Friday, May 22, 2015

Gio and the Watered Down Gold Bill

"By covetousness they will exploit you with deceptive words; for a long time their judgment has not been idle, and their destruction does not slumber."
2 Peter 2:3

[Author's Note: The 2013 version of the bill can be seen here; the 2015 version can be seen here.]

Longtime readers will remember that repatriating Texas' Gold was our top priority last session.  The bill died in committee.  Obviously, this was Gio's bill.

Thus it caught our attention when we noticed a similar bill had passed the House this session.  Something had changed.  For awhile, we were thinking that Gio had actually gotten something important in exchange for his support for Joe Straus.

Then we decided to read the bills.

In both versions of the bill, Section 2116.002 establishes the parameters of the Texas Bullion Depository.  Both versions place the agency under the Comptroller's office and enable political subdivisions to store their bullion in the depository.  Only the 2013 version of the bill (page 3), however, enables the depository to:
(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.
In other words, where the 2013 version of the bill had teeth that would help re-establish sound money, the 2015 creates a new state agency that wouldn't accomplish anything.

On a similar note, Section 2116.028 of the 2013 version of the bill (page 20) fails to make it into the 2015 counterpart:
  • (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) 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.
Again, rendering the bill toothless.

Another interesting tidbit from the 2013 version (page 8) that fails to reappear in 2015 is Section 2116.008:
Sec.A2116.008. 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.
That being said, if you end up in litigation with the Texas Bullion Depository, at least the 2015 version (page 9) offers this reassurance in Section 2116.009:
(e)A suit authorized by this section must be brought in a district court of Travis County.
Because judges in Travis County have such FANTASTIC reputations....

BOTTOM LINE: The 2013 version of this bill had meaningful economic possibilities.  The only reason it's moved in 2015, however, is because it's been gutted.  Is anyone surprised?!?

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