Legislature(2023 - 2024)ADAMS 519
04/17/2023 01:30 PM House FINANCE
Note: the audio ![]()
and video ![]()
recordings are distinct records and are obtained from different sources. As such there may be key differences between the two. The audio recordings are captured by our records offices as the official record of the meeting and will have more accurate timestamps. Use the icons to switch between them.
| Audio | Topic |
|---|---|
| Start | |
| HB3 | |
| HB83 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | HB 3 | TELECONFERENCED | |
| + | HB 83 | TELECONFERENCED | |
| + | TELECONFERENCED |
HOUSE BILL NO. 3
"An Act relating to specie as legal tender in the
state; and relating to borough and city sales and use
taxes on specie."
3:03:44 PM
REPRESENTATIVE KEVIN MCCABE, SPONSOR, gave a brief
introduction to HB 3. He read from the sponsor statement
(copy on file) as follows:
The purpose of HB 3 is to recognize Alaska's
constitutional duty, power and right under Section 10,
Article I, of the United States Constitution, and the
Tenth Amendment of the United States Constitution to
make gold and silver legal tender in the payment of
debt.
HB 3 will secure the rights of citizens of this state
under the Ninth and Tenth Amendments of the United
States Constitution to tender gold and silver in the
payment of a debt should the merchant or payee agree
to accept it.
This bill will bring Alaska into full compliance with
the United States Constitution with the policies,
practices, and procedures of this State with respect
to the use of gold, silver, and specie as legal tender
in the payment of debt.
Representative McCabe added that 12 other states had
already passed similar legislation to accept gold and
silver coins as legal tender. Tennessee had passed its
legal tender bill in the current year and Missouri and
Minnesota would be soon hearing a version of the
legislation. As of 2022, there were 42 states that had
removed some or all of the taxes from the purchase of gold
and silver. He continued reading from the sponsor
statement:
This bill will preserve, protect, and promote the
state and its economic security, safety, health, and
welfare of the people of this state; and protect this
state and its citizens in the acquisition and
possession of gold and silver and their use as legal
tender in the payment of debt.
Representative McCabe noted that his office was working on
a modification to Article 5, Subparagraph C of the bill.
The section tasked the House Finance Committee with
studying the possibility of establishing additional forms
of legal tender for various expenses, and the change would
move that responsibility to the Legislative Budget and
Audit Committee (LB&A). The change was suggested by
Representative Hannan in the prior year and he agreed that
LB&A would be better suited for the job. He concluded his
comments and offered to
Co-Chair Foster suggested that the invited testifier speak
on the bill.
3:06:43 PM
JP CORTEZ, POLICY DIRECTOR, SOUND MONEY DEFENSE, thanked
the committee for hearing HB 3 and stated his support for
the bill. He understood that Alaska did not charge a sales
tax on purchases of goods, but boroughs and municipalities
occasionally chose to charge a sales tax. He thought that
sales taxes discouraged Alaskans who wished to own gold and
silver to protect their savings at a time of record high
inflation. The bill would ensure that there were no taxes
or disincentives to prevent Alaskans from owning the
precious metals. He reiterated that the bill would also put
Alaska in compliance with the U.S. Constitution.
Mr. Cortez continued that one of the reasons that the bill
was important was because investments were not typically
subject to sales tax. There were 42 states that had active
legislation to eliminate sales taxes from precious metals
and reaffirm gold and silver as legal tender. He relayed
that there was currently a similar bill on the Mississippi
governor's desk and once signed, it would make Mississippi
the forty-third state to pass similar legislation. He added
that Missouri and Arkansas also had bills to reaffirm gold
and silver as legal tender and the bills were anticipated
to pass within the following week. In 2023, there were 25
states that had introduced similar legislation to either
remove taxes from the purchase or from the sale of metals.
He indicated that HB 3 would also allow the state treasurer
to invest state funds in physical holdings to establish in-
state depositories. He thanked the committee for its time.
Co-Chair Foster reminded the committee that there was a
meeting with the governor in 21 minutes and he planned to
spend 15 minutes on each of the bills on the agenda.
Representative Josephson understood that Alaska was already
in compliance with the US Constitution; however, the system
to use gold and silver was simply not in place. It was an
option for the state, but the state was not in non-
compliance by not engaging in the system. He asked Mr.
Cortez if his understanding was accurate.
Mr. Cortez responded that Representative Josephson's
understanding was accurate. He indicated that one could
make the argument that taxes or impediments on using gold
and silver as legal tender were in opposition to the spirit
of the U.S. Constitution.
3:10:22 PM
Representative Ortiz asked if any other states had begun to
use gold and silver in normal transactions. He wondered if
it had created any confusion in the business world.
Mr. Cortez responded that some states had begun to use the
system. He emphasized that there was no obligation and
businesses could choose to accept or decline gold and
silver as a form of currency. There were businesses in
other states and countries that had decided to accept gold
backs as currency.
Representative Ortiz asked why there was a recent push to
establish the system in the current year as opposed to
beginning the process years ago.
Mr. Cortez responded that the world was in an unprecedented
monetary period. Advocates of gold financing had been
predicting that a time of high inflation would inevitably
arrive, and it had. He opined that paper money had been an
experiment for decades and that state treasurers,
investment groups, and citizens were "waking up" to the
realization that "paper money is just that" and it was not
as established as gold and silver.
Representative Stapp asked if capital gains would be
applicable if an individual were to purchase gold or silver
and sell it for profit in a year's time.
Mr. Cortez responded that federal gains would be applicable
but there would be no applicable state taxes because Alaska
did not have a state income tax.
3:13:53 PM
Representative Galvin asked how many decades paper money
had been an experiment.
Mr. Cortez responded it had been five decades, starting in
1971.
Representative Galvin stated her understanding that Mr.
Cortez thought that the world needed to "wake up" to the
gold and silver standard. She was also hearing from young
people that the world needed to wake up to the idea that
money was abstract and could be traded online. There seemed
to be a wide spectrum as to how money was viewed. She
wondered what the advantages would be to returning to the
gold and silver standard as opposed to using cryptocurrency
and other online monies.
Mr. Cortez responded that prior to 1971, barring the years
during which the country was involved in a world war, there
was no inflation. He thought official inflation numbers in
the present day were close to 7 percent. Individuals on
hourly wages, individuals with fixed incomes, and retirees
were most harmed by inflation. It was difficult to make
long-term plans when the economic environment was unstable.
He opined that it was easier to make long-term plans when
one could rely on a stable unit of currency that was not
being manipulated.
Representative Galvin asked for a description of the
difference between the price of oil changing, the price of
gold changing, and the inflationary costs of goods. She was
trying to understand his argument that gold bars would
eradicate inflation.
Mr. Cortez responded that from 1931 to 1971, there was a
floating exchange rate. Prior to 1931, the traditional gold
standard required that a dollar be attached to a fixed
amount of gold. There was a period of nearly 100 years
where there was no inflation in the United States. He
acknowledged that there was some movement in the price of
gold as it was a global market and one of the most liquid
markets in existence. Silver was a production metal and was
used in jewelry, cars, and other technologies and there
were industrial reasons for the movement of silver. The
difference between gold and silver was that gold was not
necessarily traded as an industrial metal.
Mr. Cortez continued that there were certain countries that
were stockpiling the available gold supply to bolster the
countries' treasuries. It was difficult for individuals to
trade commodities such as oil, but gold and silver were
generally uniform assets regardless of one's background and
nationality. He indicated that gold was a universal trading
instrument and had a fixed quantity in addition to a
longstanding history of stability. He thought it was
important that gold was mentioned in the U.S. Constitution.
He concluded that for the reasons mentioned, gold should be
placed in a different category than other commodities.
3:19:30 PM
Co-Chair Foster asked if Mr. Cortez would be available
online as a resource for future committee meetings on the
bill.
Mr. Cortez responded that he would be available.
HB 3 was HEARD and HELD in committee for further
consideration.