By: Capriglione H.B. No. 3169

A BILL TO BE ENTITLED

AN ACT

relating to the operation and administration of the Texas Bullion Depository; depository agents; and to the appropriation of money from the fees, charges, penalties, and other amounts related to the depository and deposited to the general revenue fund for that purpose.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Section 2116.001(9), Government Code, is amended to read as follows:

(9) "Depository agent" means a person licensed in accordance with this chapter to serve as an agent on behalf of a current or prospective [intermediary between the] depository account holder [and a retail customer] in making a retail transaction in precious metals bullion or specie.

SECTION 2. Section 2116.002, Government Code, is amended by amending Subsection (a) and adding Subsections (c)-(h) to read as follows:

(a) The Texas Bullion Depository is established as a program [an agency of this state] in the office of the comptroller to provide a bullion depository and services for the public benefit relating to bullion, specie, and precious metals.

(c) The comptroller may establish a special purpose corporation or other legal entity, with all general corporate powers incident to its operation as a corporate body, to operate the depository for the public benefit and provide related services, as provided by this chapter. The entity has all necessary and implied powers to accomplish the purposes of the entity. The entity is subject to regulation only as provided by this chapter.

(d) The depository may adopt and amend articles of incorporation, bylaws, resolutions, and other documents necessary to carry out its purposes.

(e) This state and the comptroller may not be held liable for the depository or related activities of the depository. This chapter may not be construed as creating financial or other responsibilities to the state or to the comptroller. This state does not pledge the full faith and credit of this state for the benefit of the depository.

(f) The depository may enter into one or more contracts with a vendor to operate the depository or provide any of the depository's services.

(g) Notwithstanding Chapter 2113, Government Code, the depository may enter into contracts and engage in marketing, the sale of promotional items, advertising, and other activities to promote the depository. The comptroller may use appropriated funds to pay for activities of the depository authorized under this section.

SECTION 3. Section 2116.003, Government Code, is amended to read as follows:

Sec. 2116.003. DEPOSITORY ADMINISTRATION; ADMINISTRATOR. (a) The depository is administered as a program [division] of the office of the comptroller and under the direction and supervision of a bullion depository administrator appointed by the comptroller [with the advice and consent of the governor, lieutenant governor, and senate].

(b) The administrator shall:

(1) administer, supervise, and direct the operations and affairs of the depository and liaise with depository agents; and

(2) liaise with the comptroller and other divisions of the office of the comptroller to ensure that each transaction with the depository that involves state money, that involves an agency, a political subdivision, or another instrumentality of this state, or that involves a private person is planned, administered, and executed in a manner to achieve the purposes of this chapter.

(c) The administrator may appoint, subject to the approval of the comptroller, a deputy administrator or other subordinate officer or staff member as necessary and appropriate to the efficient administration of the depository. The depository may contract with the comptroller's office to provide staff support.

(d) The administrator, the deputy administrator or another subordinate officer, or a staff member of the depository is not personally liable in the person's private capacity for any act performed or for any contract or other obligation entered into or undertaken in an official capacity in good faith and without intent to defraud in connection with the administration, management, or conduct of the depository, its business, or other related affairs.

SECTION 4. The heading to Section 2116.009, Government Code, is amended to read as follows:

Sec. 2116.009. ACCOUNT BALANCES [CAUSE OF ACTION FOR DENIAL OF DEPOSIT LIABILITY].

SECTION 5. Section 2116.009, Government Code, is amended by amending Subsection (b) and adding Subsections (b-1), (b-2), (b-3), and (b-4) to read as follows:

(b) The depository shall furnish depository account holders with [depository's act of furnishing] an account statement or passbook, whether in physical, digital, or electronic form[, constitutes a denial of liability and the giving of such notice as to any amount not shown on the statement or passbook].

(b-1) The depository account holder is responsible for:

(1) promptly examining each account statement received from the depository; and

(2) reporting any discrepancy in the account statement to the depository not later than the 60th day after the depository sent the account statement.

(b-2) The depository may establish a process to resolve any disputed depository account balance.

(b-3) If the depository account holder fails to report any account balance discrepancy reflected on the account balance statement or passbook to the depository within 60 days of the date the depository sent the statement or passbook, then:

(1) the depository account holder will be deemed to have accepted the account statement or passbook as accurate;

(2) the depository account holder may not dispute the account balance; and

(3) the depository shall deem the depository account statement or passbook as accurate and undisputed by the depository account holder.

(b-4) The comptroller may adopt rules to implement this section.

SECTION 6. Section 2116.010, Government Code, is amended to read as follows:

Sec. 2116.010. FEES; SERVICE CHARGES; PAYMENTS; PENALTIES. (a) The comptroller [by rule] may establish fees, service charges, and penalties to be charged a depository account holder for a service or activity regarding a depository account, including a fee for an overdraft, an insufficient fund check or draft, or a stop payment order.

(b) The comptroller may establish other charges and receive payments in the course of depository operations and activities, including from transactions and relationships authorized by Section 2116.021.

(c) The comptroller shall deposit revenue realized by the depository under this section to the credit of the general revenue fund.

(d) Money credited to the general revenue fund under this section may be appropriated to the comptroller to offset the costs of implementation, administration, promotion, marketing, advertising, and operation of the depository.

SECTION 7. Section 2116.021, Government Code, is amended to read as follows:

Sec. 2116.021. TRANSACTIONS AND RELATIONSHIPS. The depository may [shall] enter into transactions and relationships with bullion banks, depositories, dealers, central banks, an IRS approved bank or non-bank acting as custodian for Individual Retirement Accounts, sovereign wealth funds, financial institutions, international nongovernmental organizations, intermediaries, and other persons, located inside or outside of this state or inside or outside of the United States, as the comptroller determines to be prudent and suitable to facilitate the operations of the depository and to further the purposes of this chapter.

SECTION 8. Section 2116.023, Government Code, is amended by amending Subsection (c) and adding Subsection (d) to read as follows:

(c) On receipt of notice of any transaction described by Subsection (a), with respect to all or any portion of the balance of a depository account, the depository shall suspend withdrawal privileges associated with the balances of the depository account until suitable substitute arrangements may be effected in accordance with the representation of the depository by the attorney general and rules of the comptroller to enable the registered account holder to take delivery of the precious metals represented by the account balances in question. A voluntary transfer of a depository account balance or of a depository account among depository account holders may continue to take place unaffected by the suspension, and the depository shall recognize the transfer to the full extent authorized by this chapter, the representation of the depository by the attorney general, and rules adopted under this chapter.

(d) On receipt of notice of any transaction described by Subsection (a), the depository shall refer the notice to the attorney general for representation, and the attorney general shall represent the depository in any action related to the notice.

SECTION 9. Subchapter A, Chapter 2116, Government Code, is amended by adding Sections 2116.027 and 2116.028 to read as follows:

Sec. 2116.027. CONFIDENTIALITY OF RECORDS. (a) Except as otherwise provided by Section 2116.028 and this section, the depository's records are subject to public inspection to the extent authorized by Chapter 552.

(b) The following information is confidential and is exempt from disclosure under Chapter 552:

(1) records and information related to the depository's physical security, information security, or designed to ensure the integrity and security of the depository including without limitation access codes, passwords, signatures, specifications, technical details, operating procedures, locations, and financial information on expenditures for depository security;

(2) records relating to individual accounts or to current or prospective depository account holders that are in the custody of the depository or in the custody of a vendor performing services related to the depository;

(3) records related to setting depository fees, service charges, penalties, or other charges or payments;

(4) records related to establishing standards under Sections 2116.005(c) and (d); and

(5) operational or other information that would give advantage to competitors or bidders.

(c) Notwithstanding Subsection (b)(2), depository account information may be disclosed:

(1) to a depository account holder regarding the depository account holder's account;

(2) to a state or federal agency as necessary to administer the program or as required by applicable law;

(3) to a vendor providing services to the depository or to a current or prospective depository account holder;

(4) in response to a subpoena issued under applicable law;

(5) if compiled as collective information that does not include any identifying information about a person; or

(6) with the express written permission of a depository account holder.

Sec. 2116.028. INTELLECTUAL PROPERTY. (a) The depository may:

(1) apply for, register, secure, hold, and protect under the laws of the United States or any state or nation:

(A) a patent for the invention, discovery, or improvement of any process, machine, manufacture, or composition of matter;

(B) a copyright for an original work of authorship fixed in any tangible medium of expression, known or later developed, from which it can be perceived, reproduced, or otherwise communicated, either directly or with the aid of a machine or device;

(C) a trademark, service mark, collective mark, or certification mark for a word, name, symbol, device, or slogan that the depository uses to identify and distinguish the depository's goods and services from other goods and services; or

(D) other evidence of protection or exclusivity issued for intellectual property;

(2) contract with a person for the reproduction, public performance, display, distribution, advertising, sale, lease, marketing, licensing, sale, use, or other distribution of the depository's intellectual property;

(3) obtain under a contract described in Subdivision (2) a royalty, license right, or other appropriate means of securing reasonable compensation for the exercise of the depository's intellectual property rights; and

(4) waive or reduce the amount of compensation secured by contract under Subdivision (3) if the depository determines that the waiver or reduction will:

(A) further a goal or mission of the depository; and

(B) result in a net benefit to the depository.

(b) Intellectual property of the depository is excepted from required disclosure under Chapter 552:

(1) beginning on the date the depository decides to seek a patent, trademark, service mark, collective mark, certification mark, or other evidence of protection of exclusivity concerning the property; and

(2) ending on the date the depository receives a decision on the depository's application for a patent, trademark, service mark, collective mark, certification mark, or other evidence of protection of exclusivity concerning the property.

(c) The comptroller shall deposit revenue realized by the depository under this section to the credit of the general revenue fund.

(d) Money credited to the general revenue fund under this section may be appropriated only to the comptroller to offset the costs of implementation, administration, promotion, marketing, advertising, and operation of the depository.

(e) The comptroller may establish intellectual property policies.

SECTION 10. Section 2116.051, Government Code, is amended to read as follows:

Sec. 2116.051. USE OF DEPOSITORY AGENTS. The depository shall use private, independently managed firms and institutions licensed as depository agents as intermediaries to conduct retail transactions in bullion and specie on behalf of [the depository with] current and prospective depository account holders.

SECTION 11. Section 2116.052, Government Code, is amended to read as follows:

Sec. 2116.052. ELECTRONIC INFORMATION SHARING SYSTEMS AND PROCESSES. A [The comptroller by rule shall require a] depository agent shall [to] maintain suitable systems and processes for electronic information sharing and communication with the comptroller and the depository to ensure that all transactions effected on behalf of current and prospective [the] depository account holders are reported to and integrated into the depository's records not later than 11:59:59 p.m. on the date of each transaction.

SECTION 12. Section 151.002(b)(9-c), Finance Code, is amended to read as follows:

(9-c) "Depository agent services" means services rendered [to the general public] for or on behalf of current or prospective depository account holders of the Texas Bullion Depository in the nature of purchasing, selling, transferring, accepting, transporting, delivering, or otherwise dealing in precious metals bullion or specie in connection with the creation, transfer, clearing, settlement, or liquidation of the rights and interests of a depository account holder and a direct or indirect transferee of a depository account holder, as those terms are defined by Subchapter J. The term "depository agent services" does not include:

(A) participation as a party or counterparty to a transaction, including an agreement with respect to a transaction, in or in connection with a contract for the purchase or sale of a person's rights and interests as a depository account holder, as a cash contract for present delivery, a cash contract for deferred shipment or delivery, or a contract for future delivery, where the underlying deliverable consists of the depository account holder's interest in the depository account, rather than the underlying precious metal represented by the depository account balance;

(B) the opening, transfer, settlement, or liquidation of any derivative of a contract described by Paragraph (A), including a forward transaction, swap transaction, currency transaction, future transaction, index transaction, or option on or other derivative of a transaction of any of those types, in the nature of a cap transaction, floor transaction, collar transaction, repurchase transaction, reverse repurchase transaction, buy-and-sell-back transaction, securities lending transaction, or other financial instrument or interest, including an option with respect to a transaction, or any combination of these transactions; or

(C) the rendition of services exclusively in support of the opening, transfer, settlement, or liquidation of transaction derivatives described by Paragraph (B) through a central counterparty, such as those customarily rendered by a clearinghouse, clearing association, or clearing corporation, or through an interbank payment system, physical or electronic trading facility, broker or brokerage firm, or similar entity, facility, system, or organization.

SECTION 13. Section 151.858, Finance Code, is amended to read as follows:

Sec. 151.858. LIABILITY OF LICENSE HOLDER. A depository agent license holder is liable for the delivery to or for the depository account of [the depository or] each current or prospective depository account holder [depositor], as applicable, of all bullion, specie, and money payable or deliverable in connection with the transactions in which the license holder engages on behalf of the current or prospective depositor who is entitled to depository agent services.

SECTION 14. Sections 2116.009(a), (c), (d), (e), and (f), Government Code, are repealed.

SECTION 15. 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, 2017.