What should a model TGS bill include?

What should a model TGS bill include?

A plain-language guide to the eight core components every Transactional Gold and Silver bill should contain — for legislators, policy staff, and citizen advocates.

What should a model TGS bill include?

A model Transactional Gold and Silver bill is more than a legal tender declaration. Legal tender recognition is the constitutional foundation — but it is only the first layer of what makes TGS practically functional and politically durable. A bill that simply says 'gold and silver are legal tender' gives citizens a constitutional right they cannot easily exercise. A complete TGS bill gives them the infrastructure to exercise it.

The American Legislative Exchange Council (ALEC) has published a model Transactional Gold and Silver Act that provides a starting framework. The enacted bills in Arkansas, Florida, Texas, Louisiana, and Missouri each build on that foundation with state-specific variations. The eight components below represent the consensus elements that the most successful TGS bills have included — drawn from those enacted laws and from the legislative feedback that has shaped subsequent iterations.

The eight components of a complete TGS bill

The table below summarizes what each component must include and why it is essential. Sections that follow explain each component in detail with examples from enacted legislation.

Component 1 — Legal tender recognition

Legal tender recognition is the constitutional foundation of every TGS bill. Without it, the depository and payment system operate without the legal standing that makes gold and silver viable as money rather than merely as commodities. The recognition must be specific: gold and silver specie are lawful legal tender for voluntary private transactions between mutually consenting parties, and when the state or local government agrees to accept them for payment of taxes, fees, or obligations.

The 'mutually consenting' and 'when accepted' language is critical. It is what makes TGS consistent with federal legal tender law — which requires creditors to accept dollars, but does not prohibit voluntary transactions in gold and silver. Florida's HB 999, signed May 27, 2025, and Arkansas's HB 1918, signed April 17, 2025, both include this formulation. Without it, a bill risks federal preemption challenges.

Component 2 — State-approved bullion depository

The depository is the operational core of TGS. Without secure, state-authorized storage, citizens cannot hold gold and silver with the legal protections and account accessibility that make TGS practical. The Texas Bullion Depository provides one ideal operational model: a public/private partnership in which the state Treasurer or Comptroller provides oversight and the legal framework, while a private contractor builds and operates the facility at no cost to taxpayers.

The key legislative language is 'the Treasurer shall designate, establish, or contract with' a depository — not 'the Treasurer shall build.' This language explicitly enables the private sector partnership model that eliminated the taxpayer cost objection that has stalled TGS bills in other states. West Virginia's SB 413 and Tennessee's HB 2427 both faced fiscal note objections; WV’s was premised on state-built and run depository costs; Tennessee’s fiscal note was added because a different legal tender bill that had circulated for a few years, advocated for tax offices to accept payment in physical metal; this would have saddled the state with fiscal burdens related to weighing and assaying physical gold at the time of payment. The private-sector-partnership language resolves that objection at the drafting stage.

Component 3 — Electronic payment system

The electronic payment system is what transforms TGS from a storage account into spendable money. Without it, the average person can still own gold — but it is not easily spent. The legislation must direct the Treasurer or other person charged with oversight to develop or contract with a payment processor that can convert gold or silver holdings to dollars at current spot rates at the point of sale, using existing payment networks.

GlintPay demonstrates that this technology already exists and operates commercially at scale — proving that the payment system is not theoretical but proven. Arkansas HB 1918 specifically directed the state to authorize one or more bullion depositories and one or more precious metals-backed electronic payment systems. This is the language model for other states to follow: the state authorizes the system, a private technology partner builds and operates it.

Component 4 — Allocated custody standards

Allocated custody is the consumer protection standard that distinguishes TGS from unregulated gold accounts. The legislation and/or rules must require that all deposits be held in allocated custody — meaning specific physical metal is legally identified to each account holder's account and tracked electronically — and that independent audits verify that physical holdings match account records on a regular schedule.

TGS account holders own allocated physical gold or silver stored in a secure, independently audited bullion depository. This is the legal standard every TGS bill must achieve. Without allocated custody requirements, account holders become creditors of the depository rather than owners of specific metal — a significantly weaker legal position in the event of depository insolvency or mismanagement.

Component 5 — Anti-CBDC and anti-surveillance protections

This component directly addresses the most politically potent objection to TGS legislation — the claim that it creates government-controlled digital money or enables financial surveillance. The bill must explicitly state that the TGS electronic payment system does not constitute a Central Bank Digital Currency and that transaction data from system participants may not be used for surveillance, social credit scoring, or behavioral conditioning.

Georgia's SB 424 — which passed the full Georgia Senate 29-21 before dying in the House Banks and Banking Committee — included some of the strongest anti-surveillance language of any 2026 TGS bill, explicitly prohibiting transactional data from being used in any social credit scoring system. Arizona's HB 2123 contained similar language. These provisions are not merely rhetorical — they are the legislative answer to the most effective attack on TGS bills and should appear in every model bill going forward.

Component 6 — Tax exemptions

Without tax exemptions, using gold and silver as money creates a taxable event every time a citizen makes a purchase — because the IRS treats gold as property, and any gain in the gold's dollar value since purchase is theoretically a capital gain.

At the state level, TGS bills should eliminate state and local capital gains taxes and sales taxes on qualifying gold and silver transactions. This is the minimum required to make TGS economically viable for ordinary citizens. Federal tax treatment remains a separate legislative priority — and is addressed in detail in Blog 31 on tax implications. Most every enacted state TGS law has included some form of state tax exemption.

Component 7 — Voluntary participation language

Voluntary participation language is not merely a political nicety — it is the constitutional and legal mechanism that makes TGS consistent with federal law. The Coinage Act of 1965 requires creditors to accept U.S. dollars in payment of debts. TGS does not conflict with this requirement because it creates a voluntary system — no creditor is required to accept gold or silver, and no debtor is required to tender gold or silver.

Every TGS bill should include explicit language stating that participation is entirely voluntary for consumers, businesses, merchants, and financial institutions. This language has appeared in every successfully enacted TGS bill. It is the legislative safeguard against federal preemption challenges and the political safeguard against 'government mandate' attack framing.

Component 8 — Accountability and reporting requirements

Annual reporting requirements create the transparency and accountability that build public confidence and legislative support over time. The Texas Bullion Depository submits annual reports to the Texas Comptroller that are publicly available — showing deposit levels, account holder counts, operational performance, and audit results. These reports are what allowed the Texas story to be told with specific numbers: $400 million in deposits, 1,700 account holders, 183% growth since 2021.

Every TGS bill should require the Treasurer, Comptroller, or other state agency tasked with oversight, to review an annual report covering the status of the gold/silver in the depository; this reporting can also be forwarded to the Governor and legislature. The audit reports should cover: total deposits and account holders, audit results, electronic payment system performance, consumer complaint resolution, and any operational changes. These reports become the evidence base for future legislative support — and the factual record that counters opposition claims about inoperability or public disinterest.

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