Capriglione’s Bitcoin Reserve Must Hold Coins At Least Five Years

The text as introduced · 1,370 words

By: Capriglione
H.B. No. 1598

A BILL TO BE ENTITLED

AN ACT

relating to the establishment of a bitcoin reserve within the state

treasury and the management of cryptocurrencies by governmental

entities.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. This Act may be cited as the Texas Strategic

Bitcoin Reserve Act.

SECTION 2. Chapter 403, Government Code, is amended by

adding Subchapter U to read as follows:

SUBCHAPTER U. TEXAS STRATEGIC BITCOIN RESERVE

Sec. 403.701. DEFINITIONS. In this subchapter:

(1) "Bitcoin" means the decentralized digital asset

created by a peer-to-peer network, which operates with no central

authority or banks.

(2) "Cold storage" means a method of storing private

keys required to transact in Bitcoin, with a nexus to a secure

physical location, protected from unauthorized access and isolated

from any network connections.

(3) "Cryptocurrency" means a type of virtual currency

that utilizes cryptography to secure transactions that are

digitally recorded on a distributed ledger, such as a blockchain.

(4) "Custody" means the holding, safeguarding, and

managing of Bitcoin assets by the state treasury.

(5) "Donor" means a Texas resident who gifts, grants,

donates, bequests, or devises Bitcoin to the Texas Strategic

Bitcoin Reserve.

Sec. 403.702. LEGISLATIVE FINDINGS. The legislature finds

that:

(1) the legislature recognizes Bitcoin as a valuable

digital asset with strategic potential for enhancing the state's

fiscal resilience;

(2) Bitcoin's decentralized nature and finite supply

provide unique qualities that can serve as a hedge against

inflation and economic volatility; and

(3) A strategic Bitcoin reserve aligns with Texas's

commitment to fostering innovation in digital assets and providing

Texans with enhanced financial security.

Sec. 403.703. PURPOSE. This fund allows the state to own

Bitcoin as a financial asset and for Texans to voluntarily donate

Bitcoin to promote a shared ownership and community investment in

Texas's financial future.

Sec. 403.704. ADMINISTRATION OF RESERVE. (a) The Texas

Strategic Bitcoin Reserve is a special fund in the state treasury

outside the general revenue fund in the custody of the comptroller

for the purpose of holding Bitcoin as a financial asset.

(b) The comptroller shall maintain custody of all Bitcoin

held in the Reserve and is responsible for implementing secure

storage, management, and reporting systems for these assets.

(c) The Reserve is designated as a strategic asset for the

State of Texas and may not be used for purposes other than those

outlined in this subchapter.

(d) The comptroller may accept gifts, grants, and donations

of Bitcoin from certain Texas residents or a governmental entity as

defined by Section 2252.001, Government Code.

(e) The comptroller shall store all Bitcoin for a duration

of at least five years from the date that the Bitcoin enters the

state's custody. After this mandatory period, the Bitcoin may be

transferred, sold, appropriated, or converted to another

cryptocurrency as directed by the comptroller.

Sec. 403.705. MANAGEMENT AND SECURITY. (a) The

comptroller shall develop policies and protocols to ensure the

secure storage and protection of Bitcoin held in the Reserve,

including the use of secure custodial technologies, cold storage,

and best practices in digital asset management.

(b) The comptroller shall prohibit transactions involving

foreign countries, entities or individuals outside of Texas, or

entities or individuals known to engage in illegal activities.

(c) The comptroller may contract with a qualified,

independent, United States-based third-party cryptocurrency entity

to assist in the creation, maintenance, operation, or

administration of the Reserve's security.

(d) The comptroller may conduct regular audits of the

Reserve to ensure transparency and security.

Sec. 403.706. BIENNIAL REPORTS. (a) The comptroller shall

prepare a biennial report including:

(1) the total amount of Bitcoin held in the reserve;

(2) details of the equivalent value of the reserve in

dollars;

(3) the growth of the account since the previous

report;

(4) any transactions or expenditures related to the

Reserve since the previous report;

(6) any security threats experienced since the

previous report; and

(5) the amount of Bitcoin that, after the mandatory

five-year holding period, is eligible to be converted or

transferred.

(b) Not later than December 31 of each even-numbered year,

the comptroller shall electronically publish the report on the

comptroller's Internet website and notify each member of the

legislature that the report is available on the website.

Sec. 403.707. VOLUNTARY DONATIONS OF BITCOIN BY TEXAS

RESIDENTS.

(a) The Texas Strategic Bitcoin Reserve may accept a gift,

grant, donation, bequest, or devise of Bitcoin from Texas

residents.

(b) The comptroller shall develop a straightforward

donation process to facilitate Bitcoin contributions from Texans.

(c) All Bitcoin donations shall be held in the Texas

Strategic Bitcoin Reserve and managed under the same protocols as

other assets in the treasury.

(d) Upon request, the comptroller may issue a certificate of

acknowledgment to individuals or organizations donating Bitcoin to

the Reserve.

(e) The treasury may also establish a recognition program to

publicly honor significant contributions made by Texans.

(f) The comptroller shall have the discretion to determine

the eligibility of donors. If the comptroller determines that a

donor is ineligible, the comptroller may establish a process to

return any Bitcoin transferred to the reserve to the ineligible

donor.

Sec. 403.708. RULEMAKING. The comptroller may adopt rules

as necessary to administer this subchapter, including but not

limited to security protocols, reporting standards, and donation

procedures.

Sec. 403.709. EXPIRATION. This subchapter expires

September 1, 2035.

SECTION 3. The heading to Section 403.023, Government Code,

is amended to read as follows:

Sec. 403.023. CREDIT, CHARGE, CRYPTOCURRENCY, AND DEBIT

CARDS.

SECTION 4. Section 403.023, Government Code, is amended to

read as follows:

(a) The comptroller may adopt rules relating to the

acceptance of credit, charge, certain cryptocurrencies, and debit

cards for the payment of fees, taxes, and other charges assessed by

state agencies. The rules may:

(1) authorize a state agency to accept credit, charge,

certain cryptocurrencies, or debit cards for a payment if the

comptroller determines the best interests of the state would be

promoted;

(2) authorize or require a person that uses a credit,

charge, or debit card to pay a processing fee to the state agency

that accepts the card for a payment; and

(3) authorize a particular state agency to accept

credit, charge, certain cryptocurrencies, or debit cards for a

payment without providing the same authorization to other state

agencies.

(b) The comptroller may adopt rules relating to the use of

credit or charge cards by state agencies to pay for purchases. The

rules may:

(1) authorize a state agency to use credit or charge

cards if the comptroller determines the best interests of the state

would be promoted;

(2) authorize a state agency to use credit or charge

cards to pay for purchases without providing the same authorization

to other state agencies; and

(3) authorize a state agency to use credit or charge

cards to pay for purchases that otherwise may be paid out of the

agency's petty cash accounts under Subchapter K.

(c) The comptroller may not adopt rules about a particular

state agency's acceptance of credit or charge cards for a payment if

the rules would affect a contract that the agency has entered into

that is in effect on September 1, 1993. The comptroller may not

adopt rules about a particular state agency's acceptance of charge

or debit cards for a payment if the rules would affect a contract

that the agency has entered into that is in effect on September 1,

1999.

(d) The comptroller may not adopt rules about a particular

state agency's acceptance or use of credit, charge, cryptocurrency,

or debit cards if another law specifically authorizes, requires,

prohibits, or otherwise regulates the acceptance or use.

(e) State agencies that accept cryptocurrencies shall first

convert the accepted cryptocurrencies to an equivalent value of

Bitcoin, if necessary, before depositing the Bitcoin to the credit

of the Texas Strategic Bitcoin Reserve.

(f) The comptroller shall establish rules to compensate

departments or agencies for the equivalent value of United States

dollars of the Bitcoin received.

SECTION 5. 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, 2025.