[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5512 Engrossed in House (EH)]
110th CONGRESS
2d Session
H. R. 5512
_______________________________________________________________________
AN ACT
To reduce the costs of producing 1-cent and 5-cent coins, provide
authority to the Secretary of the Treasury to perform research and
development on new metallic content for circulating coins, and to
require biennial reports to Congress on circulating coin production
costs and possible alternative metallic content.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Coin Modernization and Taxpayer
Savings Act of 2008''.
SEC. 2. FINDINGS.
The Congress finds as follows:
(1) International demand along with market speculation for
commodity metals has, over the past several years, increased
the cost of producing circulating coins in the United States.
(2) In a July 30, 2007, letter to the Congress, the
Secretary of the Treasury, with support of the Administration's
Office of Management and Budget, requested that legislation be
put forward to authorize the Secretary of the Treasury to make
changes to the composition of circulating coins.
(3) The United States Mint has studied alternative metals
for use in circulating coins, as noticed in its 2004 annual
report.
(4) In 1943, the United States Mint produced zinc-coated
steel pennies in response to war-time demands for copper.
(5) The United States Mint gained further experience
changing the metal content of pennies in 1982, when it began
producing copper-coated zinc pennies as a result of rising
copper prices.
(6) The Royal Canadian Mint has produced for several years
a copper-coated steel 1-cent coin that is similar to the United
States penny at a significantly lower cost than the cost to
produce the United States penny.
(7) Given the current cost to make a penny and volume of
pennies minted, by simply reducing penny production costs to
face value, the United States will save more than $500,000,000
in the next 10 years alone.
(8) Reducing the cost to produce a nickel to face value
will save the United States an additional $60,000,000 per year.
(9) Commodity metal prices are often cyclical in nature,
and can be inflated by speculation, so it is important that a
solid trend in the rising price of a commodity metal be
established before any change in the metal content of a coin is
made.
SEC. 3. IMMEDIATE REDUCTION IN THE COST OF PRODUCING 1-CENT COINS
THROUGH THE USE OF STEEL PENNIES.
Subsection (c) of section 5112 of title 31, United States Code, is
amended to read as follows:
``(c) Composition of 1-Cent and 5-Cent Coins.--
``(1) 1-cent coin.--
``(A) In general.--Subject to paragraph (2),
beginning 270 days after the date of the enactment of
the Coin Modernization and Taxpayer Savings Act of
2008, the 1-cent coin shall--
``(i) be produced primarily of steel; and
``(ii) meet such other specifications as
the Secretary may determine to be appropriate,
including any change in the weight from that
specified in subsection (a)(6).
``(B) Treatment.--The 1-cent coin shall be treated
to impart a copper color to the appearance of the coins
so that the appearance is similar to 1-cent coins
produced of a copper-zinc alloy.
``(C) Exception for lincoln bicentennial numismatic
pennies.--No provision of this paragraph shall apply
with respect to 1-cent coins described in section 304
of the Presidential $1 Coin Act of 2005 that are issued
for numismatic purposes.
``(2) Alternative 1-cent coin composition.--
``(A) In general.--If, before the end of the 90-day
period beginning on the date of the enactment of the
Coin Modernization and Taxpayer Savings Act of 2008,
the Secretary determines that, with the addition of any
other element to any alloy of zinc and copper of which
1-cent coins could have been composed as of the day
before such date of enactment, there is a way--
``(i) to produce 1-cent coins of the same
diameter, general composition, and general
weight as 1-cent coins produced in accordance
with this subsection as of the day before such
date of enactment; and
``(ii) to achieve the goals of paragraph
(1) by reducing the unit cost to produce the 1-
cent coin to less than 1 cent while retaining
such coin's ease of use and ensuring ease of
co-circulation with 1-cent coins of the
diameter and weight already circulating as of
such date of enactment for ordinary commerce,
the Secretary may add any such element and continue
production of 1-cent coins of the same diameter,
general composition, and general weight as 1-cent coins
produced in accordance with this subsection as of the
day before such date of enactment instead of complying
with paragraph (1).
``(B) Effective period.--This paragraph shall only
apply if the change to the new composition and the
subsequent drop in the production cost of the 1-cent
coin referred to in subparagraph (A) can be achieved
before the end of the 270-day period referred to in
paragraph (1).
``(C) Report to the congress.--Any determination
and action by the Secretary under subparagraph (A)
shall be promptly reported to the Congress.''.
SEC. 4. AUTHORITY TO CHANGE METALLIC CONTENT OF 5-CENT COINS TO LESS
COSTLY ALTERNATIVE.
(a) In General.--Subsection (c) of section 5112 of title 31, United
States Code, (as amended by section 3) is amended by adding at the end
the following new paragraph:
``(3) 5-cent coin.--
``(A) In general.--After the end of the 2-year
period beginning on the date of the enactment of the
Coin Modernization and Taxpayer Savings Act of 2008,
the Secretary shall produce no 5-cent coin that is not
primarily made of steel with a coating of nickel, that
can co-circulate with the existing supply of 5-cent
coins and work interchangeably in coin handling
machines, except that--
``(i) the Secretary shall make no change to
the content of the existing 5-cent coin if at
that point the unit cost of production of such
coins is lower than the face value of the coin;
and
``(ii) if the report issued by the
Secretary pursuant to section 6 indicates that
a different metallic content of circulating 5-
cent coins is both functional and
interchangeable, and more economical to produce
in both the short and long term, the Secretary
shall propose such content to the Congress in
the form of a legislative recommendation.
``(B) Factors to be considered.--In prescribing the
weight and the composition of the 5-cent coin, the
Secretary shall consider--
``(i) factors relevant to the potential
impact of any revisions to the weight and
composition of the material on the current coin
suppliers;
``(ii) factors relevant to the
acceptability of new coinage materials,
including the effect on vending machines and
commercial coin processing equipment and making
certain, to the greatest extent practicable,
that any new coins work without interruption in
existing coin acceptance equipment without
modification; and
``(iii) such other factors that the
Secretary, in consultation with merchants who
would be affected by any change in the weight
and composition of the 5-cent coin, vending
machine and other coin acceptor manufacturers,
vending machine owners and operators, transit
officials, municipal parking officials,
depository institutions, coin and currency
handlers, armored-car operators, car wash
operators, and American-owned manufacturers of
commercial coin processing equipment, considers
to be appropriate and in the public interest,
after notice and opportunity for comment.
``(C) Comment and selection process.--In making any
determination with respect to any change in the weight
and composition of the 5-cent coin, the Secretary shall
enter into a formal rulemaking process that includes a
hearing on a record in addition to the publication of
notice and opportunity for comment.''.
(b) Technical and Conforming Amendment.--Section 5112(a)(5) of
title 31, United States Code, is amended by striking ``and weighs 5
grams''.
SEC. 5. AUTHORITY TO CONDUCT RESEARCH AND DEVELOPMENT ON ALL
CIRCULATING COINS.
To accomplish the goals of this Act, the Secretary may conduct any
appropriate testing within or without the Department of the Treasury,
and may solicit input from or otherwise work in conjunction with
entities within or without the Federal government including independent
research facilities or current or potential suppliers of the material
used in volume production of circulating coins, to complete the report
referred to in this Act and to develop, evaluate or begin the use of
new metallic material for such production.
SEC. 6. BIENNIAL REPORT TO CONGRESS ON CURRENT STATUS OF COIN
PRODUCTION COSTS AND ANALYSIS OF ALTERNATIVE CONTENT
REQUIRED.
(a) Biennial Report Required.--Before the end of the 270-day period
beginning on enactment of this Act, and at 2-year intervals following
the initial report, the Secretary of the Treasury shall submit a report
to the Committee on Financial Services of the House of Representatives
and the Committee on Banking, Housing, and Urban Affairs of the Senate
analyzing production costs for each circulating coin, cost trends, and
possible new metallic materials or technologies for the production of
circulating coins.
(b) Detailed Recommendations.--The reports required under this
section shall contain detailed recommendations for any appropriate
changes to the metallic content of circulating coins in such a form
that the recommendations could be enacted into law as appropriate.
(c) Improved Production Efficiency.--The reports required under
this section shall include recommendations for changes in the methods
of producing coins at the United States Mint that would further reduce
the costs to produce circulating coins, and include notes on any
legislative changes that might be necessary to achieve such goals.
(d) Minimizing Conversion Costs.--The reports required under this
section shall--
(1) include no recommendation for new specifications for
producing a circulating coin that would require significant
change to coin-accepting and coin-handling equipment to
accommodate changes to all circulating coins simultaneously,
except for any potential change to the 5-cent coin as
authorized under section 4; and
(2) to the greatest extent possible, recommend
specifications that, while consistent with other portions of
this section and the amendments made by this Act, require no
changes to coin-accepting or coin-handling equipment whatsoever
to accommodate both coins produced with the new specifications
and coins produced as of July 31, 2007.
(e) Fraud Prevention.--The reports required under this section
shall make no recommendation for a specification change that would
facilitate or allow the use of a coin with a lesser value produced by
another country, or the use of any token or other easily or regularly
produced metal device of minimal value, in the place of a circulating
coin produced by the Secretary.
Passed the House of Representatives May 8, 2008.
Attest:
Clerk.
110th CONGRESS
2d Session
H. R. 5512
_______________________________________________________________________
AN ACT
To reduce the costs of producing 1-cent and 5-cent coins, provide
authority to the Secretary of the Treasury to perform research and
development on new metallic content for circulating coins, and to
require biennial reports to Congress on circulating coin production
costs and possible alternative metallic content.