§ 15-03-04 — Legal investments

Subject to the provisions of section 15-03-05, the board of university and school lands shall
apply the prudent investor rule in investing the permanent funds under its control. The "prudent
investor rule" means that in making investments the board shall exercise the same judgment
and care, under the circumstances then prevailing and limitations of North Dakota and federal
law, that an institutional investor of ordinary prudence, discretion, and intelligence exercises in
the management of large investments entrusted to it, not in regard to speculation but in regard
to the permanent disposition of funds, considering probable safety of capital as well as probable
investment returns. Notwithstanding any investments made before July 1, 1997, the board may
not use any funds entrusted to it to purchase, as sole owner, commercial or residential real
property in North Dakota without prior approval of the legislative assembly or the budget section
if the legislative assembly is not in session. Any request considered by the budget section must
comply with section 54-35-02.9. The board may also lend securities held by the permanent
funds, including the authority to pledge a security interest in the securities in the possession of a
custodian agent. These securities must be collateralized as directed by the board.