House File 325 - Introduced HOUSE FILE 325 BY GOLDING , CISNEROS , THOMPSON , GERHOLD , HENDERSON , SHIPLEY , BODEN , and SMITH (COMPANION TO SF 112 BY ALONS) A BILL FOR An Act relating to the establishment of a transactional 1 currency based on gold and silver held in a bullion 2 depository approved by the treasurer of state, and providing 3 fees. 4 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 5 TLSB 2553YH (2) 91 sc/ns
H.F. 325 Section 1. NEW SECTION . 12L.1 Definitions. 1 For purposes of this chapter: 2 1. Approved bullion depository means any of the following: 3 a. A bullion depository located in this state, controlled by 4 the state, and operating pursuant to regulations and safeguards 5 reasonably acceptable to the treasurer of state. 6 b. The Texas bullion depository or such other depository 7 within the United States similar in mission and operation to 8 the Texas bullion depository, provided that agreements and 9 standards reasonably acceptable to the treasurer of state 10 govern the use of the bullion depository with respect to 11 deposits from the state of Iowa or its designees. 12 2. Bullion means precious metals that are formed into 13 uniform shapes and quantities such as ingots, bars, or plates, 14 with uniform content and purity, as are suitable for or 15 customarily used in the purchase, sale, storage, transfer, and 16 delivery of bulk or wholesale transactions in precious metals. 17 3. Bullion depository means a secured physical vault 18 for the reception, authentication, storage, and security of 19 bullion. 20 4. Depository account means the rights, interests, and 21 entitlements established in favor of a depositor with respect 22 to a deposit in accordance with this chapter and rules adopted 23 under this chapter. 24 5. Depository account holder means the original depositor 25 of a depository account or a successor or assignee of the 26 depositor. 27 6. Pooled depository account means the account established 28 under section 12L.4. 29 7. Precious metal means gold or silver that bears a high 30 value-to-weight ratio relative to common industrial metals and 31 that customarily is formed into bullion or specie. 32 8. Specie means a precious metal stamped into coins of 33 uniform shape, size, design, content, and purity, suitable for 34 or customarily used as currency, a medium of exchange, or the 35 -1- LSB 2553YH (2) 91 sc/ns 1/ 7
H.F. 325 medium for purchase, sale, storage, transfer, or delivery of 1 precious metals in retail or wholesale transactions. 2 9. Transactional currency means a representation of actual 3 specie and bullion held in a depository account by a depository 4 account holder and which may be transferred by electronic 5 instruction. The representation must reflect the exact 6 fractional troy ounce measurement of physical specie or bullion 7 in the pooled depository account as provided by this chapter. 8 Sec. 2. NEW SECTION . 12L.2 Rules. 9 The treasurer of state may adopt rules pursuant to chapter 10 17A to implement this chapter, including rules to do all of the 11 following: 12 1. Ensure the security of the specie, bullion, 13 transactional currency, transactions, and related data. 14 2. Prevent fraud. 15 3. Prevent the release of data related to depository 16 accounts or depository account holders other than by order of a 17 court with proper jurisdiction. 18 Sec. 3. NEW SECTION . 12L.3 Establishment of specie and 19 transactional currency. 20 1. As authorized by Article I, section 10, of the 21 Constitution of the United States, the treasurer of state 22 shall issue specie and establish a transactional currency as 23 determined practicable. 24 2. The treasurer of state may preferentially contract with a 25 private vendor that has its principal place of business in this 26 state to establish the transactional currency or perform other 27 duties under this chapter. 28 3. In establishing the transactional currency, the 29 treasurer of state shall establish a means to ensure that a 30 person or state who holds the transactional currency may use 31 the currency as legal tender in payment of debt and readily 32 transfer or assign the transactional currency to any other 33 person or state by electronic means. 34 4. In establishing specie, the treasurer of state shall 35 -2- LSB 2553YH (2) 91 sc/ns 2/ 7
H.F. 325 exclusively authorize an approved bullion depository as the 1 states issuer and ensure that the holder of the specie may 2 use the specie as legal tender in payment of debt and that the 3 specie is readily transferable to any other person or state. 4 Sec. 4. NEW SECTION . 12L.4 Bullion depository account. 5 1. The treasurer of state, or the treasurers designee, 6 serving as trustee, shall hold in trust on behalf of the 7 transactional currency holders all specie and bullion owned or 8 purchased for such purposes. The trustee shall maintain enough 9 specie or bullion to provide for the redemption of all units of 10 the transactional currency issued but not redeemed. 11 2. The trustee shall establish an account in the approved 12 bullion depository to hold in trust as trustee on the behalf of 13 the transactional currency holders all specie and bullion owned 14 and allocated or purchased for such purposes. 15 Sec. 5. NEW SECTION . 12L.5 Purchase and issuance. 16 1. The treasurer of state shall issue transactional 17 currency to a person or a state of the United States to which 18 any of the following apply: 19 a. The person or state has made payment to the treasurer of 20 state for the purpose of a purchase of specie or bullion to be 21 represented by transactional currency and paid any fee charged 22 under section 12L.10. 23 b. The person or state designated specie or bullion held on 24 account in the approved bullion depository for the purpose of 25 being represented by transactional currency and paid any fee 26 charged under section 12L.10. 27 2. Upon receiving payment under subsection 1, paragraph a , 28 or an account holders designation and payment under subsection 29 1, paragraph b , the treasurer of state shall do all of the 30 following: 31 a. Using the money received, buy specie or bullion in the 32 number of troy ounces of precious metal equal to the number 33 of units of the transactional currency to be issued to the 34 purchaser under subsection 1. 35 -3- LSB 2553YH (2) 91 sc/ns 3/ 7
H.F. 325 b. Deposit the specie or bullion into the pooled depository 1 account for the purchaser. 2 c. Issue to the purchaser a depository account with or add 3 to an existing depository account a number of units of the 4 transactional currency equal to the amount of specie or bullion 5 that the purchase money received from the account holder would 6 buy at the market price on that date as published by the 7 approved bullion depository. 8 Sec. 6. NEW SECTION . 12L.6 Redemption of transactional 9 currency for United States dollars. 10 1. A person who holds transactional currency may present to 11 the treasurer of state any number of units of the transactional 12 currency to redeem for United States dollars. 13 2. On receipt of a persons request for redemption, the 14 treasurer of state shall do all of the following: 15 a. Sell from the specie or bullion held in the pooled 16 depository account a number of troy ounces equal to the number 17 of units of the transactional currency being redeemed. 18 b. Provide to the person an amount of United States dollars 19 equal to the amount received from the sale of specie or bullion 20 under paragraph a , less a fee charged under section 12L.10. 21 Sec. 7. NEW SECTION . 12L.7 Redemption of transactional 22 currency for specie or bullion. 23 1. Subject to section 12L.3, an account holder who holds the 24 transactional currency may present to the treasurer of state 25 any number of units of the transactional currency to redeem for 26 an equal number of troy ounces of specie or bullion from the 27 pooled depository account. 28 2. On receipt of a request for redemption, the treasurer of 29 state shall do all of the following: 30 a. Withdraw the equivalent number of troy ounces of specie 31 or bullion from the pooled depository account. 32 b. On the payment of a fee charged under section 12L.10, 33 deliver the specie or bullion as requested to the requestor. 34 Sec. 8. NEW SECTION . 12L.8 Value of transactional currency. 35 -4- LSB 2553YH (2) 91 sc/ns 4/ 7
H.F. 325 1. At the time of each transaction involving the issuance 1 or redemption of the transactional currency, the treasurer of 2 state shall determine the value of a unit of the transactional 3 currency as published by the approved bullion depository. 4 2. The value of a unit of the transactional currency 5 at the time of a transaction must be equal to the value of 6 the appropriate fraction of a troy ounce of gold or silver, 7 respectively, at the time of that transaction as published by 8 the approved bullion depository. 9 Sec. 9. NEW SECTION . 12L.9 Money and deposits held in 10 trust. 11 The treasurer of state as trustee shall hold outside 12 the state treasury on the behalf of persons who hold the 13 transactional currency money received under section 12L.5, 14 subsection 1, specie or bullion purchased and deposited in 15 the pooled depository account as provided by section 12L.5, 16 subsection 2, paragraph a , and money received from the sale of 17 specie or bullion in the pooled depository account in response 18 to a request for redemption under section 12L.6. Such money, 19 specie, and bullion is not available for appropriation by the 20 general assembly. 21 Sec. 10. NEW SECTION . 12L.10 Fees. 22 The treasurer of state may establish a fee for the issuance 23 or redemption of the transactional currency to cover the 24 treasurer of states costs in administering this chapter and 25 an industry standard merchant fee for use. Fees collected by 26 the treasurer of state under this section shall be considered 27 repayment receipts to be used for such purposes. Fees 28 collected in excess of the amount necessary for such purposes 29 shall be deposited in the general fund of the state. 30 EXPLANATION 31 The inclusion of this explanation does not constitute agreement with 32 the explanations substance by the members of the general assembly. 33 This bill requires the treasurer of state to issue specie 34 and establish a transactional currency that are usable as 35 -5- LSB 2553YH (2) 91 sc/ns 5/ 7
H.F. 325 legal tender and readily transferable. The bill permits the 1 treasurer of state to contract with a private vendor to perform 2 the treasurer of states duties and requires the treasurer of 3 state to exclusively authorize an approved bullion depository 4 as the states issuer of specie. 5 The bill requires the treasurer of state to hold all specie 6 and bullion owned or purchased for such purposes in trust for 7 the transactional currency holders and to maintain enough 8 specie or bullion to allow for the redemption of all units 9 of the transactional currency issued. The bill requires the 10 treasurer of state to create an account in the approved bullion 11 depository for all the specie and bullion. 12 Once a person or state pays the treasurer of state for specie 13 or bullion or designates specie or bullion held on account in 14 the depository for being represented by transactional currency 15 and pays a fee, the bill requires the treasurer of state to 16 issue transactional currency to that person or state and to 17 buy specie or bullion in the number of troy ounces of precious 18 metal equal to the number of units of transactional currency 19 issued to the purchaser, deposit the specie or bullion into 20 the pooled depository account for the purchaser, and issue 21 a depository account to the purchaser or update an existing 22 depository account to reflect the purchase. 23 The bill allows a person with transactional currency to 24 redeem the currency for United States dollars, specie, or 25 bullion by presenting the currency to the treasurer of state. 26 To redeem the currency for the person, the bill requires the 27 treasurer of state to sell the equivalent amount of specie 28 or bullion from the pooled depository account and provide 29 the amount received from the sale in United States dollars 30 to the person or to withdraw the specie or bullion from the 31 depository. 32 The bill requires the treasurer of state to determine 33 the value of a unit of transactional currency whenever 34 transactional currency is issued or redeemed and requires that 35 -6- LSB 2553YH (2) 91 sc/ns 6/ 7
H.F. 325 the value of a unit of transactional currency be equal to the 1 appropriate fraction of a troy ounce of gold or silver at the 2 time of that transaction as published by the approved bullion 3 depository. 4 The bill requires that specie and bullion purchased and 5 deposited into the pooled depository account and money received 6 in exchange for transactional currency or for the sale of 7 specie or bullion in response to a request for redemption be 8 held by the treasurer of state outside the state treasury and 9 provides that it is not available for appropriation by the 10 general assembly. 11 The bill allows the treasurer of state to set a fee for 12 issuing or redeeming transactional currency. The treasurer 13 of state retains the fees to administer the bill and cover 14 costs of industry standard merchant fees, with any excess to be 15 deposited in the general fund of the state. 16 -7- LSB 2553YH (2) 91 sc/ns 7/ 7