Currency Optimization, Innovation, and National Savings Act (COINS Act), H.R. 2977

H.R. 2977 (IH – Introduced in House)

To improve the circulation of $1 coins, to remove barrier to the circulation of such coins, and for other purposes.

September 20, 2011

Mr. SCHWEIKERT (for himself, Mr. HENSARLING, and Mr. LUETKEMEYER) introduced the following bill; which was referred to the Committee on Financial Services

To improve the circulation of $1 coins, to remove barrier to the circulation of such coins, and for other purposes.

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 ‘Currency Optimization, Innovation, and National Savings Act’.

SEC. 2. IMPROVING CIRCULATION AND REMOVING BARRIERS TO CIRCULATION OF $1 COINS.

(a) Duties of the Board of Governors of the Federal Reserve System-

(1) COIN SEQUESTRATION-

(A) IN GENERAL- Within six months of the date of enactment of this Act, the Board of Governors of the Federal Reserve System shall sequester all $1 coins bearing the design common to those $1 coins minted and issued from 1979-1981 and again in 1999.

(B) TREATMENT OF COINS- Coins sequestered pursuant to subparagraph (A) shall not be returned to ordinary circulation or otherwise released form storage controlled by the Federal Reserve System or an agent of the Federal Reserve System.

(C) EXCEPTION FOR CERTAIN USES- Notwithstanding subparagraph (B), coins sequestered pursuant to subparagraph (A) may be released, at face value and in bulk quantities–

(i) to dealers in collectible coins; and

(ii) to countries that have adopted the United States dollar as their base unit of exchange.

(D) OBSOLETE COINS- At the end of the 1-year period beginning on the date of the enactment of this Act, the Secretary of the Treasury shall declare all coins described under subparagraph (A) to be obsolete, and such coins–

(i) shall be treated in the same manner as all other obsolete United States coins; and

(ii) to the extent such coins remain in general circulation, shall remain legal tender.

(2) QUARTERLY REPORT ON $1 COINS- The Board of Governors of the Federal Reserve System shall issue quarterly reports to the Committee on Financial Services of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs of the Senate on–

(A) the number of coins sequestered pursuant to paragraph (1)(A);

(B) the number of coins described in paragraph (1)(A) that remain in general circulation; and

(C) efforts that have been made to reduce the number of coins described in subparagraphs (A) and (B) to zero.

(3) IMPROVEMENT OF CIRCULATION- The Board of Governors of the Federal Reserve System shall–

(A) undertake efforts to improve the circulation and remove barriers to the circulation of the $1 coin, other than those coins described under paragraph (1)(A);

(B) issue a quarterly report to the Committee on Financial Services of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs of the Senate on–

(i) what efforts have been made to improve the circulation of $1 coins and what efforts are being planned to improve the circulation of $1 coins;

(ii) the success of such efforts, including an analysis of such coins held in storage owned or controlled by the Federal Reserve System and the number such coins in circulation;

(iii) barriers to the circulation of such coins, including the availability of such coins in quantities unmixed with the $1 coins described in paragraph (1)(A); and

(iv) the extent to which the Federal Reserve System and any agents of the Federal Reserve System are unable to meet end-user requests for delivery of unmixed quantities of such coins in whatever form such end user requires, including rolls, disposable tubes, or volume bags of such coins.

(4) OUTREACH AND EDUCATION- The Board of Governors of the Federal Reserve System shall continuously conduct outreach and education programs aimed at helping each business using or accepting cash to choose the best mix of $1 coins and banknotes to facilitate transactions and reduce costs of transactions and of ‘cashing out’ at the end of a transaction period.

(5) REPORT ON NATIVE AMERICAN COINS- Not later than the end of the 3-month period beginning on the date of the enactment of this Act, and annually thereafter, the Board of Governors of the Federal Reserve System shall issue 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 on the Board’s efforts to improve the circulation of, and remove barriers to the circulation of, $1 coins bearing the so-called ‘Native American’ designs, including any efforts to institute an introductory period for each new ‘Native American’ design of the $1 coin during which quantities are available unmixed with other designs.

(6) USE OF $1 COINS BY FOREIGN COUNTRIES – The Board of Governors of the Federal Reserve System shall work with the Departments of State and Treasury to ensure that countries that have adopted the dollar as a base unit of exchange and which place orders with the Federal Reserve System, or through any United States financial institution, for supplies of $1 monetary units, are fully briefed before placing each such order on the durability and longevity of $1 coins in high-circulation economies when used for transactions of a low dollar value.

(b) Publicity Requirement- Section 5112(p)(2) of title 31, United States Code, is amended by inserting after ‘Mint’ the following: ‘and the Board of Governors of the Federal Reserve System’.

(c) Report on Implementation- Not later than the end of the 1-year period beginning on the date of the enactment of this Act, and annually thereafter, the Comptroller General of the United States and the Inspector General of the Federal Reserve System and the Bureau of Consumer Financial Protection shall each issue 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 on steps being taken by the Board of Governors of the Federal Reserve System to carry out this Act.

(d) Clarification With Respect to Seigniorage – The ninth proviso of section 5136 of title 31, United States Code, is amended, by inserting after ‘miscellaneous receipts’ the following: ‘and such amount shall be included as an estimated receipt of the Government and a receipt of the Government under paragraphs (6) and (7), respectively, of section 1105(a) in any budget submitted under such section’.

SEC. 3. SAVING TAXPAYERS FUNDS BY TRANSITIONING TO THE USE OF $1 COINS.

(a) In General- It is the policy of the United States that after $1 coins achieve sufficient market penetration such that consumers and retailers are comfortable using $1 coins and are able to obtain adequate supplies of $1 coins, $1 coins should replace $1 Federal Reserve notes as the only $1 monetary unit issued and circulated by the Federal Reserve System.

(b) Deadline for Placing $1 Federal Reserve Notes Into Circulation- Federal Reserve banks may continue to place into circulation $1 Federal Reserve notes until the earlier of–

(1) the date on which the number of $1 coins placed into circulation after the date of the enactment of this Act exceeds 600,000,000 annually; and

(2) the date that is 4 years after the date of the enactment of this Act.

(c) Transition Period- After the date referred to in subsection (b), a Federal Reserve bank may not order additional $1 Federal Reserve notes but may, for a period of one year, continue to place into circulation $1 Federal Reserve notes on hand or those deposited with it, except for notes described in subparagraph (d).

(d) Removal of Unfit Currency- After the date referred to in subparagraph (b), a Federal Reserve bank shall continue to remove unfit currency from circulation, and shall continue to destroy such currency.

(e) Exception- Notwithstanding subsections (b) and (c), the Board of Governors of the Federal Reserve System shall produce such Federal Reserve notes of $1 denomination as the Board determines from time to time are appropriate solely to meet the needs of collectors of that denomination. Such notes shall be issued by 1 or more Federal Reserve banks in accordance with section 16 of the Federal Reserve Act and sold by the Board, in whole or in part, under procedures prescribed by the Board.

(f) No Effect on Legal Tender- Notwithstanding any other subsection of this section, $1 Federal Reserve notes are legal tender in the United States for all debts, public and private, public charges, taxes, and duties, regardless of the date of printing or issue.