What changed between these versions
A complete substitute amendment. v2 fundamentally alters the approach to cash transaction rounding, changing it from a mandatory requirement in v1 to an optional practice under specific conditions. Additionally, v2 significantly expands the bill's scope by incorporating new provisions for 5-cent coin specifications, establishing a general framework for discontinuing coin circulation, and mandating strategic plans and reports on coin distribution stability, none of which were present in v1.
Overview
Extensive changes throughout the bill, including the introduction of multiple new sections and a complete rewrite of a core operative mechanism. · v2 fundamentally restructures the bill, shifting from a mandatory framework to an optional one for cash rounding, and significantly expanding its scope to include broader coin policy and reporting requirements.
The most significant change in v2 is the transformation of cash transaction rounding from a mandatory requirement to an optional practice, applicable only when exact change cannot be provided. Furthermore, v2 introduces entirely new policy areas, including provisions for the specifications of 5-cent coins, a general framework for the discontinuation of any circulating coin, and requirements for the Federal Reserve Board to develop strategic plans and reports on coin distribution stability. These additions and modifications effectively make v2 a substantially different bill from v1, which was narrowly focused on penny elimination and mandatory rounding.
Major additions
These amendments introduce new specifications for the 5-cent coin, allowing the Secretary of the Treasury to prescribe compositions, such as an inner layer of zinc and an outer layer of nickel, that reduce production costs and minimize adverse impact on coin-accepting machines. This provision was not present in v1, which focused solely on the one-cent coin.
This addition provides the Treasury with flexibility to manage the cost-effectiveness of producing 5-cent coins, potentially leading to significant savings in minting operations without affecting the coin's functionality in commerce.
This new subsection grants persons, including financial institutions, conducting cash transactions with customers the authority to round the amount of cents in the sum of the transaction in favor of the customer if exact change cannot be provided. Specifically, it allows rounding up if the person is paying the customer, and rounding down if the customer is paying the person.
This provision introduces a new discretionary mechanism that explicitly protects consumers by ensuring any rounding, when exact change is unavailable, benefits the customer. This can foster trust and simplify transactions in situations where small change is problematic.
This new subsection specifies that if an employer chooses to round a cash payment to an employee that is not divisible by 5 cents, the employer must round the amount up to the nearest amount divisible by 5 cents. It also explicitly clarifies that nothing in the subsection requires an employer to round such payments.
This addition provides clear guidance for employers regarding cash wage payments, ensuring that if rounding occurs, it is always to the employee's benefit, while also affirming that employers are not obligated to round if they can provide exact change.
This new subsection explicitly states that nothing in the Act may be construed to require any person to round a payment as described in the cash transaction rounding provisions. This reinforces the optional nature of the rounding rules.
This rule is critical for clarifying the intent of the Act, ensuring that the optionality of rounding is legally unambiguous and preventing any misinterpretation that could lead to mandatory compliance burdens for businesses or individuals.
This new subsection defines the term 'covered amount' for the purposes of the cash transaction rounding section. It includes the total transaction amount, including taxes, or the amount of change due to the customer if a cash payment exceeds the total transaction amount.
This definition provides clarity and precision to the application of the rounding rules, ensuring consistent understanding of what amounts are subject to the optional rounding provisions, thereby reducing ambiguity in cash transactions.
This new section stipulates that adherence to the cash rounding provisions described in Section 3 will not result in a violation of any Federal, State, Tribe, or political subdivision requirement, law, regulation, or standard. It also includes a rule of construction clarifying that it does not excuse noncompliance with minimum wage, overtime, or paid leave laws.
This provision offers legal protection to businesses and individuals who choose to implement the optional rounding practices, mitigating potential legal challenges or conflicts with existing laws. It also safeguards labor protections by explicitly excluding them from this immunity.
This new section mandates that the Board of Governors of the Federal Reserve System submit a strategic plan and subsequent reports to Congress outlining its approach to limiting disruptions in penny supply, maintaining coin distribution stability, and evaluating coin terminals. It also requires an assessment by the Secretary of the Treasury on the impact of penny changes on low-income communities and unbanked individuals.
This addition introduces a critical oversight and planning mechanism to ensure a smooth transition away from penny circulation and to monitor its broader economic and social impacts, particularly on vulnerable populations. It provides a framework for proactive management of the coin distribution system.
This new section amends 31 U.S.C. 5111 to establish a general procedure for the Secretary of the Treasury to discontinue the minting for circulation of any coin, not just the penny. It requires the Secretary to provide notice to covered committees, including a description of reasoning and a comprehensive phase-out plan, and to offer a briefing.
This provision significantly broadens the bill's scope by creating a standardized, transparent process for discontinuing any circulating coin, ensuring Congressional oversight and careful consideration of economic and consumer impacts before such decisions are made. This was not present in v1.
This new section provides definitions for key terms used throughout the Act, specifically 'covered committees' (referring to relevant Congressional committees) and 'financial institution' (referring to entities engaged in financial activities).
The inclusion of these definitions ensures clarity and consistent interpretation of the Act's provisions, particularly regarding reporting requirements and the scope of entities covered by the cash transaction rounding rules.
Deletions
This subsection directly instructed the Secretary of the Treasury to cease minting and issuing one-cent coins within one year of the Act's enactment. It established a firm deadline and a direct mandate for the discontinuation of penny production for general circulation, without amending existing statutory language regarding coin specifications.
The deletion removes the specific, direct mandate and timeline for ceasing penny production, replacing it with an amendment to existing law that integrates the cessation into broader coin specification regulations. This changes the legislative mechanism for achieving the penny's discontinuation.
This subsection established a specific effective date for the cash transaction rounding provisions, stating that Section 3 would take effect one year after the date of enactment of the Act. This provided a clear transition period for businesses and consumers to adapt to the mandatory rounding rules.
The deletion removes this explicit effective date for the rounding section. While the Act still has an overall effective date, the removal of this specific provision, coupled with the change from mandatory to optional rounding, alters the implementation timeline and urgency for businesses.
Modifications
The mechanism for ceasing penny production is integrated into existing statutory framework for coin specifications, and the scope is expanded to include potential changes to the 5-cent coin. The cessation is clarified to apply to general circulation, not numismatic items. This provides more flexibility for the Treasury regarding the 5-cent coin.
Before
Directed the Secretary of the Treasury to cease minting and issuing one-cent coins within one year of enactment, with an exception for numismatic collectors, and affirmed existing pennies as legal tender.
After
Amends Section 5112 of title 31, United States Code, to introduce new specifications for 5-cent coins (allowing for alternative compositions), modifies existing language regarding one-cent coins, and adds a new subsection (bb) directing the Secretary to cease production of one-cent coins for general circulation while allowing numismatic production and affirming legal tender status.
This fundamentally alters the impact of the rounding provisions. Businesses and individuals are no longer legally required to round cash transactions, but are permitted to do so under specific circumstances. This significantly reduces the burden and potential for disputes that a mandatory rounding system would entail.
Before
Mandated that any person selling goods or services in a cash transaction, or paying cash wages, shall round the payment according to specific rules (down for 1,2,6,7 cents; up for 3,4,8,9 cents).
After
States that any person may, if exact change cannot be provided, round the covered amount according to similar rules. It explicitly changes 'shall round' to 'may... round'.
Similar to the general rounding rule, this change removes the legal obligation to round up small transactions, allowing for discretion by the parties involved.
Before
Mandated that transactions totaling $0.01 or $0.02 shall be rounded up to $0.05.
After
States that in such cases, the amount may be rounded up to $0.05.
Ensures that the optional rounding rules do not apply to any form of electronic or non-cash payment, maintaining consistency with v1's intent but adapting to the expanded rounding provisions in v2.
Before
Stated that the rounding subsection (a) shall not apply to transactions paid by non-cash instruments like electronic transfers, checks, or credit cards.
After
States that subsections (a), (b), and (c) shall not apply to transactions paid by non-cash instruments. The list of instruments is expanded slightly to include 'demand or negotiable instrument' and 'other like instrument or method.'
Scope
Fundamental restructuring — Changes are scattered throughout the bill, with significant modifications to existing sections and the introduction of several entirely new sections and policy areas. — v2 represents a fundamental change in policy direction, particularly by transforming the mandatory cash transaction rounding into an optional practice. It also broadens the bill's scope from a specific focus on the penny to a more general framework for coin policy and distribution oversight. — The changes interact significantly with existing provisions of title 31, United States Code, by amending specific sections related to coin specifications and the discontinuation of coins. The new definitions also clarify terms used across the Act.
Impact analysis
Businesses and retailers conducting cash transactions
Gain (increased flexibility, reduced compliance burden)
In v1, they were required to round cash transactions. In v2, they may round cash transactions if exact change cannot be provided, and are explicitly not required to round.
Consumers making cash payments
Procedural change (from mandatory to optional rounding), with potential for minor gains in specific change scenarios
In v1, their cash payments would be rounded by businesses. In v2, their cash payments may be rounded by businesses only if exact change is unavailable, and explicitly not required. Additionally, new provisions allow rounding in their favor when receiving change.
Employers paying cash wages to employees
Gain (increased flexibility, reduced compliance burden)
In v1, they were required to round cash wage payments. In v2, if they choose to round cash payments not divisible by 5 cents, they shall round up, but are explicitly not required to round.
Numismatic collectors of one-cent coins
No change in treatment
In v1, the exception for numismatic coins was present. In v2, the exception is maintained, ensuring continued access to one-cent coins for collection purposes.
Federal Reserve Board and the Department of the Treasury
Procedural change (new responsibilities and reporting requirements)
V2 introduces new mandates for the Federal Reserve Board to submit strategic plans and reports on coin distribution stability and for the Secretary of the Treasury to conduct assessments on the impact of penny changes on vulnerable communities. V2 also establishes a general procedure for the Secretary to discontinue any coin, requiring notice and a plan. These were not present in v1.
Low-income communities, older consumers, debanked, unbanked, and underbanked individuals
Procedural gain (mandated consideration of their specific impacts)
V2 mandates an assessment by the Secretary of the Treasury on the impact of penny supply/demand disruptions and rounding practices on these groups, including recommendations to Congress. V1 did not include any specific provisions for assessing impact on these vulnerable populations.