BISMARCK, North Dakota — North Dakota's oil tax savings account could more than double to $6 billion by 2017, the first year the fund could be tapped by lawmakers, according to a group advising on its investment.
Members of the Legacy Fund Initiative, which is developing a framework for how to manage the fund, met Thursday in Bismarck. It determined that the fund, which currently has $2.4 billion, could swell to $230 billion by 2060 with strong investments, the Bismarck Tribune reports (http://bit.ly/1xDYEw1 ).
The group was formed last year to make recommendations to the Legislature. It consists of two dozen business leaders, nonprofit officials, educators and lawmakers.
Initiative co-director Brad Crabtree said the annual earnings of the fund could be in the hundreds of millions annually in a short period of time, creating numerous options for the state to make bold investments for current and future generations.
The Legacy Fund gets 30 percent of the state's oil tax collections. The money can't be touched before 2017, and it would take a two-thirds vote of the Legislature for the state to dip into the fund.
North Dakota voters approved the fund in 2010. It received its first deposit of $34.3 million in September 2011.
Rod Backman, a member of the group and former director of the state Office of Management and Budget, said the projection for Legacy Fund levels was based on $80 per barrel oil. The projection also factors in an investment strategy for the fund to achieve a 6.1 percent annual rate of return and a long-term 2 percent rate of inflation.
It also assumes no changes to the state's 6.5 percent oil extraction tax and 5 percent gross production tax.
Backman, who acknowledged long-term projections are difficult to make.
"We don't know what the price of oil's going to be next week," Backman said.
Information from: Bismarck Tribune, http://www.bismarcktribune.com