| 1 | 1 | | HOUSE BILL NO. 4086 A bill to establish and provide for the issuance of gold and silver specie and digital currency based on gold and silver; to create the office of the Michigan bullion depository in the department of treasury and prescribe its powers and duties; to provide for the powers and duties of certain state and local governmental officers and entities; to impose certain fees; to authorize the issuance of bonds, notes, and other evidences of indebtedness; to provide remedies; and to require the promulgation of rules. the people of the state of michigan enact: ARTICLE 1 GENERAL PROVISIONS Sec. 1. This act may be cited as the "Michcoin act". Sec. 3. As used in this act: (a) "Administrator" means the bullion depository administrator appointed under section 33. (b) "Bullion" means precious metals that are formed into uniform shapes and quantities such as ingots, bars, or plates, with uniform content and purity, as are suitable for or customarily used in the purchase, sale, storage, transfer, and delivery of bulk or wholesale transactions in precious metals. (c) "Business day" means a day other than a Saturday, Sunday, or banking holiday for a bank chartered under the laws of this state. (d) "Department" means the department of treasury. (e) "Deposit" means the establishment of an executory obligation of the depository to deliver to the order of the person establishing with the depository the obligation, on demand, a quantity of a specified precious metal, in bullion, specie, or a combination of bullion and specie, equal to the quantity of the same precious metal delivered by or on behalf of the depositor into the custody of either of the following: (i) The depository. (ii) A depository agent. (f) "Depositor" means a person who makes a deposit. (g) "Depository account" means the rights, interests, and entitlements established in favor of a depositor with respect to a deposit in accordance with this article and rules promulgated under this act. (h) "Depository account holder", regarding a depository account, means the original depositor or a successor or assignee of the original depositor respecting the depository account. (i) "Depository agent" means a financial institution that has entered into an agreement with the depository to provide a retail location for the provision of depository services to the general public on behalf of the depository. (j) "Depository revenues" means revenue the depository realizes from fees, charges, or other payments received in the course of depository operations. Depository revenues do not include the fee proceeds described in section 27. (k) "Depository security officer" means an individual employed under section 113. (l) "Digital currency" or "Michcoin" means the digital representation of gold and silver specie and bullion held in the pooled depository account. (m) "Financial institution" means a state or nationally chartered bank or state or federally chartered savings and loan association, savings bank, or credit union whose deposits are insured by an agency of the United States government under the laws of this state or the United States. Sec. 5. As used in this act: (a) "Michigan bullion depository" or "depository" means the office of the Michigan bullion depository created in section 31. (b) "Michigan bullion depositary fund" means the Michigan bullion depositary fund created in section 41. (c) "Person" means an individual or a partnership, corporation, limited liability company, association, governmental entity, or other legal entity. (d) "Pooled depository account" means the account in the Michigan bullion depository established under section 15. (e) "Precious metal" means a metal that bears a high value-to-weight ratio relative to common industrial metals and customarily is formed into bullion or specie. Precious metal includes gold, silver, platinum, palladium, and rhodium. (f) "Specie" means a precious metal stamped into coins of uniform shape, size, design, content, and purity, suitable for or customarily used as currency, as a medium of exchange, or as the medium for purchase, sale, storage, transfer, or delivery of precious metals in retail or wholesale transactions. Sec. 7. (1) The department shall promulgate any rules required under this act and may promulgate any other rules necessary to implement this act. (2) All rules promulgated by the department under this act must be promulgated pursuant to the administrative procedures act of 1969, 1969 PA 306, MCL 24.201 to 24.328. ARTICLE 2 GOLD AND SILVER CURRENCY Sec. 13. (1) As authorized by Section 10 of Article 1 of the Constitution of the United States, the state treasurer shall do both of the following: (a) Establish and provide for the issuance of gold and silver specie. (b) Establish and issue a digital currency based on gold and silver that represents a particular fraction of a troy ounce of gold or silver, as applicable, held in trust as provided by this article. (2) The state treasurer may contract with 1 or more private vendors to establish the digital currency under subsection (1)(b), establish a digital wallet to enable use of the digital currency as described in subsection (4), or perform other duties under this article. (3) In establishing gold and silver specie under subsection (1)(a), the state treasurer shall do both of the following: (a) Authorize the Michigan bullion depository as this state's exclusive issuer. (b) Ensure that the holder of the specie may do both of the following: (i) Use the specie as legal tender in payment of debt. (ii) Readily transfer the specie to another person. (4) In establishing the digital currency under subsection (1)(b), the state treasurer shall provide a means to ensure that a person who holds the digital currency can do both of the following: (a) Use the digital currency as legal tender in payment of debt. (b) By electronic means readily transfer or assign the digital currency to another person. Sec. 15. (1) The state treasurer, serving as trustee, or another person the state treasurer appoints to serve as trustee, shall hold in trust on behalf of the digital currency holders all gold and silver specie and bullion owned or purchased for the purposes of issuing the digital currency. The trustee shall maintain enough gold and silver specie or bullion to provide for the redemption of all units of the digital currency issued but not redeemed. (2) The trustee shall establish a pooled depository account in the Michigan bullion depository to hold in trust as trustee on behalf of the digital currency holders all gold and silver specie and bullion owned and allocated or purchased for purposes of issuing the digital currency. Sec. 17. (1) The state treasurer may issue to a person the appropriate number of units and fractional units of the digital currency when the person, together with paying any fee charged under section 27, does either of the following: (a) Makes the appropriate payment to the state treasurer for the state treasurer to purchase gold or silver specie or bullion for the pooled depository account to be represented by the digital currency. (b) Designates gold or silver specie or bullion held in a depository account with the Michigan bullion depository to be transferred to the pooled depository account for the purpose of being represented by the digital currency. (2) On receiving payment under subsection (1)(a), the state treasurer shall do all of the following: (a) Using the money received, purchase gold or silver specie or bullion in the number of fractional troy ounces equal to the number of units or fractional units of the digital currency to be issued to the person under subsection (1). (b) Deposit for the person the gold or silver specie or bullion purchased under subdivision (a) into the pooled depository account. (c) Issue to the person a digital currency account with the Michigan bullion depository, or, if applicable, add to an existing digital currency account held by the person with the depository, the number of units or fractional units of the digital currency equal to the amount of specie or bullion that the money received from the person would buy on the date the payment is received. (3) On receiving a person's designation under subsection (1)(b), the state treasurer shall do all of the following: (a) Withdraw from the person's depository account with the Michigan bullion depository the amount of gold or silver specie or bullion designated and deposit the specie or bullion for the person to the pooled depository account. (b) Issue to the person a digital currency account with the Michigan bullion depository, or, if applicable, add to an existing digital currency account held by the person with the depository, the number of units or fractional units of the digital currency equal to the amount of gold or silver specie or bullion that the pooled depository account received from the person on that date. Sec. 19. (1) A person that holds digital currency may present to the state treasurer any number of units or fractional units of the digital currency to redeem for United States dollars. (2) On receipt of a person's request for redemption under subsection (1), the state treasurer shall do both of the following: (a) Sell from the gold or silver specie or bullion held in the pooled depository account a number of fractional troy ounces equal to the number of units or fractional units of the digital currency being redeemed. (b) Provide to the person an amount of United States dollars equal to the amount received from the sale of the gold and silver specie or bullion under subdivision (a), less the amount of any fee charged under section 27. Sec. 21. (1) A person that holds digital currency may present to the state treasurer any number of units or fractional units of the digital currency to redeem for an equal fractional number of troy ounces of gold or silver specie or bullion from the pooled depository account. (2) On receipt of a person's request for redemption under subsection (1), the state treasurer shall do both of the following: (a) Withdraw the equivalent fractional number of troy ounces of gold or silver specie or bullion from the pooled depository account. (b) On the payment of the fee charged under section 27, deliver the gold or silver specie or bullion to the person as requested. Sec. 23. (1) At the time of each transaction involving the issuance or redemption of the digital currency, the state treasurer shall determine the value of a unit of the digital currency. (2) The value of a unit of the digital currency at the time of a transaction must be equal to the value of the appropriate fraction of a troy ounce of gold or silver, respectively, at the time of the transaction as published by the Michigan bullion depository. Sec. 25. Money received under section 17(1), gold or silver specie or bullion purchased or deposited in the pooled depository account under section 17(2) or (3), and money received from the sale of gold or silver specie or bullion in the pooled depository account in response to a request for redemption under section 19 are both of the following: (a) Held by the state treasurer as trustee outside the state treasury on behalf of persons that hold the digital currency. (b) Not available for legislative appropriation. Sec. 27. The state treasurer may establish a fee for the issuance or redemption of the digital currency to cover the state treasurer's costs in administering this article and an industry standard merchant fee for use. The state treasurer shall deposit fee proceeds received under this section as follows: (a) 30% of the proceeds must be deposited in the general fund. (b) The remainder of the proceeds must be deposited in the Michigan bullion depositary fund. Sec. 29. The digital currency issued under this article shall be known as "Michcoin". ARTICLE 3 MICHIGAN BULLION DEPOSITORY PART 1 ESTABLISHMENT AND ADMINISTRATION OF THE MICHIGAN BULLION DEPOSITORY Sec. 31. For this state to establish and issue gold and silver specie and a digital currency based on gold and silver, as described in section 13, the office of the Michigan bullion depository is created in the department. The depository shall serve as the custodian, guardian, and administrator of certain bullion and specie that are transferred to or otherwise acquired by this state. Sec. 33. (1) On creation of the depository under section 31, the state treasurer shall appoint a bullion depository administrator to oversee the depository. The bullion depository administrator shall do both of the following: (a) Administer, supervise, and direct the operations and affairs of the depository and depository agents. (b) Liaise with the state treasurer and the department to ensure that each transaction with the depository that involves state money, that involves an agency, a political subdivision, or another instrumentality of this state, or that involves a private person is planned, administered, and executed in a manner to achieve the purposes of this act. (2) The administrator may appoint or employ, subject to the approval of the state treasurer, a deputy administrator or other subordinate officers or employees as necessary and appropriate to the efficient administration of the depository. Sec. 35. The depository may do all of the following: (a) Enter into transactions and relationships with bullion banks, depositories, dealers, central banks, sovereign wealth funds, financial institutions, international nongovernmental organizations, and other persons, located inside or outside of this state or inside or outside of the United States, as the state treasurer determines to be prudent and suitable to facilitate the operations of the depository and to further the purposes of this act. (b) Advertise and promote the depository in any available media. (c) Issue, sell, license for sale, or obtain a license to sell promotional items approved by the administrator to further the purposes of this act and to promote the depository. The depository may set commercially reasonable prices for items licensed or sold under this subdivision. (d) By purchase, lease, donation, or other means, acquire real property necessary for 1 or more buildings to operate the depository on terms and conditions and in a manner the depository considers proper. (e) Take any other action authorized by this act or considered necessary by the depository to achieve the purposes of this act. Sec. 37. The depository may not take any of the following actions, and any attempt by the depository to take any of the following actions is void and of no force or effect: (a) Entering into a precious metals leasing, sale-leaseback, forward transaction, swap transaction, future transaction, index transaction, or option on or other derivative of any of those, whether in the nature of a cap transaction, floor transaction, collar transaction, repurchase transaction, reverse repurchase transaction, buy-and-sell-back transaction, securities lending transaction, or other financial instrument or interest intended to or having the effect of hedging or leveraging the depository's holdings of precious metals, including any option with respect to any of these transactions, or any combination of these transactions, except that the limitation provided by this subdivision does not apply to a transaction entered into to limit the depository's exposure to postsignature price risks associated with executory agreements to purchase or sell precious metals in the ordinary course of depository operations and does not apply to policies of insurance purchased to insure against ordinary casualty risks such as theft, damage or destruction, loss during shipment, or similar risks. (b) Crediting the depository account balances of a depository account holder, or disposing of any precious metal, if to do so would cause the aggregate depository account balances with respect to any precious metal represented by all depository accounts to exceed the aggregate quantities of such precious metal held by or for the benefit of the depository and the depository's depository agents. (c) Entering into or maintaining a deposit, trust, or similar relationship for the custody of precious metals by a third party outside this state, directly or indirectly, for the account or benefit of the depository if either of the following applies: (i) The custody or intermediary arrangements do not meet the department's standards of safety, security, and liquidity established by rule. (ii) Suitable alternate arrangements for physical custody of the precious metals inside this state have been established by rule and are available. This subparagraph does not restrict relationships that are incidental to the performance of or preparation for purchase and sale transactions with counterparties located outside of this state. (d) Extending credit to a person, including credit secured by a depository account or other assets, except an extension of credit incidental to the performance of the functions and responsibilities otherwise provided in this act. (e) Engaging in a business or activity that, if conducted by a private person, would be subject to regulation in this state as a banking or savings and loan function. Sec. 39. (1) None of the following are available for legislative appropriation: (a) A deposit to the depository. (b) Bullion or specie held by or on behalf of the depository or a depository agent. (c) Bullion or specie in transit to or from the depository or a depository agent. (d) A receivable or other amount owed to the depository in settlement of a transaction in bullion or specie. (2) Bullion, specie, and other assets described by subsection (1) are subject to redemption, liquidation, or transfer exclusively to discharge an obligation of the depository to depository account holders, depository agents, bullion banks, financial institutions, or other intermediaries in accordance with this act and rules adopted under this act. (3) Depository revenues must be deposited in the Michigan bullion depositary fund. Sec. 41. (1) The Michigan bullion depositary fund is created in the state treasury. (2) The state treasurer shall deposit money and other assets received under section 27(b) or 39(3) or from any other source in the Michigan bullion depositary fund. The state treasurer shall direct the investment of money in the Michigan bullion depositary fund and credit interest and earnings from the investments to the Michigan bullion depositary fund. (3) Money in the Michigan bullion depositary fund at the close of the fiscal year remains in the Michigan bullion depositary fund and does not lapse to the general fund. (4) The department is the administrator of the fund for audits of the fund. (5) The department shall expend money from the Michigan bullion depositary fund on appropriation, only for 1 or more of the following purposes: (a) The administration of this act. (b) The operation of the depository. (c) The establishment and issuance of gold and silver specie and a digital currency based on gold and silver under article 2. (d) To pay private vendors and depository agents. (e) To employ or establish a law enforcement agency to employ depository security officers under part 6. (f) To otherwise carry out the purposes of this act. Sec. 43. The department, in consultation with the depository, shall promulgate rules that do both of the following: (a) Ensure compliance with applicable federal and state law. (b) Protect the interests of all of the following: (i) The depository. (ii) Depository account holders. (iii) This state and the agencies, political subdivisions, and instrumentalities of this state. (iv) The public at large. PART 2 DEPOSITORY ACCOUNTS Sec. 51. The depository may receive a deposit of bullion or specie from or on behalf of a person acting in the person's own right, as trustee, or in another fiduciary capacity, in accordance with this act and rules promulgated by the department under this act. Sec. 53. (1) A person may invest the person's money in a depository account by purchasing precious metals and depositing the precious metals with the depository or a depository agent. (2) To establish a depository account, a depositor must contract with the depository for a depository account. The contract must specify both of the following: (a) The terms applicable to the account, including any special terms. (b) The conditions on which withdrawals or deliveries with respect to the account may be made. (3) The execution of a contract for a depository account described by this section may be made, as prescribed by rules adopted under this act, by electronic or digital transmission. (4) The depository shall hold the contract for a depository account in the records pertaining to the account. (5) A contract for a depository account executed by a depositor and the depository is considered a contract in writing for all purposes, and may be evidenced by 1 or more agreements, deposit receipts, signature cards, amendment notices, or other documentation as provided by law. (6) The depository and the depository account holder may amend a contract for a depository account by agreement, or the depository may amend the deposit contract by providing written notice of the amendment to the account holder, separately or as an enclosure with or part of the account holder's statement of account or passbook. The depository may provide the written notice electronically. The written notice of the amendment from the depository must include the text and effective date of the amendment. The effective date may not be earlier than the thirtieth day after the date the notice is sent, unless otherwise provided by rules promulgated under this act. Sec. 55. (1) The depository shall record the amount of precious metals a person deposits, regardless of form, in units of troy ounces pure, and the records must also specify the type and quantity of each precious metal deposited. (2) The state treasurer shall adopt standards by which the quantities of precious metals deposited are credited to a depositor's depository account by reference to the particular form in which the precious metals were deposited, classified by mint, denomination, weight, assay mark, or other indicator, as applicable. The standards must conform to applicable national and international standards of weights and measures. (3) The state treasurer may, if the state treasurer determines it necessary, restrict the form in which deposits of precious metals may be made. (4) The depository shall adjust each depository account balance to reflect additions to or withdrawals or deliveries from the account. Sec. 57. (1) The depository shall deliver any precious metal held by or on behalf of the depository in bullion, specie, or a combination of bullion and specie, on the order of a depository account holder, in a quantity of that precious metal as is available in the depository account holder's depository account. (2) The depository shall make a delivery described by subsection (1) on demand by the presentment of a written demand or digital electronic instruction to the depository or a depository agent. The state treasurer shall prescribe the forms, standards, and processes through which an order for delivery on demand may be made, presented, and honored. (3) The depository shall make a delivery at the depository's settlement facility designated by the state treasurer, shipping to an address specified by the account holder, or, at the depository's discretion, at a facility of a depository agent at which presentment is made, not later than 10 business days after the date of presentment. Sec. 59. (1) In accordance with rules promulgated under this act, a depository account holder may transfer any portion of the balance of the holder's depository account by written demand or digital electronic instruction to another person. (2) The depository shall adjust the depository account balances of the depository accounts to reflect a transfer transaction between depository account holders on presentment of the written demand or other instruction by reducing the payor's depository account balance and increasing the depository account balance of the payee accordingly. (3) If a depository account holder transfers to a payee who is not a depository account holder any portion of the balance of the depository account holder's depository account, the depository shall, if the payee is otherwise eligible to open a depository account under applicable laws and depository policy, allow the payee to establish a depository account. The depository shall credit a newly established account on behalf of the payee and shall debit the payor's account accordingly. Sec. 61. The state treasurer may establish fees, service charges, and penalties to be charged a depository account holder for a service or activity regarding a depository account, including a fee for an overdraft, an insufficient fund check or draft, or a stop payment order. The state treasurer may waive any fees, service charges, or penalties established under this section. Sec. 63. The depository shall not pay any of the following on a depository account: (a) Interest. (b) An amount in the nature of interest. (c) A fee or other payment for the use or forbearance of use of money, bullion, specie, or precious metals deposited to a depository account. Sec. 65. Unless the depository acknowledges in writing a pledge of a depository account, the depository may treat the holder of record of the account as the owner of the account for all purposes and without regard to a notice to the contrary. Sec. 67. (1) A depository account may be transferred on the books of the depository only on presentation to the depository of both of the following: (a) Evidence of transfer satisfactory to the depository. (b) An application for the transfer submitted by the person to whom the depository account is to be transferred. (2) A person to whom a depository account is to be transferred must accept the transferred account subject to the terms of the deposit contract, this act, and rules promulgated under this act. Sec. 69. (1) Without the need of any further agreement or pledge, the depository has a lien on each depository account owned by a depository account holder to secure any fees, charges, or other obligations owed or that may become owed to the depository in connection with any of the depository account holder's depository accounts as provided by the terms of the depository account holder's applicable depository account contract. (2) On default in the payment or in the satisfaction of a depository account holder's obligation, the depository, without notice to or consent of the depository account holder, may transfer on the depository's books all or part of the balance of a depository account holder's depository account to the extent necessary to pay or satisfy the obligation, as determined by reference to the exchange rates applicable at the time of the transfer. (3) The depository by written instrument may waive wholly or partly the depository's lien on a depository account. (4) Subject to a lien created as provided by this section, the depository shall recognize the lawful pledge to a third party by a depository account holder of the depository account holder's rights, interests, and entitlements in and to a depository account as an intangible asset. On the satisfaction of other requirements of law in respect of the perfection and enforcement of a pledge of that type, the depository shall take all steps reasonably necessary and appropriate to effectuate on the depository's books any transfer of a depository account or of all or part of a depository account balance to the account of the secured party on the successful enforcement of the pledge. Sec. 71. (1) Unless a term of the depository account provides otherwise, a person on whose signature precious metals may be withdrawn from a depository account that is jointly held in the names of 2 or more persons may, by a signed pledge, pledge and transfer to the depository or to a third party all or part of the account. (2) A pledge made as described in subsection (1) does not sever or terminate the joint and survivorship ownership of the account, to the extent applicable to the account before the pledge. Sec. 73. (1) The depository or a depository agent may accept a depository account in the name of a fiduciary, including an administrator, executor, custodian, guardian, or trustee, for a named beneficiary. (2) A fiduciary may open, add to, or withdraw precious metals from an account described in subsection (1). (3) Except as otherwise provided by law, a payment or delivery to a fiduciary or an acquittance signed by the fiduciary to whom a payment or delivery is made is a discharge of the depository for the payment or delivery. (4) After an individual who holds a depository account in a fiduciary capacity dies, the depository may pay or deliver to the beneficiary of the account the quantity of precious metals represented by the balance in the depository account, plus other rights relating to the depository account, wholly or partly, if the depository does not receive written notice or order of the probate court of either of the following: (a) A revocation or termination of the fiduciary relationship. (b) Any other disposition of the beneficial estate. (5) The depository does not have any further liability for a payment made or right delivered under subsection (4). Sec. 75. (1) If the depository opens a depository account for a person claiming to be the trustee for another person and the depository does not have any other notice of the existence or terms of the trust other than a written claim against the account, both of the following apply: (a) The person claiming to be the trustee, on the person's signature, may withdraw precious metals from the account. (b) If the person claiming to be the trustee dies, the depository may pay or deliver the quantity of precious metals represented by the balance in the account to the person for whom the account was opened. (2) The depository has no further liability for a payment or delivery made as provided in subsection (1). Sec. 77. (1) The depository shall recognize the authority of an attorney-in-fact authorized in writing by a depository account holder to manage or withdraw precious metals from the depository account holder's depository account until the depository receives written or actual notice of the revocation of that authority. (2) For purposes of this section, written notice of the death or adjudication of incompetency of a depository account holder is considered to be written notice of revocation of the authority of the account holder's attorney-in-fact. Sec. 79. The state treasurer shall establish the references by which the official exchange rate for pricing precious metals transactions in terms of United States dollars or other currency must be established at the time of a depository transaction. The state treasurer shall establish procedures and facilities through which the rates are made discoverable at all reasonable times by system participants, both on a real-time basis and retrospectively. PART 3 CIVIL ACTIONS AND OTHER MATTERS Sec. 81. (1) A cause of action for denial of deposit liability on a depository account contract without a maturity date does not accrue until the depository has denied liability and given notice of the denial to the depository account holder. (2) The depository's act of furnishing an account statement or passbook, whether in physical, digital, or electronic form, constitutes a denial of liability and the giving of such notice as to any amount not shown on the statement or passbook. (3) The depository's sovereign immunity from suit is waived for an action brought by a depositor for the denial of deposit liability. (4) The depository's liability for a denial of deposit liability is limited to the amount on deposit for which liability was denied. A depositor may not recover consequential damages, exemplary damages, pre- or post-judgment interest, costs, or attorney fees. (5) A suit authorized by this section must be brought in the court of claims. (6) A suit authorized by this section must be brought before the expiration of 1 year after the date the cause of action accrues or the suit is barred. Sec. 83. (1) A purported confiscation, requisition, seizure, or other attempt to control the ownership, disposition, or proceeds of a withdrawal, transfer, liquidation, or settlement of a depository account, including the precious metals represented by the balance of a depository account, if effected by a governmental or quasi-governmental authority other than an authority of this state or by a financial institution or other person acting on behalf of or pursuant to a directive or authorization issued by a governmental or quasi-governmental authority other than an authority of this state, in the course of a generalized declaration of illegality or emergency relating to the ownership, possession, or disposition of 1 or more precious metals, contracts, or other rights to the precious metals or contracts or derivatives of the ownership, possession, disposition, contracts, or other rights, is void and of no force or effect. (2) If the depository receives notice of a transaction described by subsection (1), with respect to all or any portion of the balance of a depository account, all of the following requirements apply: (a) The depository shall not recognize the governmental or quasi-governmental authority, financial institution, or other person acting as the lawful successor of the registered holder of the depository account in question. (b) The depository shall suspend withdrawal privileges associated with the balances of the depository account until the matter is resolved. (c) The depository shall refer the matter to the attorney general for resolution. The attorney general may take any action necessary to resolve the matter, including, but not limited to, bringing an action to obtain a declaratory judgment regarding the matter. (d) The depository shall comply with the resolution determined by the attorney general under subdivision (c). PART 4 depository agents Sec. 91. The depository may use private, independently managed financial institutions to provide retail locations for the provision of depository services to the public on behalf of the depository. Sec. 93. The department shall promulgate rules that require a depository agent to maintain suitable systems and processes for electronic information sharing and communication with the department and the depository to ensure that all transactions effected on behalf of the depository are reported to and integrated into the depository's records not later than 11:59:59 p.m. on the date of each transaction. Sec. 95. A depository agent shall submit monthly, quarterly, and annual reports of all depository transactions not later than the fifteenth day of the month following the expiration of the period with respect to which such report is submitted. The report must contain information and be in a form and format as prescribed by the department. PART 5 RECORDS AND REPORTING Sec. 101. The state treasurer shall establish procedures and requirements for the depository and depository agents designed to minimize the burden to system participants of accounting for and reporting taxable gains and losses arising out of depository transactions as denominated in United States dollars or another currency. Sec. 103. (1) All of the following records are confidential and exempt from disclosure under the freedom of information act, 1976 PA 442, MCL 15.231 to 15.246: (a) Records relating to individual depository accounts or depository account holders, including current, former, or prospective depository account holders, that are in the custody of the depository or a vendor performing services related to the depository. (b) Records and other information related to the security of the depository. (c) Records related to the method of setting the depository's fees, service charges, penalties, and other charges or payments. (d) Commercial or financial information that would cause substantial competitive harm to the depository, including operational or other information that would give advantage to competitors or bidders. (2) Notwithstanding subsection (1), depository account information may be disclosed as follows: (a) To a depository account holder regarding the depository account holder's account. (b) To a state or federal agency as required by applicable law. (c) To a vendor providing services to the depository. (d) In response to a subpoena issued under applicable law. (e) If compiled as collective information that does not include any identifying information about a person. (f) As otherwise permitted by the depository account agreement applicable to a depository account holder's account. Sec. 105. The state treasurer shall submit to the governor, the senate and house fiscal agencies, the senate majority leader, the senate minority leader, the speaker of the house of representatives, the minority leader of the house of representatives, and each member of the senate and house of representatives appropriations committees a report on the status, condition, operations, and prospects for the depository and depository participation each year not later than September 30. PART 6 DEPOSITORY SECURITY OFFICERS Sec. 111. As used in this part: (a) "Commission" means the Michigan commission on law enforcement standards created under section 3 of the Michigan commission on law enforcement standards act, MCL 28.603. (b) "Law enforcement officer" means that term as defined in section 2 of the Michigan commission on law enforcement standards act, MCL 28.602. (c) "Michigan commission on law enforcement standards act" means the Michigan commission on law enforcement standards act, 1965 PA 203, MCL 28.601 to 28.615. Sec. 113. (1) Subject to the approval of the state treasurer and subsection (2), the depository may partner with a law enforcement agency to employ law enforcement officers as depository security officers to provide security services and perform other law enforcement activities for the depository. (2) To qualify for employment as a depository security officer, an individual must meet all of the following criteria: (a) Comply with all of the licensure requirements under the Michigan commission on law enforcement standards act. (b) Be licensed by the commission under the Michigan commission on law enforcement standards act. (c) Successfully complete training required by the commission under the Michigan commission on law enforcement standards act. Sec. 115. In performing law enforcement activities under this act, a depository security officer is vested with the powers, privileges, prerogatives, and immunities conferred on law enforcement officers under the laws of this state. Sec. 117. A depository security officer may do all of the following: (a) Perform security services for the depository. (b) Exercise the authority and all the powers of a law enforcement officer with respect to offenses related to the depository or its operations or property. (c) Enforce the policies and procedures of the depository. |
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| 19 | 19 | | |
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| 21 | 21 | | |
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| 22 | 22 | | |
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| 23 | 23 | | HOUSE BILL NO. 4086 |
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| 24 | 24 | | |
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| 25 | 25 | | |
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| 26 | 26 | | |
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| 27 | 27 | | A bill to establish and provide for the issuance of gold and silver specie and digital currency based on gold and silver; to create the office of the Michigan bullion depository in the department of treasury and prescribe its powers and duties; to provide for the powers and duties of certain state and local governmental officers and entities; to impose certain fees; to authorize the issuance of bonds, notes, and other evidences of indebtedness; to provide remedies; and to require the promulgation of rules. |
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| 28 | 28 | | |
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| 29 | 29 | | the people of the state of michigan enact: |
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| 30 | 30 | | |
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| 31 | 31 | | ARTICLE 1 |
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| 32 | 32 | | |
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| 33 | 33 | | GENERAL PROVISIONS |
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| 34 | 34 | | |
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| 35 | 35 | | Sec. 1. This act may be cited as the "Michcoin act". |
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| 36 | 36 | | |
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| 37 | 37 | | Sec. 3. As used in this act: |
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| 38 | 38 | | |
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| 39 | 39 | | (a) "Administrator" means the bullion depository administrator appointed under section 33. |
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| 40 | 40 | | |
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| 41 | 41 | | (b) "Bullion" means precious metals that are formed into uniform shapes and quantities such as ingots, bars, or plates, with uniform content and purity, as are suitable for or customarily used in the purchase, sale, storage, transfer, and delivery of bulk or wholesale transactions in precious metals. |
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| 42 | 42 | | |
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| 43 | 43 | | (c) "Business day" means a day other than a Saturday, Sunday, or banking holiday for a bank chartered under the laws of this state. |
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| 44 | 44 | | |
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| 45 | 45 | | (d) "Department" means the department of treasury. |
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| 46 | 46 | | |
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| 47 | 47 | | (e) "Deposit" means the establishment of an executory obligation of the depository to deliver to the order of the person establishing with the depository the obligation, on demand, a quantity of a specified precious metal, in bullion, specie, or a combination of bullion and specie, equal to the quantity of the same precious metal delivered by or on behalf of the depositor into the custody of either of the following: |
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| 48 | 48 | | |
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| 49 | 49 | | (i) The depository. |
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| 50 | 50 | | |
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| 51 | 51 | | (ii) A depository agent. |
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| 52 | 52 | | |
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| 53 | 53 | | (f) "Depositor" means a person who makes a deposit. |
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| 54 | 54 | | |
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| 55 | 55 | | (g) "Depository account" means the rights, interests, and entitlements established in favor of a depositor with respect to a deposit in accordance with this article and rules promulgated under this act. |
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| 56 | 56 | | |
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| 57 | 57 | | (h) "Depository account holder", regarding a depository account, means the original depositor or a successor or assignee of the original depositor respecting the depository account. |
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| 58 | 58 | | |
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| 59 | 59 | | (i) "Depository agent" means a financial institution that has entered into an agreement with the depository to provide a retail location for the provision of depository services to the general public on behalf of the depository. |
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| 60 | 60 | | |
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| 61 | 61 | | (j) "Depository revenues" means revenue the depository realizes from fees, charges, or other payments received in the course of depository operations. Depository revenues do not include the fee proceeds described in section 27. |
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| 62 | 62 | | |
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| 63 | 63 | | (k) "Depository security officer" means an individual employed under section 113. |
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| 64 | 64 | | |
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| 65 | 65 | | (l) "Digital currency" or "Michcoin" means the digital representation of gold and silver specie and bullion held in the pooled depository account. |
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| 66 | 66 | | |
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| 67 | 67 | | (m) "Financial institution" means a state or nationally chartered bank or state or federally chartered savings and loan association, savings bank, or credit union whose deposits are insured by an agency of the United States government under the laws of this state or the United States. |
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| 68 | 68 | | |
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| 69 | 69 | | Sec. 5. As used in this act: |
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| 70 | 70 | | |
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| 71 | 71 | | (a) "Michigan bullion depository" or "depository" means the office of the Michigan bullion depository created in section 31. |
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| 72 | 72 | | |
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| 73 | 73 | | (b) "Michigan bullion depositary fund" means the Michigan bullion depositary fund created in section 41. |
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| 74 | 74 | | |
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| 75 | 75 | | (c) "Person" means an individual or a partnership, corporation, limited liability company, association, governmental entity, or other legal entity. |
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| 76 | 76 | | |
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| 77 | 77 | | (d) "Pooled depository account" means the account in the Michigan bullion depository established under section 15. |
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| 78 | 78 | | |
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| 79 | 79 | | (e) "Precious metal" means a metal that bears a high value-to-weight ratio relative to common industrial metals and customarily is formed into bullion or specie. Precious metal includes gold, silver, platinum, palladium, and rhodium. |
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| 80 | 80 | | |
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| 81 | 81 | | (f) "Specie" means a precious metal stamped into coins of uniform shape, size, design, content, and purity, suitable for or customarily used as currency, as a medium of exchange, or as the medium for purchase, sale, storage, transfer, or delivery of precious metals in retail or wholesale transactions. |
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| 82 | 82 | | |
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| 83 | 83 | | Sec. 7. (1) The department shall promulgate any rules required under this act and may promulgate any other rules necessary to implement this act. |
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| 84 | 84 | | |
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| 85 | 85 | | (2) All rules promulgated by the department under this act must be promulgated pursuant to the administrative procedures act of 1969, 1969 PA 306, MCL 24.201 to 24.328. |
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| 86 | 86 | | |
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| 87 | 87 | | ARTICLE 2 |
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| 88 | 88 | | |
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| 89 | 89 | | GOLD AND SILVER CURRENCY |
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| 90 | 90 | | |
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| 91 | 91 | | Sec. 13. (1) As authorized by Section 10 of Article 1 of the Constitution of the United States, the state treasurer shall do both of the following: |
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| 92 | 92 | | |
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| 93 | 93 | | (a) Establish and provide for the issuance of gold and silver specie. |
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| 94 | 94 | | |
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| 95 | 95 | | (b) Establish and issue a digital currency based on gold and silver that represents a particular fraction of a troy ounce of gold or silver, as applicable, held in trust as provided by this article. |
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| 96 | 96 | | |
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| 97 | 97 | | (2) The state treasurer may contract with 1 or more private vendors to establish the digital currency under subsection (1)(b), establish a digital wallet to enable use of the digital currency as described in subsection (4), or perform other duties under this article. |
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| 98 | 98 | | |
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| 99 | 99 | | (3) In establishing gold and silver specie under subsection (1)(a), the state treasurer shall do both of the following: |
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| 100 | 100 | | |
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| 101 | 101 | | (a) Authorize the Michigan bullion depository as this state's exclusive issuer. |
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| 102 | 102 | | |
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| 103 | 103 | | (b) Ensure that the holder of the specie may do both of the following: |
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| 104 | 104 | | |
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| 105 | 105 | | (i) Use the specie as legal tender in payment of debt. |
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| 106 | 106 | | |
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| 107 | 107 | | (ii) Readily transfer the specie to another person. |
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| 108 | 108 | | |
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| 109 | 109 | | (4) In establishing the digital currency under subsection (1)(b), the state treasurer shall provide a means to ensure that a person who holds the digital currency can do both of the following: |
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| 110 | 110 | | |
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| 111 | 111 | | (a) Use the digital currency as legal tender in payment of debt. |
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| 112 | 112 | | |
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| 113 | 113 | | (b) By electronic means readily transfer or assign the digital currency to another person. |
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| 114 | 114 | | |
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| 115 | 115 | | Sec. 15. (1) The state treasurer, serving as trustee, or another person the state treasurer appoints to serve as trustee, shall hold in trust on behalf of the digital currency holders all gold and silver specie and bullion owned or purchased for the purposes of issuing the digital currency. The trustee shall maintain enough gold and silver specie or bullion to provide for the redemption of all units of the digital currency issued but not redeemed. |
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| 116 | 116 | | |
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| 117 | 117 | | (2) The trustee shall establish a pooled depository account in the Michigan bullion depository to hold in trust as trustee on behalf of the digital currency holders all gold and silver specie and bullion owned and allocated or purchased for purposes of issuing the digital currency. |
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| 118 | 118 | | |
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| 119 | 119 | | Sec. 17. (1) The state treasurer may issue to a person the appropriate number of units and fractional units of the digital currency when the person, together with paying any fee charged under section 27, does either of the following: |
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| 120 | 120 | | |
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| 121 | 121 | | (a) Makes the appropriate payment to the state treasurer for the state treasurer to purchase gold or silver specie or bullion for the pooled depository account to be represented by the digital currency. |
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| 122 | 122 | | |
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| 123 | 123 | | (b) Designates gold or silver specie or bullion held in a depository account with the Michigan bullion depository to be transferred to the pooled depository account for the purpose of being represented by the digital currency. |
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| 124 | 124 | | |
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| 125 | 125 | | (2) On receiving payment under subsection (1)(a), the state treasurer shall do all of the following: |
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| 126 | 126 | | |
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| 127 | 127 | | (a) Using the money received, purchase gold or silver specie or bullion in the number of fractional troy ounces equal to the number of units or fractional units of the digital currency to be issued to the person under subsection (1). |
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| 128 | 128 | | |
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| 129 | 129 | | (b) Deposit for the person the gold or silver specie or bullion purchased under subdivision (a) into the pooled depository account. |
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| 130 | 130 | | |
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| 131 | 131 | | (c) Issue to the person a digital currency account with the Michigan bullion depository, or, if applicable, add to an existing digital currency account held by the person with the depository, the number of units or fractional units of the digital currency equal to the amount of specie or bullion that the money received from the person would buy on the date the payment is received. |
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| 132 | 132 | | |
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| 133 | 133 | | (3) On receiving a person's designation under subsection (1)(b), the state treasurer shall do all of the following: |
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| 134 | 134 | | |
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| 135 | 135 | | (a) Withdraw from the person's depository account with the Michigan bullion depository the amount of gold or silver specie or bullion designated and deposit the specie or bullion for the person to the pooled depository account. |
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| 136 | 136 | | |
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| 137 | 137 | | (b) Issue to the person a digital currency account with the Michigan bullion depository, or, if applicable, add to an existing digital currency account held by the person with the depository, the number of units or fractional units of the digital currency equal to the amount of gold or silver specie or bullion that the pooled depository account received from the person on that date. |
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| 138 | 138 | | |
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| 139 | 139 | | Sec. 19. (1) A person that holds digital currency may present to the state treasurer any number of units or fractional units of the digital currency to redeem for United States dollars. |
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| 140 | 140 | | |
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| 141 | 141 | | (2) On receipt of a person's request for redemption under subsection (1), the state treasurer shall do both of the following: |
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| 142 | 142 | | |
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| 143 | 143 | | (a) Sell from the gold or silver specie or bullion held in the pooled depository account a number of fractional troy ounces equal to the number of units or fractional units of the digital currency being redeemed. |
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| 144 | 144 | | |
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| 145 | 145 | | (b) Provide to the person an amount of United States dollars equal to the amount received from the sale of the gold and silver specie or bullion under subdivision (a), less the amount of any fee charged under section 27. |
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| 146 | 146 | | |
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| 147 | 147 | | Sec. 21. (1) A person that holds digital currency may present to the state treasurer any number of units or fractional units of the digital currency to redeem for an equal fractional number of troy ounces of gold or silver specie or bullion from the pooled depository account. |
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| 148 | 148 | | |
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| 149 | 149 | | (2) On receipt of a person's request for redemption under subsection (1), the state treasurer shall do both of the following: |
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| 150 | 150 | | |
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| 151 | 151 | | (a) Withdraw the equivalent fractional number of troy ounces of gold or silver specie or bullion from the pooled depository account. |
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| 152 | 152 | | |
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| 153 | 153 | | (b) On the payment of the fee charged under section 27, deliver the gold or silver specie or bullion to the person as requested. |
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| 154 | 154 | | |
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| 155 | 155 | | Sec. 23. (1) At the time of each transaction involving the issuance or redemption of the digital currency, the state treasurer shall determine the value of a unit of the digital currency. |
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| 156 | 156 | | |
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| 157 | 157 | | (2) The value of a unit of the digital currency at the time of a transaction must be equal to the value of the appropriate fraction of a troy ounce of gold or silver, respectively, at the time of the transaction as published by the Michigan bullion depository. |
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| 158 | 158 | | |
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| 159 | 159 | | Sec. 25. Money received under section 17(1), gold or silver specie or bullion purchased or deposited in the pooled depository account under section 17(2) or (3), and money received from the sale of gold or silver specie or bullion in the pooled depository account in response to a request for redemption under section 19 are both of the following: |
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| 160 | 160 | | |
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| 161 | 161 | | (a) Held by the state treasurer as trustee outside the state treasury on behalf of persons that hold the digital currency. |
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| 162 | 162 | | |
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| 163 | 163 | | (b) Not available for legislative appropriation. |
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| 164 | 164 | | |
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| 165 | 165 | | Sec. 27. The state treasurer may establish a fee for the issuance or redemption of the digital currency to cover the state treasurer's costs in administering this article and an industry standard merchant fee for use. The state treasurer shall deposit fee proceeds received under this section as follows: |
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| 166 | 166 | | |
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| 167 | 167 | | (a) 30% of the proceeds must be deposited in the general fund. |
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| 168 | 168 | | |
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| 169 | 169 | | (b) The remainder of the proceeds must be deposited in the Michigan bullion depositary fund. |
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| 170 | 170 | | |
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| 171 | 171 | | Sec. 29. The digital currency issued under this article shall be known as "Michcoin". |
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| 172 | 172 | | |
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| 173 | 173 | | ARTICLE 3 |
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| 174 | 174 | | |
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| 175 | 175 | | MICHIGAN BULLION DEPOSITORY |
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| 176 | 176 | | |
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| 177 | 177 | | PART 1 |
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| 178 | 178 | | |
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| 179 | 179 | | ESTABLISHMENT AND ADMINISTRATION OF THE MICHIGAN BULLION DEPOSITORY |
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| 180 | 180 | | |
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| 181 | 181 | | Sec. 31. For this state to establish and issue gold and silver specie and a digital currency based on gold and silver, as described in section 13, the office of the Michigan bullion depository is created in the department. The depository shall serve as the custodian, guardian, and administrator of certain bullion and specie that are transferred to or otherwise acquired by this state. |
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| 182 | 182 | | |
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| 183 | 183 | | Sec. 33. (1) On creation of the depository under section 31, the state treasurer shall appoint a bullion depository administrator to oversee the depository. The bullion depository administrator shall do both of the following: |
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| 184 | 184 | | |
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| 185 | 185 | | (a) Administer, supervise, and direct the operations and affairs of the depository and depository agents. |
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| 186 | 186 | | |
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| 187 | 187 | | (b) Liaise with the state treasurer and the department to ensure that each transaction with the depository that involves state money, that involves an agency, a political subdivision, or another instrumentality of this state, or that involves a private person is planned, administered, and executed in a manner to achieve the purposes of this act. |
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| 188 | 188 | | |
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| 189 | 189 | | (2) The administrator may appoint or employ, subject to the approval of the state treasurer, a deputy administrator or other subordinate officers or employees as necessary and appropriate to the efficient administration of the depository. |
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| 190 | 190 | | |
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| 191 | 191 | | Sec. 35. The depository may do all of the following: |
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| 192 | 192 | | |
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| 193 | 193 | | (a) Enter into transactions and relationships with bullion banks, depositories, dealers, central banks, sovereign wealth funds, financial institutions, international nongovernmental organizations, and other persons, located inside or outside of this state or inside or outside of the United States, as the state treasurer determines to be prudent and suitable to facilitate the operations of the depository and to further the purposes of this act. |
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| 194 | 194 | | |
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| 195 | 195 | | (b) Advertise and promote the depository in any available media. |
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| 196 | 196 | | |
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| 197 | 197 | | (c) Issue, sell, license for sale, or obtain a license to sell promotional items approved by the administrator to further the purposes of this act and to promote the depository. The depository may set commercially reasonable prices for items licensed or sold under this subdivision. |
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| 198 | 198 | | |
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| 199 | 199 | | (d) By purchase, lease, donation, or other means, acquire real property necessary for 1 or more buildings to operate the depository on terms and conditions and in a manner the depository considers proper. |
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| 200 | 200 | | |
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| 201 | 201 | | (e) Take any other action authorized by this act or considered necessary by the depository to achieve the purposes of this act. |
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| 202 | 202 | | |
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| 203 | 203 | | Sec. 37. The depository may not take any of the following actions, and any attempt by the depository to take any of the following actions is void and of no force or effect: |
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| 204 | 204 | | |
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| 205 | 205 | | (a) Entering into a precious metals leasing, sale-leaseback, forward transaction, swap transaction, future transaction, index transaction, or option on or other derivative of any of those, whether in the nature of a cap transaction, floor transaction, collar transaction, repurchase transaction, reverse repurchase transaction, buy-and-sell-back transaction, securities lending transaction, or other financial instrument or interest intended to or having the effect of hedging or leveraging the depository's holdings of precious metals, including any option with respect to any of these transactions, or any combination of these transactions, except that the limitation provided by this subdivision does not apply to a transaction entered into to limit the depository's exposure to postsignature price risks associated with executory agreements to purchase or sell precious metals in the ordinary course of depository operations and does not apply to policies of insurance purchased to insure against ordinary casualty risks such as theft, damage or destruction, loss during shipment, or similar risks. |
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| 206 | 206 | | |
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| 207 | 207 | | (b) Crediting the depository account balances of a depository account holder, or disposing of any precious metal, if to do so would cause the aggregate depository account balances with respect to any precious metal represented by all depository accounts to exceed the aggregate quantities of such precious metal held by or for the benefit of the depository and the depository's depository agents. |
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| 208 | 208 | | |
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| 209 | 209 | | (c) Entering into or maintaining a deposit, trust, or similar relationship for the custody of precious metals by a third party outside this state, directly or indirectly, for the account or benefit of the depository if either of the following applies: |
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| 210 | 210 | | |
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| 211 | 211 | | (i) The custody or intermediary arrangements do not meet the department's standards of safety, security, and liquidity established by rule. |
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| 212 | 212 | | |
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| 213 | 213 | | (ii) Suitable alternate arrangements for physical custody of the precious metals inside this state have been established by rule and are available. This subparagraph does not restrict relationships that are incidental to the performance of or preparation for purchase and sale transactions with counterparties located outside of this state. |
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| 214 | 214 | | |
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| 215 | 215 | | (d) Extending credit to a person, including credit secured by a depository account or other assets, except an extension of credit incidental to the performance of the functions and responsibilities otherwise provided in this act. |
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| 216 | 216 | | |
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| 217 | 217 | | (e) Engaging in a business or activity that, if conducted by a private person, would be subject to regulation in this state as a banking or savings and loan function. |
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| 218 | 218 | | |
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| 219 | 219 | | Sec. 39. (1) None of the following are available for legislative appropriation: |
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| 220 | 220 | | |
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| 221 | 221 | | (a) A deposit to the depository. |
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| 222 | 222 | | |
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| 223 | 223 | | (b) Bullion or specie held by or on behalf of the depository or a depository agent. |
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| 224 | 224 | | |
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| 225 | 225 | | (c) Bullion or specie in transit to or from the depository or a depository agent. |
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| 226 | 226 | | |
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| 227 | 227 | | (d) A receivable or other amount owed to the depository in settlement of a transaction in bullion or specie. |
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| 228 | 228 | | |
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| 229 | 229 | | (2) Bullion, specie, and other assets described by subsection (1) are subject to redemption, liquidation, or transfer exclusively to discharge an obligation of the depository to depository account holders, depository agents, bullion banks, financial institutions, or other intermediaries in accordance with this act and rules adopted under this act. |
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| 230 | 230 | | |
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| 231 | 231 | | (3) Depository revenues must be deposited in the Michigan bullion depositary fund. |
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| 232 | 232 | | |
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| 233 | 233 | | Sec. 41. (1) The Michigan bullion depositary fund is created in the state treasury. |
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| 234 | 234 | | |
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| 235 | 235 | | (2) The state treasurer shall deposit money and other assets received under section 27(b) or 39(3) or from any other source in the Michigan bullion depositary fund. The state treasurer shall direct the investment of money in the Michigan bullion depositary fund and credit interest and earnings from the investments to the Michigan bullion depositary fund. |
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| 236 | 236 | | |
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| 237 | 237 | | (3) Money in the Michigan bullion depositary fund at the close of the fiscal year remains in the Michigan bullion depositary fund and does not lapse to the general fund. |
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| 238 | 238 | | |
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| 239 | 239 | | (4) The department is the administrator of the fund for audits of the fund. |
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| 240 | 240 | | |
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| 241 | 241 | | (5) The department shall expend money from the Michigan bullion depositary fund on appropriation, only for 1 or more of the following purposes: |
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| 242 | 242 | | |
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| 243 | 243 | | (a) The administration of this act. |
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| 244 | 244 | | |
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| 245 | 245 | | (b) The operation of the depository. |
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| 246 | 246 | | |
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| 247 | 247 | | (c) The establishment and issuance of gold and silver specie and a digital currency based on gold and silver under article 2. |
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| 248 | 248 | | |
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| 249 | 249 | | (d) To pay private vendors and depository agents. |
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| 250 | 250 | | |
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| 251 | 251 | | (e) To employ or establish a law enforcement agency to employ depository security officers under part 6. |
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| 252 | 252 | | |
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| 253 | 253 | | (f) To otherwise carry out the purposes of this act. |
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| 254 | 254 | | |
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| 255 | 255 | | Sec. 43. The department, in consultation with the depository, shall promulgate rules that do both of the following: |
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| 256 | 256 | | |
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| 257 | 257 | | (a) Ensure compliance with applicable federal and state law. |
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| 258 | 258 | | |
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| 259 | 259 | | (b) Protect the interests of all of the following: |
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| 260 | 260 | | |
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| 261 | 261 | | (i) The depository. |
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| 262 | 262 | | |
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| 263 | 263 | | (ii) Depository account holders. |
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| 264 | 264 | | |
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| 265 | 265 | | (iii) This state and the agencies, political subdivisions, and instrumentalities of this state. |
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| 266 | 266 | | |
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| 267 | 267 | | (iv) The public at large. |
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| 268 | 268 | | |
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| 269 | 269 | | PART 2 |
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| 270 | 270 | | |
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| 271 | 271 | | DEPOSITORY ACCOUNTS |
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| 272 | 272 | | |
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| 273 | 273 | | Sec. 51. The depository may receive a deposit of bullion or specie from or on behalf of a person acting in the person's own right, as trustee, or in another fiduciary capacity, in accordance with this act and rules promulgated by the department under this act. |
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| 274 | 274 | | |
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| 275 | 275 | | Sec. 53. (1) A person may invest the person's money in a depository account by purchasing precious metals and depositing the precious metals with the depository or a depository agent. |
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| 276 | 276 | | |
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| 277 | 277 | | (2) To establish a depository account, a depositor must contract with the depository for a depository account. The contract must specify both of the following: |
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| 278 | 278 | | |
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| 279 | 279 | | (a) The terms applicable to the account, including any special terms. |
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| 280 | 280 | | |
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| 281 | 281 | | (b) The conditions on which withdrawals or deliveries with respect to the account may be made. |
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| 282 | 282 | | |
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| 283 | 283 | | (3) The execution of a contract for a depository account described by this section may be made, as prescribed by rules adopted under this act, by electronic or digital transmission. |
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| 284 | 284 | | |
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| 285 | 285 | | (4) The depository shall hold the contract for a depository account in the records pertaining to the account. |
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| 286 | 286 | | |
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| 287 | 287 | | (5) A contract for a depository account executed by a depositor and the depository is considered a contract in writing for all purposes, and may be evidenced by 1 or more agreements, deposit receipts, signature cards, amendment notices, or other documentation as provided by law. |
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| 288 | 288 | | |
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| 289 | 289 | | (6) The depository and the depository account holder may amend a contract for a depository account by agreement, or the depository may amend the deposit contract by providing written notice of the amendment to the account holder, separately or as an enclosure with or part of the account holder's statement of account or passbook. The depository may provide the written notice electronically. The written notice of the amendment from the depository must include the text and effective date of the amendment. The effective date may not be earlier than the thirtieth day after the date the notice is sent, unless otherwise provided by rules promulgated under this act. |
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| 290 | 290 | | |
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| 291 | 291 | | Sec. 55. (1) The depository shall record the amount of precious metals a person deposits, regardless of form, in units of troy ounces pure, and the records must also specify the type and quantity of each precious metal deposited. |
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| 292 | 292 | | |
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| 293 | 293 | | (2) The state treasurer shall adopt standards by which the quantities of precious metals deposited are credited to a depositor's depository account by reference to the particular form in which the precious metals were deposited, classified by mint, denomination, weight, assay mark, or other indicator, as applicable. The standards must conform to applicable national and international standards of weights and measures. |
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| 294 | 294 | | |
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| 295 | 295 | | (3) The state treasurer may, if the state treasurer determines it necessary, restrict the form in which deposits of precious metals may be made. |
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| 296 | 296 | | |
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| 297 | 297 | | (4) The depository shall adjust each depository account balance to reflect additions to or withdrawals or deliveries from the account. |
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| 298 | 298 | | |
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| 299 | 299 | | Sec. 57. (1) The depository shall deliver any precious metal held by or on behalf of the depository in bullion, specie, or a combination of bullion and specie, on the order of a depository account holder, in a quantity of that precious metal as is available in the depository account holder's depository account. |
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| 300 | 300 | | |
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| 301 | 301 | | (2) The depository shall make a delivery described by subsection (1) on demand by the presentment of a written demand or digital electronic instruction to the depository or a depository agent. The state treasurer shall prescribe the forms, standards, and processes through which an order for delivery on demand may be made, presented, and honored. |
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| 302 | 302 | | |
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| 303 | 303 | | (3) The depository shall make a delivery at the depository's settlement facility designated by the state treasurer, shipping to an address specified by the account holder, or, at the depository's discretion, at a facility of a depository agent at which presentment is made, not later than 10 business days after the date of presentment. |
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| 304 | 304 | | |
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| 305 | 305 | | Sec. 59. (1) In accordance with rules promulgated under this act, a depository account holder may transfer any portion of the balance of the holder's depository account by written demand or digital electronic instruction to another person. |
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| 306 | 306 | | |
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| 307 | 307 | | (2) The depository shall adjust the depository account balances of the depository accounts to reflect a transfer transaction between depository account holders on presentment of the written demand or other instruction by reducing the payor's depository account balance and increasing the depository account balance of the payee accordingly. |
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| 308 | 308 | | |
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| 309 | 309 | | (3) If a depository account holder transfers to a payee who is not a depository account holder any portion of the balance of the depository account holder's depository account, the depository shall, if the payee is otherwise eligible to open a depository account under applicable laws and depository policy, allow the payee to establish a depository account. The depository shall credit a newly established account on behalf of the payee and shall debit the payor's account accordingly. |
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| 310 | 310 | | |
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| 311 | 311 | | Sec. 61. The state treasurer may establish fees, service charges, and penalties to be charged a depository account holder for a service or activity regarding a depository account, including a fee for an overdraft, an insufficient fund check or draft, or a stop payment order. The state treasurer may waive any fees, service charges, or penalties established under this section. |
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| 312 | 312 | | |
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| 313 | 313 | | Sec. 63. The depository shall not pay any of the following on a depository account: |
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| 314 | 314 | | |
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| 315 | 315 | | (a) Interest. |
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| 316 | 316 | | |
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| 317 | 317 | | (b) An amount in the nature of interest. |
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| 318 | 318 | | |
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| 319 | 319 | | (c) A fee or other payment for the use or forbearance of use of money, bullion, specie, or precious metals deposited to a depository account. |
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| 320 | 320 | | |
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| 321 | 321 | | Sec. 65. Unless the depository acknowledges in writing a pledge of a depository account, the depository may treat the holder of record of the account as the owner of the account for all purposes and without regard to a notice to the contrary. |
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| 322 | 322 | | |
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| 323 | 323 | | Sec. 67. (1) A depository account may be transferred on the books of the depository only on presentation to the depository of both of the following: |
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| 324 | 324 | | |
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| 325 | 325 | | (a) Evidence of transfer satisfactory to the depository. |
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| 326 | 326 | | |
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| 327 | 327 | | (b) An application for the transfer submitted by the person to whom the depository account is to be transferred. |
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| 328 | 328 | | |
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| 329 | 329 | | (2) A person to whom a depository account is to be transferred must accept the transferred account subject to the terms of the deposit contract, this act, and rules promulgated under this act. |
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| 330 | 330 | | |
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| 331 | 331 | | Sec. 69. (1) Without the need of any further agreement or pledge, the depository has a lien on each depository account owned by a depository account holder to secure any fees, charges, or other obligations owed or that may become owed to the depository in connection with any of the depository account holder's depository accounts as provided by the terms of the depository account holder's applicable depository account contract. |
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| 332 | 332 | | |
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| 333 | 333 | | (2) On default in the payment or in the satisfaction of a depository account holder's obligation, the depository, without notice to or consent of the depository account holder, may transfer on the depository's books all or part of the balance of a depository account holder's depository account to the extent necessary to pay or satisfy the obligation, as determined by reference to the exchange rates applicable at the time of the transfer. |
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| 334 | 334 | | |
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| 335 | 335 | | (3) The depository by written instrument may waive wholly or partly the depository's lien on a depository account. |
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| 336 | 336 | | |
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| 337 | 337 | | (4) Subject to a lien created as provided by this section, the depository shall recognize the lawful pledge to a third party by a depository account holder of the depository account holder's rights, interests, and entitlements in and to a depository account as an intangible asset. On the satisfaction of other requirements of law in respect of the perfection and enforcement of a pledge of that type, the depository shall take all steps reasonably necessary and appropriate to effectuate on the depository's books any transfer of a depository account or of all or part of a depository account balance to the account of the secured party on the successful enforcement of the pledge. |
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| 338 | 338 | | |
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| 339 | 339 | | Sec. 71. (1) Unless a term of the depository account provides otherwise, a person on whose signature precious metals may be withdrawn from a depository account that is jointly held in the names of 2 or more persons may, by a signed pledge, pledge and transfer to the depository or to a third party all or part of the account. |
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| 340 | 340 | | |
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| 341 | 341 | | (2) A pledge made as described in subsection (1) does not sever or terminate the joint and survivorship ownership of the account, to the extent applicable to the account before the pledge. |
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| 342 | 342 | | |
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| 343 | 343 | | Sec. 73. (1) The depository or a depository agent may accept a depository account in the name of a fiduciary, including an administrator, executor, custodian, guardian, or trustee, for a named beneficiary. |
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| 344 | 344 | | |
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| 345 | 345 | | (2) A fiduciary may open, add to, or withdraw precious metals from an account described in subsection (1). |
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| 346 | 346 | | |
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| 347 | 347 | | (3) Except as otherwise provided by law, a payment or delivery to a fiduciary or an acquittance signed by the fiduciary to whom a payment or delivery is made is a discharge of the depository for the payment or delivery. |
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| 348 | 348 | | |
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| 349 | 349 | | (4) After an individual who holds a depository account in a fiduciary capacity dies, the depository may pay or deliver to the beneficiary of the account the quantity of precious metals represented by the balance in the depository account, plus other rights relating to the depository account, wholly or partly, if the depository does not receive written notice or order of the probate court of either of the following: |
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| 350 | 350 | | |
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| 351 | 351 | | (a) A revocation or termination of the fiduciary relationship. |
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| 352 | 352 | | |
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| 353 | 353 | | (b) Any other disposition of the beneficial estate. |
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| 354 | 354 | | |
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| 355 | 355 | | (5) The depository does not have any further liability for a payment made or right delivered under subsection (4). |
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| 356 | 356 | | |
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| 357 | 357 | | Sec. 75. (1) If the depository opens a depository account for a person claiming to be the trustee for another person and the depository does not have any other notice of the existence or terms of the trust other than a written claim against the account, both of the following apply: |
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| 358 | 358 | | |
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| 359 | 359 | | (a) The person claiming to be the trustee, on the person's signature, may withdraw precious metals from the account. |
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| 360 | 360 | | |
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| 361 | 361 | | (b) If the person claiming to be the trustee dies, the depository may pay or deliver the quantity of precious metals represented by the balance in the account to the person for whom the account was opened. |
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| 362 | 362 | | |
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| 363 | 363 | | (2) The depository has no further liability for a payment or delivery made as provided in subsection (1). |
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| 364 | 364 | | |
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| 365 | 365 | | Sec. 77. (1) The depository shall recognize the authority of an attorney-in-fact authorized in writing by a depository account holder to manage or withdraw precious metals from the depository account holder's depository account until the depository receives written or actual notice of the revocation of that authority. |
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| 366 | 366 | | |
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| 367 | 367 | | (2) For purposes of this section, written notice of the death or adjudication of incompetency of a depository account holder is considered to be written notice of revocation of the authority of the account holder's attorney-in-fact. |
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| 368 | 368 | | |
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| 369 | 369 | | Sec. 79. The state treasurer shall establish the references by which the official exchange rate for pricing precious metals transactions in terms of United States dollars or other currency must be established at the time of a depository transaction. The state treasurer shall establish procedures and facilities through which the rates are made discoverable at all reasonable times by system participants, both on a real-time basis and retrospectively. |
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| 370 | 370 | | |
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| 371 | 371 | | PART 3 |
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| 372 | 372 | | |
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| 373 | 373 | | CIVIL ACTIONS AND OTHER MATTERS |
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| 374 | 374 | | |
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| 375 | 375 | | Sec. 81. (1) A cause of action for denial of deposit liability on a depository account contract without a maturity date does not accrue until the depository has denied liability and given notice of the denial to the depository account holder. |
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| 376 | 376 | | |
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| 377 | 377 | | (2) The depository's act of furnishing an account statement or passbook, whether in physical, digital, or electronic form, constitutes a denial of liability and the giving of such notice as to any amount not shown on the statement or passbook. |
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| 378 | 378 | | |
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| 379 | 379 | | (3) The depository's sovereign immunity from suit is waived for an action brought by a depositor for the denial of deposit liability. |
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| 380 | 380 | | |
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| 381 | 381 | | (4) The depository's liability for a denial of deposit liability is limited to the amount on deposit for which liability was denied. A depositor may not recover consequential damages, exemplary damages, pre- or post-judgment interest, costs, or attorney fees. |
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| 382 | 382 | | |
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| 383 | 383 | | (5) A suit authorized by this section must be brought in the court of claims. |
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| 384 | 384 | | |
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| 385 | 385 | | (6) A suit authorized by this section must be brought before the expiration of 1 year after the date the cause of action accrues or the suit is barred. |
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| 386 | 386 | | |
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| 387 | 387 | | Sec. 83. (1) A purported confiscation, requisition, seizure, or other attempt to control the ownership, disposition, or proceeds of a withdrawal, transfer, liquidation, or settlement of a depository account, including the precious metals represented by the balance of a depository account, if effected by a governmental or quasi-governmental authority other than an authority of this state or by a financial institution or other person acting on behalf of or pursuant to a directive or authorization issued by a governmental or quasi-governmental authority other than an authority of this state, in the course of a generalized declaration of illegality or emergency relating to the ownership, possession, or disposition of 1 or more precious metals, contracts, or other rights to the precious metals or contracts or derivatives of the ownership, possession, disposition, contracts, or other rights, is void and of no force or effect. |
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| 388 | 388 | | |
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| 389 | 389 | | (2) If the depository receives notice of a transaction described by subsection (1), with respect to all or any portion of the balance of a depository account, all of the following requirements apply: |
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| 390 | 390 | | |
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| 391 | 391 | | (a) The depository shall not recognize the governmental or quasi-governmental authority, financial institution, or other person acting as the lawful successor of the registered holder of the depository account in question. |
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| 392 | 392 | | |
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| 393 | 393 | | (b) The depository shall suspend withdrawal privileges associated with the balances of the depository account until the matter is resolved. |
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| 394 | 394 | | |
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| 395 | 395 | | (c) The depository shall refer the matter to the attorney general for resolution. The attorney general may take any action necessary to resolve the matter, including, but not limited to, bringing an action to obtain a declaratory judgment regarding the matter. |
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| 396 | 396 | | |
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| 397 | 397 | | (d) The depository shall comply with the resolution determined by the attorney general under subdivision (c). |
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| 398 | 398 | | |
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| 399 | 399 | | PART 4 |
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| 400 | 400 | | |
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| 401 | 401 | | depository agents |
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| 402 | 402 | | |
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| 403 | 403 | | Sec. 91. The depository may use private, independently managed financial institutions to provide retail locations for the provision of depository services to the public on behalf of the depository. |
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| 404 | 404 | | |
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| 405 | 405 | | Sec. 93. The department shall promulgate rules that require a depository agent to maintain suitable systems and processes for electronic information sharing and communication with the department and the depository to ensure that all transactions effected on behalf of the depository are reported to and integrated into the depository's records not later than 11:59:59 p.m. on the date of each transaction. |
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| 406 | 406 | | |
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| 407 | 407 | | Sec. 95. A depository agent shall submit monthly, quarterly, and annual reports of all depository transactions not later than the fifteenth day of the month following the expiration of the period with respect to which such report is submitted. The report must contain information and be in a form and format as prescribed by the department. |
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| 408 | 408 | | |
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| 409 | 409 | | PART 5 |
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| 410 | 410 | | |
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| 411 | 411 | | RECORDS AND REPORTING |
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| 412 | 412 | | |
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| 413 | 413 | | Sec. 101. The state treasurer shall establish procedures and requirements for the depository and depository agents designed to minimize the burden to system participants of accounting for and reporting taxable gains and losses arising out of depository transactions as denominated in United States dollars or another currency. |
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| 414 | 414 | | |
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| 415 | 415 | | Sec. 103. (1) All of the following records are confidential and exempt from disclosure under the freedom of information act, 1976 PA 442, MCL 15.231 to 15.246: |
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| 416 | 416 | | |
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| 417 | 417 | | (a) Records relating to individual depository accounts or depository account holders, including current, former, or prospective depository account holders, that are in the custody of the depository or a vendor performing services related to the depository. |
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| 418 | 418 | | |
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| 419 | 419 | | (b) Records and other information related to the security of the depository. |
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| 420 | 420 | | |
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| 421 | 421 | | (c) Records related to the method of setting the depository's fees, service charges, penalties, and other charges or payments. |
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| 422 | 422 | | |
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| 423 | 423 | | (d) Commercial or financial information that would cause substantial competitive harm to the depository, including operational or other information that would give advantage to competitors or bidders. |
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| 424 | 424 | | |
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| 425 | 425 | | (2) Notwithstanding subsection (1), depository account information may be disclosed as follows: |
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| 426 | 426 | | |
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| 427 | 427 | | (a) To a depository account holder regarding the depository account holder's account. |
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| 428 | 428 | | |
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| 429 | 429 | | (b) To a state or federal agency as required by applicable law. |
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| 430 | 430 | | |
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| 431 | 431 | | (c) To a vendor providing services to the depository. |
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| 432 | 432 | | |
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| 433 | 433 | | (d) In response to a subpoena issued under applicable law. |
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| 434 | 434 | | |
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| 435 | 435 | | (e) If compiled as collective information that does not include any identifying information about a person. |
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| 436 | 436 | | |
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| 437 | 437 | | (f) As otherwise permitted by the depository account agreement applicable to a depository account holder's account. |
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| 438 | 438 | | |
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| 439 | 439 | | Sec. 105. The state treasurer shall submit to the governor, the senate and house fiscal agencies, the senate majority leader, the senate minority leader, the speaker of the house of representatives, the minority leader of the house of representatives, and each member of the senate and house of representatives appropriations committees a report on the status, condition, operations, and prospects for the depository and depository participation each year not later than September 30. |
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| 440 | 440 | | |
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| 441 | 441 | | PART 6 |
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| 442 | 442 | | |
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| 443 | 443 | | DEPOSITORY SECURITY OFFICERS |
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| 444 | 444 | | |
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| 445 | 445 | | Sec. 111. As used in this part: |
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| 446 | 446 | | |
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| 447 | 447 | | (a) "Commission" means the Michigan commission on law enforcement standards created under section 3 of the Michigan commission on law enforcement standards act, MCL 28.603. |
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| 448 | 448 | | |
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| 449 | 449 | | (b) "Law enforcement officer" means that term as defined in section 2 of the Michigan commission on law enforcement standards act, MCL 28.602. |
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| 450 | 450 | | |
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| 451 | 451 | | (c) "Michigan commission on law enforcement standards act" means the Michigan commission on law enforcement standards act, 1965 PA 203, MCL 28.601 to 28.615. |
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| 452 | 452 | | |
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| 453 | 453 | | Sec. 113. (1) Subject to the approval of the state treasurer and subsection (2), the depository may partner with a law enforcement agency to employ law enforcement officers as depository security officers to provide security services and perform other law enforcement activities for the depository. |
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| 454 | 454 | | |
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| 455 | 455 | | (2) To qualify for employment as a depository security officer, an individual must meet all of the following criteria: |
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| 456 | 456 | | |
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| 457 | 457 | | (a) Comply with all of the licensure requirements under the Michigan commission on law enforcement standards act. |
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| 458 | 458 | | |
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| 459 | 459 | | (b) Be licensed by the commission under the Michigan commission on law enforcement standards act. |
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| 460 | 460 | | |
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| 461 | 461 | | (c) Successfully complete training required by the commission under the Michigan commission on law enforcement standards act. |
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| 462 | 462 | | |
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| 463 | 463 | | Sec. 115. In performing law enforcement activities under this act, a depository security officer is vested with the powers, privileges, prerogatives, and immunities conferred on law enforcement officers under the laws of this state. |
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| 464 | 464 | | |
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| 465 | 465 | | Sec. 117. A depository security officer may do all of the following: |
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| 466 | 466 | | |
|---|
| 467 | 467 | | (a) Perform security services for the depository. |
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| 468 | 468 | | |
|---|
| 469 | 469 | | (b) Exercise the authority and all the powers of a law enforcement officer with respect to offenses related to the depository or its operations or property. |
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| 470 | 470 | | |
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| 471 | 471 | | (c) Enforce the policies and procedures of the depository. |
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