04/19/2022 08:00 AM House COMMUNITY & REGIONAL AFFAIRS

         HB 167-GOLD AND SILVER SPECIE AS LEGAL TENDER                                                                      
                                                                                                                                
9:14:06 AM                                                                                                                    
                                                                                                                                
CO-CHAIR SCHRAGE announced that the  next order of business would                                                               
be  HOUSE BILL  NO.  167, "An  Act relating  to  specie as  legal                                                               
tender in the  state; and relating to borough and  city sales and                                                               
use taxes on specie."                                                                                                           
                                                                                                                                
CO-CHAIR SCHRAGE welcomed invited testimony.                                                                                    
                                                                                                                                
9:14:55 AM                                                                                                                    
                                                                                                                                
JP  CORTEZ, Policy  Director, Sound  Money  Defense League,  gave                                                               
invited testimony in  support of HB 167, which is  a measure that                                                               
ensures that  gold and  silver coin remain  tax free  in boroughs                                                               
and cities  across Alaska.  He  said that people are  looking for                                                               
ways to  save their  wealth, and  it is paramount  to be  able to                                                               
preserve  the  purchasing power  of  their  money.   He  strongly                                                               
encouraged Alaska  and the  committee to approve  HB 167,  and he                                                               
offered to answer any questions.                                                                                                
                                                                                                                                
9:16:58 AM                                                                                                                    
                                                                                                                                
CO-CHAIR  HANNAN  asked  Mr.  Cortez   whether  he  provided  any                                                               
research or  data for  the bill  sponsor on what  it would  do to                                                               
local governments' taxation  base.  She also asked  how one would                                                               
bifurcate  one piece  of  gold from  another,  which could  raise                                                               
substantial concerns.                                                                                                           
                                                                                                                                
MR. CORTEZ explained  that currently his company  is also working                                                               
on legislation in Tennessee, which  had an associated fiscal note                                                               
that  ensures that  the loss  of revenue  to cities  and boroughs                                                               
would  likely not  be  substantial.   He  further explained  that                                                               
conventions and  coin shows tend  to stay away from  districts or                                                               
areas that  charge sales tax.   In regard to jewelry,  there is a                                                               
percentage threshold in most states  with similar legislation, he                                                               
said.                                                                                                                           
                                                                                                                                
9:20:27 AM                                                                                                                    
                                                                                                                                
CO-CHAIR  HANNAN commented  that  she had  two large  operational                                                               
gold processors  in her district  and expressed  curiosity, being                                                               
they are the largest private  property taxpayers in her district.                                                               
She asked if they  decided to mill on site and  change half in to                                                               
process before  bringing it into  town, whether they would  get a                                                               
"workaround" from taxation.                                                                                                     
                                                                                                                                
REPRESENTATIVE  MCCABE stated  that this  is gold  to be  used as                                                               
legal tender,  adding that  one would  not tax a  $50 bill.   For                                                               
example, if  they were sold  as collectibles, then they  would be                                                               
taxed, he shared.                                                                                                               
                                                                                                                                
9:22:07 AM                                                                                                                    
                                                                                                                                
CO-CHAIR  HANNAN provided  an example  of Alaska  Mint and  asked                                                               
whether  the  bill  would  authorize that  product  to  be  legal                                                               
tender; further, whether  it would be exempt from  or included in                                                               
local taxation.                                                                                                                 
                                                                                                                                
REPRESENTATIVE MCCABE believed that's  where the 90 percent would                                                               
come in; for example, if the  Alaska Mint mints a copper coin and                                                               
it is  gold plated offered as  a collectible, it would  likely be                                                               
taxed.                                                                                                                          
                                                                                                                                
9:23:29 AM                                                                                                                    
                                                                                                                                
LARRY HILTON,  Co-founder/General Counsel, Goldback  Inc., stated                                                               
he believed  he was  looking at  the current  version of  HB 167,                                                               
which has  a specific  definition of specie  and seemed  clear to                                                               
him.  As  Mr. Cortez had pointed out, he  said, the vast majority                                                               
of states  do not impose  a tax on  gold and silvers,  and beyond                                                               
that,  there has  been judicial  action,  which he  gave a  brief                                                               
example of.   He also  touched on using  silver or gold  coin for                                                               
paying  taxes.   As for  taxable and  non-taxable gold,  he noted                                                               
that in  Utah the legislature  adopted an exemption  stating that                                                               
coin is used as currency.   He stated the proposed legislation is                                                               
broad  enough to  capture legal  and non-legal  tender currencies                                                               
and would bring  Alaska into line with fellow states.   He highly                                                               
recommended the adoption of the legislation.                                                                                    
                                                                                                                                
9:29:19 AM                                                                                                                    
                                                                                                                                
CO-CHAIR  HANNAN assumed  that Goldback  Inc. was  a producer  of                                                               
specie or a company advocating for it.                                                                                          
                                                                                                                                
MR.  HILTON  confirmed yes,  that  is  what Goldback  distributes                                                               
throughout the country.                                                                                                         
                                                                                                                                
CO-CHAIR HANNAN referred to page  2, line 24, and interpreted the                                                               
language  to  indicate that  gold  and  silver bullion  would  be                                                               
exempt from taxation at the 90 percent threshold.                                                                               
                                                                                                                                
MR. HILTON  explained that if  the gold and silver  product being                                                               
produced by  these mines  is intended  for circulation  as money,                                                               
that might be  an issue, but severance tax would  be untouched by                                                               
the bill.                                                                                                                       
                                                                                                                                
9:35:35 AM                                                                                                                    
                                                                                                                                
CO-CHAIR  HANNAN  questioned  whether any  states  are  accepting                                                               
Goldbacks as their taxation obligation for cannabis taxes.                                                                      
                                                                                                                                
MR. HILTON offered his understanding  that it had not occurred in                                                               
any states.                                                                                                                     
                                                                                                                                
9:37:06 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  MCCABE  brought  up  a  subject  mentioned  "last                                                               
time,"  about counterfeiting,  and  asked Mr.  Hilton whether  he                                                               
could give  a quick "thumbnail"  on why  these bills are  hard to                                                               
counterfeit.                                                                                                                    
                                                                                                                                
9:38:10 AM                                                                                                                    
                                                                                                                                
MR.  HILTON explained  that there  are a  few anti-counterfeiting                                                               
security measures built into the bill  itself, and on the back of                                                               
the Goldback,  it is a structured,  thin gold, and can  be proven                                                               
to be actual gold.                                                                                                              
                                                                                                                                
9:40:17 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE PRAX sought to clarify  whether Juneau is charging                                                               
any sales tax or a severance tax.                                                                                               
                                                                                                                                
CO-CHAIR HANNAN  clarified that  Juneau is  not charging  a sales                                                               
tax.                                                                                                                            
                                                                                                                                
9:41:03 AM                                                                                                                    
                                                                                                                                
MR. HILTON  continued on  the subject of  a royalty  or severance                                                               
tax, and  said they could  not do  that without fraud,  and would                                                               
still be liable for severance tax.                                                                                              
                                                                                                                                
9:41:47 AM                                                                                                                    
                                                                                                                                
JOHN  NELSON, Financial  Advisor, Edward  Jones, said  he started                                                               
looking for  ways to protect  his clients' net worth,  which lead                                                               
him  to  the  public  banking  institute  that  speaks  to  local                                                               
economy, currencies, and  banking systems that are  not tied with                                                               
federal  reserves.   He stated  he  is an  advocate; however,  it                                                               
needs to be separated from the  federal reserve and the way to do                                                               
that is  local control.   He recalled  when he was  introduced to                                                               
the Goldback  and thought it was  an incredible way to  take back                                                               
control of and  protect currency.  He suggested that  if the bill                                                               
was adopted,  consider adding a  "c" and adding  "Goldback Bucks"                                                               
on the bill to recognize Goldbacks as legal tendered currency.                                                                  
                                                                                                                                
9:47:08 AM                                                                                                                    
                                                                                                                                
CO-CHAIR SCHRAGE announced that HB 167 was held over.