Can North Dakota's Retirement and Investment Office use investment earnings to pay employee incentive compensation without a separate legislative appropriation?

Plain-English summary

North Dakota Attorney General Drew Wrigley concluded that the Retirement and Investment Office (RIO) may pay its employee incentive-compensation program from earnings on client funds without a separate, specific legislative appropriation.

The opinion reads two statutes together. N.D.C.C. § 54-52.5-04 authorizes RIO to develop an incentive-compensation program for specified investment and fiscal-operations positions. N.D.C.C. § 54-52.5-03 creates the state retirement and investment fund and permits RIO's administrative expenses to be paid from its appropriation authority and from "earnings lawfully available for such purposes."

The AG treated that earnings language as a continuing appropriation. Incentive compensation is an authorized administrative expense because the Legislature created the compensation program and expanded the earnings language in the same 2023 bill. The legislative history also showed that RIO sought the amendment so incentive compensation could be paid from fund earnings on a continuing basis.

The 2025 Legislature did not provide a separate line-item appropriation for these payments, but the opinion concluded that none was required. It did not decide whether RIO's implied appropriation authority independently supports the payments because the express continuing appropriation was sufficient.

What this means for you

Retirement and Investment Office officials

The opinion treats incentive compensation authorized by N.D.C.C. § 54-52.5-04 as an administrative expense payable from lawfully available client-fund earnings under § 54-52.5-03. RIO does not need a separate specific appropriation for those payments under the statutory language analyzed in the opinion.

State Investment Board members

The opinion notes that the incentive program must be approved annually by the State Investment Board. It also quotes the statutory conditions tying payouts to risk-based investment performance above policy benchmarks and treating each payout as compensation rather than personal profit.

Legislators and state budget staff

The AG distinguished RIO's biennial appropriation from its continuing authority. A separate legislative appropriation is needed for expenses paid solely under the agency's ordinary appropriation authority, but the opinion concluded that incentive payments may instead be paid from earnings lawfully available under § 54-52.5-03.

RIO employees covered by the program

The opinion describes the payments as compensation under a State Investment Board-approved program. It also notes the statutory reporting requirement covering total annual incentives and the minimum, maximum, and average payout per eligible position.

Common questions

Q: Did the Legislature authorize RIO to create an incentive-compensation program?
A: Yes. N.D.C.C. § 54-52.5-04 authorizes RIO to develop the program for full-time investment and fiscal-operations positions needed to manage State Investment Board funds.

Q: Where can the money for incentive payments come from?
A: The AG concluded that N.D.C.C. § 54-52.5-03 allows RIO to use earnings from client funds that are lawfully available for administrative expenses.

Q: Is a separate line-item appropriation required?
A: No, according to this opinion. The earnings clause in § 54-52.5-03 itself operates as a continuing appropriation for legally authorized administrative expenses, including the incentive program.

Q: Who sets the incentive amounts?
A: The opinion explains that the State Investment Board approves the program annually. The statute requires RIO to report program terms and payout information to legislative management each interim.

Q: Did the AG rely only on legislative history?
A: No. The opinion began with the statutory text and concluded that it supplies appropriation authority. It then used the 2023 legislative history and related interpretive aids to confirm that the earnings amendment was intended to fund incentive compensation.

Background and statutory framework

RIO coordinates the State Investment Board and Teachers' Fund for Retirement activities and manages investments for statutory and contractual client funds. The opinion describes RIO as a special-funded agency that does not receive general-fund dollars.

In 2023, the Legislature enacted N.D.C.C. § 54-52.5-04, authorizing the incentive-compensation program. In the same bill, it amended § 54-52.5-03 so RIO administrative expenses could be paid in accordance with the agency's appropriation authority and with earnings lawfully available for that purpose.

The opinion applied the usual North Dakota rules of statutory interpretation: begin with the text, read related statutes together, give effect to each provision, and use legislative history when needed to confirm meaning. It also relied on the legal definition of an appropriation as setting aside public revenue for a specified object.

The AG found that the 2023 testimony consistently tied the earnings amendment to RIO's plan to bring more investment work in house and fund incentive compensation on a continuing basis. Because the statutory program and expanded funding authority were enacted together, the opinion concluded that the payments are authorized administrative expenses.

Citations and references

Statutes:

• N.D.C.C. § 54-52.5-03, state retirement and investment fund and continuing appropriation
• N.D.C.C. § 54-52.5-04, incentive-compensation program
• N.D.C.C. § 21-10-06, State Investment Board client funds
• N.D.C.C. § 54-44.3-20, classified-service exemptions
• N.D.C.C. § 1-02-39, aids to statutory construction
• N.D.C.C. § 54-12-01, Attorney General opinion authority

Cases:

• N.D. Legis. Assembly v. Burgum, 2018 ND 189, 916 N.W.2d 83
• State ex rel. Link v. Olson, 286 N.W.2d 262 (N.D. 1979)
• Gange v. Clerk of Burleigh Cnty. Dist. Ct., 429 N.W.2d 429 (N.D. 1988)
• State ex rel. Johnson v. Baker, 21 N.W.2d 355 (N.D. 1946)

Source

• Landing page: https://attorneygeneral.nd.gov/the-north-dakota-attorney-general-issued-an-opinion-to-senator-sean-cleary-representative-mitch-ostlie/
• Original PDF: https://attorneygeneral.nd.gov/wp-content/uploads/2026/07/2026-L-03.pdf

Original opinion text

STATE OF NORTH DAKOTA

                     OFFICE OF ATTORNEY GENERAL
                                   www.attorneygeneral.nd gov
                                           (701) 328-2210

Drew H. Wrigley
ATTORNEY GENERAL

                                       LETTER OPINION
                                          2026-L-03




Senator Sean Cleary                            Representative Mitch Ostlie
District 35                                    District 12
Bismarck, ND                                   Jamestown, ND
[email protected]                            [email protected]

Dear Senator Cleary and Representative Ostlie:

Thank you for your email requesting my opinion regarding whether the Retirement and Investment
Office (RIO) has legal authority to provide incentive compensation payments to its employees from
its existing appropriation authority. It is my opinion that the continuing appropriation in N.D.C.C. §
54-52.5-03 1 authorizes RIO to make the incentive compensation payments.

                                            ANALYSIS

The Legislature created RIO to administratively coordinate the activities of the State Investment
Board (SIB), which oversees RIO, and the Teachers' Fund for Retirement (TFFR). 2 The SIB is
required by statute to manage the investment of several enumerated state client funds and has
executed contracts to manage the funds of other state entity clients. 3 RIO is a special-funded agency
that does not receive general fund dollars. 4

In 2023, the Legislature authorized RIO to create a new incentive compensation program for RIO
employees. The legislation, codified at N.D.C.C. § 54-52.5-04, provides:

       The state retirement and investment office may develop an incentive compensation
       program for full-time equivalent investment and fiscal operations positions
       necessary for the management of the investment of funds under the control of the

1
  The State Investment Board has additional continuing appropriation authority under N.D.C.C. §§
21-10-05, 21-10-06.2. This opinion does not address whether the incentive compensation payments
could be made under those statutes because consideration of those statutes is not necessary to
answer the question presented.
2
  N.D.C.C. §§ 54-52.5-01, 54-52.5-02.
3
  N.D.C.C. § 21-10-06.
4
  H.B. l 022, 2025 N.D. Leg., § 1; S.B. 2022, 2023 N.D. Leg., § 1.

Page 2

LETTER OPINION 2026-L-03
July 28, 2026
Page 2

   state investment board. The program must promote profitability, productivity, and
   responsible fund management. The provisions of the program must be approved
   annually by the state investment board. The provisions must ensure that the payouts
   do not occur unless the risk-based perforn1ance of the investments that are internally
   managed exceed the risk-based perforn1ance of policy benchmarks. Any amounts
   paid under this program must be considered compensation and not personal profit on
   behalf of the employee. Each interim, the state retirement and investment otlice
   shall provide at least one report to the legislative management regarding the status of
   the program, including the provisions of the program; the total amount of incentives
   paid out to employees each year; and the minimum, maximum, and average payout
   per eligible full-time equivalent position. 5

In the same bill, the Legislature also amended and reenacted RIO's continuing appropriation statute,
N.D.C.C. § 54-52.5-03, to add language providing for payment of RIO's administrative expenses
from lawfully available earnings. 6 In its cmTent form, with the 2023 amendment language
underlined for identification, N.D.C.C. § 54-52.5-03, provides:

   A special fund known as the "state retirement and investment fund" is established
   for the purpose of defraying administrative expenses of the state retirement and
   investment office. The actual amount of administrative expenses incmTed by the
   state retirement and investment office must be paid from the respective funds listed
   under section 21-10-06 and are hereby appropriated to the state retirement and
   investment fund in proportion to the services rendered for each fund as estimated by
   the state investment board. The amount necessary to pay all administrative expenses
   of the state retirement and investment office must be paid from the state retirement
   and investment fund in accordance with the agency's appropriation authority and
   earnings lawfully available for such purposes. Any interest income earned on the
   state retirement and investment fund must be credited to the fund. 7

While you acknowledge that the Legislature created an incentive compensation program for RIO
employees in 2023, you question whether the Legislature provided a method to pay for the program.
As part of your request for an Attorney General's opinion, you assert that, during the 2025
Legislative Session, the Legislature did not provide an explicit appropriation for the program and
that the existing appropriation in N.D.C.C. § 54-52.5-03 is insufficient to authorize RIO's incentive
compensation payments. 8

5
N.D.C.C. § 54-52.5-04.
6
S.B. 2022, 2023 N.D. Leg.,§ 4.
7
N.D.C.C. § 54-52.5-03 (underline added to identify amendment).
8
Letter from Sen. Sean Cleary, Dist. 35, & Rep. Mitch Ostlie, Dist. 12, N.D. Legis. Assemb., to
Drew H. Wrigley, Att'y Gen., Off. of Att'y Gen. (Dec. 29, 2025); H.B. 1022, 2025 N.D. Leg.

Page 3

LETTER OPINION 2026-L-03
July 28, 2026
Page 3

Whether the appropriation in N.D.C.C. § 54-52.5-03 authorizes RIO to make the incentive
compensation payments permitted under N.D.C.C. § 54-52.5-04 is a question of statutory
interpretation.

   [The] primary goal in statutory construction is to ascertain the intent of the
   Legislature. In ascertaining the Legislature's intent, we first look to the plain
   language of the statute and give each word of the statute its ordinary meaning. We
   construe the statute as a whole and give effect to each of its provisions if possible. If
   the language of the statute is clear and unambiguous when read as a whole, we
   cannot ignore that language under the pretext of pursuing its spirit because the
   legislative intent is presumed clear from the face of the statute. If, however, the
   statute is ambiguous or if adherence to the strict letter of the statute would lead to an
   absurd or ludicrous result, a court may resort to extrinsic aids, such as legislative
   history, to interpret the statute. A statute is ambiguous if it is susceptible to
   meanings that are different, but rational. 9

In addition, statutes must be construed together and ham1onized to give meanmg to related
provisions and to every word, phrase, and sentence. 10

"An appropriation is 'the setting apaii from the public revenue of a definite sum of money for the
specified object in such a manner that the officials of the government are authorized to use the
amount so set apart, and no more, for that object."' 11 The Legislature can appropriate funds for a
bie1mium or on a continuing basis. 12 RIO has both biennial and continuing appropriation authority.

In a 2015 opinion, this office concluded that N.D.C.C. § 54-52.5-03, in its then-current fon11,
provided a valid continuing appropriation for the payment of various administrative expenses, even
though the statute did not expressly identify them. 13 This office had previously concluded that
RIO's "administrative expenses" include salaries and wages, 14 so salaries and wages could be paid
pursuant to N.D.C.C. § 54-52.5-03. Without the 2023 amendment to that statute, this authority was

9
Workforce Safety & Ins. v. Avila, 2020 ND 90, , 7, 942 N.W.2d 811 (quoting Shiek v. ND.
Workers Comp. Bureau, 2002 ND 85, il 12,643 N.W.2d 721).
10
State v. Johns, 2019 ND 227, , 8, 932 N.W.2d 893; Rocky Mountain Steel .Founds., Inc. v.
Brockett Co., LLC, 2018 ND 96,, 5,909 N.W.2d 671, citingN.D.C.C. § 1-02-07.
11
N.D. Legis. Assembly v. Burgum, 2018 ND 189,, 18,916 N.W.2d 83 (quoting State ex rel. Link
v. Olson, 286 N.W.2d 262,268 (N.D. 1979)).
12
Gange v. Clerk o/Burleigh Cnty. Dist. Ct., 429 N.W.2d 429 (N.D. 1988).
13
N.D.A.G. 2015-L-04.
14
Letter from Nicholas J. Spaeth, Att'y Gen., to Scott Engmann, Exec. Dir., N.D. Ret. & Inv. Off.
(Feb. 20, 1990).

Page 4

LETTER OPINION 2026-L-03
July 28, 2026
Page 4

limited to payments made "in accordance with the agency's appropriation authority" 15 and was
therefore "[restricted] to an amount established by the Legislature." 16

In the 2015 opinion, this office also concluded that RIO has implied appropriation authority. Due to
RIO's fiduciary obligation to prudently administer the funds with which it is entrusted, the agency
must have some implied appropriation authority to pay "wages and operating costs of the
individuals necessary to effectuate the continuing appropriations" and to "expend funds for the
salaries and associated operating expenses" of the individuals needed to administer those funds. 17
Otherwise RIO's mandate to properly manage the funds could be frustrated by a legislative
oversight or legislative inaction. 18

Since the 2015 opinion was issued, RIO's continuing appropriation authority has expanded through
legislation. As noted above, the 2023 amendment to N.D.C.C. § 54-52.5-03 added the phrase "and
earnings lawfully available for such purposes" to the end of the sentence authorizing payment of
RIO's administrative expenses. 19 By using the word "and," the Legislature unambiguously
expressed its intent to increase RIO's authority to pay administrative expenses. As a result, the
plain language of N.D.C.C. § 54-52.5-03 now authorizes RIO to pay administrative expenses from
the state retirement and investment fund in two circumstances. First, as discussed in the 2015
opinion, RIO can pay administrative expenses "in accordance with the agency's appropriation
authority. " 20 Expenses paid pursuant to this authority require a separate legislative appropriation. 21
Second, RIO can pay administrative expenses from "earnings lawfully available for such
purposes. " 22

In the absence of an explicit appropriation for the incentive compensation payments, we look to the
scope of RIO's authority to pay administrative expenses from "earnings lawfully available for such
purposes." The plain language of this provision constitutes an appropriation by setting aside a
certain sum, specifically the earnings from client funds, for a specified object, the payment of
legally authorized administrative expenses. 23 The question therefore is whether the payment of
incentive compensation is a legally authorized administrative expense.

15
1991 N.D. Sess. Laws ch. 628, § 1 (codified as amended at N.D.C.C. § 54-52.5-03 (2023));
N.D.A.G. 2015-L-04.
16
N.D.A.G. 2015-L-04.
17 Id
is Id
19
S.B. 2022, 2023 N.D. Leg.,§ 4.
20
N.D.C.C. § 54-52.5-03.
21
N.D.A.G. 2015-L-04.
22
N.D.C.C. § 54-52.5-03.
23
Id See also ND. Legis. Assembly v. Burgum, 2018 ND 189, ,i 18, 916 N.W.2d 83; Stale ex rel.
Link v. Olson, 286 N.W.2d 262,268 (N.D. 1979) (defining an appropriation).

Page 5

LETTER OPINION 2026-L-03
July 28, 2026
Page 5

The 2023 legislation that provided the new appropriation language to N.D.C.C. § 54-52.5-03 also
increased RIO's administrative expenses by creating the incentive compensation program. It is
reasonable, but not indisputable, to infer from this that the additional appropriation authority was
intended to provide funding for the new program created in the same bill, even though the
connection was not explicitly stated in the bill. That reasonable inference is confirmed by other
extrinsic aids for statuto1y interpretation-including the legislative history, the object sought to be
attained, and the circumstances under which the statute was enacted-which clearly demonstrate
that the Legislature intended to authorize RIO to pay incentive compensation with client fund
earnings when it amended N.D.C.C. § 54-52.5-03 in 2023. 24

The incentive compensation program is pmi of a new internal investment strategy intended to
increase investment returns while decreasing costs as a result of internal management. 25 In written
testimony to Senate and House committees, RIO identified the requirements for the internal
investment strategy as: seven new full time employees, "adequate classification of roles,"26 and
"incentive compensation/imded on a continuing basis."27 RIO's written testimony also explained

24
See N.D.C.C. § 1-02-39 (identifying aids in constrnction of ambiguous statutes).
25
Hearing on S.13. 2022 Before the S. Appropriations Comm., 2023 N.D. Leg. (Jan. 6, 2023)
(Written Testimony of .Jm1ilyn Murtha, JD MPAP, Exec. Dir., Chad Roberts, MAc, Deputy Exec.
Dir./Chief Ret. Officer, Scott Anderson, CF A, MBA, Chief Inv. Officer, & Ryan Skor, CPA, MBA,
Chief Fin. Officer/Chief Operating Officer, N.D. Ret. & Inv. Off.); Hearing on S.13. 2022 Beji)re the
S Appropriations Comm. - Hum. Res. Div., 2023 N.D. Leg. (Jan. 19, 2023) (Written Testimony of
Janilyn Murtha, JD MP AP, Exec. Dir., Chad Roberts, MAc, Deputy Exec. Dir./Chief Ret. Officer,
Scott Anderson, CFA, MBA, Chief Inv. Officer, & Ryan Skor, CPA, MBA, Chief Fin.
Officer/Chief Operating Officer, N.D. Ret. & Inv. Off.); Hearing on SB. 2022 Bef<Jre the H
Appropriations Comm. -- Gov 't Operations Div., 2023 N .D. Leg. (Mm. 9, 2023) (Written
Testimony of Janilyn Murtha, JD MPAP, Exec. Dir., Chad Roberts, MAc, Deputy Exec. Dir.IChief
Ret. Officer, Scott Anderson, CFA, MBA, Chiefinv. Officer, & Ryan Skor, CPA, MBA, Chief Fin.
Officer/Chief Operating Officer, N.D. Ret. & Inv. Off.).
26
Adequate classification was a reference to a request to exclude RIO employees from the state
employee classification system. The bill that authorized the incentive compensation program also
amended N.D.C.C. § 54-44.3-20 to exempt from classified service "[i]nvestment and fiscal
operations positions of the state retirement and investment office necessary for the management of
the investment of funds under the control of the state investment board." S.B. 2022, 2023 N.D.
Leg.,§3.
27
Hearing on SB. 2022 Before the S Appropriations Comm., 2023 N.D. Leg. (Jan. 6, 2023)
(Written Testimony of Janilyn Mmiha, JD MPAP, Exec. Dir., Chad Roberts, MAc, Deputy Exec.
Dir./Chief Ret. Officer, Scott Anderson, CFA, MBA, Chieflnv. Officer, & Ryan Skor, CPA, MBA,
Chief Fin. Officer/Chief Operating Ofiicer, N.D. Ret. & Inv. Off) (emphasis added); Hearing on
SB. 2022 Bef<Jre the S. Appropriations Comm. - Hum. Res. Div., 2023 N.D. Leg. (Jan. 19, 2023)
(Written Testimony of Janilyn Murtha, JD MPAP, Exec. Dir., Chad Roberts, MAc, Deputy Exec.
Dir./Chief Ret. Officer, Scott Anderson, CFA, MBA, Chiefinv. Officer, & Ryan Skor, CPA, MBA,

Page 6

LETTER OPINION 2026-L-03
July 28, 2026
Page 6

the need for amending N.D.C.C. § 54-52.5-03 in particular for those expenses: "[g]enerally,
investment management costs fall within the scope of continuing appropriation authority granted by
the legislature in NDCC [sic] 21-10-06.2; however, because this proposal involves cost savings
achieved by internalizing investment operations through additional permanent FTE's and
infrastructure it falls within the scope ofNDCC [sic] 54-52.5-03."28

Consistent with its written testimony, RIO's oral testimony specified that the expansion of RIO's
continuing appropriation authority in the amendment to N.D.C.C. § 54-52.5-03 would be used to
pay for incentive compensation. When describing the proposed internal investment strategy at a
Senate committee hearing, RIO's Chief Investment Officer stated, "the investment role
classification system is different from our typical state classification system so we're asking for an
adequate classification of roles and also we're asking for some legislation in addition for an
incentive compensation program .fimded on a continuing basis .fom continuing appropriations."29
At another Senate committee hearing, RIO's Chief Financial Officer/Chief Operating Officer
(CFO/COO) explained that "incentive compensation is a vital part of the investment professional
compensation throughout industry, and this amendment would allow for that to be paid out of
earnings qf the fimd so the continuing appropriation would be the incentive compensation plan
barring, or requiring, approval of the State Investment Board."30 Later in the testimony, RIO's
CFO/COO elaborated:

    The authority to bring the in-house investing already exists. That is already within
    our authority under the SIB chapter, the 21-10 chapter. We have the ability to do
    that. The change that vve 're asking for in Century Code is solely related to the
    incentive compensation for the staff' because currently we are under the classified
    system, which keeps each position in a specified pay range and it doesn't, our
    appropriation authority covers our salaries, it covers the salaries that we're allowed
    to pay, it doesn't allow, have room for an incentive compensation plan. The
    incentive compensation language is what we've included in here to allow for that.
    One is the declassification, for lack of a better tem1, but two is the language that

Chief Fin. Officer/Chief Operating Officer, N.D. Ret. & Inv. Off.) (emphasis added); Hearing on
S.B. 2022 Before the H Appropriations Comm. - Gov't Operations Div., 2023 N.D. Leg. (Mar. 9,
2023) (Written Testimony of Janilyn Mm1ha, JD MPAP, Exec. Dir., Chad Robe11s, MAc, Deputy
Exec. Dir./Chief Ret. Officer, Scott Anderson, CF A, MBA, Chief Inv. Officer, & Ryan Skor, CPA,
MBA, Chief Fin. Officer/Chief Operating Officer, N.D. Ret. & Inv. Off.) (emphasis added).
28 Id.
29
Hearing on S.B. 2022 Be.fore the S. Appropriations Comm. - Hum. Res. Div., 2023 N.D. Leg.
(Jan. 19, 2023) (Statement of Scott Anderson, CFA, MBA, Chief Inv. Officer, N.D. Ret. & Inv.
Off.) (emphasis added).
30
Hearing on SB. 2022 Beji)re the S. Appropriations Comm. - Hum. Res. Div., 2023 N.D. Leg.
(Jan. 23, 2023) (Statement of Ryan Skor, CPA, MBA, Chief Fin. Officer/Chief Operating Officer,
N.D. Ret. & Inv. Off.) (emphasis added).

Page 7

LETTER OPINION 2026-L-03
July 28, 2026
Page 7

   allows incentive compensation to be paid out qf earnings qf the fund rather than
   solely the appropriation c~f the agency. So that's the language that we would need
   changed in Century Code. 31

The only provision regarding "earnings" in the bill is the amendment to N.D.C.C. § 54-52.5-03.
The legislative history is replete with testimony making it clear that the 2023 amendment to that
section was intended to provide continuing appropriation authority for RJO's incentive
compensation payments to be paid out of fund earnings.

Furthermore, RIO explained in testimony to the House that incentive compensation amounts would
not be included in the salaries and wages line item in RJO's budget and would be set by the SIB. At
a House committee hearing, in response to a legislator who asked whether the SIB would have
oversight over the amounts paid for incentive compensation, RIO's Executive Director responded in
the affirmative and explained that if the legislation passed, the SIB would establish a program for
detennining the incentive compensation an1ounts. 32 Later in the testimony, when asked by another
legislator how much RIO would pay its employees, RJO's Executive Director, responded, "We'll
pay them a base salary which is in the budget before you ... and then they would have the
opportunity to cam . . . that incentive compensation."33 Based on RIO's testimony to both
legislative bodies, the Legislature clearly understood that the statutory amendments would provide
authority for incentive compensation at a level to be determined in the future by the SIB rather than
a set amount to be specifically appropriated.

In light of this legislative history, the intended purpose of the amendment to N.D.C.C. § 54-52.5-03,
and the circumstances under which the incentive compensation program was created, the use of
fund earnings to make the incentive compensation payments is "lawfully authorized." RIO's
continuing appropriation statute therefore provides the necessary authority to carry out the incentive
compensation program.

31
Id. (emphasis added).
32
Hearing on S.B. 2022 Before the H. Appropriations Comm. - Gov't Operations Div., 2023 N.D.
Leg. (Mar. 31, 2023) (Statement ofJanilyn Murtha, JD MPAP, Exec. Dir., N.D. Ret. & Inv. Off.).
The Executive Director's explanation is also consistent with the plain language of N.D.C.C. §
54-52.5-04, which authorizes the SIB to develop and approve annually the incentive compensation
progran1 and requires RIO to report at least once each interim to legislative management regarding
the status of the program, including the total incentive amounts paid.
Representative Meier: Jan, when you, if this was approved, then would your Board have
oversight over the amounts of what would be paid for either a bonus or an incentive salary?
Jan Murtha: Rep. Meier, Mr. Chairman and members of the Committee, yes ... it would have
to be a program that has clear rules ... we haven't worked all of those details out.
33 Hearing on SB. 2022 Before the Ii Appropriations Comm. - Gov 't Operations Div., 2023 N.D.

Leg. (Mar. 31, 2023) (Statement of Janilyn Murtha, JD MPAP, Exec. Dir., N.D. Ret. & Inv. Off.).

Page 8

LETTER OPINION 2026-L-03
July 28, 2026
Page 8

The Legislature could have altered or eliminated that continuing appropriation authority in the 2025
Legislative Session. RIO's testimony regarding its budget during that session included discussion
of the continuing appropriation to provide incentive compensation. 34 No amendments to N.D.C.C.
§ 54-52.5-03 were made in 2025, however, and no other restrictions were placed on the incentive
compensation plan.

Although the Legislature did not provide RIO an explicit appropriation for the incentive
compensation payments for the cun-ent bicnnium,35 such an appropriation was unnecessary. RIO
has continuing appropriation authority tmder the amended language of N.D.C.C. § 54-52.5-03 to
use earnings to pay incentive compensation. RIO also has implied appropriation authority to
compensate its employees within prudent limits in order to carry out its fiduciary obligations. This
opinion need not address whether the implied authority separately enables RIO to pay incentive
compensation, however, because RIO has the necessary appropriation authority under its continuing
appropriations.

                                       SUMMARY

The plain language of N.D.C.C. §§ 54-52.5-03 and 54-52.5-04, the relevant legislative history, and
other extrinsic aids of statutory construction all clearly reveal legislative intent to grant RIO
continuing appropriation authority to make incentive compensation payments with earnings from
client funds. It is my opinion that N.D.C.C. § 54-52.5-03 authorizes RIO to make the incentive
compensation payments without a separate, specific legislative appropriation.

kht

This opinion is issued pursuant to N.D.C.C. § 54-12-01. It governs the actions of public officials
until such time as the question presented is decided by the comis. 36

34
See e.g., Hearing on HB. 1022 Be.fore the H. Appropriations Comm. ~ Gov 't Operations Div.,
2025 N.D. Leg. (Jan. 21, 2025) (Statement of Scott Anderson, CFA, MBA, Chieflnv. Officer, N.D.
Ret. & Inv. Off.).
35
H.B. 1022, 2025 N.D. Leg.,§ 1; S.B. 2022, 2023 N.D. Leg.,§ 1.
36
See State ex rel. Johnson v. Baker, 21 N.W.2d 355 (N.D. 1946).