89R10588 TYPED
By: Schwertner S.B. No. 778
A BILL TO BE ENTITLED
AN ACT
relating to the establishment and administration of the Texas
Strategic Bitcoin Reserve; making an appropriation.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. This Act may be cited as the Texas Strategic
Bitcoin Reserve Act.
SECTION 2. Chapter 403, Government Code, is amended by
adding Subchapter V to read as follows:
SUBCHAPTER V. TEXAS STRATEGIC BITCOIN RESERVE
Sec. 403.701. DEFINITIONS. In this subchapter:
(1) "Bitcoin" means a type of decentralized
cryptocurrency created by a peer-to-peer network that operates
independently of any central authority or bank.
(2) "Cold storage" means a method of storing private
keys required to engage in transactions involving bitcoin that:
(A) has a nexus to a secure physical location;
(B) is protected from unauthorized access; and
(C) is isolated from any Internet network
connections.
(3) "Cryptocurrency" means a type of virtual currency
that utilizes cryptography to secure transactions that are
digitally recorded on a distributed ledger, such as a blockchain.
(4) "Reserve" means the Texas Strategic Bitcoin
Reserve established under this subchapter.
(5) "Virtual currency" has the meaning assigned by
Section 12.001, Business & Commerce Code.
Sec. 403.702. LEGISLATIVE FINDINGS. The legislature finds
that:
(1) bitcoin is a valuable digital asset with strategic
potential for enhancing this state's financial resilience;
(2) bitcoin's decentralized nature and finite supply
are unique qualities that can serve as a hedge against inflation and
economic volatility; and
(3) the establishment of a strategic bitcoin reserve
aligns with this state's commitment to fostering innovation in
digital assets and providing enhanced financial security to
residents of this state.
Sec. 403.703. PURPOSE. The reserve is established to
allow:
(1) this state to own and hold bitcoin as a financial
asset; and
(2) persons, including residents of this state, to
donate bitcoin to the state for deposit in the reserve to promote
the shared ownership of and community investment in this state's
financial future.
Sec. 403.704. ESTABLISHMENT AND ADMINISTRATION OF RESERVE.
(a) The Texas Strategic Bitcoin Reserve is a special fund outside
the general revenue fund in the state treasury. The comptroller has
custody of and shall administer the reserve for the purpose of
holding bitcoin as a financial asset.
(b) The comptroller shall maintain custody of all bitcoin
held in the reserve.
(c) The reserve is a strategic asset of this state and may
not be used for purposes other than those authorized by this
subchapter.
Sec. 403.705. CERTAIN TRANSACTIONS PROHIBITED. The
comptroller may not enter into a transaction to acquire bitcoin to
be held in the reserve with a foreign country, an entity or
individual located outside of this state, or an entity or
individual known to engage in illegal activity.
Sec. 403.706. MANAGEMENT AND SECURITY; AUDITS. (a) The
comptroller is responsible for implementing secure storage,
management, and reporting systems for all bitcoin held in the
reserve.
(b) The comptroller shall adopt and implement policies and
procedures to ensure the security of bitcoin held in the reserve,
including policies and procedures requiring the use of secure
custodial technologies such as cold storage and best practices in
digital asset management.
(c) The comptroller may conduct regular audits of the
reserve to ensure transparency in the operation and security of the
bitcoin in the reserve.
Sec. 403.707. THIRD-PARTY CONTRACTS. The comptroller may
contract with a qualified, independent third-party entity based in
the United States to assist in the establishment, creation,
maintenance, operation, or administration of the reserve.
Sec. 403.708. TRANSFER, SALE, OR CONVERSION OF BITCOIN IN
RESERVE. (a) Bitcoin in the reserve may be transferred, sold, or
converted only in the manner authorized by this section.
(b) During a regular or special session of the legislature,
the legislature may, by adoption of a concurrent resolution
approved by a two-thirds vote of the members of each house of the
legislature, direct the comptroller to transfer, sell, or convert
bitcoin in the reserve and deposit the proceeds realized from the
transfer, sale, or conversion to the credit of a fund or account in
the state treasury as specified by the legislature in the
resolution.
(c) During any period in which the legislature is not
meeting in regular or special session, the governor or Legislative
Budget Board may by order direct the comptroller to transfer, sell,
or convert bitcoin in the reserve, provided that the governor or
board first finds that an emergency exists. The order adopted by
the governor or board must clearly state the nature of the
emergency.
(d) The comptroller shall deposit all proceeds realized
from the transfer, sale, or conversion of bitcoin under Subsection
(c) to the credit of the general revenue fund.
Sec. 403.709. VOLUNTARY DONATION OF BITCOIN TO RESERVE;
RECOGNITION PROGRAM. (a) Except as otherwise provided by this
subchapter, the comptroller may accept a gift, grant, or other
donation of bitcoin to the reserve from any public or private
source.
(b) The comptroller by rule shall adopt and implement a
process for the donation of bitcoin to the reserve and establish
eligibility requirements for potential donors. The rules adopted
by the comptroller must establish a process by which the
comptroller may return bitcoin donated to the reserve by a person
determined to be ineligible to make a donation of bitcoin under this
subchapter before the bitcoin is deposited in the reserve.
(c) All donations of bitcoin deposited to the reserve by the
comptroller:
(1) become property of this state; and
(2) shall be deposited and held in the reserve and,
except as otherwise provided by this subchapter, managed in the
same manner as any other asset in the state treasury.
(d) The comptroller may issue a certificate of
acknowledgment to a person that donates bitcoin to the reserve if
the person requests the certificate.
(e) The comptroller may establish a recognition program to
publicly honor significant contributions of bitcoin to the reserve.
Sec. 403.710. APPROPRIATIONS TO PURCHASE BITCOIN FOR
RESERVE. (a) The legislature may appropriate money to the
comptroller for the purpose of purchasing bitcoin for deposit in
the reserve.
(b) An appropriation to the comptroller for the purpose
described by Subsection (a) may be made as a dollar amount or as a
percentage of the unencumbered and unexpended balance of the
general revenue fund on the date the appropriation is made.
(c) An appropriation described by Subsection (a) may not
exceed one percent of the unencumbered and unexpended balance of
the general revenue fund for any biennial cycle.
Sec. 403.711. TEXAS STRATEGIC BITCOIN RESERVE ADVISORY
COMMITTEE. (a) In this section, "committee" means the Texas
Strategic Bitcoin Reserve advisory committee.
(b) The committee is composed of the following five members:
(1) the chair of the house committee on
appropriations;
(2) the chair of the senate committee on finance;
(3) the comptroller;
(4) one member of the senate appointed by the
lieutenant governor; and
(5) one member of the house of representatives
appointed by the speaker of the house of representatives.
(c) A member of the committee appointed under Subsection
(b)(4) or (5) serves at the will of the appointing authority.
(d) The lieutenant governor and speaker of the house of
representatives shall each designate one member of the committee as
a co-chair of the committee.
(e) The committee may hold public hearings, formal
meetings, and work sessions. Either co-chair of the committee may
call a public hearing, formal meeting, or work session of the
committee at any time. The committee may not take formal action at
a public hearing, formal meeting, or work session unless a quorum of
the committee is present.
(f) Except as otherwise provided by this subsection, a
member of the committee is not entitled to receive compensation for
service on the committee or reimbursement for expenses incurred in
the performance of official duties as a member of the committee.
Service on the committee by a member of the senate or house of
representatives is considered legislative service for which the
member is entitled to reimbursement and other benefits in the same
manner and to the same extent as for other legislative service.
(g) The committee:
(1) may provide comments and recommendations to the
comptroller for consideration in adopting rules regarding the use
of the reserve or on any other matter related to the reserve; and
(2) shall review the overall operation, function, and
structure of the reserve at least semiannually.
(h) The advisory committee may adopt rules, procedures, and
policies as needed to administer this section and perform its
duties under this section.
(i) Chapter 2110 does not apply to the size, composition, or
duration of the committee.
(j) The committee is subject to Chapter 325 (Texas Sunset
Act). Unless continued in existence as provided by that chapter,
the committee is abolished September 1, 2035.
Sec. 403.712. BIENNIAL REPORT. (a) The comptroller shall
prepare a biennial report that includes:
(1) the total amount of bitcoin held in the reserve;
(2) an estimate of the monetary value of the total
amount of bitcoin held in the reserve, expressed in dollars;
(3) the growth, if any, in the amount and estimated
monetary value of bitcoin in the reserve since the date the previous
report required under this section was published;
(4) all transactions and expenditures, if any, related
to the reserve made since the date the previous report required
under this section was published; and
(5) any security threats made against the reserve
since the date the previous report required under this section was
published.
(b) Not later than December 31 of each even-numbered year,
the comptroller shall electronically publish the report prepared
under Subsection (a) on the comptroller's Internet website and
notify each member of the legislature of the report's availability
on that website.
Sec. 403.713. RULES. The comptroller may adopt rules as
necessary to administer this subchapter, including rules related to
security protocols, reporting standards, and donation procedures
for the reserve.
SECTION 3. This Act takes effect immediately if it receives
a vote of two-thirds of all the members elected to each house, as
provided by Section 39, Article III, Texas Constitution. If this
Act does not receive the vote necessary for immediate effect, this
Act takes effect September 1, 2025.