Bill Summary – FastDemocracy

0455.01000
     Sixty-eighth
     Legislative Assembly                     HOUSE BILL NO. 1278
     of North Dakota
     Introduced by
       Representatives Satrom, Grueneich, Headland, Lefor, S. Olson, Ostlie, Schauer, Steiner
       Senators Conley, Wanzek
  A BILL for an Act to create and enact a new subsection to section 21-10-02.1 of the North
  Dakota Century Code, relating to the prudent investor rule; and to amend and reenact section
  21-10-02, subsection 1 of section 21-10-08.1, and subsection 2 of section 21-10-11 of the North
  Dakota Century Code, relating to the state investment board and the legacy fund.
  BE IT ENACTED BY THE LEGISLATIVE ASSEMBLY OF NORTH DAKOTA:
      SECTION 1. AMENDMENT. Section 21-10-02 of the North Dakota Century Code is
  amended and reenacted as follows:
      21-10-02. Board - Powers and duties.
      1.   The board is charged with the investment of the funds enumerated in section
          21-10-06. It shall approve general types of securities for investment by these funds
          and set policies and procedures regulating securities transactions on behalf of the
          various funds. Representatives of the funds enumerated in section 21-10-06 may
          make recommendations to the board in regard to investments.
     2.   The board or its designated agents must be custodian of securities purchased on
          behalf of funds under the management of the board. Any designated agent acting as a
          custodian of securities purchased on behalf of funds under the management of the
          board may not be a member of any association that has not publicly supported the
          fossil fuel and agriculture industries of this state. All contracts between the board and
          any designated agent, custodian, or investing entity must include a written requirement
          that the designated agent, custodian, or investing entity supports the fossil fuel and
          agriculture industries of this state.
     3.   The board may appoint an investment director or advisory service, or both, who must
          be experienced in, and hold considerable knowledge of, the field of investments. The
          investment director or advisory service shall serve at the pleasure of the board. The
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           investment director or advisory service may be an individual, corporation, limited
           liability company, partnership, or any legal entity which meets the qualifications
           established herein. After five years of offering advisory services, the board shall
           re-evaluate the contract for all legal entities offering advisory services by issuing a
           request for proposal to interested bidders. The board may authorize the investment
           director to lend securities held by the funds. These securities must be collateralized as
           directed by the board.
      4.   The board may create investment fund pools in which the funds identified in section
           21-10-06 may invest.
     5.   For purposes of investment of the legacy fund, the board shall give preference to
          investment firms and financial institutions with a presence in the state.
    SECTION 2. A new subsection to section 21-10-02.1 of the North Dakota Century Code is
 created and enacted as follows:
          Notwithstanding section 21-10-07, a designated agent acting as a custodian of
          securities purchased on behalf of funds under the management of the board or entities
          offering advisory services shall publicly support the fossil fuel and agriculture
          industries of this state.
     SECTION 3. AMENDMENT. Subsection 1 of section 21-10-08.1 of the North Dakota
 Century Code is amended and reenacted as follows:
     1.   As used in this section, "social investment" means the consideration of socially
          responsible criteria in the investment or commitment of public funds for the purpose of
          obtaining an effect other than a maximized return to the state. The term does not
          include any transactions made by the board or a designated agent acting as a
          custodian of securities purchased on behalf of funds under the management of the
          board which makes an investment with a person or legal entity that publicly supports
          the fossil fuel and agriculture industries of this state.
     SECTION 4. AMENDMENT. Subsection 2 of section 21-10-11 of the North Dakota Century
 Code is amended and reenacted as follows:
     2.   The goal of investment for the legacy fund is principal preservation while maximizing
          total return and to provide a direct benefit to the state by investing a portion of the
          principal in the state. Preference must be given to qualified investment firms and
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    Legislative Assembly
         financial institutions with a presence in the state for investment of the legacy fund and
         those that publicly support the fossil fuel and agriculture industries of this state.
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Statutes affected: 
INTRODUCED: 21-10-02, 21-10-08.1, 21-10-11
Adopted by the House Government and Veterans Affairs Committee: 21-10-08.1, 54-44.4-02
FIRST ENGROSSMENT: 21-10-02, 21-10-06.1, 21-10-08.1, 54-44.4-02