04/28/2022 08:00 AM House COMMUNITY & REGIONAL AFFAIRS

         HB 167-GOLD AND SILVER SPECIE AS LEGAL TENDER                                                                      
                                                                                                                                
8:21:31 AM                                                                                                                    
                                                                                                                                
CO-CHAIR HANNAN announced that the  final 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."                                                                                                           
                                                                                                                                
8:21:41 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  MCCABE, as  prime sponsor,  presented the  second                                                               
hearing  of HB  167.   He  stated that  he had  not received  any                                                               
letters  of opposition,  and that  he was  interested in  hearing                                                               
public  testimony.     He  said  that  over   the  past  century,                                                               
currencies have had their values  wiped out, and for this reason,                                                               
many  people  hold some  gold  and  silver;  however, it  may  be                                                               
difficult to spend  a theoretical one ounce of  gold on something                                                               
like bread  due to the  merchant not  having enough cash  to make                                                               
change.  Using  coin as currency will allow the  ability to spend                                                               
money if  the merchant accepts  it, while  meeting constitutional                                                               
requirements for the state to utilize  it.  Should the bill pass,                                                               
the  state can  then build  up  a specie  and create  a State  of                                                               
Alaska Goldback.                                                                                                                
                                                                                                                                
8:24:19 AM                                                                                                                    
                                                                                                                                
CO-CHAIR  HANNAN  opened  public  testimony on  HB  167.    After                                                               
ascertaining that  no one  wished to  testify, she  closed public                                                               
testimony.                                                                                                                      
                                                                                                                                
REPRESENTATIVE MCCABE expressed  appreciation for the opportunity                                                               
to bring the  bill forward and welcomed  questions from committee                                                               
members and their constituents.                                                                                                 
                                                                                                                                
8:25:50 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  MCCARTY  noted  that   specie  does  not  have  a                                                               
denomination  to  it.    He  asked whether  there  is  an  online                                                               
mechanism  to see  the  value of  the  specie at  the  time of  a                                                               
transaction.                                                                                                                    
                                                                                                                                
REPRESENTATIVE MCCABE  confirmed there  are a number  of websites                                                               
that  list the  price  of gold.    He further  noted  that it  is                                                               
typical of vendors to negotiate or "barter."                                                                                    
                                                                                                                                
8:27:37 AM                                                                                                                    
                                                                                                                                
CO-CHAIR SCHRAGE brought up the  fluctuating value of assets.  He                                                               
shared an  example of $1,000  not having the same  spending power                                                               
as it once  did.  He asked  whether one would be  required to pay                                                               
taxes on a Goldback that gains worth over time.                                                                                 
                                                                                                                                
REPRESENTATIVE MCCABE gave  a personal example of  his gold coins                                                               
through Oxford Assaying in Anchorage,  Alaska, and explained that                                                               
when a person  buys a gold coin, there is  nothing else involved;                                                               
however, when  the person sells  a gold coin, there  is paperwork                                                               
involving reporting to the Internal Revenue Service (IRS).                                                                      
                                                                                                                                
CO-CHAIR SCHRAGE expressed concern over  the ability for the "mom                                                               
and  pop" shops  that may  not  have the  business experience  or                                                               
organization to track the gold and silver purchases.                                                                            
                                                                                                                                
REPRESENTATIVE  MCCABE reminded  the  committee that  one of  the                                                               
purposes  of  the bill  was  to  prevent  taxation of  [gold  and                                                               
silver] when  used as legal tender.   He expounded and  shared an                                                               
example.                                                                                                                        
                                                                                                                                
8:33:29 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE PRAX  shared his understanding  that historically,                                                               
gold and  silver was intended  to be  the medium of  exchange for                                                               
the  entire  country;  however, the  federal  government  changed                                                               
course.   He said it would  be great if Alaska  could participate                                                               
in  reestablishing  gold  and  silver specie  as  the  medium  of                                                               
exchange.    He further  commented  on  his region,  North  Pole,                                                               
Alaska, having a sales tax, and  explained that no one would ever                                                               
open a coin shop or gold exchange  because of the tax.  He opined                                                               
that the same goes for Juneau, Alaska.                                                                                          
                                                                                                                                
CO-CHAIR HANNAN clarified  that Juneau has had  several gold coin                                                               
sellers and  buyers in seasonal  businesses.  She noted  the sale                                                               
of gold bullion.                                                                                                                
                                                                                                                                
REPRESENTATIVE MCCABE explained that if  Goldbacks were sold as a                                                               
collectible in  Juneau, it  would be  taxable; however,  not when                                                               
used as a medium of exchange.                                                                                                   
                                                                                                                                
REPRESENTATIVE MCCARTY  expressed concern about  compensation for                                                               
the devaluation and taxation of money.                                                                                          
                                                                                                                                
8:43:02 AM                                                                                                                    
                                                                                                                                
CO-CHAIR SCHRAGE asked  whether this would eliminate  the need to                                                               
report  and  be   taxed  on  capital  gains.     He  offered  his                                                               
understanding that  the proposed legislation would  eliminate the                                                               
sales tax but not the capital gains tax.                                                                                        
                                                                                                                                
REPRESENTATIVE MCCABE confirmed that is correct.                                                                                
                                                                                                                                
CO-CHAIR  SCHRAGE  recognized  that  in   the  U.S.  there  is  a                                                               
tremendous benefit for not being  on gold standard.  He supported                                                               
the idea of  removing the sales tax; however, he  said there is a                                                               
lot to consider about the bill.                                                                                                 
                                                                                                                                
8:45:18 AM                                                                                                                    
                                                                                                                                
CO-CHAIR  HANNAN  referred to  the  study  by the  House  Finance                                                               
Committee and asked how it was conceived.                                                                                       
                                                                                                                                
8:46:08 AM                                                                                                                    
                                                                                                                                
ANGELA STEPHL,  Staff, Representative Kevin McCabe,  Alaska State                                                               
Legislature, on  behalf of  Representative McCabe,  prime sponsor                                                               
of HB 167, responded to  Co-Chair Hannan's question and explained                                                               
that  Legislative Legal  Services  conceptualized  the idea  from                                                               
other states and  suggested that in Alaska,  the legislature have                                                               
control over  the study, and  recommended it be performed  by the                                                               
House Finance Committee.                                                                                                        
                                                                                                                                
CO-CHAIR HANNAN pointed  out that the House  Finance Committee is                                                               
a singular committee on one side  of a bipartisan structure.  She                                                               
shared  her  understanding   that  typically,  external  research                                                               
contracts were handled by the [Legislative Council].                                                                            
                                                                                                                                
MS. STEPHL  said that could be  changed.  She reiterated  that it                                                               
was a suggestion by Legislative Legal Services.                                                                                 
                                                                                                                                
8:47:12 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE MCCABE  stated that  it was  not the  intention to                                                               
exclude  the Senate  Finance  Committee.   He  suggested that  an                                                               
amendment  could be  created to  list both  the Senate  and House                                                               
Finance Committees or some sort of joint committee.                                                                             
                                                                                                                                
[HB 167 was held over.]