AN ACT to amend Tennessee Code Annotated, Title 9, relative to precious metals.
Impact
The implementation of SB2737 will alter the framework of how Tennessee manages its treasury reserves by officially allowing investments in precious metals like gold, silver, platinum, and palladium. This move is seen as an effort to diversify state investments and may lead to changes in financial strategies related to revenue generation and expenditure management. However, by providing the state with authority to invest public funds in these assets, the bill raises questions about the appropriateness and risks associated with such investments, particularly regarding market volatility and liquidity.
Summary
Senate Bill 2737 seeks to amend Tennessee’s Code Annotated, Title 9, by introducing new provisions regarding the purchase and holding of precious metals by the state. The bill allows the state treasurer, with the comptroller's approval, to buy and sell precious metal bullion or specie. It stipulates that a certain percentage of the state’s revenue fluctuations reserve account must be allocated to hold these precious metals, thereby establishing a more stable base for managing state funds. This initiative is intended to provide a safeguard against economic fluctuations and capitalize on potential investment opportunities in the precious metals market.
Contention
While proponents argue that investing in precious metals could offer a hedge against inflation and economic downturns, critics express concern about transparency and the potential misuse of funds. The classification of precious metals as legal tender for both public and private debts might also be contentious, as it poses implications for existing monetary policies and how transactions are conducted in the state. The requirement that costs related to the verification of precious metals must be borne by the receiving entity raises further operational and financial responsibility for entities accepting these forms of currency.
To provide appropriations from the General Fund for the expenses of the Executive, Legislative and Judicial Departments of the Commonwealth, the public debt and the public schools for the fiscal year July 1, 2023, to June 30, 2024, and for the payment of bills incurred and remaining unpaid at the close of the fiscal year ending June 30, 2023; to provide appropriations from special funds and accounts to the Executive and Judicial Departments for the fiscal year July 1, 2023, to June 30, 2024, and for the payment of bills remaining unpaid at the close of the fiscal year ending June 30, 2023; to provide for the appropriation of Federal funds to the Executive and Judicial Departments for the fiscal year July 1, 2023, to June 30, 2024, and for the payment of bills remaining unpaid at the close of the fiscal year ending June 30, 2023; and to provide for the additional appropriation of Federal and State funds to the Executive and Legislative Departments for the fiscal year July 1, 2022, to June 30, 2023, and for the payment of bills incurred and remaining unpaid at the close of the fiscal year ending June 30, 2022.