Schwertner Bitcoin Reserve Bill Lets Governor Sell On An ‘Emergency’

The text as introduced · 1,691 words

89R10588 TYPED

By: Schwertner
S.B. No. 778

A BILL TO BE ENTITLED

AN ACT

relating to the establishment and administration of the Texas

Strategic Bitcoin Reserve; making an appropriation.

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 V to read as follows:

SUBCHAPTER V. TEXAS STRATEGIC BITCOIN RESERVE

Sec. 403.701. DEFINITIONS. In this subchapter:

(1) "Bitcoin" means a type of decentralized

cryptocurrency created by a peer-to-peer network that operates

independently of any central authority or bank.

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

keys required to engage in transactions involving bitcoin that:

(A) has a nexus to a secure physical location;

(B) is protected from unauthorized access; and

(C) is isolated from any Internet 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) "Reserve" means the Texas Strategic Bitcoin

Reserve established under this subchapter.

(5) "Virtual currency" has the meaning assigned by

Section 12.001, Business & Commerce Code.

Sec. 403.702. LEGISLATIVE FINDINGS. The legislature finds

that:

(1) bitcoin is a valuable digital asset with strategic

potential for enhancing this state's financial resilience;

(2) bitcoin's decentralized nature and finite supply

are unique qualities that can serve as a hedge against inflation and

economic volatility; and

(3) the establishment of a strategic bitcoin reserve

aligns with this state's commitment to fostering innovation in

digital assets and providing enhanced financial security to

residents of this state.

Sec. 403.703. PURPOSE. The reserve is established to

allow:

(1) this state to own and hold bitcoin as a financial

asset; and

(2) persons, including residents of this state, to

donate bitcoin to the state for deposit in the reserve to promote

the shared ownership of and community investment in this state's

financial future.

Sec. 403.704. ESTABLISHMENT AND ADMINISTRATION OF RESERVE.

(a) The Texas Strategic Bitcoin Reserve is a special fund outside

the general revenue fund in the state treasury. The comptroller has

custody of and shall administer the reserve for the purpose of

holding bitcoin as a financial asset.

(b) The comptroller shall maintain custody of all bitcoin

held in the reserve.

(c) The reserve is a strategic asset of this state and may

not be used for purposes other than those authorized by this

subchapter.

Sec. 403.705. CERTAIN TRANSACTIONS PROHIBITED. The

comptroller may not enter into a transaction to acquire bitcoin to

be held in the reserve with a foreign country, an entity or

individual located outside of this state, or an entity or

individual known to engage in illegal activity.

Sec. 403.706. MANAGEMENT AND SECURITY; AUDITS. (a) The

comptroller is responsible for implementing secure storage,

management, and reporting systems for all bitcoin held in the

reserve.

(b) The comptroller shall adopt and implement policies and

procedures to ensure the security of bitcoin held in the reserve,

including policies and procedures requiring the use of secure

custodial technologies such as cold storage and best practices in

digital asset management.

(c) The comptroller may conduct regular audits of the

reserve to ensure transparency in the operation and security of the

bitcoin in the reserve.

Sec. 403.707. THIRD-PARTY CONTRACTS. The comptroller may

contract with a qualified, independent third-party entity based in

the United States to assist in the establishment, creation,

maintenance, operation, or administration of the reserve.

Sec. 403.708. TRANSFER, SALE, OR CONVERSION OF BITCOIN IN

RESERVE. (a) Bitcoin in the reserve may be transferred, sold, or

converted only in the manner authorized by this section.

(b) During a regular or special session of the legislature,

the legislature may, by adoption of a concurrent resolution

approved by a two-thirds vote of the members of each house of the

legislature, direct the comptroller to transfer, sell, or convert

bitcoin in the reserve and deposit the proceeds realized from the

transfer, sale, or conversion to the credit of a fund or account in

the state treasury as specified by the legislature in the

resolution.

(c) During any period in which the legislature is not

meeting in regular or special session, the governor or Legislative

Budget Board may by order direct the comptroller to transfer, sell,

or convert bitcoin in the reserve, provided that the governor or

board first finds that an emergency exists. The order adopted by

the governor or board must clearly state the nature of the

emergency.

(d) The comptroller shall deposit all proceeds realized

from the transfer, sale, or conversion of bitcoin under Subsection

(c) to the credit of the general revenue fund.

Sec. 403.709. VOLUNTARY DONATION OF BITCOIN TO RESERVE;

RECOGNITION PROGRAM. (a) Except as otherwise provided by this

subchapter, the comptroller may accept a gift, grant, or other

donation of bitcoin to the reserve from any public or private

source.

(b) The comptroller by rule shall adopt and implement a

process for the donation of bitcoin to the reserve and establish

eligibility requirements for potential donors. The rules adopted

by the comptroller must establish a process by which the

comptroller may return bitcoin donated to the reserve by a person

determined to be ineligible to make a donation of bitcoin under this

subchapter before the bitcoin is deposited in the reserve.

(c) All donations of bitcoin deposited to the reserve by the

comptroller:

(1) become property of this state; and

(2) shall be deposited and held in the reserve and,

except as otherwise provided by this subchapter, managed in the

same manner as any other asset in the state treasury.

(d) The comptroller may issue a certificate of

acknowledgment to a person that donates bitcoin to the reserve if

the person requests the certificate.

(e) The comptroller may establish a recognition program to

publicly honor significant contributions of bitcoin to the reserve.

Sec. 403.710. APPROPRIATIONS TO PURCHASE BITCOIN FOR

RESERVE. (a) The legislature may appropriate money to the

comptroller for the purpose of purchasing bitcoin for deposit in

the reserve.

(b) An appropriation to the comptroller for the purpose

described by Subsection (a) may be made as a dollar amount or as a

percentage of the unencumbered and unexpended balance of the

general revenue fund on the date the appropriation is made.

(c) An appropriation described by Subsection (a) may not

exceed one percent of the unencumbered and unexpended balance of

the general revenue fund for any biennial cycle.

Sec. 403.711. TEXAS STRATEGIC BITCOIN RESERVE ADVISORY

COMMITTEE. (a) In this section, "committee" means the Texas

Strategic Bitcoin Reserve advisory committee.

(b) The committee is composed of the following five members:

(1) the chair of the house committee on

appropriations;

(2) the chair of the senate committee on finance;

(3) the comptroller;

(4) one member of the senate appointed by the

lieutenant governor; and

(5) one member of the house of representatives

appointed by the speaker of the house of representatives.

(c) A member of the committee appointed under Subsection

(b)(4) or (5) serves at the will of the appointing authority.

(d) The lieutenant governor and speaker of the house of

representatives shall each designate one member of the committee as

a co-chair of the committee.

(e) The committee may hold public hearings, formal

meetings, and work sessions. Either co-chair of the committee may

call a public hearing, formal meeting, or work session of the

committee at any time. The committee may not take formal action at

a public hearing, formal meeting, or work session unless a quorum of

the committee is present.

(f) Except as otherwise provided by this subsection, a

member of the committee is not entitled to receive compensation for

service on the committee or reimbursement for expenses incurred in

the performance of official duties as a member of the committee.

Service on the committee by a member of the senate or house of

representatives is considered legislative service for which the

member is entitled to reimbursement and other benefits in the same

manner and to the same extent as for other legislative service.

(g) The committee:

(1) may provide comments and recommendations to the

comptroller for consideration in adopting rules regarding the use

of the reserve or on any other matter related to the reserve; and

(2) shall review the overall operation, function, and

structure of the reserve at least semiannually.

(h) The advisory committee may adopt rules, procedures, and

policies as needed to administer this section and perform its

duties under this section.

(i) Chapter 2110 does not apply to the size, composition, or

duration of the committee.

(j) The committee is subject to Chapter 325 (Texas Sunset

Act). Unless continued in existence as provided by that chapter,

the committee is abolished September 1, 2035.

Sec. 403.712. BIENNIAL REPORT. (a) The comptroller shall

prepare a biennial report that includes:

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

(2) an estimate of the monetary value of the total

amount of bitcoin held in the reserve, expressed in dollars;

(3) the growth, if any, in the amount and estimated

monetary value of bitcoin in the reserve since the date the previous

report required under this section was published;

(4) all transactions and expenditures, if any, related

to the reserve made since the date the previous report required

under this section was published; and

(5) any security threats made against the reserve

since the date the previous report required under this section was

published.

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

the comptroller shall electronically publish the report prepared

under Subsection (a) on the comptroller's Internet website and

notify each member of the legislature of the report's availability

on that website.

Sec. 403.713. RULES. The comptroller may adopt rules as

necessary to administer this subchapter, including rules related to

security protocols, reporting standards, and donation procedures

for the reserve.

SECTION 3. 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.