FISCAL NOTE
Date Requested: February 05, 2026
Time Requested: 09:49 AM |
| Agency: |
Treasurer's Office, WV |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 1934 |
Comm. Sub. |
SB413 |
|
|---|
| CBD Subject: |
Finance and Administration |
|---|
|
FUND(S):
1322
Sources of Revenue:
Special Fund
Legislation creates:
Creates New Expense, Creates New Program
Fiscal Note Summary
Effect this measure will have on costs and revenues of state government.
The bill would authorize the Treasurer to establish the West Virginia Bullion Depository to serve as the custodian, guardian, and administrator of all bullion and specie deposited with the State. The Treasurer would ensure that specie holders can use the specie as legal tender in the payment of debt and readily transfer the specie to another person. The bill would also authorizes the Treasurer to establish and issue transactional currency based on gold and silver that can be used as legal tender in the payment of debt and can be transferred electronically. The Treasurer would be authorized to contract with a private vendor to establish the transactional currency. The bill would require the Treasurer to hold all gold and silver specie and bullion for the purpose of issuing transactional currency. The Treasurer would issue the transactional currency to any person who makes a payment or designates gold or silver specie or bullion already held at the Depository to be transferred to the depositor's account. The bill would require the Treasurer to determine the value of the transactional currency at the time of each transaction based on the value of the appropriate fraction of a troy ounce of gold or silver and permits the promulgation of legislative rules to establish such transactional currency. Finally, the bill establishes that bullion and specie held in the depository do not give rise to any tax liability in this state.
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2026
Increase/Decrease
(use"-") |
2027
Increase/Decrease
(use"-") |
Fiscal Year
(Upon Full
Implementation) |
| 1. Estmated Total Cost |
0 |
14,660,250 |
1,160,250 |
| Personal Services |
0 |
560,250 |
560,250 |
| Current Expenses |
0 |
2,100,000 |
600,000 |
| Repairs and Alterations |
0 |
12,000,000 |
0 |
| Assets |
0 |
0 |
0 |
| Other |
0 |
0 |
0 |
| 2. Estimated Total Revenues |
0 |
0 |
0 |
Explanation of above estimates (including long-range effect):
The Treasurer would need additional staff to implement the provisions of the bill. The Treasurer's Office estimates that two Program Specialists, two Security Officers, one Cybersecurity Analyst, one Customer Service Representative, and one Director. The above analysis includes total salaries and benefits for seven FTE's in the amount of approximately $560,250 annually. Additionally, funds would be required to contract with a third-party vendor, which would be needed to establish the digital currency and a user-driven platform for the transactions. The Treasurer’s Office estimates the cost of such a system to be approximately $150,000 annually with an initial implementation cost of $1.5 million to ensure integration, dashboard reporting, secure data exchange, and cybersecurity and penetration testing. The Treasurer's Office can also estimate annual auditing, cybersecurity, hardware, software, and maintenance costs in the amount of approximately $450,000 annually. While it is the intent of the Treasurer’s Office to locate a safekeeping entity to hold and store all gold and precious metals, the Treasurer’s Office is unaware of a partner at this time. The Treasurer’s Office spoke to representatives at Brinks and Loomis Security regarding their willingness and ability to store precious metals required under this legislation. Both entities informed the Treasurer’s Office that they currently do not have a facility located in West Virginia that would satisfy and would therefore be unable to accept gold and other precious metals on behalf of the State. Additionally, the Treasurer’s Office also spoke with financial institutions that currently contract with the State for various banking and safekeeping services. Those institutions also do not have the capability to provide storage for gold and other precious metals on behalf of the State. Currently, there are no banking institutions or security companies that have the capability to provide these safekeeping services to the State, and this is unlikely to change by the effective date of this legislation. Because of the challenges the Office has encountered thus far with securing an appropriate safekeeping partner, the Treasurer’s Office believes if the proposed legislation were passed, the State would be responsible for either retrofitting an existing facility or constructing a new facility to store gold and other precious metals. The Treasurer's Office estimates that utilizing an existing structure to serve as the depository could cost anywhere from $2 million to $10 million to provide the necessary state of the art security upgrades and expand the office's current operating network system. If a new structure would be required to be built, the Treasurer's Office estimates the cost could be between $20 million to $35 million.
Furthermore, the State would be required to have an insurance policy for any gold and other precious metals in its possession. After discussing with a representative from BRIM, the State’s current insurance policy excludes gold and other bullion from its coverage. BRIM informed the Treasurer’s Office that the State’s insurance coverage would need to be updated to include gold and other bullion which would likely result in an increased premium but are unable to estimate how much that increase may be at this time. Therefore, the fiscal note does not reflect any potential insurance coverage increase.
Memorandum
The Treasurer’s Office would also like to note two items regarding the proposed legislation. After speaking with the State Tax Department, it is likely that any increased valuation of gold or precious metals that would be reflected in the State’s transactional currency payment card system and subsequently spent would be considered a realized investment gain and therefore subject to federal capital gains taxation. If this were the case, the Treasurer’s Office would likely be responsible for the issuance of tax documentation and IRS reporting requirements which could create an additional cost. Finally, the Treasurer’s Office is uncertain where the revenue source will come from to fund the transactional current payment cards. Financial institutions will generally only value gold and other precious metals at 30%-50%, therefore, the Treasurer’s Office is uncertain as to whether it would be required to make up that difference so that participants in the program will have access to 100% of the value of their gold and other metals.
Person submitting Fiscal Note: James Fuerhoff
Email Address: james.fuerhoff@wvsto.gov