In early 2020, millions of dollars in precious metals will be transferred from Austin to a new facility in Leander.
Construction on the Texas Bullion Depository, located off Heritage Grove Road, began at the end of 2018 and is anticipated to be complete in the next couple months, according to the depository’s administrator, Tom Smelker. The first state-administered gold depository in the U.S., the Texas Bullion Depository is a place where state agencies, U.S. citizens and residents, and businesses can store precious metals. It began operating in Austin in June 2018 with plans to eventually move to the Leander facility. “We promised to have it finished in about a year, so we’re close, but we’re a little behind,” Smelker said of the Leander facility. “There were some heavy rains in the spring, so that kind of slowed us down.”
During the last election, Texans saw 10 state constitutional amendments on the ballot—one of which directly impacts the depository. Proposition 9 created a property tax exemption for precious metals in state depositories. The Texas Constitution makes precious metals held for the production of income subject to property taxation. Though state law exempted precious metals not held for the production of income from taxation, such exemption could have been overridden by a local government—a city or county, for example. While local taxing units do not tax gold in the Texas Bullion Depository, Smelker said the goal of the amendment was to remove any uncertainty that they would in the future.Texas Comptroller Glenn Hegar urged people to vote in favor of the proposition in a letter to the editor published in the Dallas Morning News on Nov. 5.
“Proposition 9 asks voters to ensure the Texas Bullion Depository and private depositories in our state can compete with depositories in other states,” he wrote.
The amendment, proposed during the last legislative session, had to go before voters because the tax laws it impacted were enshrined in the Texas Constitution, Smelker said. It was one of several changes made in the last legislative session that affect the depository. Additionally, legislators passed legislation that allows for the creation of a security force for the depository. The force will be composed of state-commissioned peace officers, Smelker said.
“Essentially we will have a Texas Bullion Depository Police Force, which is cool because we’ll be the only depository in the U.S. open to the public with a police force,” Smelker said.
The depository can hold gold, silver, platinum, palladium and rhodium. There is not a minimum deposit amount, and account holders do not receive interest. Customers pay storage fees that depend on the total value of their account. When the new facility opens, it will have vaults capable of holding 41 million ounces of silver, or about 2.56 million pounds, and 120,000 ounces of gold, or 7,500 pounds, according to Matt Ferris, the depository’s managing director.
It was announced the depository would be located in Leander in November 2017, after Leander City Council approved an economic incentive package with Lone Star Tangible Assets, the company the state comptroller’s office selected to construct and operate the depository. Williamson County also struck an economic development deal with the company in November 2017.
Spokespeople from the city and county said the incentive deals would not be impacted by the passage of Proposition 9.