A Wyomingized Fort Knox may be setting up shop in Casper, but a significant contingent of lawmakers in the House said they don’t believe that necessarily means Wyoming should force the Department of Revenue or Treasurer’s hands when it comes to holding physical gold investments or accepting tax payments in gold.
The business, Scottsdale Mint, was among parties testifying on Senate File 101 during committee hearings, and offered to help Wyoming move toward accepting gold for tax payments and holding gold as an investment.
The Mint has also hosted several lawmakers involved in crafting the bill for tours of its facility. Its existence was referred to obliquely several times during floor testimony Monday night, particularly after Rep. Steve Harshman, R-Casper, moved a standing committee amendment changing “shall” accept mineral tax payments in gold to “may.”
Harshman’s amendment also removed a directive that the Treasurer or Department of Revenue shall invest in and hold at least some physical gold.
The state can already invest in gold, Harshman said. The Department of Revenue develops an investment plan that goes through a five-member body, the State Loan Investment Board (SLIB), and could, at any time, buy gold as part of that portfolio.
“Those five elected officials and the SLIB board is a creation of the Legislature,” Harshman said. “That’s not in the constitution about the SLIB board. We created that and we want them, the majority, three out of five, to vote on, you know a portfolio of how we invest the state’s wealth.”
That process allows the state to invest in whatever is most advantageous, be it gold or some other commodity, Harshman said.
As far as paying taxes in gold, Harshman suggested that then the state would have to also develop a hedge program for it.
“You’ve got to hedge it,” Harshman said. “You got to hold it. You got to make sure it’s right on that day. I think maybe someday we could probably do that. I just don’t think we’re there yet. And I don’t think we want to spend the time, money, or the effort to do it for something that we never heard one mineral company come forward and say, hey, we want to do this.”
Why Not Pork Bellies?
Several of the representatives speaking against the idea of the state accepting gold tax payments and holding onto physical gold were concerned about the volatility with bringing commodities into the tax payment system, or felt that it was simply absurd.
“Gold is a commodity,” Rep. Sandy Newsome, R-Cody said. “So why wouldn’t we allow other commodities? Why don’t we take a barrel of oil for our taxes? Why don’t we take a ton of coal? Why don’t we take 40,000 pounds of pork bellies in payment for taxes? Because they are a commodity the same way gold is a commodity and the same way sliver is a commodity. So I would resist the notion that we should take commodity pricing for the payment of taxes.”
Gold is too volatile, Speaker Pro Tempore Clark Stith, R-Rock Springs, said.
“In March of 2022, the price of gold was $2,043.96,” he said. “Months later, at the end of September, it was $1,628. It dropped 20 percent in value in six months. There’s no point in introducing that kind of volatility into our system, certainly not into our system of tax payments.”
Harshman’s standing committee amendments improve the bill, Stith added. But he doesn’t feel it really solves any problems in Wyoming.
He urged members to vote no on the bill, with or without amendments.
Neiman Speaks Out
Majority Floor Leader Chip Neiman, R-Hulett meanwhile, spoke in favor of the bill’s original intent, but also urged a “yes” vote even with the amendments that have angered many of the bill’s advocates, some of whom have told Cowboy State Daily they feel the bill itself is dead with those amendments.
“Last year, the central bank bought more gold than they have in the last 50 years,” Neiman said. “Holding some gold would help the state of Wyoming hedge against a very high exposure to Federal Reserve note dollars, whose value has recently plummeted, the fastest it has since the 1970s.”
Senate File 101, as originally envisioned, is an effort to bring diversification to the state’s portfolio, Neiman suggested.
“We are seeing inflation at rates we have not seen in my lifetime,” Neiman said. “Well, actually, I shouldn’t say that. I should go back to the early 80s when people were paying 18 percent interest on land notes, and land and ranches were being lost, and people were trying to figure out how they were going to make this thing work.”
Neiman suggested the country is headed for similarly dire straits.
“I would just suggest that I would appreciate support of this bill,” he said. “Even with the amendments on it, to be able to create a framework that we can use and build on and allow some choice.”
Amendment To Restore Dies Quietly
Rep. Mark Jennings, R-Sheridan, meanwhile, had planned to bring an amendment reversing the amendments Harshman brought to the floor.
But, hearing the debate, he withdrew the amendment without explanation. That doesn’t necessarily mean the amendments have died. In an email to Cowboy State Daily, Money Metals Exchange and Money Metals Depository President Stefan Gleason told Cowboy State Daily that Jennings is still likely to bring a revised amendment restoring some of the bill’s functionality for the bill’s third and final reading on Wednesday.
“(It) would restore some, but not all of the original sound money provisions of SF 101,” Gleason said. “The amendment would primarily require that the state of Wyoming own at least some gold to protect the state – just like other U.S. states as well as central banks around the world have been doing.”
Gleason said that since discussion first began in 2019 about Wyoming holding some gold, the metal’s value has continued to rise.
“The primary monetary metal has risen 50 percent in value, priced in declining dollars,” he said. “To this day, the state does not own a single ounce of gold! Yet this state owns hundreds of millions of dollars in Third World debt, and has suffered huge losses on those holdings.”
Where The Bill Stands
Senate File 101 has passed its second reading on the House Floor with amendments that were approved in committee and brought to the floor by Rep. Steven Harshman, R-Casper. The bill requires a third and final reading to pass the House. If it passes the third reading, it will be sent back to the Senate, which will decide if it will accept and agree with the amendments the House has made.