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Senate File 2108 - IntroducedA Bill ForAn Act 1relating to the establishment of a transactional
2currency based on gold and silver held in a bullion
3depository approved by the treasurer of state, and providing
4fees.
5BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1 Section 1. NEW SECTION. 12L.1 Definitions.
2For purposes of this chapter:
31. “Approved bullion depository” means any of the following:
4a. A bullion depository located in this state, controlled by
5the state, and operating pursuant to regulations and safeguards
6reasonably acceptable to the treasurer of state.
7b. The Texas bullion depository or such other depository
8within the United States similar in mission and operation to
9the Texas bullion depository, provided that agreements and
10standards reasonably acceptable to the treasurer of state
11govern the use of the bullion depository with respect to
12deposits from the state of Iowa or its designees.
132. “Bullion” means precious metals that are formed into
14uniform shapes and quantities such as ingots, bars, or plates,
15with uniform content and purity, as are suitable for or
16customarily used in the purchase, sale, storage, transfer, and
17delivery of bulk or wholesale transactions in precious metals.
183. “Bullion depository” means a secured physical vault
19for the reception, authentication, storage, and security of
20bullion.
214. “Depository account” means the rights, interests, and
22entitlements established in favor of a depositor with respect
23to a deposit in accordance with this chapter and rules adopted
24under this chapter.
255. “Depository account holder” means the original depositor
26of a depository account or a successor or assignee of the
27depositor.
286. “Pooled depository account” means the account established
29under section 12L.4.
307. “Precious metal” means gold or silver that bears a high
31value-to-weight ratio relative to common industrial metals and
32that customarily is formed into bullion or specie.
338. “Specie” means a precious metal stamped into coins of
34uniform shape, size, design, content, and purity, suitable for
35or customarily used as currency, a medium of exchange, or the
-1-1medium for purchase, sale, storage, transfer, or delivery of
2precious metals in retail or wholesale transactions.
39. “Transactional currency” means a representation of actual
4specie and bullion held in a depository account by a depository
5account holder and which may be transferred by electronic
6instruction. The representation must reflect the exact
7fractional troy ounce measurement of physical specie or bullion
8in the pooled depository account as provided by this chapter.
9 Sec. 2. NEW SECTION. 12L.2 Rules.
10The treasurer of state may adopt rules pursuant to chapter
1117A to implement this chapter, including rules to do all of the
12following:
131. Ensure the security of the specie, bullion,
14transactional currency, transactions, and related data.
152. Prevent fraud.
163. Prevent the release of data related to depository
17accounts or depository account holders other than by order of a
18court with proper jurisdiction.
19 Sec. 3. NEW SECTION. 12L.3 Establishment of specie and
20transactional currency.
211. As authorized by Article I, section 10, of the
22Constitution of the United States, the treasurer of state
23shall issue specie and establish a transactional currency as
24determined practicable.
252. The treasurer of state may preferentially contract with a
26private vendor that has its principal place of business in this
27state to establish the transactional currency or perform other
28duties under this chapter.
293. In establishing the transactional currency, the
30treasurer of state shall establish a means to ensure that a
31person or state who holds the transactional currency may use
32the currency as legal tender in payment of debt and readily
33transfer or assign the transactional currency to any other
34person or state by electronic means.
354. In establishing specie, the treasurer of state shall
-2-1exclusively authorize an approved bullion depository as the
2state’s issuer and ensure that the holder of the specie may
3use the specie as legal tender in payment of debt and that the
4specie is readily transferable to any other person or state.
5 Sec. 4. NEW SECTION. 12L.4 Bullion depository account.
61. The treasurer of state, or the treasurer’s designee,
7serving as trustee, shall hold in trust on behalf of the
8transactional currency holders all specie and bullion owned or
9purchased for such purposes. The trustee shall maintain enough
10specie or bullion to provide for the redemption of all units of
11the transactional currency issued but not redeemed.
122. The trustee shall establish an account in the approved
13bullion depository to hold in trust as trustee on the behalf of
14the transactional currency holders all specie and bullion owned
15and allocated or purchased for such purposes.
16 Sec. 5. NEW SECTION. 12L.5 Purchase and issuance.
171. The treasurer of state shall issue transactional
18currency to a person or a state of the United States to which
19any of the following apply:
20a. The person or state has made payment to the treasurer of
21state for the purpose of a purchase of specie or bullion to be
22represented by transactional currency and paid any fee charged
23under section 12L.10.
24b. The person or state designated specie or bullion held on
25account in the approved bullion depository for the purpose of
26being represented by transactional currency and paid any fee
27charged under section 12L.10.
282. Upon receiving payment under subsection 1, paragraph “a”,
29or an account holder’s designation and payment under subsection
301, paragraph “b”, the treasurer of state shall do all of the
31following:
32a. Using the money received, buy specie or bullion in the
33number of troy ounces of precious metal equal to the number
34of units of the transactional currency to be issued to the
35purchaser under subsection 1.
-3- 1b. Deposit the specie or bullion into the pooled depository
2account for the purchaser.
3c. Issue to the purchaser a depository account with or add
4to an existing depository account a number of units of the
5transactional currency equal to the amount of specie or bullion
6that the purchase money received from the account holder would
7buy at the market price on that date as published by the
8approved bullion depository.
9 Sec. 6. NEW SECTION. 12L.6 Redemption of transactional
10currency for United States dollars.
111. A person who holds transactional currency may present to
12the treasurer of state any number of units of the transactional
13currency to redeem for United States dollars.
142. On receipt of a person’s request for redemption, the
15treasurer of state shall do all of the following:
16a. Sell from the specie or bullion held in the pooled
17depository account a number of troy ounces equal to the number
18of units of the transactional currency being redeemed.
19b. Provide to the person an amount of United States dollars
20equal to the amount received from the sale of specie or bullion
21under paragraph “a”, less a fee charged under section 12L.10.
22 Sec. 7. NEW SECTION. 12L.7 Redemption of transactional
23currency for specie or bullion.
241. Subject to section 12L.3, an account holder who holds the
25transactional currency may present to the treasurer of state
26any number of units of the transactional currency to redeem for
27an equal number of troy ounces of specie or bullion from the
28pooled depository account.
292. On receipt of a request for redemption, the treasurer of
30state shall do all of the following:
31a. Withdraw the equivalent number of troy ounces of specie
32or bullion from the pooled depository account.
33b. On the payment of a fee charged under section 12L.10,
34deliver the specie or bullion as requested to the requestor.
35 Sec. 8. NEW SECTION. 12L.8 Value of transactional currency.
-4- 11. At the time of each transaction involving the issuance
2or redemption of the transactional currency, the treasurer of
3state shall determine the value of a unit of the transactional
4currency as published by the approved bullion depository.
52. The value of a unit of the transactional currency
6at the time of a transaction must be equal to the value of
7the appropriate fraction of a troy ounce of gold or silver,
8respectively, at the time of that transaction as published by
9the approved bullion depository.
10 Sec. 9. NEW SECTION. 12L.9 Money and deposits held in
11trust.
12The treasurer of state as trustee shall hold outside
13the state treasury on the behalf of persons who hold the
14transactional currency money received under section 12L.5,
15subsection 1, specie or bullion purchased and deposited in
16the pooled depository account as provided by section 12L.5,
17subsection 2, paragraph “a”, and money received from the sale of
18specie or bullion in the pooled depository account in response
19to a request for redemption under section 12L.6. Such money,
20specie, and bullion is not available for appropriation by the
21general assembly.
22 Sec. 10. NEW SECTION. 12L.10 Fees.
23The treasurer of state may establish a fee for the issuance
24or redemption of the transactional currency to cover the
25treasurer of state’s costs in administering this chapter and
26an industry standard merchant fee for use. Fees collected by
27the treasurer of state under this section shall be considered
28repayment receipts to be used for such purposes. Fees
29collected in excess of the amount necessary for such purposes
30shall be deposited in the general fund of the state.
31EXPLANATION
32The inclusion of this explanation does not constitute agreement with
33the explanation’s substance by the members of the general assembly.
34This bill requires the treasurer of state to issue specie
35and establish a transactional currency that are usable as
-5-1legal tender and readily transferable. The bill permits the
2treasurer of state to contract with a private vendor to perform
3the treasurer of state’s duties and requires the treasurer of
4state to exclusively authorize an approved bullion depository
5as the state’s issuer of specie.
6The bill requires the treasurer of state to hold all specie
7and bullion owned or purchased for such purposes in trust for
8the transactional currency holders and to maintain enough
9specie or bullion to allow for the redemption of all units
10of the transactional currency issued. The bill requires the
11treasurer of state to create an account in the approved bullion
12depository for all the specie and bullion.
13Once a person or state pays the treasurer of state for specie
14or bullion or designates specie or bullion held on account in
15the depository for being represented by transactional currency
16and pays a fee, the bill requires the treasurer of state to
17issue transactional currency to that person or state and to
18buy specie or bullion in the number of troy ounces of precious
19metal equal to the number of units of transactional currency
20issued to the purchaser, deposit the specie or bullion into
21the pooled depository account for the purchaser, and issue
22a depository account to the purchaser or update an existing
23depository account to reflect the purchase.
24The bill allows a person with transactional currency to
25redeem the currency for United States dollars, specie, or
26bullion by presenting the currency to the treasurer of state.
27To redeem the currency for the person, the bill requires the
28treasurer of state to sell the equivalent amount of specie
29or bullion from the pooled depository account and provide
30the amount received from the sale in United States dollars
31to the person or to withdraw the specie or bullion from the
32depository.
33The bill requires the treasurer of state to determine
34the value of a unit of transactional currency whenever
35transactional currency is issued or redeemed and requires that
-6-1the value of a unit of transactional currency be equal to the
2appropriate fraction of a troy ounce of gold or silver at the
3time of that transaction as published by the approved bullion
4depository.
5The bill requires that specie and bullion purchased and
6deposited into the pooled depository account and money received
7in exchange for transactional currency or for the sale of
8specie or bullion in response to a request for redemption be
9held by the treasurer of state outside the state treasury and
10provides that it is not available for appropriation by the
11general assembly.
12The bill allows the treasurer of state to set a fee for
13issuing or redeeming transactional currency. The treasurer
14of state retains the fees to administer the bill and cover
15costs of industry standard merchant fees, with any excess to be
16deposited in the general fund of the state.
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2currency based on gold and silver held in a bullion
3depository approved by the treasurer of state, and providing
4fees.
5BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1 Section 1. NEW SECTION. 12L.1 Definitions.
2For purposes of this chapter:
31. “Approved bullion depository” means any of the following:
4a. A bullion depository located in this state, controlled by
5the state, and operating pursuant to regulations and safeguards
6reasonably acceptable to the treasurer of state.
7b. The Texas bullion depository or such other depository
8within the United States similar in mission and operation to
9the Texas bullion depository, provided that agreements and
10standards reasonably acceptable to the treasurer of state
11govern the use of the bullion depository with respect to
12deposits from the state of Iowa or its designees.
132. “Bullion” means precious metals that are formed into
14uniform shapes and quantities such as ingots, bars, or plates,
15with uniform content and purity, as are suitable for or
16customarily used in the purchase, sale, storage, transfer, and
17delivery of bulk or wholesale transactions in precious metals.
183. “Bullion depository” means a secured physical vault
19for the reception, authentication, storage, and security of
20bullion.
214. “Depository account” means the rights, interests, and
22entitlements established in favor of a depositor with respect
23to a deposit in accordance with this chapter and rules adopted
24under this chapter.
255. “Depository account holder” means the original depositor
26of a depository account or a successor or assignee of the
27depositor.
286. “Pooled depository account” means the account established
29under section 12L.4.
307. “Precious metal” means gold or silver that bears a high
31value-to-weight ratio relative to common industrial metals and
32that customarily is formed into bullion or specie.
338. “Specie” means a precious metal stamped into coins of
34uniform shape, size, design, content, and purity, suitable for
35or customarily used as currency, a medium of exchange, or the
-1-1medium for purchase, sale, storage, transfer, or delivery of
2precious metals in retail or wholesale transactions.
39. “Transactional currency” means a representation of actual
4specie and bullion held in a depository account by a depository
5account holder and which may be transferred by electronic
6instruction. The representation must reflect the exact
7fractional troy ounce measurement of physical specie or bullion
8in the pooled depository account as provided by this chapter.
9 Sec. 2. NEW SECTION. 12L.2 Rules.
10The treasurer of state may adopt rules pursuant to chapter
1117A to implement this chapter, including rules to do all of the
12following:
131. Ensure the security of the specie, bullion,
14transactional currency, transactions, and related data.
152. Prevent fraud.
163. Prevent the release of data related to depository
17accounts or depository account holders other than by order of a
18court with proper jurisdiction.
19 Sec. 3. NEW SECTION. 12L.3 Establishment of specie and
20transactional currency.
211. As authorized by Article I, section 10, of the
22Constitution of the United States, the treasurer of state
23shall issue specie and establish a transactional currency as
24determined practicable.
252. The treasurer of state may preferentially contract with a
26private vendor that has its principal place of business in this
27state to establish the transactional currency or perform other
28duties under this chapter.
293. In establishing the transactional currency, the
30treasurer of state shall establish a means to ensure that a
31person or state who holds the transactional currency may use
32the currency as legal tender in payment of debt and readily
33transfer or assign the transactional currency to any other
34person or state by electronic means.
354. In establishing specie, the treasurer of state shall
-2-1exclusively authorize an approved bullion depository as the
2state’s issuer and ensure that the holder of the specie may
3use the specie as legal tender in payment of debt and that the
4specie is readily transferable to any other person or state.
5 Sec. 4. NEW SECTION. 12L.4 Bullion depository account.
61. The treasurer of state, or the treasurer’s designee,
7serving as trustee, shall hold in trust on behalf of the
8transactional currency holders all specie and bullion owned or
9purchased for such purposes. The trustee shall maintain enough
10specie or bullion to provide for the redemption of all units of
11the transactional currency issued but not redeemed.
122. The trustee shall establish an account in the approved
13bullion depository to hold in trust as trustee on the behalf of
14the transactional currency holders all specie and bullion owned
15and allocated or purchased for such purposes.
16 Sec. 5. NEW SECTION. 12L.5 Purchase and issuance.
171. The treasurer of state shall issue transactional
18currency to a person or a state of the United States to which
19any of the following apply:
20a. The person or state has made payment to the treasurer of
21state for the purpose of a purchase of specie or bullion to be
22represented by transactional currency and paid any fee charged
23under section 12L.10.
24b. The person or state designated specie or bullion held on
25account in the approved bullion depository for the purpose of
26being represented by transactional currency and paid any fee
27charged under section 12L.10.
282. Upon receiving payment under subsection 1, paragraph “a”,
29or an account holder’s designation and payment under subsection
301, paragraph “b”, the treasurer of state shall do all of the
31following:
32a. Using the money received, buy specie or bullion in the
33number of troy ounces of precious metal equal to the number
34of units of the transactional currency to be issued to the
35purchaser under subsection 1.
-3- 1b. Deposit the specie or bullion into the pooled depository
2account for the purchaser.
3c. Issue to the purchaser a depository account with or add
4to an existing depository account a number of units of the
5transactional currency equal to the amount of specie or bullion
6that the purchase money received from the account holder would
7buy at the market price on that date as published by the
8approved bullion depository.
9 Sec. 6. NEW SECTION. 12L.6 Redemption of transactional
10currency for United States dollars.
111. A person who holds transactional currency may present to
12the treasurer of state any number of units of the transactional
13currency to redeem for United States dollars.
142. On receipt of a person’s request for redemption, the
15treasurer of state shall do all of the following:
16a. Sell from the specie or bullion held in the pooled
17depository account a number of troy ounces equal to the number
18of units of the transactional currency being redeemed.
19b. Provide to the person an amount of United States dollars
20equal to the amount received from the sale of specie or bullion
21under paragraph “a”, less a fee charged under section 12L.10.
22 Sec. 7. NEW SECTION. 12L.7 Redemption of transactional
23currency for specie or bullion.
241. Subject to section 12L.3, an account holder who holds the
25transactional currency may present to the treasurer of state
26any number of units of the transactional currency to redeem for
27an equal number of troy ounces of specie or bullion from the
28pooled depository account.
292. On receipt of a request for redemption, the treasurer of
30state shall do all of the following:
31a. Withdraw the equivalent number of troy ounces of specie
32or bullion from the pooled depository account.
33b. On the payment of a fee charged under section 12L.10,
34deliver the specie or bullion as requested to the requestor.
35 Sec. 8. NEW SECTION. 12L.8 Value of transactional currency.
-4- 11. At the time of each transaction involving the issuance
2or redemption of the transactional currency, the treasurer of
3state shall determine the value of a unit of the transactional
4currency as published by the approved bullion depository.
52. The value of a unit of the transactional currency
6at the time of a transaction must be equal to the value of
7the appropriate fraction of a troy ounce of gold or silver,
8respectively, at the time of that transaction as published by
9the approved bullion depository.
10 Sec. 9. NEW SECTION. 12L.9 Money and deposits held in
11trust.
12The treasurer of state as trustee shall hold outside
13the state treasury on the behalf of persons who hold the
14transactional currency money received under section 12L.5,
15subsection 1, specie or bullion purchased and deposited in
16the pooled depository account as provided by section 12L.5,
17subsection 2, paragraph “a”, and money received from the sale of
18specie or bullion in the pooled depository account in response
19to a request for redemption under section 12L.6. Such money,
20specie, and bullion is not available for appropriation by the
21general assembly.
22 Sec. 10. NEW SECTION. 12L.10 Fees.
23The treasurer of state may establish a fee for the issuance
24or redemption of the transactional currency to cover the
25treasurer of state’s costs in administering this chapter and
26an industry standard merchant fee for use. Fees collected by
27the treasurer of state under this section shall be considered
28repayment receipts to be used for such purposes. Fees
29collected in excess of the amount necessary for such purposes
30shall be deposited in the general fund of the state.
31EXPLANATION
32The inclusion of this explanation does not constitute agreement with
33the explanation’s substance by the members of the general assembly.
34This bill requires the treasurer of state to issue specie
35and establish a transactional currency that are usable as
-5-1legal tender and readily transferable. The bill permits the
2treasurer of state to contract with a private vendor to perform
3the treasurer of state’s duties and requires the treasurer of
4state to exclusively authorize an approved bullion depository
5as the state’s issuer of specie.
6The bill requires the treasurer of state to hold all specie
7and bullion owned or purchased for such purposes in trust for
8the transactional currency holders and to maintain enough
9specie or bullion to allow for the redemption of all units
10of the transactional currency issued. The bill requires the
11treasurer of state to create an account in the approved bullion
12depository for all the specie and bullion.
13Once a person or state pays the treasurer of state for specie
14or bullion or designates specie or bullion held on account in
15the depository for being represented by transactional currency
16and pays a fee, the bill requires the treasurer of state to
17issue transactional currency to that person or state and to
18buy specie or bullion in the number of troy ounces of precious
19metal equal to the number of units of transactional currency
20issued to the purchaser, deposit the specie or bullion into
21the pooled depository account for the purchaser, and issue
22a depository account to the purchaser or update an existing
23depository account to reflect the purchase.
24The bill allows a person with transactional currency to
25redeem the currency for United States dollars, specie, or
26bullion by presenting the currency to the treasurer of state.
27To redeem the currency for the person, the bill requires the
28treasurer of state to sell the equivalent amount of specie
29or bullion from the pooled depository account and provide
30the amount received from the sale in United States dollars
31to the person or to withdraw the specie or bullion from the
32depository.
33The bill requires the treasurer of state to determine
34the value of a unit of transactional currency whenever
35transactional currency is issued or redeemed and requires that
-6-1the value of a unit of transactional currency be equal to the
2appropriate fraction of a troy ounce of gold or silver at the
3time of that transaction as published by the approved bullion
4depository.
5The bill requires that specie and bullion purchased and
6deposited into the pooled depository account and money received
7in exchange for transactional currency or for the sale of
8specie or bullion in response to a request for redemption be
9held by the treasurer of state outside the state treasury and
10provides that it is not available for appropriation by the
11general assembly.
12The bill allows the treasurer of state to set a fee for
13issuing or redeeming transactional currency. The treasurer
14of state retains the fees to administer the bill and cover
15costs of industry standard merchant fees, with any excess to be
16deposited in the general fund of the state.
-7-sc/ns