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:

                                            LORRAINE C. MILLER,

                                                                 Clerk.
Coin Modernization and Taxpayer Savings Act of 2008 - Requires the one-cent coin (except for Lincoln Bicentennial Numismatic Pennies) to be produced primarily of steel and treated to impart a copper color to its appearance similar to one-cent coins produced of a copper-zinc alloy.

Authorizes the Secretary of the Treasury, in the alternative, during the 90 days following enactment of this Act, to add any other element to any alloy of zinc and copper of which one-cent coins could have been composed before enactment of this Act, if during such 90-day period another element is determined to help produce one-cent coins of the same diameter, general composition, and general weight, but at a lower unit cost. Requires a prompt report to Congress if such a determination is made.

Directs the Secretary, two years after enactment of this Act, to produce only five-cent coins primarily made of steel with a coating of nickel, unless by that time the unit cost of production of existing five-cent coins is lower than their face value. Requires the Secretary, however, to recommend a different metallic content of circulating five-cent coins if any biennial report to Congress, required by this Act, indicates that such a different metallic content is both functional and interchangeable with existing coins, and more economical to produce in both the short and long term.

Authorizes the Secretary, in order to accomplish the goals of this Act, to research, develop, evaluate or begin to use new metallic material for circulating coin production.

Requires the Secretary to report biennially to specified congressional committees on the production costs for each circulating coin, cost trends, and possible new metallic materials or technologies for the production of circulating coins, with detailed recommendations for any appropriate changes to the metallic content of circulating coins.
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.