Coins serve as a medium of exchange in everyday commerce. In 2012, Concurrent Technologies Corporation, a contractor to the U.S. Mint, estimated that there were from 355 billion to 370 billion coins in circulation—about two-thirds of them pennies. Many of these coins are not in active circulation because people hold coins in storage containers in their homes, automobiles, or office desk drawers, among other places. However, coins in active use are accepted across the nation as payment in hand-to-hand transactions and for products and services in millions of machines ranging from vending and laundry to amusement and parking machines. These automated, unattended machines validate U.S. coins and their denominations by measuring one or more of the diameter, thickness, weight, and electromagnetic signature (EMS) of each coin. In addition to the four primary coins in circulation—the penny, nickel, dime, and quarter—the 50-cent piece and 1-dollar coin are also considered circulating coins. The Constitution gives Congress the power to coin money, and under this authority, Congress has specified that the current metal composition of coins be as follows: the penny (1-cent) is made of copper-plated zinc and consists of 97.5 percent zinc and 2.5 percent copper, the nickel (5-cent) is made with an alloy of 75 percent copper and 25 percent nickel (a combination known as “cupronickel”), and the dime (10-cent) and the quarter (25-cent) consist of three layers of metal. The inner layer is copper and the two identical outer layers are a silver-colored alloy of 75 percent copper and 25 percent nickel. (A multi-layer coin is called a “clad coin.”) The Federal Reserve determines the number of coins required to meet the public’s needs. Specifically, depository institutions (e.g., commercial banks and credit unions) order new coins from the Federal Reserve through an online coin-ordering system called FedLine. Then, the Federal Reserve’s Cash Product Office submits a new coin order to the U.S. Mint. In turn, the U.S. Mint produces and distributes new coins each month to the 12 Federal Reserve Banks that fulfill the orders made by the depository institutions. In general, coin production varies from year to year depending on several factors, such as public demand, the need to replace mutilated or worn coins, and the price of copper, as well as orders from the Federal Reserve to maintain its targeted inventory levels. The U.S. Mint produced about 5-billion circulating coins in 2010 and about 13- billion circulating coins in 2014. When the cost to produce and distribute a coin is less than its face value, the federal government experiences a financial gain, creating a value known as “seigniorage”. In fiscal year 2014, the U.S. Mint realized about $315 million in seigniorage from circulating coins. The quarter and dime resulted in seigniorage of $406 million, whereas the nickel and penny resulted in a loss of seigniorage in the amount of $91 million. Seigniorage is returned to the Treasury General Fund and reduces government’s borrowing and interest cost, resulting in a financial benefit to the government, whereas loss of seigniorage is absorbed as part of the U.S. Mint’s operating costs. Table 1 shows the amount of seigniorage from fiscal year 2010 through 2014. The Act authorized the Secretary of the Treasury to conduct research and development on new metals for all circulating coins with the goal of reducing production costs. The Act also required, among other things, that the Secretary: consider “actors relevant to the ease of use of and ability to co- circulate 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;” “include 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;” “to the greatest extent possible, may not include any recommendation for new specifications for producing a circulating coin that would require any significant change to coin accepting and coin-handling equipment to accommodate changes to all circulating coins simultaneously;” and submit a biennial report to Congress “analyzing production costs for each circulating coin, cost trends for such production, and possible new metallic materials or technologies for the production of circulating coins.” The Secretary of the Treasury issued the first biennial report in December 2012 and another in December 2014. These reports summarized the U.S. Mint’s research and development efforts to identify new metallic materials or technologies for the production of circulating coins and also included information on the U.S. Mint’s outreach efforts to industry and industry cost estimates. In identifying potential new materials for circulating coins, the U.S. Mint needed to ensure that the material could be used as a viable, durable coin. After testing 29 different metal compositions for circulating coins, the U.S. Mint has identified four viable metal compositions—a new version of the current cupronickel (copper and nickel), nickel-plated steel, multi-ply plated steel, and stainless steel. The U.S. Mint plans to issue another report in December 2016. According to U.S. Mint officials, the 2016 report will highlight areas of further study as discussed in the 2014 Biennial Report to Congress. The areas of study include further testing and evaluation of the new cupronickel alloy, stainless steel research and development, improvements in production, and outreach to the coin industry, among other things. Other countries have also taken steps to reduce metal composition of coins to reduce costs. For example, the Royal Canadian Mint and the Royal Mint of the United Kingdom have both changed the metal composition of their coins from cupronickel to steel-based coinage in an effort to reduce production costs. The Royal Canadian Mint manufacturers its coins using a patented multi-ply plated steel technology. The Royal Mint produces its coins using its own plated steel technology known as aRMour® plating. A variety of businesses rely on coins. Some industries sell products or services through the use of coin machines, such as vending and coin- operated laundry machines. According to the vending machine industry, it generally sells products using modern, technologically advanced coin machines that validate and accept many types of circulating coins as well as dollar bills. Its members include well-known, large corporations. In contrast, representatives from the coin-operated laundry industry stated that the industry is comprised of small “mom-and-pop” business owners and operators, provides services using mechanical technology, and depends heavily on the quarter. Representatives from the amusement industry also stated that their industry depends heavily on the quarter for playing games, billiards, and juke-boxes. Businesses in the amusement industry range from large national chains to small owners and operators. Another type of industry that deals with coins is the armored car industry. According to this industry, it sorts, counts, wraps, and transports all denominations of circulating coins from Federal Reserve Banks to commercial banks and other privately owned businesses. This industry is dominated by four large armored car carriers. Finally, manufacturers that make coin acceptance and handling equipment support the entire coin industry. The U.S. Mint’s analysis estimates that the government could potentially save from about $8 million to about $39 million per year through different changes in coin composition to the nickel, dime, and quarter. The U.S. Mint developed four alternatives for coin composition and estimated the savings for each alternative (see fig. 1). The U.S. Mint’s analysis shows that changing to a new version of a copper and nickel combination (cupronickel) could potentially save the government about $8 million per year, based on 2014 production costs, and should not affect industry. This change is known as the “seamless” alternative because it would not significantly change the characteristics of the nickel, dime, or quarter. The savings would result from a change in metal costs alone, specifically (1) increasing the amount of copper in the nickel and the outer clad layer of the dime and the quarter from 75 percent to 77 percent and decreasing the amount of nickel, which is more expensive, from 25 percent to 20 percent, and (2) adding manganese to the coins. The seamless alternative is designed to have the same diameter and EMS characteristics and nearly the same weight as the current cupronickel composition. According to the U.S. Mint, this alternative would not require any changes to coin acceptance machines and would not affect industry. As of September 30, 2015, the U.S. Mint was conducting further testing of another version of this alloy that substitutes zinc or zinc and manganese for some of the nickel, to help ensure that the alloy has the same characteristics as the current nickel and would not require changes to coin acceptance machines. The U.S. Mint’s analysis also shows that the largest savings the government could potentially achieve is about $39 million per year by changing the coin composition of the nickel and dime to multi-ply plated steel. This type of change is referred to as a “co-circulating” alternative because different types of coin compositions for the same coin denomination would circulate together in the economy for 30 years or more. Under this co-circulating alternative, savings would result from both metal changes (as steel is less expensive than copper or nickel) and production changes. According to U.S. Mint officials, their metal suppliers would supply coin “blanks” for multi-ply plated steel coins, thereby eliminating the need for the U.S. Mint to make its own blanks. Currently, suppliers provide sheets of metal that the U.S. Mint uses to produce coin blanks.