Legislature(2025 - 2026)GRUENBERG 120
04/29/2025 03:15 PM House STATE AFFAIRS
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| Audio | Topic |
|---|---|
| Start | |
| HJR10 | |
| HCR2 | |
| HB170 | |
| HB1 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 1 | TELECONFERENCED | |
| += | HJR 10 | TELECONFERENCED | |
| += | HCR 2 | TELECONFERENCED | |
| *+ | HB 170 | TELECONFERENCED | |
| + | TELECONFERENCED |
HB 1-SPECIE AS LEGAL TENDER
4:15:30 PM
CHAIR CARRICK announced that the final order of business would
be HOUSE BILL NO. 1, "An Act relating to specie as legal tender
in the state; and relating to borough and city sales and use
taxes on specie."
4:15:54 PM
REPRESENTATIVE MCCABE, Alaska State Legislature, as prime
sponsor, presented HB 1. He remarked that HB 1 is a bill rooted
in Alaska's constitutional authority and attempts to protect the
financial freedom of everyday Alaskans. He noted that a
sectional analysis was available and could be reviewed on record
[included in the committee file]. He explained that HB 1 would
recognize gold and silver specie as legal tender in Alaska under
Article 1 Section 10 of the U.S. Constitution, as well as the
Tenth Amendment. He explained that it would secure the rights
of Alaskans with the Ninth and Tenth Amendments and allow
tendering of gold and silver to pay debt where accepted. It
would bring Alaska into full compliance with the U.S.
Constitution by aligning state policy with the treatment of gold
and silver specie as legal tender. The proposed bill would
prohibit boroughs and municipalities from taxing precious metal
exchanges when used as currency for transactions. He explained
that currently this tax occurs. He said the proposed bill would
protect Alaskans from double taxation, but one would still have
to pay any sales tax, if applicable. The bill addresses only
sales tax on the purchase and use of the specie itself. The
legislation clarifies that nobody is required to use specie, and
it is about freedom of choice, not mandates. He also explained
that the seller and the buyer must agree to this type of
transaction. He said it would prepare Alaska for the future by
granting the Legislative Budget and Audit Committees the power
to explore tools like state held gold reserves or repositories.
He said this bill matters because it asserts state sovereignty
and reclaims the powers that have long gone unused. It would
protect Alaskans from inflation, especially seniors, wage
earners, and small savers - those hardest hit by a devaluating
dollar. It would correct a fundamental unfairness; the state
does not tax stock or bonds and the state shouldn't penalize
those who wish to save in gold or silver. The proposed
legislation would establish Alaska leadership in a growing
national movement towards sound money policies.
REPRESENTATIVE MCCABE remarked that national momentum is moving
quickly in this arena, and new updates have occurred. He said
that HB 1 reaffirms gold and silver as legal tender and stops
local level taxes on specie. It would keep Alaska at the
forefront of the national "sound money movement." He said that
Alaska would become the seventh state to reaffirm gold and
silver as legal tender, joining Wyoming, Utah, Oklahoma,
Louisiana, Arkansas and Alabama with similar policies. He said
that 46 states had now eliminated sales taxes on gold and
silver, and nine of these states had acted on this in the last
four years. He said that 14 states have ended capital gains
taxes on precious metals, including Idaho. He said this is a
growing bipartisan national trend with legislative winds in five
states that are working on similar legislation this year. He
said bills on this issue are occurring in Alaska, Florida,
Indiana, Missouri, and Tennessee. HB 1 would reaffirm gold and
silver as legal tender in Alaska and ensure that cities,
boroughs and municipalities cannot impose sales tax on these
transactions. He said that this would close a loophole left by
a lack of a state sales tax and aligns Alaska with the "sound
money movement."
REPRESENTATIVE MCCABE remarked that the Alaska Municipal League
has voiced concerns about the potential revenue loss, but it was
important to keep in mind that Alaska does not track precious
metal sales separately. The impact would be unknown but likely
minimal given some research in other states such as New
Hampshire. He said that given an estimation it would likely be
less than $27,000 in Alaska. He said that HB 1 would not fix
the Federal Reserve but give Alaskans a tool to "fight back,"
restore constitutional fidelity, provide financial resilience,
and end unjust local taxation. The proposed legislation would
protect small savers, empower choice, and establish Alaska
leadership on this monetary policy. He said it would preserve,
promote, and protect the state's economic security and the
welfare of its people while affirming their right to use "sound
money" in everyday transaction. In closing, he remarked that
this would be a "portable" way to store value. He remarked on
inflation with the U.S. dollar and discussed value storing
approaches with land and real estate. He said that someone
could not sell land or real estate for a loaf a bread, but with
specie it would support "small savers." He remarked on gold
maintaining value with regards to other goods in the United
States. He gave an example of a small saver that could invest a
couple hundred dollars in precious metals every month and gain
the ability to store value.
4:22:10 PM
JULIE MORRIS, Staff, Representative Kevin McCabe, Alaska State
Legislature, on behalf of Representative McCabe, prime sponsor,
presented the sectional analysis on HB 1 [included in the
committee file], which read as follows [original punctuation
provided]:
Sections 1 & 2: Amend AS 29.10.200 to ensure boroughs
and cities cannot impose sales or use taxes on specie
by adding new subsections (m) and (i) to the list of
protected tax exemptions.
Section 3: Updates AS 29.45.650(a) to reference the
new prohibition on taxing specie, ensuring boroughs
comply with the restriction.
Section 4: Adds AS 29.45.650(m), explicitly
prohibiting boroughs from levying sales or use taxes
on the sale or exchange of specie. This applies to
both home rule and general law municipalities.
Section 5: Amends AS 29.45.700(a) to ensure city
taxation policies align with the borough restrictions
on taxing specie.
Section 6: Adds AS 29.45.700(i), prohibiting cities
from imposing sales or use taxes on specie, applying
to both home rule and general law municipalities.
Section 7: Creates AS 44.12.400, establishing specie
as legal tender in Alaska, including:
Specie issued by the U.S. government,
recognized foreign governments, or the state (if
legally authorized).
• No requirement for individuals or businesses to
accept specie.
A Legislative Budget and Audit Committee study
on additional legal tender options for state debts,
including taxes.
Defines "specie" as gold or silver in coin or
bullion form, valued by metal content.
4:25:12 PM
REPRESENTATIVE MCCABE clarified one point of confusion. This
bill is only concerning the purchase of specie. He explained
that specie is much like a gold coin and if used for a
transaction then the tax would still be there. He said that
really this legislation is for the initial purchase of these
types of precious metals. He said that if someone took two $50
bills and exchanged for a $100 bill, there would be no tax.
However, with specie there would be taxation, including in
Wasilla. He said that the goal is to get equality when used as
legal tender when the price is the same. He said that a sheet
of $2 bills is a collectible worth about fifty dollars, but cut
up and used individually for purchase, those $2 bills would be
worth their face value. If these precious metals are sold as a
collectible, then taxes would be owed. He said that these
things are a little bit nuanced and confusing but clarified that
HB 1 was focused on the tax on specie.
4:27:05 PM
CHAIR CARRICK announced the committee would hear invited
testimony on HB 1.
4:27:16 PM
JP CORTEZ, Executive Director, Sound Money Defense League, gave
invited testimony in support of HB 1. He said that removing
sales tax from gold and silver from localities and
municipalities is a trend nationwide. He reiterated that 46
states have now eliminated the sales tax on purchases of
precious metals. He also reiterated that this process would
involve exchanging one form of constitutional money for another.
He used the example of exchanging four quarters for a single
dollar: one form of money to another. He said that HB 1 would
align Alaska with the U.S. Constitution and enact parity between
investments of precious metals and other financial instruments
such as stocks.
4:29:14 PM
REPRESENTATIVE HOLLAND asked whether the proposed bill was two-
part. One was the elimination of sales tax on the purchase of
specie and the second, establishing specie as a legal tender for
transaction. He asked whether other states were putting these
changes in place simultaneously or whether they were addressing
one part or another. He was curious about the structure of the
bill and what has been occurring in other states.
MR. CORTEZ responded that these changes are not necessarily
happening in tandem. He reiterated that 46 states had
eliminated sales tax on precious metals and fewer states had
constitutionalized precious metals as legal tender. However,
more states are introducing legal tender issues as a stand-alone
bill in many cases. He said that after eliminating the sales
tax on previous metals, a bill that symbolically reaffirms gold
and silver as legal tender has zero cost to the state and would
not carry mandates on accepting this type of payment. He said
many states are taking the opportunity now to pass legislation
like this. He said that last week the governor of Alabama
signed a bill that did not include the sales tax issue because
Alabama had already exempted precious metals from state sales
tax. He said that the State of Alabama had a symbolic legal
tender bill much like what HB 1 proposes. He said that more
states are doing this because it costs nothing to the state and
comes with no mandates to businesses.
REPRESENTATIVE HOLLAND, in terms of the intent and purpose in
Alaska, asked whether these two parts of the bill were of equal
importance to people who support the bill.
REPRESENTATIVE MCCABE responded that there is interest in
Alaska, he mentioned a shop in Wasilla that buys and sells
specie. He said there is also interest in the prepper community
and those that want to store value in safes as opposed to
banking systems. He said that some of these people are
prohibited by taking part in this form of storing value due to
the sales tax. He said that generating support by having these
tax changes in play is important for formalizing use of specie.
He said that once the bill is established there are several
Alaskans that support changes. He said that when thinking of
the "prepper mentality" and if there is a currency problem with
the United States Dollar, then someone could still have some
economic churning with gold and silver. He mentioned that
Argentina had a large economic problem in 2000, and some people
had used BIC Lighters as currency. He described super inflation
in countries that eliminated the practical use of currency. He
said that one half of the bill was symbolic and yes, the sales
tax is important for folks that support the bill.
4:34:37 PM
CHAIR CARRICK asked whether the bill would specially authorize
specie but inquired about individuals who just have gold and
silver in other forms and want to use them as a currency.
REPRESENTATIVE MCCABE said that Mr. Cortez could address this,
but he suspected that for use as currency it may require a
certain purity level and the weight stamped on it. He
illustrated the example of the specie that was brought to the
committee.
4:35:24 PM
MR. CORTEZ responded that Representative McCabe was correct, and
this was an IRS rule. To qualify as "tradable gold," the gold
requires weight and purity stamping. He said this is to confirm
validity.
CHAIR CARRICK asked whether the specie that Representative
McCabe had before committee was not necessarily the only kind of
acceptable specie. She explained that she had a personal
collection of silver but in the form of coins. She asked
whether the bill would recognize other gold and silver forms or
whether it was focused on specie. She was unsure of the
parameters of what would be included.
REPRESENTATIVE MCCABE responded that this could include gold and
silver coins, specie (the bills presented before committee), and
even Krugerrands. All these could be considered and reminded
committee members that it does not apply to "collectible value."
He gave an example of a Roman coin and its value exceeding the
precious metal price.
4:38:00 PM
REPRESENTATIVE STORY said that given previous discussions of the
bill concept, she had reached out to the Department of Revenue
and reported that they explained that there was no way to
measure the value due to changes. She inquired to the
"voluntary" nature of the bill and who can use it and how one
could visualize different groups using it.
REPRESENTATIVE MCCABE mentioned that a store in Wasilla buys and
sells gold backs (specie). He said that if he brought a $4
Goldback to the store, the store could evaluate the spot price
for the gold prior to a transaction. He reiterated that he
would be paying any taxes to Wasilla. He reiterated that it is
nuanced; he did not envision that the average store would
collect these but that some stores would use Goldbacks for
trade. He thought that some stores would probably keep those
Goldbacks and not put them into play until needed for purpose of
storing value. He mentioned that in the Old West, a one-ounce
piece of gold could buy a nice suit and vest; today it would be
the same given spot prices. He said that gold has tracked
commodity prices whereas the U.S. Dollar (USD) has not.
4:40:41 PM
CHAIR CARRICK said that in states with specie, it seems that the
vision is that it would be something at a purely local level.
Her example was that she could exchange on Venmo to another
person, Venmo could charge a transfer fee. She said that this
would not be the case for specie if the proposed bill passes.
She said the vision is that it may only be implemented at a
small local level. She said that Fred Meyer store likely
wouldn't take Goldback for transactions.
REPRESENTATIVE MCCABE responded that Fred Meyer likely would not
want to do this, but smaller businesses may be open to the idea.
He agreed that Fred Meyer and larger organizations may not want
to deal with the extra currency form for the same reasons as not
wanting to deal with Canadian Dollars and other foreign
currencies. He mentioned that he had spoken with former Senator
Bishop about a state repository that could be interested in
collecting and holding gold and silver as a storable value for
the state. He said that Texas has a law for this and other
states are considering it. He referred to them as the state's
very own Fort Knox. He said that the Chinese were buying gold
by the pallet to store value.
4:43:01 PM
REPRESENTATIVE HIMSCHOOT asked how someone would know that the
specie is pure.
REPRESENTATIVE MCCABE said that Mr. Cortez could better address
this issue. He noted that there is a website, Goldback.com,
that talks about the military level encryption it uses. He said
that if something was 1/1,000 of an ounce then 1,000 could
theoretically be weighed. He said that the risk could be like
counterfeit $100 bills. He said that buying it from a quality
buyer would foster trust.
4:44:18 PM
MR. CORTEZ added that as Representative McCabe had mentioned, it
would be incumbent on the vendor to confirm that whatever money
it is accepting, USDs or gold, is what it is purported to be.
He said that today there are many ways testing can be done,
including apps on phone and various testing apparatus. He said
that several methods exist today to confirm the validity. He
reminded the committee that this would not place a mandate on
vendors but anyone who would accept this would take steps to
ensure authenticity.
4:45:26 PM
REPRESENTATIVE HOLLAND discussed the rich history that gold had
for the State of Alaska and historical gold rushes. He said he
is intrigued by the idea that Alaska can endorse gold in
different ways. He noted that currency has changed, especially
given the advent of cryptocurrency. He said that many of these
"virtual" cryptocurrencies have become accepted despite their
shortcomings regarding tracking. He asked how Alaska deals with
something virtual like Bitcoin and whether it is related to the
argument regarding specie as currency. He noted that there is
an intangible nature to Bitcoin as opposed to the tangible
aspects of Gold. He inquired whether HB 1 would allow anything
different from what has been allowed in other areas of currency.
4:48:27 PM
SALLY COX, Local Government Specialist, Division of Community &
Regional Affairs, Department of Commerce, Community & Economic
Development responded that she did not have a specific answer
but could follow up with an answer.
4:49:05 PM
MR. CORTEZ added that the proposed bill would not impact current
dynamics associated with Bitcoin and other forms of
cryptocurrency. He said that one of the shortcomings of Bitcoin
is the intangible nature of it which makes it riskier than other
forms of currency. He said that gold and silver are the
extinguishers of debt. He noted that the founding fathers knew
the value of gold and silver and that's why they wrote about the
perils of paper money. Many of these perils could be applied to
cryptocurrency or "internet money." He said the reason the
Federal Reserve note has shortcomings regarding cryptocurrency
is due to its sort of "imagined" nature. He reiterated that
gold and silver are mentioned in the U.S. Constitution. He
reiterated that this movement was a national trend and earlier
this year Wyoming created a gold and silver reserve with other
states considering similar measures. He said that this is all
speaking to a "reimagining" of money. He discussed that many
groups are reconciling that many balance sheets are USD
denominated debt that has worse rates of return than gold and
silver. He said that there is a shaking confidence in the
monetary policy of the USD and that countries across the world
are stockpiling gold because it is an apolitical form of
currency. He said that HB 1 is promoting gold and silver and
allowing people to more easily adopt a gold standard.
REPRESENTATIVE MCCABE said that if someone studied history, the
beginning of a demise of any dynasty is when it starts down the
fiat currency, gold that is backed by nothing. He said that
this proposed legislation would make the gold that used to back
the USD into something that could be in someone's pockets rather
than Fort Knox. He said that if someone went into the prepper
mentality and the "sound money" defense mentality, the objective
is to make money tangible again.
4:52:49 PM
CHAIR CARRICK said that while both gold and silver have over
time maintained stable value, on a day-to-day basis they can
fluctuate. She said that she was unsure how exactly a merchant
could decide what the value is on a given day. She asked how
other states have navigated this type of merchant discretion.
REPRESENTATIVE MCCABE responded that anybody who uses this
understands the limitations. He said that he used to travel
internationally and when going to China and staying at a hotel,
the counter of the hotel would set the trading price for Chinese
Yuan to USD for the day. He said that if changing to the local
currency there is an exchange rate based on what the current
market conditions are. Someone using a Goldback or specie would
be in the same boat and understand these fluctuations. He said
that some apps assess spot prices for precious metals; it could
be used to determine the spot price for gold or silver.
CHAIR CARRICK replied that it would be a domestic currency that
would operate like a foreign currency and that most vendors
probably would not accept it, and it would change on a regular
basis.
4:55:14 PM
REPRESENTATIVE VANCE said that she went to a museum in Virginia
that had the history of this debate. She noted that the danger
of having a note is that the USD is not real but a promissory
note. She said that the value of the dollar fluctuates all day
long and this is a reason for inflation. She referred to
inflation as a "thief in the night" and remarked that the public
doesn't pay attention to these fluctuations. She said the value
in gold and silver is not having this promissory note and gave
her wedding bands as an example of gold and silver appreciation.
She said that she supports the bill because people could feel
that the money they earn is secure. She asked whether HB 1
could help the cannabis industry given its challenges depositing
the USD, and whether the legislation support these types of
industries.
REPRESENTATIVE MCCABE responded that the proposed legislation
could support the cannabis industry because it would not require
a bank. He noted that the cannabis industry has challenges
depositing money and gold could be stored in a safe without any
bank interventions. He said it could accrue the same or better
return than placing $10,000 in the bank given bank interest
rates. He said the gold would maintain and accrue more value
over time.
REPRESENTATIVE MCCABE, in response to a previous comment from
Chair Carrick, noted that yes there are minor daily
fluctuations; however, if he were a merchant and accepting
Goldbacks, he would be stashing every single one into his safe
to combat inflation because they store value exceptionally.
REPRESENTATIVE VANCE asked Representative McCabe why the
proposed bill did not include the authority for the State of
Alaska to make a repository so that gold could be used as a
debit much like what the state of Texas is doing.
REPRESENTATIVE MCCABE responded that he felt the current bill
was enough of a leap for the legislature and he wanted to start
there first. He said the transactional bit is another "bunny
trail." He described the dynamic of buying gold with U.S.
dollars and putting physical gold in a repository with someone's
name on it. He said that a credit card can be used relative to
that stored gold and its value. He felt that this is a bit more
complicated than what he wanted to do currently. He said that
an amendment could always be put in place.
REPRESENTATIVE VANCE said that the transactional piece would be
very practical because someone has a debit that is easily
usable. She said it would be used for whatever and where a
Goldback may not be accepted; it would encourage more
participation due to merchant discretion. She opined that the
fact that other states are doing it is incredible. She said
that she was surprised that Alaska moved away from using gold
and silver as legal tender due to the history of the state. She
asked whether Representative McCabe had any insight into when
Alaska stopped using gold.
REPRESENTATIVE MCCABE said that there are three presidents that
impacted the gold standard and noted that Mr. Cortez could
better address the history of the gold standard and the USD.
5:01:05 PM
MR. CORTEZ said that the USD was formerly convertible, and
someone could go to a bank and convert Federal Reserve notes for
ounces of gold. He remarked that in 1971, under the Nixon
Administration, this practice stopped. He noted that since
then, the U.S. has been on an entirely paper currency, which has
caused issues. He said that the "paper money experiment" has
trended like others in history. He said that this legislation
would help address this issue. He opined that monetary
dysfunction today comes from the Federal Reserve, and this would
be a state approach to mitigate issues associated with no gold
backing.
MR. CORTEZ said that further legislation could create state
repositories, enable treasurers to change investment approaches,
and allow other transactional vehicles to be considered. He
said that many states start with this type of legislation before
pursuing additional transactional approaches. He reiterated
that the state should not penalize people for investing in gold
or silver if they choose.
5:03:07 PM
CHAIR CARRICK asked whether only a private entity produces the
specie or whether the state produce these as well.
REPRESENTATIVE MCCABE responded that Mr. Cortez could address
this better, but he believed that a private entity usually
produces it, but production is sponsored by the state. He
explained that the specie example at the committee was sponsored
by the State of Florida. He said that Florida was unique in the
regard that it produced the example specie before the law was
put in place. He said that specie was somewhat fluid at the
moment.
MR. CORTEZ added that in the case of Goldbacks, it was a private
company that produced the example. He said that it was not
minted by the state. He said the State of Tennessee is
currently considering legislation to actively mint things like
Goldbacks. He said as far as what HB 1 pertains to, it would be
more Internal Revenue Service (IRS) classification which would
include things like Goldbacks, privately minted rounds, and even
government minted coins. He said that the U.S. Mint releases a
gold and silver eagle, buffalo, and other minted precious
metals. He then discussed other countries that produce
government minted items. He said that it would not exclusively
pertain to privately minted items.
CHAIR CARRICK said that Alaska has a long history of bartering
and exchanging goods for other goods. She said that there is
nothing in state law that prohibits this to her understanding.
Right now, gold and silver are treated as a good rather than
tender. She inquired about why it is important to have this
legislation rather than the current status quo. She said that
she could go to a friend's house to buy a bike and then exchange
it for silver troy ounces. She asked why it should be a
recognized tender opposed to how people might exchange
currently.
REPRESENTATIVE MCCABE replied that it was about portability and
storability. He remarked on the physicality of the tender and
the serial numbers and other recognizable features. He said
many things that are bartered are in the safe and things like
diamonds were even more difficult to evaluate. He said that the
specific examples of specie before the committee were easy to
store and easy to make determinations of authenticity. He
suggested this might be a difference when it comes to bartering.
He said that one of his dreams is to see an Alaska-specific
specie. He said that former Senator Revak wanted to send it to
the Alaska Arts Council and have a contest for the artwork on
potential Alaska Goldbacks.
MR. CORTEZ added that the legislation was symbolic in nature as
Alaska would embrace gold and silver as legal tender, but it
would offer contractual protection in the case of a contract
denominated in gold and silver. He said by not taxing this, if
someone went into a contract and the payment was in gold and
silver and there was a dispute in court, the courts currently
would not recognize gold or silver as legal transactional
tender. He said that the proposed legislation would try to
address this. He concluded that having these legal tender
classifications in place was important.
5:09:49 PM
CHAIR CARRICK announced that HB 1 was held over.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB 170 Sponsor Statement ver N.pdf |
HSTA 4/29/2025 3:15:00 PM |
HB 170 |
| HB 170 Ver N.pdf |
HSTA 4/29/2025 3:15:00 PM |
HB 170 |
| HB 170 Sectional Analysis ver N.pdf |
HSTA 4/29/2025 3:15:00 PM |
HB 170 |
| HB 170 Fiscal Note DOC-IDO-4-25-25.pdf |
HSTA 4/29/2025 3:15:00 PM |
HB 170 |
| HB 170 Fiscal Note DPS-AST-4-24-25.pdf |
HSTA 4/29/2025 3:15:00 PM |
HB 170 |
| HB 170 Fiscal Note LAW-CJL-04-25-25.pdf |
HSTA 4/29/2025 3:15:00 PM |
HB 170 |
| HB 170 Burke Presentation 4-29-25.pdf |
HSTA 4/29/2025 3:15:00 PM |
HB 170 |
| HB 170 Written Testimony Rec'd 4-28-25.pdf |
HSTA 4/29/2025 3:15:00 PM |
HB 170 |
| HB 1 Written Testimony Rec'd 4-28-25.pdf |
HSTA 4/29/2025 3:15:00 PM |
HB 1 |
| HB 170 Letter of Support Data for Indigenous Justice 4-24-25.pdf |
HSTA 4/29/2025 3:15:00 PM |
HB 170 |
| HB 170 Burke Presentation UPDATED 4-29-25.pdf |
HSTA 4/29/2025 3:15:00 PM |
HB 170 |