TITLE 34. PUBLIC FINANCE

PART 1. COMPTROLLER OF PUBLIC ACCOUNTS

CHAPTER 14. TEXAS BULLION DEPOSITORY

34 TAC §§14.1 - 14.20

The Comptroller of Public Accounts adopts new §§14.1 - 14.20, concerning the implementation of the Texas Bullion Depository. Section 14.4 and §14.13 are adopted with changes to the proposed text as published in the October 27, 2017, issue of the Texas Register (42 TexReg 5984) and will be republished. Sections 14.1 - 14.3, 14.5 - 14.12, and 14.14 - 14.20 are adopted without changes. These sections are adopted to be located in new Chapter 14, entitled "Texas Bullion Depository."

The agency is making a change to §14.4(a) to correct a typographical error. The agency is making a substantive change to §14.13 in response to an internal review of the proposed rules. The change provides that powers of attorney do not need to be on a form prescribed by the comptroller, but must still be notarized.

The adoption is to comply with Government Code, Chapter 2116. Government Code, §2116.005(a) permits the comptroller to adopt rules regarding the Texas Bullion Depository as appropriate to ensure compliance with the law and to protect the interests of the depository, depository account holders, this state and the agencies, political subdivisions, and instrumentalities of this state, and the public at large.

Section 14.1 provides definitions.

Section 14.2 establishes standards for deposit. Under this rule the depository will record deposits of precious metals in units of troy ounces. Deposits may be further classified by reference to other indicators as applicable. The depository may restrict the types, sources and forms in which precious metals may be deposited and is required to publish on its website the types, sources and forms that may be deposited with the depository.

Section 14.3 provides that a depository account holder may make a written demand for withdrawal of precious metals in accordance with the terms of the depository account agreement. This rule permits the depository to prescribe the form or format of a written demand for withdrawal. This rule further details how and when the depository must respond to a written demand for withdrawal.

Section 14.4 provides for the process by which a depository account holder may transfer all or part of a depository account to another person in accordance with the terms of the depository account agreement.

Section 14.5 outlines that a person seeking to establish a depository account must be eligible to open an account under applicable law and depository policy. This rule also provides that submission of a signed application to establish an account constitutes acceptance of the terms applicable to the account.

Section 14.6 permits the depository to prescribe the manner in which a contract for depository account may be executed electronically.

Section 14.7 provides that amendments to the depository account agreement may be made either by agreement between the parties or unilaterally by the depository upon providing written notice to depository account holders.

Section 14.8 outlines the responsibilities of depository account holders to give notice to the depository of any discrepancies in account statements.

Section 14.9 authorizes the comptroller to set fees, service charges, and penalties to be charged to a depository account holder.

Section 14.10 outlines the requirements for transferring a depository account to another person.

Section 14.11 provides that the depository has an automatic lien on depository accounts to secure the payment of any fees, charges, or other obligations that are owed by a depository account holder to the depository. Under this rule, the depository may liquidate all or part of a depository account to the extent necessary to satisfy the obligation. Alternatively, the depository may suspend withdrawal privileges for the depository account until the obligation is satisfied. This rule also outlines the requirements a third party has to meet to have a pledge of a depository account recognized by the depository.

Section 14.12 provides that applicable provisions of the Estates Code govern a depository account and provides that the depository may prescribe the forms that must be used to implement the provisions of the Estates Code.

Section 14.13 provides that powers of attorney must be executed on a form prescribed by the depository and must be notarized.

Section 14.14 provides that the depository shall refer certain matters related to the purported confiscation of precious metals as part of a generalized declaration of illegality or emergency relating to the ownership of precious metals to the attorney general for resolution. This rule requires the depository to suspend withdrawal privileges from the depository until the matter is resolved. This rule permits the depository to prescribe procedures by which voluntary transfers of precious metals may continue to take place between depository account holders.

Section 14.15 requires the comptroller to publish on the depository website the official exchange rates used in pricing precious metals transactions.

Section 14.16 requires the comptroller to provide to depository account holders the statements or other documents necessary to report taxable gains and losses arising from depository transactions in a manner that is compliant with Federal law.

Section 14.17 requires depository agents to maintain suitable systems and processes as the comptroller may prescribe to ensure that all reportable transactions may be reported to the depository on a daily basis. This rule also allows the comptroller to prescribe the transactions that are reportable under this rule.

Section 14.18 requires depository agents to submit periodic reports of all depository transactions. This rule permits the comptroller to prescribe the form and formats of the reports to be filed under this section. The comptroller may require the forms to be filed electronically.

Section 14.19 permits the depository to prescribe all forms or documents that may be required to implement this chapter and may require that such forms be submitted electronically. This rule also permits that any notice required to be provided to a depository account holder by this chapter, the rules, or under the account agreement may be provided electronically.

Section 14.20 outlines which persons or entities are required to be licensed as depository agents.

No comments were received regarding adoption of the new rules.

These new rules are adopted under Government Code, §§2116.005, 2116.006, 2116.007, 2116.008, 2116.010, 2116.012, 2116.023, 2116.024, 2116.025, 2116.052, and 2116.053.

The new sections implement Government Code, Chapter 2116.

§14.4.Transfer of Depository Account Balances.

(a) As provided by the depository account agreement, a depository account holder may transfer to another depository account holder or to a person who at the time of the transfer is not a depository account holder, any portion of a precious metal as is available in the depository account holder's depository account. A transfer request must be made using a form prescribed by the depository. The form prescribed by the depository may be electronic and must be submitted either on the depository website or in person to the depository or a depository agent as provided in the account agreement and in accordance with policies established by the depository. All transfers must be made in units of troy ounces pure or other applicable weights and measures as established by the depository.

(b) If a payee under this section is a depository account holder, the depository shall adjust the depository account balances to reflect the transfer by reducing the payor's depository account balance and increasing the depository account balance of the payee accordingly.

(c) If a payee is not a depository account holder, upon receipt of a valid transfer request, the depository shall at the option of the payee:

(1) deliver to the payee the amount of precious metals transferred by the transfer request, minus any applicable fees; or

(2) if the payee is otherwise eligible to open a depository account under applicable laws and regulations, allow the payee to establish a depository account and credit the balance of the payee's account accordingly.

(d) The depository may require a non-account holder to provide information as is reasonably necessary to ensure that a delivery of precious metals to a non-account holder under this section is made in accordance with applicable law and policies established by the depository. Notwithstanding any other provision in these rules, the depository is not obligated to honor a transfer request if doing so violates any applicable law or depository policy. A delivery made to a non-account holder payee under this subsection may only be made in person to the payee at a facility designated by the depository.

(e) As provided by the depository account agreement or depository policy, precious metals transferred under this section are subject to a settlement period for up to ten business days and may not be sold, withdrawn or otherwise transferred during that period unless approved by the depository.

§14.13.Powers of Attorney.

To be effective, a power of attorney by a depository account holder to manage or withdraw precious metals from the depository account holder's depository account must be notarized. Powers of attorney shall be effective for the length of time designated on the form unless earlier revoked by the depository account holder in writing or upon written notice of the death or adjudication of incompetency of the depository account holder.

The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on December 7, 2017.

TRD-201704993

Don Neal

Chief Deputy General Counsel

Comptroller of Public Accounts

Effective date: December 27, 2017

Proposal publication date: October 27, 2017

For further information, please call: (512) 475-0387