RESERVE ACCOUNT

      Present law requires a state treasury reserve account to be in the general fund called the "reserve for revenue fluctuations" ("reserve account").  Amounts in this reserve account must be available to meet unexpected shortfalls of revenue or to meet expenditure requirements in excess of budgeted appropriation levels.  This bill creates, within the reserve account, a restricted account for the purchase and sale of precious metal bullion, which includes gold, silver, platinum, or palladium, or specie, which is a precious metal stamped into coins. 

      It is the legislative intent of this bill that there is an initial transfer from the reserve account to the restricted account from 1 to 3% of the total funds in the reserve account as of July 1, 2025.  On an annual basis, the restricted account must be valued based on the total funds in the reserve account that may result in additional transfers from the reserve account to the restricted account.  Any funds remaining in the restricted account at the end of any fiscal year must be carried forward.  The income, gains, and losses from the investment in precious metal bullion and specie must remain in the restricted account and must be accounted for separately from other investments.

INVESTMENTS

      State Treasurer Investment Authority

      Present law authorizes the state treasurer to, in the state treasurer's sole discretion, invest money in the custody of any officer or officers of the state, which is otherwise required to be invested through the pooled investment fund or the intermediate-term investment fund, if the investment is in obligations guaranteed by United States government, and the state officer or officers who have custody of the money request it to be invested.  This bill requires the state treasurer, with the approval of the comptroller of the treasury, to additionally (i) purchase and sell precious metal bullion or specie that will be directly owned by the state, and in the custody of the state treasurer and (ii) establish and adopt investment policies or guidelines. 

      Contracting and Procurement

      With the approval of the comptroller of the treasury, this bill authorizes the state treasurer to enter into contracts, trust instruments, agreements, trade agreements, warrants, and other instruments with a person to buy and sell bullion and specie.  Procurements may be made in a manner prescribed by the state treasurer with the approval of the comptroller of the treasury without regard to the requirements for public purchases.  For the purposes of procuring precious metal bullion or specie as an investment, the precious metal bullion and specie are not considered goods, and therefore, not subject to noncompetitive contract requirements with the general assembly's fiscal review committee.  

      Safekeeping Precious Metal Bullion or Specie

      With the approval of the comptroller of the treasury, this bill requires the state treasurer to ensure that the precious metal bullion or specie is securely maintained and transported, adequately insured, independently audited, and physically segregated from the other assets custodied at a financial institution or other entity designated by the state treasurer with the approval of the comptroller of the treasury.  Expenses may be charged to the earnings of the general fund balances in the state pooled investment fund or to funds available in the revolving accounts established for pooled investments or obligations guaranteed by the federal government.

      Confidentiality

      This bill provides that records, documents, and papers in the possession of the treasury department, or any other state agency, containing the following information relative to the precious metal bullion or specie purchased, sold, and maintained are confidential and are not open for inspection by members of the public: 

      Location, custody, maintenance, transportation, insurance, procurement processes, and security.

      Proposals relative to the procurement of goods or services, and related records.

      Procurement solicitations, requests for quotes, and requests submitted to the state's central procurement office for the procurement of goods and services.

      Contracts, agreements, warrants, and confirmations.

LEGAL TENDER

      This bill makes gold and silver coins legal tender in this state.  However, a person must not compel another person to use or accept such coins as legal tender, unless expressly authorized by law or contract.  A "person" means an individual; state, local government, political subdivision, or any agent or agency thereof; company; corporation; partnership; firm; trust; organization; or association.  The state treasurer may transact, transmit, or exchange such coins through any one or a combination of (i) physical means, (ii) electronic means, or (iii) written instruction.  The state, or a department or agency of state government, may, but is not required to, accept payment of taxes, fees, debts, or obligations in precious metal coins.