SF 112 (LSB 1072XS (2) 91)

SENATE FILE 112

BY  ALONS, EVANS, TAYLOR, LOFGREN, GREEN, SWEENEY, DE WITT, ROWLEY, SALMON, GUTH, CAMPBELL, SHIPLEY, REICHMAN, PIKE, McCLINTOCK, and WESTRICH

A BILL FOR

An Act relating to the establishment of a transactional currency based on gold and silver held in a bullion depository approved by the treasurer of state, and providing fees.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

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