Bill Summary – FastDemocracy

       Florida Senate - 2024                                     SB 750
       
       
        
       By Senator Rodriguez
       
       
       
       
       
       40-00526A-24                                           2024750__
                      A bill to be entitled                      
       An act relating to state legal tender and bullion
       depository; creating s. 17.45, F.S.; providing
       definitions; providing that specie legal tender and
       electronic currency are legal tender; providing that
       bullion is not personal property for taxation and
       regulatory purposes; providing that certain
       transactions of bullion do not give rise to tax
       liability; providing that exchange of one type or form
       of legal tender for another type or form of legal
       tender does not give rise to tax liability;
       prohibiting persons from compelling others to tender
       or accept specie as legal tender; authorizing that
       specie legal tender be recognized for certain payments
       by governmental entities; authorizing courts to
       require the specific type and form of specie under
       certain circumstances; requiring the Attorney
       General’s office to enforce certain provisions;
       requiring the Department of Financial Services to
       establish and administer a bullion depository;
       authorizing the department to contract with a third
       party to act as the depositories’ administrator;
       authorizing that depository accounts be established
       through depository agreements with a depository;
       providing rights of depository account holders;
       requiring depositories to have certain processes and
       systems; authorizing governmental entities to use
       depositories for storing bullion; authorizing the
       State Treasury to deposit a portion of its funds into
       depositories in the form of bullion; providing that
       such bullion is considered part of the state’s
       official financial reserves; requiring the department
       to develop certain guidelines; providing recordkeeping
       requirements; providing requirements for security
       measures and insurance coverage for depositories;
       providing requirements for audits; providing specified
       administration duties for the administrator; requiring
       that such duties and specified services be publicly
       available; requiring the Chief Financial Officer to
       review such duties and services; prohibiting specified
       employees and officials from having financial
       interests in certain companies and entities; requiring
       disclosure of potential conflicts of interest;
       providing removal from positions, fines, and
       penalties; authorizing the Chief Financial Officer to
       enter into contracts for specified purposes;
       authorizing the administrator to enter into
       contractual agreements with private entities for
       certain services; requiring the department to review
       and approve such contractual agreements; requiring the
       depositories’ compliance with certain laws; requiring
       the administrator to consult regularly with legal
       counsel; prohibiting depositories from being
       terminated or transferred to a private entity;
       providing an exception; providing reporting
       requirements; requiring the department to adopt rules
       and regulations; providing that certain confiscations,
       requisitions, seizures, and other actions relating to
       depository accounts by certain entities are void and
       of no force and effect under certain circumstances;
       prohibiting depositories from recognizing such
       entities as lawful successors of depository account
       holders; requiring depositories to suspend withdrawal
       privileges associated with such depository accounts
       for a specified period; authorizing voluntary
       transfers of account balances and of accounts among
       account holders; requiring the Chief Financial Officer
       to refer certain matters to the Attorney General;
       requiring the Chief Financial Officer to establish
       electronic currencies backed by specie legal tender
       and other bullion; authorizing the Chief Financial
       Officer to contract with a private vendor for certain
       services; providing requirements for establishing
       electronic currencies; requiring the Chief Financial
       Officer to hold specie legal tender and other bullion
       as bailment for specified purposes; authorizing
       persons to purchase units of electronic currencies, to
       deposit specie legal tender and other designated
       bullion, and to exchange electronic currencies for
       specie legal tender, legal tender other than specie
       legal tender, and designated bullion; requiring the
       Chief Financial Officer to determine values of units
       of electronic currency in non-specie legal tender;
       requiring that the exchange rates be published online;
       providing that specie legal tender and other
       designated bullion holdings are held as bailment on
       behalf of holders of electronic currencies and are not
       available for legislative appropriation; providing
       rulemaking authority; authorizing the Chief Financial
       Officer to enter into contracts for specified
       purposes; requiring the Chief Financial Officer to
       administer this act pursuant to specified provisions;
       providing an effective date.
        
Be It Enacted by the Legislature of the State of Florida:

       Section 1. Section 17.45, Florida Statutes, is created to
read:
       17.45 Gold and silver as legal tender; state bullion
depositories; gold and silver electronic currency.—
       (1) DEFINITIONS.—As used in this section, the term:
       (a) “Administrator” means the individual or entity
appointed by the department to oversee the operation and
management of the depositories.
       (b) “Bullion” means refined precious metal in any shape or
form with uniform content and purity, including, but not limited
to, coins, rounds, bars, ingots, and any other products, which
is:
       1. Stamped or imprinted with the weight and purity of the
precious metal that it contains; and
       2. Valued primarily based on its metal content and not on
its form and function.
       (c) “Depository” means a bullion depository established in
this section.
       (d) “Depository account” means an account established with
a depository to facilitate the storage, transfer, and exchange
of bullion.
       (e) “Electronic currency” means a representation of actual
gold and silver, specie, and bullion held in a depository
account, which may be transferred by electronic instruction.
Such representation must reflect the exact units of physical
gold and silver, specie, or bullion in the depository account in
its fractional troy ounce measurement as provided in this
section.
       (f) “Legal tender” means a recognized medium of exchange
that is authorized by the United States Congress or by any state
pursuant to s. 8 or s. 10, Art. I of the United States
Constitution, respectively, for the payment of debts, public
charges, taxes, or dues.
       (g) “Precious metal” means gold or silver.
       (h) “Specie” means bullion fabricated into products of
uniform shape, size, design, content, weight, and purity which
are 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.
       (i) “Specie legal tender” means:
       1. Specie coin issued by the Federal Government at any
time; and
       2. Any other specie designated by the Chief Financial
Officer as legal tender pursuant to the monetary authority not
prohibited in s. 10, Art. I of the United States Constitution.
       (2) LEGAL TENDER.—
       (a) The following are considered legal tender:
       1. Specie legal tender; and
       2. Electronic currency.
       (b) Bullion may not be characterized as personal property
for taxation or regulatory purposes.
       (c) The purchase or sale of any type or form of bullion
does not give rise to any tax liability.
       (d) The exchange of one type or form of legal tender for
another type or form of legal tender does not give rise to any
tax liability.
       (e) Unless specifically provided by the State Constitution
or general law or by contract, a person may not compel another
person to tender specie or to accept specie as legal tender.
       (f) Specie legal tender may be recognized to pay private
debts, taxes, and fees levied by the state or local government
or any subdivision thereof.
       (g) If a valid and enforceable contract expressly
designates a type or form of specie as tender, the court that is
asked to adjudicate the breach of the contract must require, as
a remedy for the breach, the specific performance of tendering
the type or form of specie specified in the contract.
       (h) The Attorney General’s office shall enforce this
subsection without prejudice to a private right of action.
       (3) BULLION DEPOSITORIES.—
       (a) State bullion depository establishment and
administration.—The department may:
       1. Establish and administer bullion depositories to provide
a secure location for the storage of bullion; or
       2. Contract with a third party to act as the administrator
to manage the day-to-day operations of the depositories and
implement the depositories’ security, storage, and transactional
and administrative procedures in accordance with this subsection
and any rule adopted thereunder. As used in this subsection, the
term “security” means physical, online, and logical security
standards that meet generally accepted standards within the
information assurance industry.
       (b) Depository accounts; state use of depositories.—
       1. A person, including, but not limited to, an individual,
a corporation, a partnership, a company, an association, a
trust, an estate, and a governmental entity, may establish a
depository account by entering into a depository agreement with
a depository.
       2. A depository account holder may purchase, sell, deposit,
or withdraw bullion through the holder’s account in accordance
with this section and any rule adopted thereunder. A depository
must have processes and systems to facilitate timely bullion
purchases, sales, deposits, and withdrawals, which may include,
but are not limited to:
       a. Physical deposits and withdrawals to and from the
depository’s physical location, or a partner organization such
as a major mint or refiner capable of providing bullion that
meets standards established by the department; and
       b. Electronic systems that meet current industry standards
for the purchase and sale of bullion for depository account
holders that cannot or choose not to travel to the physical
location.
       3. State agencies, counties, municipalities, and other
governmental entities may use a depository for storing bullion.
The State Treasury may deposit a portion of its funds into a
depository in the form of bullion, and such bullion is
considered part of the state’s official financial reserves. The
department shall develop guidelines for the state’s use of
depositories.
       4. The administrator shall maintain a record of all
depository accounts and all transactions, deposits, and
withdrawals associated with each account. Such records must be
provided to the department within 5 business days after the
department’s request. All records shall be kept and maintained,
at a minimum, on an approved state computer system for a period
of at least 7 years and 1 day.
       (c) Security measures and insurance.—
       1. The administrator shall ensure that a depository has
state-of-the-art security measures to prevent theft, fraud, or
other unauthorized access or removal of bullion.
       2. A depository shall maintain insurance coverage
sufficient to cover the full value of all bullion stored at the
depository. Such insurance shall be provided by an insurer that
is rated “A” or higher by A.M. Best Company or an equivalent
rating by another national rating service acceptable to the
office.
       3. An independent third party shall conduct audits at least
twice a year to verify the amount and value of bullion stored in
a depository and to inspect the security measures and protocols
in place. The third party must be an established provider with a
good history of providing such auditing service. Documentation
of audit results must be made available within a reasonable
timeframe to the public upon request. Documentation must
include, at a minimum, summary totals of precious metal amounts
assessed, as well as documentation of any discrepancies found
during the audit.
       (d) Transactions and services.—
       1. The administrator shall administer the bullion storage,
withdrawal, and transfer within a depository pursuant to the
safekeeping services provisions under s. 17.59 and shall make
such administration and services provisions publicly available.
       2. The Chief Financial Officer shall periodically review
the administration and the safekeeping services provisions under
s. 17.59, as described in subparagraph 1., to ensure that such
administration and services provisions are reasonable and in
line with market rates.
       (e) Conflicts of interest.—
       1. An employee or official associated with the oversight or
operation of a depository:
       a. May not have any financial interests in companies or
entities that produce, sell, or manage bullion.
       b. Must disclose any potential conflict of interest to the
department immediately upon discovery.
       2. A violation of this paragraph may result in the
employee’s or official’s removal from his or her position,
fines, or other legal penalties as determined by the department.
       (f) Contractual agreements.—The Chief Financial Officer has
all authority necessary to enter into contractual agreements
with third parties to administer this section and fulfill the
purposes of this section. The administrator may enter into
contractual agreements with private entities for the provision
of services for bullion storage, transportation, or security.
All contractual agreements must be reviewed and approved by the
department to ensure that the agreements align with the state’s
interests and security requirements.
       (g) Legal and regulatory compliance.—A depository must
comply with federal and state laws pertaining to bullion
storage, management, and transactions. The administrator shall
consult regularly with legal counsel to ensure that each
depository remains compliant with evolving laws and regulations.
       (h) Termination or transfer of a depository.—A depository
may not be terminated or transferred to a private entity unless
such termination or transfer is approved by the Legislature. A
depository termination or transfer must ensure the security of
the bullion, the rights of account holders, and the financial
interests of the state.
       (i) Reporting and oversight.—
       1. The administrator shall provide a quarterly report to
the department detailing the operations, transactions, and
financial status of each depository.
       2. The department shall provide an annual report to the
Legislature regarding the operations and financial status of
each depository.
       3. The Legislature may request additional reports or
conduct investigations into the operations of a depository as it
deems necessary.
       (j) Rules and regulations.—The department shall adopt rules
and regulations necessary for the establishment, operation,
security, and administration of a depository and shall make
these rules and regulations publicly available. Before final
adoption of the rules and regulations, the department must
undergo a public comment period.
       (k) Confiscations, requisitions, seizures, and other
actions void.—
  292