IIB 

110TH CONGRESS 

2D SESSION H. R. 5512 

IN THE SENATE OF THE UNITED STATES 

MAY 12, 2008 

Received; read twice and referred to the Committee on Banking, Housing, and 

Urban Affairs 

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. 


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1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Coin Modernization 

5 and Taxpayer Savings Act of 2008’’. 

6 SEC. 2. FINDINGS. 

7 The Congress finds as follows: 

8 (1) International demand along with market 

9 speculation for commodity metals has, over the past 

10 several years, increased the cost of producing circu11 lating coins in the United States. 

12 (2) In a July 30, 2007, letter to the Congress, 

13 the Secretary of the Treasury, with support of the 

14 Administration’s Office of Management and Budget, 

15 requested that legislation be put forward to author16 ize the Secretary of the Treasury to make changes 

17 to the composition of circulating coins. 

18 (3) The United States Mint has studied alter19 native metals for use in circulating coins, as noticed 

20 in its 2004 annual report. 

21 (4) In 1943, the United States Mint produced 

22 zinc-coated steel pennies in response to war-time de23 mands for copper. 

24 (5) The United States Mint gained further ex25 perience changing the metal content of pennies in 


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1 1982, when it began producing copper-coated zinc 

2 pennies as a result of rising copper prices. 

3 (6) The Royal Canadian Mint has produced for 

4 several years a copper-coated steel 1-cent coin that 

5 is similar to the United States penny at a signifi6 cantly lower cost than the cost to produce the 

7 United States penny. 

8 (7) Given the current cost to make a penny and 

9 volume of pennies minted, by simply reducing penny 

10 production costs to face value, the United States will 

11 save more than $500,000,000 in the next 10 years 

12 alone. 

13 (8) Reducing the cost to produce a nickel to 

14 face value will save the United States an additional 

15 $60,000,000 per year. 

16 (9) Commodity metal prices are often cyclical in 

17 nature, and can be inflated by speculation, so it is 

18 important that a solid trend in the rising price of a 

19 commodity metal be established before any change in 

20 the metal content of a coin is made. 

21 SEC. 3. IMMEDIATE REDUCTION IN THE COST OF PRO22 DUCING 1-CENT COINS THROUGH THE USE 

23 OF STEEL PENNIES. 

24 Subsection (c) of section 5112 of title 31, United 

25 States Code, is amended to read as follows: 


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1 ‘‘(c) COMPOSITION OF 1-CENT AND 5-CENT COINS.— 

2 ‘‘(1) 1-CENT COIN.— 

3 ‘‘(A) IN GENERAL.—Subject to paragraph 

4 (2), beginning 270 days after the date of the 

5 enactment of the Coin Modernization and Tax6 payer Savings Act of 2008, the 1-cent coin 

7 shall— 

8 ‘‘(i) be produced primarily of steel; 

9 and 

10 ‘‘(ii) meet such other specifications as 

11 the Secretary may determine to be appro12 priate, including any change in the weight 

13 from that specified in subsection (a)(6). 

14 ‘‘(B) TREATMENT.—The 1-cent coin shall 

15 be treated to impart a copper color to the ap16 pearance of the coins so that the appearance is 

17 similar to 1-cent coins produced of a copper18 zinc alloy. 

19 ‘‘(C) EXCEPTION FOR LINCOLN BICENTEN20 NIAL NUMISMATIC PENNIES.—No provision of 

21 this paragraph shall apply with respect to 1- 

22 cent coins described in section 304 of the Presi23 dential $1 Coin Act of 2005 that are issued for 

24 numismatic purposes. 


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1 ‘‘(2) ALTERNATIVE 1-CENT COIN COMPOSI2 TION.— 

3 ‘‘(A) IN GENERAL.—If, before the end of 

4 the 90-day period beginning on the date of the 

5 enactment of the Coin Modernization and Tax6 payer Savings Act of 2008, the Secretary deter7 mines that, with the addition of any other ele8 ment to any alloy of zinc and copper of which 

9 1-cent coins could have been composed as of the 

10 day before such date of enactment, there is a 

11 way— 

12 ‘‘(i) to produce 1-cent coins of the 

13 same diameter, general composition, and 

14 general weight as 1-cent coins produced in 

15 accordance with this subsection as of the 

16 day before such date of enactment; and 

17 ‘‘(ii) to achieve the goals of paragraph 

18 (1) by reducing the unit cost to produce 

19 the 1-cent coin to less than 1 cent while re20 taining such coin’s ease of use and ensur21 ing ease of co-circulation with 1-cent coins 

22 of the diameter and weight already circu23 lating as of such date of enactment for or24 dinary commerce, 


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1 the Secretary may add any such element and 

2 continue production of 1-cent coins of the same 

3 diameter, general composition, and general 

4 weight as 1-cent coins produced in accordance 

5 with this subsection as of the day before such 

6 date of enactment instead of complying with 

7 paragraph (1). 

8 ‘‘(B) EFFECTIVE PERIOD.—This para9 graph shall only apply if the change to the new 

10 composition and the subsequent drop in the 

11 production cost of the 1-cent coin referred to in 

12 subparagraph (A) can be achieved before the 

13 end of the 270-day period referred to in para14 graph (1). 

15 ‘‘(C) REPORT TO THE CONGRESS.—Any 

16 determination and action by the Secretary 

17 under subparagraph (A) shall be promptly re18 ported to the Congress.’’. 

19 SEC. 4. AUTHORITY TO CHANGE METALLIC CONTENT OF 5- 

20 CENT COINS TO LESS COSTLY ALTERNATIVE. 

21 (a) IN GENERAL.—Subsection (c) of section 5112 of 

22 title 31, United States Code, (as amended by section 3) 

23 is amended by adding at the end the following new para24 graph: 

25 ‘‘(3) 5-CENT COIN.— 


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1 ‘‘(A) IN GENERAL.—After the end of the 

2 2-year period beginning on the date of the en3 actment of the Coin Modernization and Tax4 payer Savings Act of 2008, the Secretary shall 

5 produce no 5-cent coin that is not primarily 

6 made of steel with a coating of nickel, that can 

7 co-circulate with the existing supply of 5-cent 

8 coins and work interchangeably in coin handling 

9 machines, except that— 

10 ‘‘(i) the Secretary shall make no 

11 change to the content of the existing 5- 

12 cent coin if at that point the unit cost of 

13 production of such coins is lower than the 

14 face value of the coin; and 

15 ‘‘(ii) if the report issued by the Sec16 retary pursuant to section 6 indicates that 

17 a different metallic content of circulating 

18 5-cent coins is both functional and inter19 changeable, and more economical to 

20 produce in both the short and long term, 

21 the Secretary shall propose such content to 

22 the Congress in the form of a legislative 

23 recommendation. 


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1 ‘‘(B) FACTORS TO BE CONSIDERED.—In 

2 prescribing the weight and the composition of 

3 the 5-cent coin, the Secretary shall consider— 

4 ‘‘(i) factors relevant to the potential 

5 impact of any revisions to the weight and 

6 composition of the material on the current 

7 coin suppliers; 

8 ‘‘(ii) factors relevant to the accept9 ability of new coinage materials, including 

10 the effect on vending machines and com11 mercial coin processing equipment and 

12 making certain, to the greatest extent 

13 practicable, that any new coins work with14 out interruption in existing coin acceptance 

15 equipment without modification; and 

16 ‘‘(iii) such other factors that the Sec17 retary, in consultation with merchants who 

18 would be affected by any change in the 

19 weight and composition of the 5-cent coin, 

20 vending machine and other coin acceptor 

21 manufacturers, vending machine owners 

22 and operators, transit officials, municipal 

23 parking officials, depository institutions, 

24 coin and currency handlers, armored-car 

25 operators, car wash operators, and AmerVerDate Aug 31 2005 01:46 May 13, 2008 Jkt 069200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H5512.RFS H5512

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1 ican-owned manufacturers of commercial 

2 coin processing equipment, considers to be 

3 appropriate and in the public interest, 

4 after notice and opportunity for comment. 

5 ‘‘(C) COMMENT AND SELECTION PROC6 ESS.—In making any determination with re7 spect to any change in the weight and composi8 tion of the 5-cent coin, the Secretary shall enter 

9 into a formal rulemaking process that includes 

10 a hearing on a record in addition to the publi11 cation of notice and opportunity for comment.’’. 

12 (b) TECHNICAL AND CONFORMING AMENDMENT.— 

13 Section 5112(a)(5) of title 31, United States Code, is 

14 amended by striking ‘‘and weighs 5 grams’’. 

15 SEC. 5. AUTHORITY TO CONDUCT RESEARCH AND DEVEL16 OPMENT ON ALL CIRCULATING COINS. 

17 To accomplish the goals of this Act, the Secretary 

18 may conduct any appropriate testing within or without the 

19 Department of the Treasury, and may solicit input from 

20 or otherwise work in conjunction with entities within or 

21 without the Federal government including independent re22 search facilities or current or potential suppliers of the 

23 material used in volume production of circulating coins, 

24 to complete the report referred to in this Act and to deVerDate Aug 31 2005 01:46 May 13, 2008 Jkt 069200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H5512.RFS H5512

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1 velop, evaluate or begin the use of new metallic material 

2 for such production. 

3 SEC. 6. BIENNIAL REPORT TO CONGRESS ON CURRENT 

4 STATUS OF COIN PRODUCTION COSTS AND 

5 ANALYSIS OF ALTERNATIVE CONTENT RE6 QUIRED. 

7 (a) BIENNIAL REPORT REQUIRED.—Before the end 

8 of the 270-day period beginning on enactment of this Act, 

9 and at 2-year intervals following the initial report, the Sec10 retary of the Treasury shall submit a report to the Com11 mittee on Financial Services of the House of Representa12 tives and the Committee on Banking, Housing, and Urban 

13 Affairs of the Senate analyzing production costs for each 

14 circulating coin, cost trends, and possible new metallic ma15 terials or technologies for the production of circulating 

16 coins. 

17 (b) DETAILED RECOMMENDATIONS.—The reports re18 quired under this section shall contain detailed rec19 ommendations for any appropriate changes to the metallic 

20 content of circulating coins in such a form that the rec21 ommendations could be enacted into law as appropriate. 

22 (c) IMPROVED PRODUCTION EFFICIENCY.—The re23 ports required under this section shall include rec24 ommendations for changes in the methods of producing 

25 coins at the United States Mint that would further reduce 


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1 the costs to produce circulating coins, and include notes 

2 on any legislative changes that might be necessary to 

3 achieve such goals. 

4 (d) MINIMIZING CONVERSION COSTS.—The reports 

5 required under this section shall— 

6 (1) include no recommendation for new speci7 fications for producing a circulating coin that would 

8 require significant change to coin-accepting and 

9 coin-handling equipment to accommodate changes to 

10 all circulating coins simultaneously, except for any 

11 potential change to the 5-cent coin as authorized 

12 under section 4; and 

13 (2) to the greatest extent possible, recommend 

14 specifications that, while consistent with other por15 tions of this section and the amendments made by 

16 this Act, require no changes to coin-accepting or 

17 coin-handling equipment whatsoever to accommodate 

18 both coins produced with the new specifications and 

19 coins produced as of July 31, 2007. 

20 (e) FRAUD PREVENTION.—The reports required 

21 under this section shall make no recommendation for a 

22 specification change that would facilitate or allow the use 

23 of a coin with a lesser value produced by another country, 

24 or the use of any token or other easily or regularly proVerDate Aug 31 2005 01:46 May 13, 2008 Jkt 069200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\H5512.RFS H5512

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1 duced metal device of minimal value, in the place of a cir2 culating coin produced by the Secretary. 

Passed the House of Representatives May 8, 2008. 

Attest: LORRAINE C. MILLER, 

Clerk. 


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