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.

Texas H 1598

Establishment of a Bitcoin Reserve

2025 TE H 1598

Texas H 1598

Establishment of a Bitcoin Reserve

2025 TE H 1598