SB 1812

This bill establishes within the state treasury an enterprise fund to be known as the "precious metals fund"" for the purpose of acquiring, converting, storing, and selling bullion and specie. The state treasurer must administer the precious metals fund in accordance with this bill. PRECIOUS METALS FUNDING MECHANISM Present law requires the expenses for the administration and implementation of the purchase, sale, transportation, maintenance, valuation, security, insurance, and custody of the gold or precious metal bullion or specie to be paid from state funds approp riated in the general appropriations act. This bill provides that such be paid from the precious metals fund established under this bill instead of from appropriations in the general appropriations act. This bill provides that it is the legislative intent that $50 million be appropriated to the precious metals fund in fiscal year 2027 for the purpose of acquiring and converting bullion into specie. Transfers from the reserve for revenue fluctuations or any other state reserve fund must not be used to make appropriations to the precious metals fund. DUTIES OF STATE TREASURER – RULEMAKING This bill requires the state treasurer to contract with a toll converter based in this state for the conversion of acquired bullion into specie. It is the legislative intent that (i) precious metal bullion purchased under this bill be converted to speci e by the toll converter within 12 months of acquisition, and (ii) the state treasurer, when reviewing bids and selecting the toll converter, consider such toll converter's business presence in this state, with a preference that the toll converter has at l ea st 40 years' experience selling coin-type products and at least 50 years in the industry. This bill authorizes the treasurer to generate revenue through the sale of specie. The treasurer must develop and implement a process to sell up to 10% of the converted specie to residents of this state and other states to establish the brand and reputa tion of Tennessee bullion and to establish the fair market value of bullion manufactured in this state and held by the state. However, the treasurer must prioritize sales to residents of this state. This bill requires the treasurer to retain at least 90% of the precious metal specie for state reserves as a long-term hedge against inflation and economic instability, with silver specie held to protect state assets from potential price increases and st ored in a manner not directly tied to the United States dollar. This bill requires the treasurer to establish policies and procedures to ensure the security, accounting, and reporting of fund activities. The treasurer may promulgate rules to effectuate this bill. OVERSIGHT AND REPORTING This bill requires the state treasurer to submit an annual report to the general assembly detailing (i) the amount of bullion acquired and converted to specie, (ii) the total quantity and market value of specie held by the state, (iii) revenue generated from sales of specie and third-party storage fees, and (iv) any additional recommendations regarding operations of the precious metals fund. This bill requires the treasurer to ensure all transactions and fund operations are conducted in a transparent manner. Such transactions and operations are subject to audit by the comptroller of the treasury. This bill requires the funds for the purchase and sale of bullion and specie to come from the precious metals fund. Any funds remaining in the precious metals fund at the end of any fiscal year must be carried forward in the precious metals fund and rem ain available to purchase and sell bullion and specie. The income, gains, and losses from transactions involving bullion or specie must remain in the precious metals fund and be accounted for separately from other transactions. This bill authorizes the procurement of bullion and specie to be made in a manner prescribed by the state treasurer with the approval of the comptroller of the treasury. Bullion and specie procured for the precious metals fund in accordance with this bi ll are not considered goods, and are not subject to law requiring procuring agencies to procure goods or services through a noncompetitive contracts to be filed with, and reviewed by, the fiscal review committee. CONFIDENTIAL RECORDS This bill requires the records, documents, and papers in the possession of the department of the treasury or any other state agency containing the following information relative to bullion and specie purchased, sold, and maintained in accordance with thi s bill to be treated as confidential and not be open for inspection by members of the public under open records law:  Location  Custody  Maintenance  Transportation  Insurance  Procurement processes  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  Security, including, but not limited to, alarm systems, security codes, access codes, passwords, security procedures and protocols, security and vulnerability testing, business continuity plans and testing, disaster recovery plans and testing, and audit reports"