Texas Legislature Passes Bill To Create Gold Depository, Wants To Repatriate $1 Billion In GoldBy Kitco News
Tuesday June 02, 2015 16:48
(Kitco News) - It is not just European countries that what their gold back. Texas is planning to create its own depository and repatriate $1 billion in gold bullion, currently being stories in New York.
Monday, the Texas State legislation passed a bill that was first introduced by State Rep, Giovanni Capriglione, to set up a depository in Texas. The bill has now been passed along to the Governor Greg Abbott for consideration.
According to media reports, House Bill 483 would allow the state’s comptroller’s office establish a bullion depository. The articles add that the the plan is to repatriate the University of Texas Investment Management Company’s gold holdings, which are worth about $1 billion.
Currently, the University endowment fund holds its gold in HSBC vaults in New York City.
Of course the plan is not just to house the University’s gold investments; in an interview with the Forth Worth Star-Telegram, Capriglione envisions that other investors will take advantage of Texas’ potential gold storage infrastructure.
“We are not talking Fort Knox. But when I first announced this, I got so many emails and phone calls from people literally all over the world who said they want to store their gold … in a Texas depository,” he is quoted saying in the article.
“This will allow for bullion to be deposited here, as well as any other investments that … any state agencies, businesses or individuals have,” he added, describing his proposed legislation.
Capriglione also said that the creation of a state depository will also save tax payers money as Texas pays about $1 million in fees to store its gold in New York.
The University of Texas’ endowment fund is the second biggest in the U.S. and made headlines in 2013 when it sold $375 million in gold bullion, reducing its gold reserves to $1 billion from its original value of $1.4 billion.
In its 2013 fiscal year report, the investment company said that its initial gold investment represented about 4% of its portfolio.
This isn’t the first time Texas has tried to set up its own gold depository. In 2013, Capriglione presented a similar bill but it did not receive approval before the Legislature ended.
Gold repatriation plans have been growing in popularity in Europe.
Last week the Austrian Central Bank Oesterreichische Nationalbank (OeNB) released plans to increase the gold reserves held within its borders by 50%, up from the current level of 17%.According to the OeNB, currently, about 80% of the country’s gold reserves are held in London and that will fall to 30% within the next five years. At the same time the central bank is also planning to increase its gold reserves stored with the Swiss National Bank to 20% from the current level of 3%.
The repatriation trend started in 2013 when the German central bank, announced that it would repatriate a total of 674 tonnes of gold from Paris and New York.
In mid-November, the Dutch central bank said that it had transferred 122.5 tonnes of gold from New York to Amsterdam and in December Luc Coene, governor of Belgium’s central bank, confirmed that the bank is looking at how they can bring their gold reserves back into the country.