Texas Politics

Texas lawmaker: It’s time to protect gold depository, reduce precious-metal taxes

Texas comptroller talks about possibility of gold depository

Could Texas eventually have its own Fort Knox? In this 2015 video created by his office, Texas Comptroller Glenn Hegar discusses the bullion repository. He also takes a look at some of the assets in Texas' unclaimed property cache.
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Could Texas eventually have its own Fort Knox? In this 2015 video created by his office, Texas Comptroller Glenn Hegar discusses the bullion repository. He also takes a look at some of the assets in Texas' unclaimed property cache.

State leaders want to make sure that whenever and wherever a gold depository is eventually built in Texas, the facility is safe and sound.

State Rep. Giovanni Capriglione, R-Southlake, filed a bill recently to do everything from allowing operators to market and brand the facility to ensuring that security and operational information remains confidential.

“We filed this in order to make sure everything goes smoothly and we can get someone managing the depository as soon as possible,” Capriglione said. He added that the bill “is an important part of” completing the bidding process, which is behind its original schedule.

“It will make things a lot easier,” he said.

A related measure proposes eliminating property taxes on bullion and precious metals.

“We would get rid of that tax completely to make [the state] more competitive,” Capriglione said of House Joint Resolution 113.

If passed by the Legislature, the tax proposal would go before voters in November.

State officials have yet to name the company that will create the Texas Bullion Depository — which could hold deposits of gold and other precious metals from financial institutions, cities, school districts, businesses, individuals and countries — or announce where it will be.

Original plans called for having work on the winning proposal underway by Dec. 1. But state officials are still reviewing the proposals.

“Within the agency, we are still working to make sure we get this done as quickly as possible,” said Chris Bryan, a spokesman with the Texas comptroller’s office. “But we are also working to make sure we get this right.”

Looking ahead

House Bill 3169 updates the original law that allows the bullion depository and shields the state and comptroller from being held liable for the depository or related activities.

One provision of the bill would change where money generated by the depository goes.

The original law requires all fees and revenue to go into the state’s general fund. But since lawmakers only meet for 140 days every two years, that could make it difficult for the depository operator to get paid in a timely manner. So Capriglione said a rider is being added to the state budget to allow money generated by the depository to go to the operator.

Another provision of HB 3169 calls for the depository to give account holders statements that they must check over quickly and either report problems or accept.

We need to make sure private information remains private.

State Rep. Giovanni Capriglione, R-Southlake

The bill would give the operator the statutory ability to promote, brand and market the depository and apply for patents, copyrights and trademarks — moves that could generate more revenue.

And while many depository records will be open to the public, some will remain confidential, including information about the depository’s physical and information security, as well as operating procedures and security expenditures.

“We need to make sure private information remains private,” Capriglione said.

Other information to remain confidential includes records about individual accounts and operational information that could give “advantage to competitors or bidders.”

Opening date TBD

Officials with the comptroller’s office say they don’t know when work to create the depository will begin because they are still reviewing proposals.

Last year, state officials laid out criteria for a Texas depository, noting that any company wanting to create and manage it must shoulder all the upfront costs and be reimbursed down the road once storage fees and other payments begin.

Because of ongoing negotiations, officials won’t say how many proposals they received, only that there were “a number” of them.

“I’m patiently impatient,” Capriglione said. “I want to see this done as quickly as possible. I understand there are still some things that need to get done. But it’s a law, so it needs to be done as soon as possible.”

The 85th Legislature is in session until May 29.

Officials have said the depository could be in one location or multiple sites throughout the state, depending on which proposal the comptroller’s task force prefers.

The overall process has been underway since 2015, when Capriglione shepherded a measure to create the depository through the Texas House.

Capriglione has said this depository is similar to a bank that doesn’t do any lending. At the depository, Texans will be able to open accounts similar to checking or savings accounts at traditional banks — and monitor them online.

But storage fees will be charged.

Those fees could add up, particularly when storing larger amounts, such as the estimated $650 million owned by the University of Texas Investment Management Co. now stored at the HSBC Bank in New York.

The company pays about $650,000 a year to store the gold there. Some Texas officials have long indicated they would like for the gold to come home.

“The Texas Bullion Depository will become the first state-level facility of its kind in the nation, increasing the security and stability of our gold reserves and keeping taxpayer funds from leaving Texas to pay for fees to store gold in facilities outside our state,” Gov. Greg Abbott said when he signed the original bill into law.

Anna Tinsley: 817-390-7610, @annatinsley

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