HB 439

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 legislati ve 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 t otal 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 loss es 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) p urchase 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) e stablish and adopt investment policies or guidelines . Contracting and Procurement W ith the approval o f the comptroller of the treasury, this bill authorizes t he 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 mad e 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 met al 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 W ith 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 fi nancial institution or other entity designated by the state treasurer with the approval of the comptroller of the treasury . E xpenses may be charged to the earnings of the general fund balances in the state pooled investment fund or to funds available in t he 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 confi d ential and are not open for inspection by members of the public:  Location, custody, maintenance, transportation, insurance, p rocurement 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 subdivisio n, 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) p hysical means, ( ii ) e lectronic mea ns, or ( iii ) w ritten 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."