Bill Description: Senate Bill 1314 would allow the state to take money that is sitting idle in its treasury and invest it in physical gold and silver.

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NOTE: The Senate Amendment to Senate Bill 1314 would limit the state's maximum allowed investment in physical gold and silver to 7.5% of the idle moneys invested pursuant to this law. This limit is unnecessary and limits the value of this bill. The analysis has been updated, but the rating has not changed.

Does it violate the spirit or the letter of either the U.S. Constitution or the Idaho Constitution? Examples include restrictions on speech, public assembly, the press, privacy, private property, or firearms. Conversely, does it restore or uphold the protections guaranteed in the U.S. Constitution or the Idaho Constitution?

Senate Bill 1314 would amend Section 67-1210, Idaho Code, which provides for how the state may invest its idle funds. The bill would add a new subsection to this list, saying the state treasurer may invest in "physical gold and silver, owned directly."

The new subsection would also require that the gold and silver "shall be maintained securely in a depository for precious metals constructed, at a minimum, to currently accepted industry standards for secure storage and located within the geographical boundaries of the state."

Another option would be to store the gold and silver in "a bank chartered under the Idaho bank act or a credit union organized under the Idaho credit union act when such facility is located within the geographical boundaries of this state and the gold and silver is stored in a class 1 vault"

A third option allows the gold and silver to be stored in "a qualifying depository in a contiguous state" if "no depository meeting the requirements of this subsection exists in this state." 

The treasurer is also tasked with ensuring that the gold and silver is "insured, independently audited, and physically segregated from other assets." 

Senate Bill 1314 was amended by the Senate to add a provision that says, "The maximum allowed investment in physical gold and silver shall not exceed seven and one-half percent (7.5%) of the idle moneys invested pursuant to this section." This provision is unnecessary and limits the value of this bill because the other 92.5% of idle moneys would sill be subject to the volatility of the bond market and the wealth-destroying scourge of inflation.

The U.S. Constitution states in Article 1, Section 10, that "no state shall ... make any thing but gold and silver coin a tender in payment of debts." The framers of the constitution clearly recognized the importance of physical gold and silver as a store of wealth and the foundation of currency. 

Senate Bill 1314 is a positive first step toward restoring the constitutional role of gold and silver. Diversifying the state's investments to include physical gold and silver also helps to protect the state's resources from the volatility of the bond market and the wealth-destroying scourge of inflation.

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