Sponsor urges 1% state investment in gold and silver; treasurer cites cost, security and liquidity trade-offs

Representative Dan Johnson, District 24, presented House Bill 1183 to the Industry, Business and Labor Committee, saying the bill "seeks to mandate that the state treasurer invest at least 1% of the general fund into gold and silver bullion."

The bill would require the state treasurer to hold a minimum allocation of physical gold and silver as a partial hedge against inflation and systemic risks, and it would authorize a study of how precious metals could "augment and protect the state of North Dakota, its economy, and its citizens," the sponsor said.

JP Cortez, executive director of the Sound Money Defense League, testified in support and told the committee that the proposal is a modest, state-level step against what he called federal monetary risks: "Gold is an inflation hedge with a 5000 year history and was the 2nd best performing asset of all asset classes in 2024." He also emphasized the bill would limit ownership to physical bullion stored in a treasurer‑approved vault and would not authorize paper or electronically traded gold.

State Treasurer Thomas Beadle described the office’s practical concerns and the fiscal-note estimate for the bill’s study. Beadle said the treasurer’s vault is not currently used for currency and that the office lacks facilities and round‑the‑clock security for storing physical bullion. "The current daily balance in the general fund is just shy of $1,100,000,000," Beadle said, adding that 1% of that balance would be "in the $10,000,000 range." He said the treasurer’s office requested funding to contract outside experts to produce a substantive security and cost analysis rather than a rapid, in‑house literature review.

Beadle also flagged how a 1% minimum in non‑yielding physical bullion would change earnings patterns: "An asset like gold ... doesn't pay a dividend. There's not a dividend coming off of that. There's not an earning coming off of that. You don't realize the earning until you sell that asset and get the growth in the valuation." He warned any allocation to non‑yielding specie would reduce interest income that currently flows back to state funds.

Don Morgan, president of the Bank of North Dakota, testified neutrally that the bank does not hold physical gold and that its portfolio mix is chosen to prioritize mission‑driven liquidity and lending capacity. "We don't hold any physical gold today," Morgan said, explaining the bank keeps a large portion of assets in liquid, government‑backed securities so it can provide rapid liquidity to the state during budget shortfalls.

Committee members discussed operational questions raised by the treasurer and the bank, including where bullion would be stored (state vault, Bank of North Dakota, or third‑party private vaults), ongoing security and transportation costs, and the effect on other programs that rely on interest earnings. The treasurer and the bank repeatedly noted that diverting deposits reduces the bank’s ability to leverage those funds into loans and other state economic programs.

No formal vote was taken. The committee closed the hearing on HB 1183 and held the bill over for committee work.