
The Texas Bullion Depository is a
bullion
Bullion is non-ferrous metal that has been refined to a high standard of elemental purity. The term is ordinarily applied to bulk metal used in the production of coins and especially to precious metals such as gold and silver. It comes from ...
depository based in
Texas
Texas ( , ; or ) is the most populous U.S. state, state in the South Central United States, South Central region of the United States. It borders Louisiana to the east, Arkansas to the northeast, Oklahoma to the north, New Mexico to the we ...
in the United States. It was the first state-administered depository to be established in the
United States
The United States of America (USA), also known as the United States (U.S.) or America, is a country primarily located in North America. It is a federal republic of 50 U.S. state, states and a federal capital district, Washington, D.C. The 48 ...
; previous depositories were either at federal level or private companies. Texas Comptroller Glenn Hegar announced it was open for business on June 6, 2018.
In 2017, the Comptroller’s office partnered with Lone Star Tangible Assets (LSTA) as the vendor to build and operate the depository. LSTA, a Texas-based company that also owns precious metals dealers U.S. Gold Bureau and WholesaleCoinsDirect.com, operates a highest-rated, Class 3 vault that serves as the depository’s initial location.
Planning for a permanent home for the Texas Bullion Depository began in 2018, at a site in Leander, Texas that should be completed in 2019. Tom Smelker, director of Comptroller Treasury Operations, was named administrator of the depository in 2017.
The depository eliminates the need for out-of-state storage and gives Texas the opportunity to become a “commodities hub for the continent,” according to Rep. Giovanni Capriglione, R-Southlake. Free from the jurisdiction of governmental or quasi-governmental authority beyond the state of Texas, the depository offers a safe storage facility for the bullion of both institutions and individuals and creates a more stable Texas economy.
The depository accepts deposits of gold, silver, platinum, palladium and rhodium.
History
Texas Governor
Greg Abbott
Gregory Wayne Abbott ( ; born November 13, 1957) is an American politician, attorney, and jurist who has served since 2015 as the 48th governor of Texas. A member of the Republican Party (United States), Republican Party, he served from 2002 to ...
signed the Texas Bullion Depository Bill, HB 483, on June 19, 2015. Rep.
Giovanni Capriglione
Giovanni Capriglione (born March 8, 1973) is an American politician. He is a Republican member of the Texas House of Representatives, having represented District 98 since 2013.
Early life and education
Capriglione studied for a Bachelor of ...
,
R-Southlake, originally filed the bill on December 10, 2014. The bill was co-authored by 31 other colleagues and sponsored by Sen.
Lois Kolkhorst
Lois Winkelmann Kolkhorst (born November 4, 1964) is an American businesswoman and politician serving as a Republican member of the Texas State Senate. She was first elected to the state Senate from the 18th District in a special election held ...
,
R-Brenham. In 2013 Capriglione announced his interest in creating the depository and was subsequently contacted by people around the world interested in storing their gold in a Texas depository. Capriglione was able to draw support for the depository by requiring that it be run by the private sector with no costs to taxpayers. The bullion depository will hold precious metals deposits owned by multiple entities: individuals, businesses, financial institutions and even foreign countries.
Texas Comptroller Glenn Hegar issued a request for information, RFI 212P, regarding the location of the depository. Many companies replied, including Texas Precious Metals, Brink's and Anthem Vault. All three companies envision different solutions for the storage of the precious metals. Tarek Saab, chief operating officer of Texas Precious Metals, proposed building a $20 million depository on 40-acres in Shiner, Texas, without the cost of taxpayer dollars. Brink's is in favor of relocating the state's’ precious metals to one of their branch locations instead of constructing a physical building. Anthem Vault addressed the issue of location by offering the implementation of multiple locations for the depository, including retail storefronts and coin shops across the state. Hegar worked through business models with his task force to ensure Texas has a safe and secure depository.
The June 2017 announcement of Lone Star Tangible Assets as the partnering vendor concluded a lengthy evaluation period and followed the announcement that Tom Smelker, the director of Treasury Operations at the Comptroller's office, was named the depository administrator.
Legislation
Texas HB 483 authorizes the establishment and administration of a state
bullion depository to serve as the
custodian
Custodian may refer to:
Occupations
* Fullback (rugby league), in rugby, also called a sweeper
* Janitor, a person who cleans and maintains buildings
* Legal guardian or conservator, who may be called a custodian in some jurisdictions
Religion
...
, guardian and administrator of bullion that may be transferred to or otherwise acquired by this state or an agency, political subdivision, or another instrumentality of the state. The bill grants the
Comptroller
A comptroller (pronounced either the same as ''controller'' or as ) is a management-level position responsible for supervising the quality of accountancy, accounting and financial reporting of an organization. A financial comptroller is a senior- ...
authority to interpret and implement the Act and allows the Texas Bullion Depository to "purchase" and "sell"
precious metals
Precious metals are rare, naturally occurring metallic chemical elements of high economic value. Precious metals, particularly the noble metals, are more corrosion resistant and less chemically reactive than most elements. They are usual ...
in the "course of ordinary business" (Sec. 151.003). The bill states that the Texas Bullion Depository should be a monument to the state of Texas, a recruitment attraction for business, and an asset for domestic and international relations.
Challenges and reactions
Although there has been both public and private support behind the bill –– which passed nearly unanimously with only one "nay" vote –– some disagree that the bill should have been passed, claiming that any depository concept doesn't make financial sense for taxpayers, and that gold is not a practical investment for the state.
The University of Texas Investment Management Company (UTIMCO) has
gold bullion
A gold bar, also known as gold bullion or a gold ingot, is a quantity of refining, refined metallic gold that can be shaped in various forms, produced under standardized conditions of manufacture, labeling, and record-keeping. Larger varietie ...
stored in
New York
New York most commonly refers to:
* New York (state), a state in the northeastern United States
* New York City, the most populous city in the United States, located in the state of New York
New York may also refer to:
Places United Kingdom
* ...
, worth $647 million. According to
Lois Kolkhorst
Lois Winkelmann Kolkhorst (born November 4, 1964) is an American businesswoman and politician serving as a Republican member of the Texas State Senate. She was first elected to the state Senate from the 18th District in a special election held ...
,
HSBC Bank HSBC Bank may refer to any one of the following principal local banks or divisions of the HSBC Group:
Asia-Pacific
* HSBC (Hong Kong)
** PayMe, its local payment service
* HSBC Bank (China)
* HSBC Bank Australia
* HSBC Bank India
* HSBC Bank Malays ...
in
New York City
New York, often called New York City (NYC), is the most populous city in the United States, located at the southern tip of New York State on one of the world's largest natural harbors. The city comprises five boroughs, each coextensive w ...
charges
Texas
Texas ( , ; or ) is the most populous U.S. state, state in the South Central United States, South Central region of the United States. It borders Louisiana to the east, Arkansas to the northeast, Oklahoma to the north, New Mexico to the we ...
a fee to store each individual bar of gold.
HB 483 does not require UTIMCO to move the $647 million in precious metals back to Texas. New York City is within the COMEX trading market. Currently, all COMEX rated facilities are located within 150 miles of New York City and earning a COMEX membership out of this region may be difficult.
See also
*
United States Bullion Depository
The United States Bullion Depository, often known as Fort Knox, is a fortified bank vault, vault building located next to the United States Army post of Fort Knox, Kentucky. It is operated by the United States Department of the Treasury. The v ...
*
Federal Reserve Bank of New York Building
The Federal Reserve Bank of New York Building, also known as 33 Liberty Street, is a building in the Financial District, Manhattan, Financial District of Lower Manhattan in New York City, which serves as the headquarters of the Federal Reserve ...
*
Gold as an investment
Of all the precious metals, gold is the most popular as an investment. Investors generally buy gold as a way of diversifying risk, especially through the use of futures contracts and derivatives. The gold market is subject to speculation and ...
*
Vaulted gold
Vaulted gold denotes gold bullion stored in bank vaults. Buyers of vaulted gold obtain outright ownership of the physical gold which is held for them in a vault. This is unlike structured gold products such as Gold based exchange traded funds ...
References
{{Reflist
External links
Texas Bullion Depository – Official Site Mints of the United States
Mining in Texas
Precious metals
Gold
Silver