83R1852 JJT-F
	By: Capriglione	H.B. No. 3505

	A BILL TO BE ENTITLED
	AN ACT
	relating to the establishment and administration of a state bullion
	depository and the investment of certain public money in precious
	metals and depository accounts.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
	SECTION 1.  Subtitle C, Title 10, Government Code, is
	amended by adding Chapter 2116 to read as follows:
	CHAPTER 2116. TEXAS BULLION DEPOSITORY
	SUBCHAPTER A. ESTABLISHMENT AND ADMINISTRATION OF TEXAS
	BULLION DEPOSITORY
	Sec. 2116.001.  DEFINITIONS. In this chapter:
	(1)  "Administrator" means the bullion depository
	administrator appointed under Section 2116.003.
	(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)  "Business day" means a day other than a Saturday,
	Sunday, or banking holiday for a bank chartered under the laws of
	this state.
	(4)  "Deposit" means the establishment of an executory
	obligation of the depository's to deliver to the order of the person
	establishing with the depository the obligation, on demand, a
	quantity of a specified precious metal, in bullion, specie, or a
	combination of both, equal to the quantity of the same precious
	metal delivered by or on behalf of the depositor into the custody
	of:
	(A)  the depository; or
	(B)  a depository agent.
	(5)  "Depositor" means a person who makes a deposit.
	(6)  "Depository" means the Texas Bullion Depository
	created by this chapter.
	(7)  "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.
	(8)  "Depository account holder," regarding a
	depository account, means the original depositor or a successor or
	assignee of the depositor respecting the depository account.
	(9)  "Depository agent" means a person licensed in
	accordance with this chapter to serve as an intermediary between
	the depository and a retail customer in making a transaction in
	precious metals bullion or specie.
	(10)  "Precious metal" means a metal, including gold,
	silver, platinum, palladium, and rhodium, that:
	(A)  bears a high value-to-weight ratio relative
	to common industrial metals; and
	(B)  customarily is formed into bullion or specie.
	(11)  "Specie" means a precious metal stamped into
	coins of uniform shape, size, design, content, and purity, suitable
	for or customarily used as currency, as a medium of exchange, or as
	the medium for purchase, sale, storage, transfer, or delivery of
	precious metals in retail or wholesale transactions.
	Sec. 2116.002.  TEXAS BULLION DEPOSITORY. (a)  The Texas
	Bullion Depository is established as an agency of this state in the
	office of the comptroller.
	(b)  The depository is established to:
	(1)  serve as the custodian, guardian, and
	administrator of all bullion and specie transferred to or otherwise
	acquired by this state or an agency, a political subdivision, or
	another instrumentality of this state;
	(2)  provide the basis for a system for precious
	metals-denominated intergovernmental payments and settlements
	between and among:
	(A)  the agencies, political subdivisions, and
	instrumentalities of this state; and
	(B)  persons making payments to, receiving
	payments from, or otherwise doing business with an agency, a
	political subdivision, or another instrumentality of this state in
	the exercise and discharge of a governmental function or
	responsibility of the political subdivision, agency, or
	instrumentality;
	(3)  establish a process and mechanism by which the
	system described by Subdivision (2) is able to function in the event
	of a systemic dislocation in a national and international financial
	system, including systemic problems in liquidity, credit markets,
	or currency markets; and
	(4)  provide a regulatory and administrative framework
	for the system described by Subdivision (2) to be made available to
	private persons.
	Sec. 2116.003.  DEPOSITORY ADMINISTRATION; ADMINISTRATOR.
	(a)  The depository is administered as a 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 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 as necessary and appropriate to the efficient
	administration of the depository.
	Sec. 2116.004.  DEPOSITS AND RELATED ASSETS NOT SUBJECT TO
	LEGISLATIVE APPROPRIATION; STATUS OF DEPOSITS AND ALLOCATION OF
	REVENUES. (a)  The following are not available for legislative
	appropriation:
	(1)  a deposit to the depository;
	(2)  bullion or specie held by or on behalf of the
	depository or a depository agent;
	(3)  bullion or specie in transit to or from the
	depository or a depository agent; and
	(4)  a receivable or other amount owed to the
	depository in settlement of a transaction in bullion or specie.
	(b)  Bullion, specie, and other assets described by
	Subsection (a) are subject to redemption, liquidation, or transfer
	exclusively to discharge an obligation of the depository to
	depository account holders, depository agents, bullion banks,
	financial institutions, or other intermediaries in accordance with
	this chapter and rules adopted under this chapter.
	(c)  Revenue the depository realizes from fees, charges, or
	other payments received in the course of depository operations
	shall be deposited to the credit of the general revenue fund.
	Sec. 2116.005.  DEPOSITS AND DEPOSITORY ACCOUNTS;
	STANDARDS. (a) The depository may receive a deposit of bullion or
	specie from or on behalf of a person acting in the person's own
	right, as trustee, or in another fiduciary capacity, in accordance
	with rules adopted by the comptroller as appropriate to:
	(1)  ensure compliance with law; and
	(2)  protect the interests of:
	(A)  the depository;
	(B)  depository account holders;
	(C)  this state and the agencies, political
	subdivisions, and instrumentalities of this state; and
	(D)  the public at large.
	(b)  The depository shall record the amount of precious
	metals a person deposits, regardless of form, in units of troy
	ounces pure, and the records must also specify the type and quantity
	of each precious metal deposited.
	(c)  The comptroller by rule shall adopt standards by which
	the quantities of precious metals deposited are credited to a
	depositor's depository account by reference to the particular form
	in which the metals were deposited, classified by mint,
	denomination, weight, assay mark, or other indicator, as
	applicable. The standards must conform to applicable national and
	international standards of weights and measures.
	(d)  The comptroller by rule may, if the comptroller
	determines that to do so is in the public interest, restrict the
	forms in which deposits of precious metals may be made to those
	forms that conveniently lend themselves to measurement and
	accounting in units of troy ounces and standardized fractions of
	troy ounces.
	(e)  The depository shall adjust each depository account
	balance to reflect additions to or withdrawals or deliveries from
	the account.
	(f)  Precious metal deposited with the depository by any
	person is the property of this state and is held by the depository
	outside the state treasury. On withdrawal and settlement, the
	precious metals become the property of the depository account
	holder.
	Sec. 2116.006.  DEMAND, PRESENTMENT, WITHDRAWAL, DELIVERY,
	AND SETTLEMENT. (a)  Except as otherwise provided by Subsection
	(e), the depository shall deliver any precious metal held by or on
	behalf of the depository in bullion, specie, or a combination of
	bullion and specie, on the order of a depository account holder in a
	quantity of that precious metal as is available in the depository
	account holder's depository account.
	(b)  The depository shall make a delivery described by
	Subsection (a) on demand by the presentment of a suitable check,
	draft, or digital electronic instruction to the depository or a
	depository agent. The comptroller by rule shall adopt the forms,
	standards, and processes through which an order for delivery on
	demand may be made, presented, and honored.
	(c)  The depository, to the extent reasonably practicable,
	shall make or cause to be made deliveries on demand in the form
	requested by the depository account holder, except that the form of
	delivery may be made in any form at the discretion of the depository
	after considering cost, convenience, and availability.
	(d)  The depository shall make a delivery at the depository's
	settlement facility designated by the comptroller or, at the
	depository's discretion, at a facility of a depository agent at
	which presentment is made, not later than five business days after
	the date of presentment.
	(e)  A depository account holder may order delivery in any
	integral multiple of one one-thousandth of a troy ounce. To the
	extent a portion of an order is not available for delivery in
	bullion or specie, that portion shall be settled in the equivalent
	value of that portion in United States legal tender or other
	available cash or currency reasonably acceptable to the depository
	account holder at exchange rates applicable at the time of
	settlement.
	Sec. 2116.007.  TRANSFER OF DEPOSITORY ACCOUNT BALANCE. (a)
	In accordance with rules adopted under this chapter, a depository
	account holder may transfer any portion of the balance of the
	holder's depository account by check, draft, or digital electronic
	instruction to another depository account holder or to a person who
	at the time the transfer is initiated is not a depository account
	holder.
	(b)  The depository shall adjust the depository account
	balances of the depository accounts to reflect a transfer
	transaction between depository account holders on presentment of
	the check, draft, or other instruction by reducing the payor's
	depository account balance and increasing the depository account
	balance of the payee accordingly.
	(c)  If a depository account holder transfers to a payee who
	is not a depository account holder any portion of the balance of the
	holder's depository account, the depository shall allow the payee
	to establish a depository account by presentment of the payor's
	check, draft, or instruction to the depository or to a depository
	agent. The depository shall credit a newly established account on
	behalf of the payee and shall debit the payor's account
	accordingly.
	Sec. 2116.008.  FULL FAITH AND CREDIT. The depository's
	obligation to deliver precious metals and transfer account balances
	to the order of a depository account holder under this chapter is
	backed by the full faith and credit of this state.
	Sec. 2116.009.  DEPOSITORY ACCOUNT CONTRACTS. (a)  To
	establish a depository account, a depositor must contract with the
	depository for a depository account. The contract must specify:
	(1)  the terms applicable to the account, including any
	special terms; and
	(2)  the conditions on which withdrawals or deliveries
	with respect to the account may be made.
	(b)  The execution of a contract for a depository account
	described by this section may be made, as prescribed by rules
	adopted under this chapter, by electronic or digital transmission.
	(c)  The depository or a depository agent shall hold the
	contract for a depository account in the records pertaining to the
	account.
	(d)  A contract for a depository account executed by a
	depositor and the depository is considered a contract in writing
	for all purposes, and may be evidenced by one or more agreements,
	deposit receipts, signature cards, amendment notices, or other
	documentation as provided by law.
	(e)  The depository and the depository account holder may
	amend a contract for a depository account by agreement, or the
	depository may amend the deposit contract by mailing a written
	notice of the amendment to the account holder, separately or as an
	enclosure with or part of the account holder's statement of account
	or passbook.  In the case of amendment by notice from the
	depository, the notice must include the text and effective date of
	the amendment. The effective date may not be earlier than the 30th
	day after the date the notice is mailed, unless otherwise provided
	by rules adopted under this chapter.
	Sec. 2116.010.  CAUSE OF ACTION FOR DENIAL OF DEPOSIT
	LIABILITY. (a)  A cause of action for denial of deposit liability
	on a depository account contract without a maturity date does not
	accrue until the depository has denied liability and given notice
	of the denial to the depository account holder.
	(b)  The 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.
	Sec. 2116.011.  FEES; SERVICE CHARGES; PENALTIES.  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.
	Sec. 2116.012.  DEPOSITORY ACCOUNT OWNERSHIP BY OWNER OF
	RECORD. Unless the depository acknowledges in writing a pledge of a
	depository account, the depository may treat the holder of record
	of the account as the owner of the account for all purposes and
	without regard to a notice to the contrary.
	Sec. 2116.013.  TRANSFER OF DEPOSITORY ACCOUNT. (a)  A
	depository account may be transferred on the books of the
	depository only on presentation to the depository of:
	(1)  evidence of transfer satisfactory to the
	depository; and
	(2)  an application for the transfer submitted by the
	person to whom the depository account is to be transferred.
	(b)  A person to whom a depository account is to be
	transferred must accept the transferred account subject to the
	terms of the deposit contract, this chapter, and rules adopted
	under this chapter.
	Sec. 2116.014.  DEPOSITORY ACCOUNTS NOT INTEREST-BEARING.
	The depository may not pay on a depository account:
	(1)  interest;
	(2)  an amount in the nature of interest; or
	(3)  a fee or other payment for the use or forbearance
	of use of money, bullion, specie, or precious metals deposited to a
	depository account.
	Sec. 2116.015.  DEPOSITORY ACCOUNT NOT REDEEMABLE. Except
	in circumstances of urgent need of this state as determined under
	rules adopted under this chapter or by other law, the depository may
	not redeem all or any part of a depository account.
	Sec. 2116.016.  LIEN ON DEPOSITORY ACCOUNT. (a)  Without the
	need of any further agreement or pledge, the depository has a lien
	on each depository account owned by a depository account holder to
	secure any fees, charges, or other obligations owed or that may
	become owed to the depository in connection with any of the
	depository account holder's depository accounts as provided by the
	terms of the depository account holder's applicable depository
	account contract.
	(b)  On default in the payment or in the satisfaction of a
	depository account holder's obligation, the depository, without
	notice to or consent of the depository account holder, may transfer
	on the depository's books all or part of the balance of a depository
	account holder's depository account to the extent necessary to pay
	or satisfy the obligation, as determined by reference to the
	exchange rates applicable at the time of the transfer.
	(c)  The depository by written instrument may waive wholly or
	partly the depository's lien on a depository account.
	(d)  Subject to a lien created as provided by this section,
	the depository shall recognize the lawful pledge to a third party by
	a depository account holder of the depository account holder's
	rights, interests, and entitlements in and to a depository account
	as an intangible asset.  On the satisfaction of other requirements
	of law in respect of the perfection and enforcement of a pledge of
	that type, the depository shall take all steps reasonably necessary
	and appropriate to effectuate on the depository's books any
	transfer of a depository account or of all or part of a depository
	account balance to the account of the secured party on the
	successful enforcement of the pledge.
	Sec. 2116.017.  DEPOSITORY ACCOUNT AS LEGAL INVESTMENT. (a)
	The following persons may invest the person's money in a depository
	account by purchasing precious metals and depositing the precious
	metals with the depository or a depository agent:
	(1)  a fiduciary, including an administrator,
	executor, guardian, or trustee;
	(2)  a political subdivision of this state or an
	instrumentality of this state;
	(3)  a business or nonprofit corporation;
	(4)  a charitable or educational corporation or
	association; or
	(5)  a financial institution, including a bank, savings
	and loan association, or credit union.
	(b)  An investment by an insurance company in a depository
	account is eligible to be applied as a credit against taxes payable
	under Chapters 221 and 222, Insurance Code, in accordance with
	rules adopted by the comptroller after consultation with the
	commissioner of insurance.
	(c)  An investment by a school district in a depository
	account may be made instead of an investment as provided by Section
	45.102, Education Code, and the depository may be used by a district
	instead of a depository bank for the purposes of Subchapter G,
	Chapter 45, Education Code.
	Sec. 2116.018.  APPLICABILITY OF PROBATE CODE. The
	applicable provisions of Chapter XI, Texas Probate Code, govern a
	depository account.
	Sec. 2116.019.  DEPOSITORY ACCOUNT HELD BY MINOR. (a)  The
	depository may accept a minor as the sole and absolute owner of a
	depository account and the depository may pay withdrawals, transfer
	rights to account balances, accept a pledge of the account, and act
	in any other manner with respect to the depository account owned by
	a minor.
	(b)  Subject to Subsection (d), a payment or delivery to a
	minor, or an acquittance signed by a minor who holds a depository
	account, is a discharge of the depository for that payment or
	delivery.
	(c)  If the depository requires a minor to furnish an
	acquittance or pledge or take other action with respect to the
	minor's depository account, that action is binding on the minor as
	if the minor had the capacity of an adult.
	(d)  If a minor's parent or guardian informs the depository
	in writing that the parent or guardian, as applicable, denies the
	minor's authority to control the minor's depository account, the
	minor may not control the depository account during the minority
	without the joinder of the parent or guardian.
	(e)  If a minor who owns a depository account dies, the
	acquittance of a parent or guardian of the minor discharges the
	depository for amounts that in the aggregate do not exceed $1,000.
	Sec. 2116.020.  PLEDGE OF JOINTLY HELD DEPOSITORY ACCOUNT.
	(a)  Unless a term of the depository account provides otherwise, a
	person on whose signature precious metals may be withdrawn from a
	depository account that is jointly held in the names of two or more
	persons may, by a signed pledge, pledge and transfer to the
	depository or to a third party all or part of the account.
	(b)  A pledge made as described by Subsection (a) does not
	sever or terminate the joint and survivorship ownership of the
	account, to the extent applicable to the account before the pledge.
	Sec. 2116.021.  DEPOSITORY ACCOUNT HELD BY FIDUCIARY. (a)
	The depository or a depository agent may accept a depository
	account in the name of a fiduciary, including an administrator,
	executor, custodian, guardian, or trustee, for a named beneficiary.
	(b)  A fiduciary may open, add to, or withdraw precious
	metals from an account described by Subsection (a).
	(c)  Except as otherwise provided by law, a payment or
	delivery to a fiduciary or an acquittance signed by the fiduciary to
	whom a payment or delivery is made is a discharge of the depository
	for the payment or delivery.
	(d)  After a person who holds a depository account in a
	fiduciary capacity dies, the depository may pay or deliver to the
	beneficiary of the account the quantity of precious metals
	represented by the balance in the depository account, plus other
	rights relating to the depository account, wholly or partly, if the
	depository has no written notice or order of the probate court of:
	(1)  a revocation or termination of the fiduciary
	relationship; or
	(2)  any other disposition of the beneficial estate.
	(e)  The depository has no further liability for a payment
	made or right delivered under Subsection (d).
	Sec. 2116.022.  DEPOSITORY ACCOUNT HELD IN TRUST;
	UNDISCLOSED TRUST INSTRUMENT. (a)  If the depository opens a
	depository account for a person claiming to be the trustee for
	another person and the depository has no other notice of the
	existence or terms of the trust other than a written claim against
	the account:
	(1)  the person claiming to be the trustee, on the
	person's signature, may withdraw precious metals from the account;
	and
	(2)  if the person claiming to be the trustee dies, the
	depository may pay or deliver the quantity of precious metals
	represented by the balance in the account to the person for whom the
	account was opened.
	(b)  The depository has no further liability for a payment or
	delivery made as provided by Subsection (a).
	Sec. 2116.023.  POWER OF ATTORNEY; REVOCATION ON DEATH OR
	INCOMPETENCY. (a)  The depository shall recognize the authority of
	an attorney-in-fact authorized in writing by a depository account
	holder to manage or withdraw precious metals from the depository
	account holder's depository account until the depository receives
	written or actual notice of the revocation of that authority.
	(b)  For purposes of this section, written notice of the
	death or adjudication of incompetency of a depository account
	holder is considered to be written notice of revocation of the
	authority of the account holder's attorney-in-fact.
	Sec. 2116.024.  TRANSACTIONS AND RELATIONSHIPS. The
	depository shall enter into transactions and relationships with
	bullion banks, depositories, dealers, central banks, sovereign
	wealth funds, financial institutions, international
	nongovernmental organizations, 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.
	Sec. 2116.025.  CERTAIN ACTIONS PROHIBITED. The depository
	may not take any of the following actions, and any attempt by the
	depository to take any of the following actions is void ab initio
	and of no force or effect:
	(1)  enter into a precious metals leasing,
	sale-leaseback, forward transaction, swap transaction, future
	transaction, index transaction, or option on or other derivative of
	any of those, whether 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
	intended to or having the effect of hedging or leveraging the
	depository's holdings of precious metals, including any option
	with respect to any of these transactions, or any combination of
	these transactions, except that the limitation provided by this
	subdivision does not apply to a transaction entered into to limit
	the depository's exposure to post-signature price risks associated
	with executory agreements to purchase or sell precious metals in
	the ordinary course of depository operations and does not apply to
	policies of insurance purchased to insure against ordinary casualty
	risks such as theft, damage or destruction, loss during shipment,
	or similar risks;
	(2)  credit the depository account balances of a
	depository account holder, or dispose of any precious metals, if to
	do so would cause the aggregate depository account balances with
	respect to any precious metal represented by all depository
	accounts to exceed the aggregate quantities of such precious metal
	held by or for the benefit of the depository and the depository's
	depository agents;
	(3)  enter into or maintain a deposit, trust, or
	similar relationship for the custody of precious metals by a third
	party outside this state, directly or indirectly, for the account
	or benefit of the depository if the comptroller by rule establishes
	that:
	(A)  the custody or intermediary arrangements in
	question do not meet the comptroller's standards of safety,
	security, and liquidity; or
	(B)  except in those cases where such relationship
	may be incidental to the performance of or preparation for purchase
	and sale transactions with counterparties located outside of this
	state, suitable alternate arrangements for physical custody of the
	precious metals inside this state have been established and are
	available;
	(4)  extend credit to a person, including credit
	secured by a depository account or other assets, except an
	extension of credit incidental to the performance of the functions
	and responsibilities otherwise provided by this chapter; or
	(5)  engage in a business or activity that, if
	conducted by a private person, would be subject to regulation in
	this state as a banking or savings and loan function.
	Sec. 2116.026.  CONFISCATIONS, REQUISITIONS, SEIZURES, AND
	OTHER ACTIONS VOID. (a)  A purported confiscation, requisition,
	seizure, or other attempt to control the ownership, disposition, or
	proceeds of a withdrawal, transfer, liquidation, or settlement of a
	depository account, including the precious metals represented by
	the balance of a depository account, if effected by a governmental
	or quasi-governmental authority other than an authority of this
	state or by a financial institution or other person acting on behalf
	of or pursuant to a directive or authorization issued by a
	governmental or quasi-governmental authority other than an
	authority of this state, in the course of a generalized declaration
	of illegality or emergency relating to the ownership, possession,
	or disposition of one or more precious metals, contracts, or other
	rights to the precious metals or contracts or derivatives of the
	ownership, possession, disposition, contracts, or other rights, is
	void ab initio and of no force or effect.
	(b)  The depository in the case of receiving notice of a
	purported confiscation, requisition, seizure, or other attempt to
	control the ownership, disposition, or proceeds of a withdrawal,
	transfer, liquidation, or settlement of a depository account,
	including the precious metals represented by the balance of a
	depository account, effected by a governmental or
	quasi-governmental authority other than an authority of this state
	or by a financial institution or other person acting on behalf of or
	pursuant to a directive or authorization issued by a governmental
	or quasi-governmental authority other than an authority of this
	state, in the course of a generalized declaration of illegality or
	emergency relating to the ownership, possession, or disposition of
	one or more precious metals, contracts, or other rights to the
	precious metals or contracts or derivatives of the ownership,
	possession, disposition, contracts, or other rights, may not
	recognize the governmental or quasi-governmental authority,
	financial institution, or other person acting as the lawful
	successor of the registered holder of a depository account in
	question.
	(c)  On receipt of notice of any such event 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 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 to the full extent authorized by this
	chapter rules adopted under this chapter.
	Sec. 2116.027.  OFFICIAL EXCHANGE RATES. The comptroller by
	rule shall establish the references by which the official exchange
	rate for pricing precious metals transactions in terms of United
	States dollars or other currency must be established at the time of
	a depository transaction. The comptroller shall establish
	procedures and facilities through which the rates are made
	discoverable at all reasonable times by system participants, both
	on a real-time basis and retrospectively.
	Sec. 2116.028.  DEVELOPMENT OF DEPOSITORY SYSTEM AND
	PARTICIPATION. (a) The comptroller shall monitor the development
	of the depository-based system of payments and settlements and
	shall direct and encourage all funds and agencies of this state to
	use the system for intergovernmental payments and settlements to
	the extent prudent and practicable.
	(b)  As conditions of acceptance and liquidity of the
	depository system improve, the comptroller shall:
	(1)  establish appropriate firm requirements for the
	use of the system for intergovernmental payments and settlements to
	the extent prudent and practicable; and
	(2)  encourage the use of the system by private persons
	to make or receive payments to or from a state agency or fund.
	Sec. 2116.029.  FACILITATION OF ACCOUNTING AND REPORTING OF
	TAXABLE GAINS. The comptroller by rule shall establish procedures
	and requirements for the depository and depository agents designed
	to minimize the burden to system participants of accounting for and
	reporting taxable gains and losses arising out of depository
	transactions as denominated in United States dollars or another
	currency.
	Sec. 2116.030.  ANNUAL REPORT. The comptroller shall submit
	to the governor and the legislature a report on the status,
	condition, operations, and prospects for the depository and
	depository participation each year not later than September 30.
	[Sections 2116.031-2116.050 reserved for expansion]
	SUBCHAPTER B. DEPOSITORY AGENTS
	Sec. 2116.051.  USE OF DEPOSITORY AGENTS. To the extent that
	the services of depository agents are reasonably cost-effective and
	available, 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. In addition to licensing requirements for
	depository agents provided by Chapter 151, Finance Code, and rules
	adopted under that chapter, the comptroller by rule may impose
	additional requirements as to capitalization, net worth,
	liquidity, or other financial prerequisites to qualify a depository
	agent to conduct transactions or take other action on behalf of the
	depository.
	Sec. 2116.052.  ELECTRONIC INFORMATION SHARING SYSTEMS AND
	PROCESSES. The comptroller by rule shall require a depository
	agent 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
	the depository are reported to and integrated into the depository's
	records not later than 11:59:59 p.m. on the date of each
	transaction.
	Sec. 2116.053.  PERIODIC REPORTS. A depository agent shall
	submit monthly, quarterly, and annual reports of all depository
	transactions not later than the 15th day of the month following the
	expiration of the period with respect to which such report is
	submitted. The report must contain information and be in a form and
	format as rules of the comptroller require.
	SECTION 2.  Section 151.002(a), Finance Code, is amended to
	read as follows:
	(a)  This section defines general terms that apply to an
	applicant for or holder of a money services license issued under
	this chapter, regardless of whether the license is a money
	transmission license, [or] a currency exchange license, or a
	depository agent license. Additional terms that apply specifically
	to money transmission are defined in Section 151.301. Additional
	terms that apply specifically to currency exchange are defined in
	Section 151.501. Additional terms that apply specifically to
	depository agents are defined in Section 151.851.
	SECTION 3.  Section 151.002(b), Finance Code, is amended by
	adding Subdivisions (9-a), (9-b), and (9-c) and amending
	Subdivisions (11) and (14) to read as follows:
	(9-a)  "Depository agent" has the meaning assigned by
	Section 151.851.
	(9-b)  "Depository agent license" means a license
	issued under Subchapter J.
	(9-c)  "Depository agent services" means services
	rendered to the general public for or on behalf 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.
	(11)  "License holder" means a person that holds a
	money transmission license, [or] a currency exchange license, or a
	depository agent license.
	(14)  "Money services" means money transmission, [or]
	currency exchange, or depository agent services.
	SECTION 4.  Section 151.003, Finance Code, is amended to
	read as follows:
	Sec. 151.003.  EXCLUSIONS. Subject to Subchapter J, the
	[The] following persons are not required to be licensed under this
	chapter:
	(1)  the United States or an instrumentality of the
	United States, including the United States Post Office or a
	contractor acting on behalf of the United States Post Office;
	(2)  a state or an agency, political subdivision, or
	other instrumentality of a state;
	(3)  a federally insured financial institution, as that
	term is defined by Section 201.101, that is organized under the laws
	of this state, another state, or the United States;
	(4)  a foreign bank branch or agency in the United
	States established under the federal International Banking Act of
	1978 (12 U.S.C. Section 3101 et seq.);
	(5)  a person acting as an agent for an entity excluded
	under Subdivision (3) or (4), to the extent of the person's actions
	in that capacity, provided that:
	(A)  the entity is liable for satisfying the money
	services obligation owed to the purchaser on the person's receipt
	of the purchaser's money; and
	(B)  the entity and person enter into a written
	contract that appoints the person as the entity's agent and the
	person acts only within the scope of authority conferred by the
	contract;
	(6)  a person that, on behalf of the United States or a
	department, agency, or instrumentality of the United States, or a
	state or county, city, or any other governmental agency or
	political subdivision of a state, provides electronic funds
	transfer services of governmental benefits for a federal, state,
	county, or local governmental agency;
	(7)  a person that acts as an intermediary on behalf of
	and at the direction of a license holder in the process by which the
	license holder, after receiving money or monetary value from a
	purchaser, either directly or through an authorized delegate,
	transmits the money or monetary value to the purchaser's designated
	recipient, provided that the license holder is liable for
	satisfying the obligation owed to the purchaser;
	(8)  an attorney or title company that in connection
	with a real property transaction receives and disburses domestic
	currency or issues an escrow or trust fund check only on behalf of a
	party to the transaction;
	(9)  a person engaged in the business of currency
	transportation who is both a registered motor carrier under Chapter
	643, Transportation Code, and a licensed armored car company or
	courier company under Chapter 1702, Occupations Code, provided that
	the person does not engage in the money transmission or currency
	exchange business or depository agent services business without a
	license issued under this chapter; and
	(10)  any other person, transaction, or class of
	persons or transactions exempted by commission rule or any other
	person or transaction exempted by the commissioner's order on a
	finding that the licensing of the person is not necessary to achieve
	the purposes of this chapter.
	SECTION 5.  Section 151.201, Finance Code, is amended to
	read as follows:
	Sec. 151.201.  SCOPE. This subchapter sets out the general
	qualifications and provisions that apply to a money services
	license, regardless of whether the license is a money transmission
	license, [or] a currency exchange license, or a depository agent
	license.  Subchapters D and E set forth the additional
	qualifications and provisions that apply specifically to a money
	transmission license.  Subchapter F sets forth the additional
	qualifications and provisions that apply specifically to a currency
	exchange license. Subchapter J sets forth the additional
	qualifications and provisions that apply specifically to a
	depository agent license.
	SECTION 6.  Sections 151.207(b) and (d), Finance Code, are
	amended to read as follows:
	(b)  As a condition of renewal, a license holder must
	continue to possess the qualifications and satisfy the requirements
	that apply to an applicant for a new money transmission license,
	[or] currency exchange license, or depository agent license, as
	applicable.  Additionally, not later than July 1 of each year, a
	license holder must:
	(1)  pay an annual renewal fee in an amount established
	by commission rule; and
	(2)  submit a renewal report that is under oath, is in
	the form and medium required by the commissioner, and contains:
	(A)  if the license is a money transmission
	license or depository agent license, an audited unconsolidated
	financial statement dated as of the last day of the license holder's
	fiscal year that ended in the immediately preceding calendar year;
	(B)  if the license is a currency exchange
	license, a financial statement, audited or unaudited, dated as of
	the last day of the license holder's fiscal year that ended in the
	immediately preceding calendar year; and
	(C)  documentation and certification, or any
	other information the commissioner reasonably requires to
	determine the security, net worth, permissible investments, and
	other requirements the license holder must satisfy and whether the
	license holder continues to meet the qualifications and
	requirements for licensure.
	(d)  If the license holder fails to submit the completed
	renewal report and pay the renewal fee and any late fee due, the
	license expires effective 5 p.m. central daylight time on August
	15, and the license holder must cease and desist from engaging in
	the business of money transmission, [or] currency exchange, or
	depository agent services, as applicable, as of that time.  The
	expiration of a license is not subject to appeal.
	SECTION 7.  Section 151.602(a), Finance Code, is amended to
	read as follows:
	(a)  A license holder must prepare, maintain, and preserve
	the following books, accounts, and other records for at least five
	years or another period as may be prescribed by rule of the
	commission:
	(1)  a record of each money transmission transaction,
	[or] currency exchange transaction, or depository agent
	transaction, as applicable;
	(2)  a general ledger posted in accordance with
	generally accepted accounting principles containing all asset,
	liability, capital, income, and expense accounts, unless directed
	otherwise by the commissioner;
	(3)  bank statements and bank reconciliation records;
	(4)  all records and reports required by applicable
	state and federal law, including the reporting and recordkeeping
	requirements imposed by the Bank Secrecy Act, the USA PATRIOT ACT,
	and Chapter 271, and other federal and state laws pertaining to
	money laundering, drug trafficking, or terrorist funding; and
	(5)  any other records required by commission rule or
	reasonably requested by the commissioner to determine compliance
	with this chapter.
	SECTION 8.  Section 151.603, Finance Code, is amended by
	adding Subsection (c-1) to read as follows:
	(c-1)  A depository agent license holder shall prepare
	written reports and statements as follows:
	(1)  the renewal report required by Section
	151.207(b)(2), including an audited unconsolidated financial
	statement that is dated as of the last day of the license holder's
	fiscal year that ended in the immediately preceding calendar year;
	(2)  a quarterly interim financial statement and report
	regarding the permissible investments required to be maintained
	under applicable rules that reflect the license holder's financial
	condition and permissible investments as of the last day of the
	calendar quarter to which the statement and report relate and that
	are prepared not later than the 45th day after the last day of the
	calendar quarter; and
	(3)  any other report required by commission rule or
	reasonably requested by the commissioner to determine compliance
	with this chapter.
	SECTION 9.  Section 151.604(b), Finance Code, is amended to
	read as follows:
	(b)  A license holder must file a written report with the
	commissioner not later than 24 hours after the license holder knows
	or has reason to know of:
	(1)  the filing of a petition by or against the license
	holder for bankruptcy or reorganization;
	(2)  the filing of a petition by or against the license
	holder for receivership, the commencement of any other judicial or
	administrative proceeding for its dissolution or reorganization,
	or the making of a general assignment for the benefit of the license
	holder's creditors;
	(3)  the institution of a proceeding to revoke or
	suspend the license holder's license, or to enjoin or otherwise
	require the license holder to cease and desist from engaging in an
	activity related to a business activity that, if conducted in this
	state, would be subject to this chapter [money transmission], by a
	state or country in which the license holder engages in business or
	is licensed;
	(4)  the felony indictment or conviction of the license
	holder or a principal of, person in control of,  responsible
	individual of, or authorized delegate of the license holder for an
	offense identified in Section 151.202(e);
	(5)  the cancellation or other impairment of the
	license holder's security; or
	(6)  the inability to meet the license holder's
	transmission obligations under this chapter for a period of 24
	hours or longer.
	SECTION 10.  Chapter 151, Finance Code, is amended by adding
	Subchapter J to read as follows:
	SUBCHAPTER J.  DEPOSITORY AGENT LICENSE
	Sec. 151.851.  DEFINITIONS. In this subchapter, "bullion,"
	"deposit," "depository," "depository account," "depository account
	holder," "depository agent," "precious metal," and "specie" have
	the meanings assigned by Section 2116.001, Government Code.
	Sec. 151.852.  APPLICABILITY TO DEPOSITORY AGENT SERVICES.
	(a)  Notwithstanding any other provision of this chapter, a money
	service that constitutes both a depository agent service and a
	money transmission service, or both a depository agent service and
	a currency exchange service, for purposes of this chapter
	constitutes a depository agent service only.
	(b)  A depository agent service described by Subsection (a)
	is not subject to a provision of this chapter applicable uniquely to
	money transmission services or currency exchange services.
	(c)  A person who renders a service that constitutes a
	depository agent service, including a depository agent service
	described by Subsection (a), and renders another service that
	constitutes money transmission or currency exchange service only,
	is subject to the requirements of this chapter applicable to each
	type of service rendered.
	Sec. 151.853.  LICENSE REQUIRED. (a)  A person may not
	engage in the business of rendering depository agent services or
	advertise, solicit, or hold itself out as a person that engages in
	the business of depository agent services unless the person:
	(1)  is licensed under this subchapter and has received
	the requisite certifications from the comptroller of its
	facilities, systems, processes, and procedures as required by
	Chapter 2116, Government Code, or rules adopted under that chapter;
	or
	(2)  is exempted from licensing requirements under
	Section 151.003(2).
	(b)  Notwithstanding any other provision of this chapter, a
	person described by Section 151.003(1), (6), (7), (8), or (9) is not
	eligible for a license under this subchapter.
	(c)  For purposes of this chapter:
	(1)  a person engages in the business of depository
	agent services if the person renders a depository agent service,
	regardless of whether:
	(A)  compensation is sought or received for the
	service, directly or indirectly; and
	(B)  the service is incidental to any other
	business in which the person is primarily engaged; and
	(2)  a person solicits, advertises, or holds the person
	out as a person that engages in the business of depository agent
	services if the person represents that the person will conduct
	depository agent services.
	(d)  Notwithstanding Subsection (c), a person does not
	engage in the business of depository agent services by engaging in a
	transaction for the person's own depository account or for the
	account of another person acting as a fiduciary that would
	constitute depository agent services if conducted for another
	person.
	(e)  A depository agent license holder may engage in
	depository agent services business at one or more locations in this
	state owned directly or indirectly by the license holder under a
	single license.
	Sec. 151.854.  ADDITIONAL QUALIFICATIONS. In addition to
	the general qualifications for licensure set forth in Section
	151.202, an applicant for a depository agent license must
	demonstrate to the satisfaction of the commissioner that:
	(1)  the applicant has and will maintain the
	capitalization, minimum net worth, and other applicable financial
	requirements established from time to time by rules of the
	comptroller;
	(2)  the applicant's financial condition will enable
	the applicant to safely and soundly engage in the business of
	depository agent services; and
	(3)  the applicant does not engage in any activity or
	practice that adversely affects the applicant's safety and
	soundness.
	Sec. 151.855.  APPLICATION AND ACCOMPANYING FEE,
	STATEMENTS, AND SECURITY. (a) An applicant for a depository agent
	license must submit an application in accordance with Section
	151.203.
	(b)  At the time an application for a depository agent
	license is submitted, an applicant must file with the department:
	(1)  an application fee in the amount established by
	commission rule;
	(2)  audited financial statements that are
	satisfactory to the commissioner for purposes of determining
	whether the applicant has the minimum net worth required under
	applicable rules and regulations and is likely to maintain the
	required minimum net worth if a license is issued; and
	(3)  security in the amount of $500,000 that meets the
	requirements of applicable rules and an undertaking or agreement
	that the applicant will increase or supplement the security to
	equal the aggregate security required by the commissioner before
	the issuance of the license and the start of operations.
	Sec. 151.856.  INVESTIGATION AND ACTION ON APPLICATION. The
	commissioner shall investigate the applicant and act on the
	application in accordance with Sections 151.204 and 151.205.
	Sec. 151.857.  TEMPORARY LICENSE. (a) The commissioner may
	issue a temporary depository agent license to a person that is
	engaging in depository agent services, but has not obtained a
	license under this subchapter, if the person:
	(1)  certifies in writing that the person qualifies for
	the license and will submit a completed license application not
	later than the 60th day after the date the temporary license is
	issued;
	(2)  submits a recent financial statement acceptable to
	the commissioner that reflects the minimum net worth required under
	applicable regulations;
	(3)  provides security that meets the requirements
	specified by the commissioner, but not less than $500,000;
	(4)  agrees in writing that, until a permanent license
	is issued, the person will engage only in activities being
	conducted at existing locations; and
	(5)  pays the application fee and a nonrefundable
	temporary license fee in the amount established by commission rule.
	(b)  The effective period for a temporary depository agent
	license may not exceed 90 days from the date the license is issued.
	The commissioner may extend the effective period for not more than
	30 days if necessary to complete the processing of a timely filed
	application for which approval is likely.
	Sec. 151.858.  LIABILITY OF LICENSE HOLDER. A depository
	agent license holder is liable for the delivery to or for the
	account of the depository or each 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 depository.
	Sec. 151.859.  TRUST IMPOSED. (a)  A depository agent
	license holder shall hold in trust all cash, bullion, specie, and
	other assets received in the ordinary course of its business until
	the time the delivery obligation is discharged. A trust resulting
	from the depository agent license holder's actions is in favor of
	the persons to whom such delivery obligations are owed.
	(b)  If a depository agent license holder commingles any
	money or other property received for delivery with money or other
	property owned or controlled by the depository agent license
	holder, all commingled money and other property are impressed with
	a trust as provided by this section in an amount equal to the amount
	of money or property received for delivery, less the amount of fees
	paid for the delivery.
	(c)  If the commissioner revokes a depository agent license,
	all money and other property held in trust by the depository agent
	license holder is assigned to the commissioner for the benefit of
	the persons to whom the related delivery obligations are owed.
	(d)  Money or other property of a depository agent license
	holder impressed with a trust under this section may not be
	considered an asset or property of the license holder in the event
	of bankruptcy, receivership, or a claim against the license holder
	unrelated to the license holder's obligations under this chapter.
	Sec. 151.860.  DISCLOSURE REQUIREMENTS. (a)  A depository
	agent license holder's name and mailing address or telephone number
	must be provided to the purchaser in connection with each
	depository agent services transaction conducted by the depository
	agent license holder.
	(b)  A depository agent license holder receiving currency or
	an instrument payable in currency for transmission must comply with
	Chapter 278.
	SECTION 11.  As soon as practicable after the effective date
	of this Act, the comptroller of public accounts shall:
	(1)  undertake or cause to be undertaken a survey of
	existing third-party facilities and firms in this state that may be
	suitable for rendering custodial services to the Texas Bullion
	Depository with respect to precious metals deposited in accordance
	with Chapter 2116, Government Code, as added by this Act, and
	identify where possible the direct and indirect ownership of
	suitable facilities and firms. The survey must be designed to
	ascertain the terms and conditions under which the facilities and
	firms would likely be made available for that purpose;
	(2)  in coordination with the governor and lieutenant
	governor, undertake a survey of those sites currently in the
	control of this state or that might through purchase be brought
	within the control of this state that are or could be made suitable
	for a fortified, secure depository facility operated by this state
	and controlled by the Texas Bullion Depository, ascertaining the
	estimated costs and time required to establish and operate the
	facility on an ongoing basis; and
	(3)  report the findings of these surveys to the
	legislature for further consideration no later than September 1,
	2014.
	SECTION 12.  (a)  In this section:
	(1)  "Collateralized debt obligations" means direct or
	securitized obligations based upon, derived from or in any way
	representing anticipated stream of income or principal from
	third-party debt obligations secured by the assets of such third
	parties, such as, by way of illustration and not limitation, home
	mortgages, auto finance loans, and other consumer credit
	facilities, whether or not such instruments bear an explicit or
	implicit guarantee of any governmental or quasi-governmental
	organization, or that otherwise would be classified as "Corporate
	Asset and Mortgage Backed" investments in the comptroller's
	Comprehensive Annual Financial Report for the State of Texas.
	(2)  "Federal debt securities" means any debt
	obligation, coupon, scrip, or other component thereof issued by the
	United States government or any agency or instrumentality thereof
	that would be classified in the comptroller's Comprehensive Annual
	Financial Report for the State of Texas as "U.S. Treasury
	Securities," "U.S. Treasury Strips," "U.S. Treasury Scrip," "U.S.
	Treasury TIPS," and "U.S. Governmental Agency Securities"
	investments, together with any and all investments that would be
	classified in such report as "repurchase agreements," "securities
	lending collateral," and "cash or cash equivalents" that are based
	upon, derived from, or in any way representing any of the foregoing.
	(3)  "Municipal debt securities" means any direct or
	securitized obligations based upon, derived from, or in any way
	representing anticipated stream of income or principal from debt
	obligations issued by or on behalf of local governmental districts
	and municipalities.
	(4)  "Maximum percentage" means the highest percentage
	of their overall investment holdings in which state funds and state
	agencies may lawfully continue to hold collateralized debt
	obligations, federal debt securities, and municipal debt
	securities from and after the 180th day following the effective
	date of this Act, as established from time to time by the provisions
	of this Act and the rules issued by the comptroller of public
	accounts under this Act.
	(b)  Subject to the terms and provisions of this section, but
	in accordance with rules and procedures to be established by the
	comptroller of public accounts under this section, the comptroller
	and each state fund and state agency not otherwise barred from doing
	so by the Texas Constitution shall undertake to divest itself of
	one-half the amount by value of its holdings of federal debt
	securities, collateralized debt obligations, and municipal debt
	obligations as reflected in the comptroller's 2012 Comprehensive
	Annual Financial Report for the State of Texas.
	(c)  For those funds and investments in the custody or under
	the management of the comptroller of public accounts, the
	comptroller shall commence divestment promptly on the 180th day
	following the effective date of this Act and shall continue such
	divestment in a deliberate and orderly manner until achieving
	compliance with the requirement of Subsection (b) of this section.
	(d)  Compliance shall be determined individually with
	respect to the investment holdings of each state fund and state
	agency, except that investment holdings maintained by the
	comptroller of public accounts in a pooled or consolidated fund or
	account shall be treated for this purpose on an aggregate,
	consolidated basis as measured with respect to the pooled or
	consolidated fund or account in its entirety, and those funds shall
	be excluded from the other assets of state funds and state agencies
	for purposes of their individual determinations.
	(e)  The comptroller of public accounts shall exercise
	reasonable prudence and discretion in the timing and amounts of
	divestment and reinvestment transactions so as to conduct those
	transactions in the most favorable market conditions, and on the
	most favorable terms, reasonably feasible or available.  The
	program of divestment required to achieve initial compliance shall
	in any case be completed not later than December 31, 2015.
	(f)  Following the initial compliance with this section, the
	comptroller of public accounts shall manage or cause to be managed
	such funds in such a way as to remain in compliance with the
	applicable standards except in those limited circumstances in which
	fluctuations in market value, unplanned inflows or outflows, or
	other factors beyond the comptroller's immediate control cause such
	holdings to exceed the maximum percentage. In such circumstances,
	the comptroller shall promptly effect or cause to be effected such
	transactions as shall be necessary and sufficient to restore the
	fund or account in question to full compliance.
	(g)  As and to the extent practicable in view of the
	divestments described by this section, market conditions, and the
	development of the depository system established by Chapter 2116,
	Government Code, as added by this Act, the comptroller of public
	accounts shall cause a portion between 3 and 10 percent of
	investment assets under the comptroller's management to be
	reinvested in physical precious metals or in trust or depository
	accounts with respect to physical precious metals determined by the
	comptroller to meet requisite standards of safety, security, and
	liquidity. To the extent available, such investments shall by
	preference be made in depository accounts provided for by this Act.
	Otherwise they may be made through other institutions and parties.
	(h)  For those state funds not in the custody or under the
	management of the comptroller of public accounts, the boards,
	trustees, or other investment decision authorities of such funds
	and agencies shall undertake to establish a plan of divestment that
	would be necessary to achieve compliance with the foregoing
	provisions in the absence of any contrary provision of the Texas
	Constitution.
	(i)  Not later than the 240th day after the effective date of
	this Act, each such state fund and state agency shall submit its
	divestment plan to the comptroller of public accounts, together
	with an itemization of the provisions of the Texas Constitution, if
	any, that would require modification in order for such fund or
	agency lawfully to implement the plan submitted.
	(j)  The comptroller of public accounts shall review the
	plans so received and, in consultation with the attorney general,
	present a report to the governor and the legislature on or before
	the first anniversary of the effective date of this Act proposing
	any amendments to the Texas Constitution as are minimally necessary
	to authorize and enable all state funds and state agencies to meet
	the standards established by this Act. The comptroller by rule may
	prescribe forms and procedures as suitable to facilitate and
	coordinate the reporting process described by this section.
	(k)  For those state funds and state agencies for which no
	amendments to the Texas Constitution would be necessary, the
	comptroller of public accounts, in communication and coordination
	with those funds and agencies, shall issue findings and regulations
	as are reasonably suited to establishing a coordinated divestment
	plan for all such funds and agencies. This coordinated divestment
	plan must:
	(1)  minimize disruption to, or the creation of adverse
	conditions in, the financial markets in which such debt and
	securities are traded as a result of the transactions to be effected
	by such funds and agencies;
	(2)  take into consideration the results or likely
	effects of the transactions to be effected by the comptroller under
	Subsection (c) of this section, the aggregate values and types of
	securities to be liquidated, the size, liquidity, and absorptive
	capacity of the markets for such securities at the time in question,
	and the availability of alternative investments such as those
	authorized by this Act; and
	(3)  afford the boards, trustees, or other investment
	decision authorities of such funds and agencies sufficient latitude
	as to have a reasonable opportunity to conduct the transactions to
	be effected by the comptroller under Subsection (c) of this section
	in the most favorable market conditions and on the most favorable
	terms reasonably feasible or available.
	(l)  However, the program of divestment required for such
	funds and agencies to achieve initial compliance shall in any case
	be completed not later than the later of December 31, 2016, or the
	first anniversary of the issuance by the comptroller of public
	accounts of the coordinated divestment plan and applicable rules.
	(m)  Following the initial compliance with this section, the
	boards, trustees, or other authorities shall manage or cause to be
	managed such funds in such a way as to remain in compliance with the
	applicable standards except in those limited circumstances in which
	fluctuations in market value, unplanned inflows or outflows, or
	other factors beyond the boards', trustees', or other authorities'
	immediate control cause such holdings to be in noncompliance with
	this section. In such circumstances, the authority shall promptly
	effect or cause to be effected such transactions as shall be
	necessary and sufficient to restore the fund or account in question
	to full compliance.
	(n)  As and to the extent practicable in view of the
	divestments described by this section, market conditions, and the
	development of the depository system established by this Act, the
	boards, trustees, or other investment authorities of such funds and
	agencies shall cause a portion between 3 and 10 percent of
	investment assets under their management to be reinvested in
	physical precious metals or in trust or depository accounts with
	respect to physical precious metals determined by the comptroller
	of public accounts to meet requisite standards of safety, security,
	and liquidity.  To the extent available, such investments shall by
	preference be made in depository accounts provided for by this Act.
	Otherwise they may be made through other institutions and parties.
	(o)  Not later than the 120th day after the effective date of
	this Act, the comptroller of public accounts shall adopt rules
	establishing the procedures by which the transactions required by
	this section shall be coordinated and the frequency and amounts
	with which such transactions shall be implemented, in order to
	minimize any resulting disturbance to the regular functioning of
	the markets for the securities affected and to ensure the best
	possible pricing for such sales on the dates and times thereof. Such
	rules shall afford each participating fund or agency access on a
	non-preferential basis to the opportunities to participate in such
	transactions, in proportion to the aggregate values in which they
	then hold the types of securities to be covered by such
	transactions.
	(p)  Within the limits and guidelines established by this
	Act, the comptroller of public accounts shall establish from time
	to time by rule guidelines for the maximum holdings of federal debt
	securities, collateralized debt obligations, and municipal debt
	securities in which state funds and agencies may be invested at any
	given time. The initial figures so established shall be determined
	as one-half the amount by value of such securities as reported for
	the fund or agency in question in the comptroller's 2012
	Comprehensive Annual Financial Report for the State of Texas,
	subject to subsequent adjustment as necessary to reflect changes in
	the composition and value of such investments and evolving market
	conditions, but always with the aim of keeping the percentage of
	aggregate fund or agency investments represented by such securities
	at no more than one-half the percentage reflected in that report.
	SECTION 13.  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, 2013.