Proposed Texas legislation: gold bullion repository

Welcome to the Precious Metals Bug Forums

Welcome to the PMBug forums - a watering hole for folks interested in gold, silver, precious metals, sound money, investing, market and economic news, central bank monetary policies, politics and more.

Why not register an account and join the discussions? When you register an account and log in, you may enjoy additional benefits including no Google ads, market data/charts, access to trade/barter with the community and much more. Registering an account is free - you have nothing to lose!

pmbug

pmbug

Your Host
Administrator
Benefactor
Messages
16,443
Reaction score
5,755
Points
268
Location
Texas
United-States
...
A lawmaker has proposed a bill to create a Texas Bullion Depository, which would allow the state and its citizens to store gold bullion in its own facility in Texas, with the protection of the state.

If passed, the Texas bill would tell Washington to “shove off” under the 10th amendment power given the states, if we ever saw the kind of currency craziness we saw during the Great Depression when President Franklin D. Roosevelt mandated citizens hand over most of their gold.
...
As for the Texas proposal, Jim Rickards, senior managing director of Tangent Capital Partners and author of Currency Wars, tells The Daily Ticker you can think of it like the “Fort Knox of Texas.”

And on the legal side Rickards says, “you’ve got the state of Texas standing up for you if the federal government tries to do what they tried to do in 1933, which is take the people’s gold." Rickards is also a lawyer and has read the legislation.
...
Click to expand...

More (incl. video): http://finance.yahoo.com/blogs/dail...t-hoarding-gold-secession-next-192407075.html
 
More details:
Call it the Rick Perry gold rush: The governor wants to bring the state's gold reserves back from a New York vault to Texas.

And he may have legislative support to do it. Freshman Rep. Giovanni Capriglione, R-Southlake, is carrying a bill that would establish the Texas Bullion Depository, a secure state-based bank to house $1 billion worth of gold bars owned by the University of Texas Investment Management Company, or UTIMCO, and currently stored by the Federal Reserve.

The idea isn't entirely new. Some Republican members worked on a gold bill last session that was never filed. And gold-standard-backing Ron Paul, the former Texas congressman, has raised repeated concerns about the safety of states' gold supplies.

"If you think gold is a hedge, or a protection, you always want it as close to the individual and the entity as possible," Paul told the Tribune on Thursday. "Texas is better served if it knows exactly where the gold is rather than depending on the security of the Federal Reserve."

Bringing Texas' gold home has gained more traction this legislative session because of Perry's vocal support for it. On conservative radio host Glenn Beck's show on Tuesday, the governor said Texas was "in the process" -- the legislative process, he later clarified -- of "bringing gold that belongs to the state of Texas back into the state." He argued that the state was at least as capable as the Federal Reserve of safeguarding Texas' "physical gold."
...
Capriglione said he was at a Tea Party event in Tarrant County earlier this year where Perry spoke about the state's gold investments as an economic development tool. Since then, he has been working with Perry's office on the bill.

"Something on the scorecards of a lot of these businesses in deciding whether they want to come to Texas is stability and gold as being one of those items," Capriglione said. "I think it's been in his consciousness for a while in trying to get some sort of depository in the state of Texas."

He has also spoken with UTIMCO, which owns the 6,643 gold bars currently housed underground in New York City.

"We're trying to figure out the right amount of gold to have here in Texas," Capriglione said. "'We don't want just the certificates. We want our gold. And if you're the state of Texas, you should be able to get your gold."

The United States and many other countries stopped pegging their currencies to the gold standard decades ago. Capriglione said the bill is not about putting Texas on its own gold standard. Rather, a depository would give the state a reputation as being more financially secure in the event of a national or international financial crisis.
...
Click to expand...

More: http://www.star-telegram.com/2013/03/21/4720491/tarrant-lawmaker-seeks-to-create.html
 
I'm certainly in favor of this, but the really interesting part will be the reaction of the fed when they see gold leaving their vault.

Assuming there is any gold there to take back...

:paperbag:
 
This is Cool!
We're working on relocating to Texas.


GOD BLESS OUR TROOPS!!!
 
swissaustrian said:
Gov. Perry is supporting this, so the chances of getting this law passed are high?
Click to expand...

Don't know yet. Looks like the bill was just introduced and the author is planning some changes based upon early feedback.

If Dewhurst (Lt. Gov) is on board, it will likely pass eventually. Having Gov. Perry essentially being the driving force for it doesn't hurt though.
 
PMBug said:
Looks like the bill was just introduced and the author is planning some changes based upon early feedback.
Click to expand...

There's one very troubling section, so if you wanna give feedback mention this. It means you don't own the metal as long as it is deposited with the state:
Sec.
A
2116.005.
AA
DEPOSITS AND DEPOSITORY ACCOUNTS;
STANDARDS.

...

(f)
AA
Precious metal deposited with the depository by any
person is the property of this state and is held by the depository
outside the state treasury. On withdrawal and settlement, the
precious metals become the property of the depository account
holder.
Click to expand...
p. 6 : http://www.legis.state.tx.us/tlodocs/83R/billtext/pdf/HB03505I.pdf#navpanes=0
 
email sent:
Hello,

I read with interest about your bill HB 3505:

http://www.texastribune.org/2013/03/21/perry-some-lawmakers-want-states-gold-back-texas/

In general, I think it's a fantastic idea. Given news about Germany's 7 year repatriation effort (is the gold actually there?) and recent news about central bank desperation (Cyprus bail-in), it seems only prudent to safeguard assets important to Texas.

However, it appears that your proposed repository would only be offering pooled or unallocated accounts to the Texas public:

"Sec. 2116.005 (f)
Precious metal deposited with the depository by any person is the property of this state and is held by the depository outside the state treasury. On withdrawal and settlement, the precious metals become the property of the depository account holder."

http://www.legis.state.tx.us/tlodocs/83R/billtext/pdf/HB03505I.pdf#navpanes=0

I would prefer to see the proposed repository acting as a custodian only. Ie. any gold deposited by the public is still owned by the depositor and is merely being held on account for the depositor.

Is the state of Texas not willing to guarantee the gold 100%? If they are, what is the objection to offering fully allocated (ie. depositor owned) accounts?
Click to expand...

http://www.house.state.tx.us/members/member-page/?district=98
 
The University of Texas Investment Management Co., the third-largest U.S. academic endowment, sold $375 million in gold bars from holdings of about $1.4 billion and reinvested the proceeds in gold futures and equities.

In the three months that ended Feb. 28, the Austin, Texas- based fund bought $75 million in gold futures, $225 million in developed-market equities and $75 million in emerging-market equity futures, Bruce Zimmerman, the chief executive officer, said yesterday in a telephone interview.

The fund, which manages $29.2 billion, started taking delivery of gold through futures starting in 2008 as a hedge against inflation, Zimmerman said. While fund managers and directors remain concerned global consumer prices may increase, the fund wanted to increase investments in equities, he said.

“Our idea was to buy and hold gold, and when the world’s central banks begin tightening, we’ll sell,” Zimmerman said. “The price of gold has traded off, but the world’s central banks haven’t started tightening.”

The latest investment didn’t change the fund’s overall exposure to the metal because of the leverage involved in its gold futures, Zimmerman said.

The fund hasn’t bought or sold gold since February, he said. Its gold holdings are now valued at about $1.1 billion, while its cost basis is $967 million, he said.
...
Click to expand...

http://www.bloomberg.com/news/2013-...nd-sold-375-million-in-gold-bar-holdings.html
 
... Utimco is holding tight to its stash of the metal and even is thinking about buying a bit more. The fund won't consider exiting from gold until central banks such as the U.S. Federal Reserve tighten the money supply, according to Mr. Zimmerman. ...

"The basic reason we put on the hedge still exists. You could see interest rates and yields way up, and that would be bad for stocks," Mr. Zimmerman says. "Right now, everyone's dancing, but there really isn't an elegant exit to easy money."
Click to expand...

http://online.wsj.com/article/SB10001424127887323463704578497230480765680.html
 
This bill never made it out of committee and the regular Congressional session ended. Perhaps it will have better luck next session.
 
...

Texas is about the only place I would consider storing (a little bit of) my gold other than in our own bunker...

I hope that the TX Legislature makes a go of it next year.
 
Looks like a double edged sword to me. It’s a great decision if it passes the political traps and execution flaws, and a dangerous one if it has grey areas as pointed out by Yellow Jacket.
 
I bet Texas doesn't have its gold there anymore :P

I wonder how much the US will be left with after everyone repatriates and withdraws. They don't have Germany's gold, they might not have the approx. 9,000 tons the USA is supposed to have.
 
Perry is a two-face shill.

Legislation to outlaw TSA groping passed the house, but Perry made sure it didn't go through the senate. He is a fake conservative wannabe who looks to Ron Paul to fill in the blanks when he forgets his script.
 
DoChenRollingBearing said:
...

Texas is about the only place I would consider storing (a little bit of) my gold other than in our own bunker...

I hope that the TX Legislature makes a go of it next year.
Click to expand...

I would use Peter Schiff's gold bank, if I wasn't an American citizen. You can deposit gold and spend it with a regular bank card.
 
I hope they do it, and lots of other states do the same. That being said. I will continue taking my PM's with me on recreational maritime excursions and hope my skills at keeping a boat afloat improve.
 
Texas could get its own version of Fort Knox, the impenetrable repository for the nation's gold bullion, if the Legislature gets its way.

Under House Bill 483, approved unanimously on Tuesday by the state Senate, Comptroller Glenn Hegar would be authorized to establish and administer the state's first bullion depository at a site not yet determined.
...
Yes, Kolkhorst said, the new depository would be available for his deposits and those of other Texans, and would save the state money.

"The state has gold, and several years ago (the University of Texas Investment Management Corp.) purchased just under a billion dollars worth of gold," she said. "Most of the bullion depositories are in New York -- there may be a small one in Delaware -- and they charge the state a fee to store each bar of gold."

The United States Bullion Depository, located at Fort Knox in Kentucky, adjacent to a U.S. Army base by the same name, was built in the late 1930s to hold the nation's gold reserves. Its name has become synonymous with impenetrable security. In addition to holding the country's gold reserves, Fort Knox has been used as secure storage for vital documents over the years, including the Declaration of Independence and the U.S. Constitution.

Kolkhorst said UTIMCOin March had 5,610 gold bars in its portfolio, an investment worth $645 million, and was being charged a storage fee of $108 per bar by a bullion depository in New York City, a total of more than $605,000 a year.

HB 483 was filed by Rep. Giovanni Capriglione, R-Southlake, the president of a private equity company, and is co-authored by 31 other colleagues. It passed the House 140-1 this month.

"New York will hate this," Kolkhorst said of the bill that now goes to Gov. Greg Abbott to be signed into law. "To me, that and the fact that it will save Texas money makes it a golden idea."
Click to expand...

http://gata.org/node/15398

ron-paul.gif
 
"The state has gold, and several years ago (the University of Texas Investment Management Corp.) purchased just under a billion dollars worth of gold,"


So was that when gold was closer to $2K/ozt or $350/ozt?
 
Major international players in the precious metals industry — and some local upstarts — are hoping to get a piece of Texas’ plan to launch an official state gold bullion depository, and the wide range of pitches they're making suggests even basic details of the project remain up in the air.

More than a dozen companies responded to a recent request from Comptroller Glenn Hegar for input on the first-of-its-kind project. ... State Rep. Giovanni Capriglione, R-Southlake, began pushing the idea in 2013 but was only able to draw enough support from other lawmakers by requiring that the private sector run the depository and charge fees to cover its costs.
...
With few firm details in place, the project is drawing a wildly eclectic range of proposals, some more ambitious than others.

“We would build a 46,000+ square foot independent depository; a monument of the state of Texas,” wrote Texas Precious Metals, which runs a private bullion depository in Shiner, Texas. The company offered to construct a facility with 12-inch-thick reinforced concrete walls and a roof designed to “withstand the weight of a Boeing 767.”

Yet some larger corporations, including armored car giant Brink's, argued that the state doesn’t need to build anything to launch its depository. “Brink’s has several secure branch locations in the State of Texas so we would look to utilize existing facilities to provide the vault storage services,” the company wrote in its response to Hegar.

Las Vegas-based Anthem Vault proposed “multiple vaulting locations throughout Texas to enable all Texans access to their bullion within a reasonable distance from their homes.” The company also offered to set up a network of “coin shops and retail storefronts” to accept deposits on behalf of the state depository.
...
Hegar’s office is still evaluating the responses, according to spokeswoman Lauren Willis. Eventually, the agency is expected to issue a formal solicitation for bids on the project, detailing more fully what the state envisions.

Along with ideas on the depository’s design, Hegar requested thoughts on whether the state should vie for membership in the Chicago Mercantile Exchange’s COMEX platform, where gold futures contracts are traded. The question is crucial to whether Texas will be able to achieve a widely reported declaration by Abbott’s office in June that Texas would “repatriate $1 billion of gold bullion from the Federal Reserve in New York to Texas.”

The gold bullion at issue is actually worth only $647 million and is owned by the University of Texas Investment Management Company, which oversees the assets of both the University of Texas and Texas A&M systems. UTIMCO currently pays about $647,000 a year to store the gold at the HSBC Bank headquarters in New York City, according to UT System spokeswoman Jenny LaCoste-Caputo.

The new law does not require UTIMCO to move its gold to the state’s depository. UTIMCO has said it will only do so under two conditions: that it cost less to store the gold in Texas than it does in New York and that the depository is a member of COMEX.

The Chicago Mercantile Exchange, also known as the CME Group, did not respond to a request for comment. Hegar’s office has not reached out to the exchange, Willis said.

Several companies told Hegar they were skeptical that the Texas depository could ever gain membership in COMEX, which currently requires that all its licensed gold depositories be located within 150 miles of New York City.

“Texas may be too far outside that mileage parameter, unless the State of Texas can make provisions for exceptions with these organizations,” a U.S. subsidiary of Switzerland-based Loomis International wrote.

Addison-based Dillon Gage, which runs private precious metal depositories in Delaware and Toronto, noted that CME membership would give the Texas depository a “certain reputational weight” and predicted that the CME would likely waive its geographic restrictions “for a state-run depository.”
...
Click to expand...

http://www.texastribune.org/2015/10/30/gold-firms-hope-help-texas-build-gold-depository/
 
Tarek Saab has a golden vision for Texas.

Well, for a Texas Bullion Depository anyway.

So he, and his company — Texas Precious Metals — set up a booth at the Republican Party of Texas state convention in Dallas to tell Texans about it.
...
Saab’s company, one of many interested in being involved with the state’s plan to create a depository, proposes building a potentially $20 million facility — with no Texas tax dollars — on 40 acres of land it has in Shiner, about 250 miles south of Fort Worth.
...
“I am optimistic that the depository will be up and running at the end of this year or the beginning of next year,” Capriglione said. “The most important factor is making sure that the process is completed with considerable thought and care.”

At the depository, Texans will be able to open accounts similar to checking or savings accounts at traditional banks — and monitor them online.

For now, interested companies and Texans alike must wait for the comptroller’s office to put out a request for proposals to gain more information.

Officials have long said a depository could be in one location, or many, in Texas.

“I think the attitude here is like measure twice cut once,” said Chris Bryan, a spokesman with the comptroller’s office. “If you don’t do it right, it has the potential to be catastrophic.

“There’s a sense that when we feel we are comfortable with all the elements — transportation, security [and more] — then we can put this thing in place.”
Click to expand...

http://www.star-telegram.com/news/politics-government/article77795702.html

Better article here (a few more details):
Almost a year after Gov. Greg Abbott signed a bill into law ... the state’s Republicans got a look at one proposal for what a Texas Bullion Depository could look like.

Texas Precious Metals, a Shiner-based wholesale precious metals company, presented its proposal for the depository in a booth at the Texas Republican Party convention this week.

It’s one of several companies that responded to state Comptroller Glenn Hegar’s request for information in September. The comptroller’s office used the request to get answers to questions that lingered after the ink had dried on the bill, including concerns about how the state could best secure and transport the bullion.
...
The company has proposed investing $20 million to build a 46,473-square-foot facility with 12-inch thick reinforced concrete walls and a roof built to withstand about 395,000 pounds — the weight of a Boeing 767.

Other companies, including armored transportation firm Brink’s, say Texas does not need to build a new facility to get started on the depository outlined in the law.

“Brink’s has several secure branch locations in the State of Texas so we would look to utilize existing facilities to provide the vault storage services,” the company wrote in its response to Hegar, according to The Texas Tribune.

Saab criticized these proposals, arguing that a designated space at Brink’s does not provided the layer of self-sufficiency the law establishes for the depository.
...
Where the depository would be built is up in the air, Bryan said. Some think the depository should be in a single location that is easily accessible but secure. Others are advocating for a central branch with satellite locations throughout the state.

Anthem Vault, a Las Vegas-based company, called for “multiple vaulting locations throughout Texas to enable all Texans access to their bullion within a reasonable distance from their homes.” The Tribune reports that Anthem Vault offered to create a network of “coin shops and retail storefronts” to accept deposits to the state depository.

“There is an element of, this is the interplay between there being a secure location and ensuring that Texans have access to it,” Bryan said.

The comptroller is expected to issue a request for proposals by the end of the year that will outline the state’s specific goals for the depository.
Click to expand...

http://trailblazersblog.dallasnews....ry.html/?_ga=1.86132568.1749983098.1450848210
 
Texas Comptroller Glenn Hegar announced Wednesday that his office had picked an Austin-based company to build and operate the first state-administered gold depository in the country and that it could open as early as January.
...
The state has signed a five-year-contract with Lone Star Tangible Assets with two one-year extension options, Hegar said.

Hegar said the depository could open in Lone Star's current Austin facility as early as January. The company will also build a new vault facility in the Austin-area specifically for the Texas Bullion Depository, Hegar said. That facility could be ready as early as December 2018.

But Hegar said he expects Texans won't have to travel to Austin to open accounts at the depository.

“We envision a network of licensed and insured depository agents to help Texans sign up for our services,” Hegar said.
...
The new state depository will not be a member of COMEX, according to Matthew Ferris, chairman of Lone Star Tangible Assets. ...
Click to expand...

https://www.texastribune.org/2017/06/14/texas-taps-private-vendor-first-gold-bullion-depository/
 
November 3, 2017

Texas Bullion Depository to be Headquartered in City of Leander

(AUSTIN) — Texas Comptroller Glenn Hegar announced today that the city of Leander will be the future home of the Texas Bullion Depository.

Construction on a multi-acre site is expected to begin in early 2018. ...
...
The new facility will include space for highly secure precious metals storage and will incorporate the latest technology in security systems, including advanced perimeter defense and high-definition security cameras. The exact location of the site is being withheld for security reasons.
...
... Although the depository will be located in Texas, it will provide services nationwide in 2018, with international services to be offered in future phases. LSTA expects the brand-new, purpose-built depository facility to be completed late in 2018 or early 2019.
...
Ret. Col. Paul Hamilton, a 37-year veteran of the U.S. Air Force, leads operational security design efforts for LSTA and is responsible for the design and implementation of procedural and physical security for the Texas Bullion Depository and LSTA headquarters facility. Hamilton held several commands at Air Force installations with some of the nation’s highest security levels. His previous projects include coordinating manning requirements for the 14th Air Force and the Joint Space Operation Center, relocating a USAF Regional Headquarters operation and serving on the initial Site Activation Committee for Buckley Air Force Base.

Due to the unique nature of the facility, the city of Leander has authorized LSTA to build its own on-site firearms range and tactical training area.
...
For more information, please visit TexasBullionDepository.Gov
Click to expand...

https://comptroller.texas.gov/about/media-center/news/2017/171103-bullion.php
 
Any updates on how this is going? I can't seem to find much on how the average Texan is liking, (or not even knowing about) this. Wasn't there someone here from TX?
 
Yeah, I'm from Texas. We don't hear much about it in the news, but the Tribune did publish this back in June when it opened for business:

Texans can now store their precious metals in a publicly backed secure vault close to home, as the United States’ first state-run gold depository opens for business in Austin.
...
Any U.S. citizen hoping to use the Texas facility can set up an account online and either ship or personally deliver precious metals to the site in Austin. Customers will be charged for storage at an annual rate of 0.5 percent for deposits worth up to $2.5 million. Along with gold, the depository will accept deposits of silver, platinum, rhodium and palladium.
...
Click to expand...

https://www.texastribune.org/2018/06/06/gold-depository-texas-bullion-glenn-hegar-precious-metals/
 
Not that I have heard. They removed state sales tax on pms a while back. I don't expect much more from the local political scene.
 
...
Austin-based general contractor MHT Constructors LLC broke ground Dec. 12 on the 40,000-square-foot Texas Bullion Depository on Heritage Grove Road near U.S. Highway 183 in Leander. The depository will be operated by Lone Star Tangible Assets.

Construction is expected to wrap in late 2019. It is described as a class 3 vault, the highest level. According to LSTA Chairman Matt Ferris, the Leander depository will weigh as much as 10 NASA space shuttles and have room for up to $350 billion in gold, silver, platinum and other precious metals — more than what is held in Fort Knox, the famous U.S. Bullion Depository in Kentucky.

Ferris added in a statement that the Texas Bullion Depository could be expanded by 85,000 square feet if "market forces dictate — and we think they will."
...
Click to expand...

https://www.bizjournals.com/houston/news/2018/12/19/texas-fort-knox-dirt-turns-for-states-first.html
 
Texas passed a bill exempting bullion stored at the TBD from property taxes pending voter approval of a State Constitutional amendment:

https://legiscan.com/TX/text/HB2859/2019

I was unaware that any taxing authorities were attempting to collect ad valorem (property) taxes on bullion held there.
 
Election was yesterday. Proposition 9 barely passed with 51.x% of the vote:
Proposition 9: Authorizes the Texas Legislature to exempt from ad valorem taxation precious metal held in a precious metal depository located in the state.
Click to expand...
 
`

Wyoming Bill Would Establish Bullion Depository; Help Facilitate Transactions in Gold and Silver

"CHEYENNE, Wyo. (Feb. 12, 2020) – A bill introduced in the Wyoming House would establish a precious metals bullion depository in the state. It would not only create a safe place to store precious metals; it would also facilitate the everyday use of gold and silver in financial transactions in Wyoming and set the stage to undermine the Federal Reserve’s monopoly on money.

A coalition of nine Republicans introduced House Bill 198 (HB198) on Feb. 11. The legislation would create the Wyoming Bullion Depository.

“The depository is established to serve as the repository for and to safeguard and administer bullion and specie that may be transferred to or otherwise acquired by the state or an agency, political subdivision or another instrumentality of the state.”

Use of the Wyoming depository would not be limited to state agencies. Individuals, businesses, charities and banks could also store precious metals in the facility.

Significantly, the depository would feature a process to transfer gold or silver in depositor’s account to other account holders, individuals or businesses by check or electronic means. In practice, private individuals and entities would be able to purchase goods and services, using assets in the vault the same way they use cash today. It would essentially set the stage to establish a specie- and bullion-based bank introducing currency competition with Federal Reserve notes.

In 2018, Wyoming set the foundation for using gold and silver in everyday transactions when it enacted a law that defines gold and silver specie as legal tender and eliminated all taxes levied on it.

In 2015, Gov. Greg Abbot signed a similar bill into law creating a state gold bullion and precious metal depository in Texas. That depository received its first deposits in the summer of 2018.

The effect has been most dramatic in Utah where United Precious Metals Association (UMPA) was established after the passage of the Utah Specie Legal Tender Act and the elimination of all taxes on gold and silver. UPMA offers accounts denominated in U.S. minted gold and silver dollars. The company also recently released the “Utah Goldback.” UPMA describes it as “the first local, voluntary currency to be made of a spendable, beautiful, physical gold.”

Constitutional tender expert Professor William Greene said when people in multiple states actually start using gold and silver instead of Federal Reserve Notes, it could create a “reverse Gresham’s effect,” drive out bad money, effectively nullify the Federal Reserve, and end the federal government’s monopoly..."

.
 
Tennessee might end up with their own depository:

www.moneymetals.com

Tennessee Lawmakers Introduce "Tennessee Bullion Depository Act"

Building on the success of passing a full sales tax exemption on precious metals (HB 1874 and SB 1857) in 2022, lawmakers in Tennessee have set their sights on another pro-sound money effort: an in-state bullion depository.
www.moneymetals.com www.moneymetals.com
 
You must log in or register to reply here.
Back
Top Bottom