SENATE BILL 168
By Bailey
HOUSE BILL 439
By Hulsey
HB0439
001340
- 1 -
AN ACT to amend Tennessee Code Annotated, Title 9,
relative to precious metals.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF TENNESSEE:
SECTION 1. Tennessee Code Annotated, Section 9-4-211(a)(1), is amended by
deleting the subdivision and substituting instead the following:
(1) There is created on the books and records of the state treasury a reserve
account in the general fund to be known as the "reserve for revenue fluctuations." The
funds in this account may be used from time to time, as provided in this section, to meet
unexpected shortfalls of revenue, to meet expenditure requirements in excess of
budgeted appropriation levels, or to fund the purchase and sale of precious metal bullion
or specie.
SECTION 2. Tennessee Code Annotated, Section 9-4-211, is amended by adding the
following new subsection:
(e) There is created in the reserve for revenue fluctuations account a restricted
account for the purchase and sale of precious metal bullion or specie. It is the legislative
intent that there is an initial transfer from the reserve for revenue fluctuations account to
the restricted account of not less than one percent (1%), but no more than three percent
(3%), of the total funds in the reserve for revenue fluctuations account as of July 1, 2025.
On an annual basis thereafter, the restricted account must be valued based on the total
funds in the reserve for revenue fluctuations account that may result in additional
transfers from the reserve account to the restricted account.
- 2 - 001340
SECTION 3. Tennessee Code Annotated, Section 9-4-612(c), is amended by adding
the following new subdivision:
(3) Precious metal bullion or specie. For purposes of this subdivision (c)(3):
(A) "Bullion" means a precious metal that is 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 metal;
(B) "Precious metal" means gold, silver, platinum, or palladium; and
(C) "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 metal in retail or wholesale transactions.
SECTION 4. Tennessee Code Annotated, Section 9-4-612, is amended by adding the
following new subsections:
(i) Notwithstanding the state treasurer's discretionary investment authority
pursuant to subsection (a), the state treasurer, with the approval of the comptroller of the
treasury, shall:
(1) Purchase and sell precious metal bullion or specie that will be directly
owned by the state, and in the custody of the state treasurer; and
(2) Establish and adopt investment policies or guidelines, which shall
include, but not be limited to, quality standards and purity levels for the precious
metal.
(j) The funds for the purchase and sale of precious metal bullion or specie must
come from the reserve for revenue fluctuations account under § 9-4-211 and be placed
in a restricted account within the reserve account. Any funds remaining in the restricted
- 3 - 001340
account at the end of any fiscal year must be carried forward in the restricted account
and remain available for the purposes of the purchase and sale of precious metal bullion
and specie. The income, gains, and losses from the investment in precious metal bullion
and specie must remain in the restricted account and must be accounted for separately
from other investments made pursuant to this section.
(k) The state treasurer, with the approval of the comptroller of the treasury, may
make and enter into contracts, trust instruments, agreements, trade agreements,
warrants, and other instruments with a person to effectuate this section, including, but
not limited to, financial institutions, brokers, dealers, securities markets and exchanges,
accountants, auditors, attorneys, consultants, the entity described in subsection (m), and
other contractors. Procurements may be made in a manner prescribed by the state
treasurer with the approval of the comptroller of the treasury without regard to the
requirements contained in title 12, chapter 3. For the purposes of procuring precious
metal bullion or specie as an investment pursuant to this section, the precious metal
bullion and specie are not considered goods, as defined in § 12-3-201, and therefore,
not subject to § 4-56-107.
(l) The state treasurer, with the approval of the comptroller of the treasury, shall
ensure that the precious metal bullion or specie is securely maintained and transported,
adequately insured, independently audited, and physically segregated from the other
assets custodied at the financial institution or other entity described in subsection (m).
The expenses referenced in this subsection (l) may be charged to the earnings of the
general fund balances in the state pooled investment fund or to funds available in the
revolving accounts established in §§ 9-4-603(g) and 9-4-612(g).
(m) The physical precious metal purchased under this section must be custodied
by the state treasurer in a financial institution as defined in § 45-11-102, or in an entity
- 4 - 001340
designated by the state treasurer with the approval of the comptroller of the treasury.
(n) The records, documents, and papers in the possession of the treasury
department or any other state agency containing the following information relative to the
precious metal bullion or specie purchased, sold, and maintained in accordance with
subsections (i) through (m), must be treated as confidential and must not be open for
inspection by members of the public:
(1) Location;
(2) Custody;
(3) Maintenance;
(4) Transportation;
(5) Insurance;
(6) Procurement processes;
(7) Proposals relative to the procurement of goods or services, and
related records, including, but not limited to, evaluations, notices,
communications, memoranda;
(8) Procurement solicitations, requests for quotes, and requests
submitted to the state's central procurement office for the procurement of goods
and services;
(9) Contracts, agreements, warrants, confirmations; and
(10) Security, including, but not limited to, alarm systems; security codes;
access codes; passwords; security procedures and protocols; security and
vulnerability testing; business continuity plans and testing; disaster recovery
plans and testing; and audit reports.
SECTION 5. Tennessee Code Annotated, Title 9, Chapter 1, is amended by adding the
following as a new section:
- 5 - 001340
(a) As used in this section:
(1) "Coins" means:
(A) Precious metal fabricated into products of uniform shape,
size, design, content, weight, and purity that are 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 metal
in retail or wholesale transactions; or
(B) Refined precious metal bullion, stamped or imprinted with its
weight and purity and valued primarily based on its metal content and not
its form;
(2) "Legal tender" means a recognized medium of exchange for the
payment of debts and taxes;
(3) "Person" means an individual; state, local government, political
subdivision, or any agent or agency thereof; company; corporation; partnership;
firm; trust; organization; or association; and
(4) "Precious metal" means gold and silver.
(b) Precious metal coins are legal tender in this state.
(c) A person shall not compel another person to use or accept precious metal
coins as legal tender, unless expressly authorized by law or contract.
(d) The state treasurer may transact, transmit, or exchange precious metal coins
through any one (1) or a combination of:
(1) Physical means;
(2) Electronic means; or
(3) Written instruction.
- 6 - 001340
(e) The state, or a department or agency of state government, may, but is not
required to, accept payment of taxes, fees, debts, or obligations in precious metal coins.
SECTION 6. This act takes effect upon becoming a law, the public welfare requiring it.