05/08/2025 03:15 PM House STATE AFFAIRS

                  HB 1-SPECIE AS LEGAL TENDER                                                                               
                                                                                                                                
4:45:08 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."                                                                                                               
                                                                                                                                
4:46:11 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE MCCABE, as  prime sponsor, reintroduced HB  1.  He                                                               
said  that  he  appreciates  a second  hearing  on  the  proposed                                                               
legislation.  He said that  HB 1 is about constitutional fidelity                                                               
and financial  freedom.   It would recognize  gold and  silver as                                                               
legal tender in  Alaska; this would be in  alignment with Article                                                               
1 Section 10  of the United States (U.S.) Constitution.   He said                                                               
that the  proposed legislation would protect  Alaskans' rights to                                                               
use "sound money."  He said  the legislation is about choice, not                                                               
mandates, and  nobody would  be required to  use gold  or silver,                                                               
but the  legislation would affirm  someone could.  He  noted that                                                               
testifiers  were  available to  address  any  questions from  the                                                               
committee.                                                                                                                      
                                                                                                                                
4:47:45 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  STORY asked  what  consumer  protections were  in                                                               
place.   She said that  she wanted  to ensure that  consumers can                                                               
understand what they  are getting and buying.   She remarked that                                                               
the  Department of  Commerce,  Community  & Economic  Development                                                               
(DCCED) reported  that the State  of Alaska (SOA) did  not accept                                                               
cryptocurrencies  as a  valid form  of payment  for any  debts or                                                               
obligations.    She  said that  cryptocurrencies  must  first  be                                                               
converted to  United States  Dollars (USD).   She asked  how much                                                               
notice would need to be given to consumers.                                                                                     
                                                                                                                                
REPRESENTATIVE MCCABE  responded that  HB 1  does not  pertain to                                                               
cryptocurrency but  pertains to physical gold  and other precious                                                               
metals.  He said that the  consumer protections would be the same                                                               
as  with a  USD.   He  said  it  falls to  the  consumer to  make                                                               
purchases  from  a  vendor  that  is reputable.    He  said  that                                                               
Goldbacks had military level  anti-counterfeit features built in.                                                               
He  said  that online  testimony  could  better address  consumer                                                               
protection.                                                                                                                     
                                                                                                                                
REPRESENTATIVE  STORY  said  that  when looking  at  specie,  her                                                               
understanding  was  that  there  were different  values  for  the                                                               
specie  and  it  seemed  to  her  that  much  like  the  USD,  it                                                               
fluctuates.   She wondered  how much  education the  public would                                                               
need to  understand these types  of fluctuations.  She  asked for                                                               
clarification about this.                                                                                                       
                                                                                                                                
REPRESENTATIVE MCCABE  said that  U.S. Citizens  were [accustomed                                                               
to] a  single currency.   He said  that some countries  might use                                                               
four or even five types  of currency with different values, which                                                               
requires negotiated  rates.  He  said that  when he went  to Hong                                                               
Kong, he negotiated  between USD and Hong Kong Dollars.   He said                                                               
that he accepts or declines what  the stated value is regarding a                                                               
set price.  He  said that with HB 1, the price  would be based on                                                               
daily spot price of the precious  metal.  He said a merchant that                                                               
accepted Goldbacks may have an  application ("app"), a device, or                                                               
even a set price.  He said  he had a conversation about this with                                                               
Mr. Diaz that  morning.  Additionally, he said Mr.  Hilton may be                                                               
able to further speak about the issue.                                                                                          
                                                                                                                                
4:52:25 PM                                                                                                                    
                                                                                                                                
LAWRENCE   HILTON,  General   Counsel,  United   Precious  Metals                                                               
Association,   proffered  that   Federal  Statute   requires  the                                                               
Treasurer  of  the United  States  to  maintain equal  purchasing                                                               
power  among all  forms  of the  USD.   However,  there are  five                                                               
different  kinds  of  dollars,  each  with  different  purchasing                                                               
power.   He  said the  Federal Government  has not  fulfilled its                                                               
obligation to  maintain parity.   It has prompted states  to step                                                               
in and  assert that these  dollars are  not equivalent.   He said                                                               
these  types  of dollars  can  include  the Gold  Dollar,  Silver                                                               
Dollar, Platinum  Dollar, and Paper Dollar  Federal Reserve Note.                                                               
He  said  each has  different  purchasing  power due  to  Federal                                                               
Government's failure to uphold equal purchasing power.                                                                          
                                                                                                                                
MR. HILTON, regarding the Goldback,  said that it is a negotiable                                                               
instrument redeemable  for USD.   What makes the  Goldback unique                                                               
                                                             th                                                                 
is its physical composition; it contains as little  as 1/2000  of                                                               
an ounce of gold, making it  usable in everyday transactions.  He                                                               
said  that  thousands  of merchants  across  the  country  accept                                                               
Goldbacks for goods and services.                                                                                               
                                                                                                                                
MR.  HILTON  explained  that  Goldbacks   include  over  a  dozen                                                               
security features to prevent counterfeit  attempts.  He said apps                                                               
are available to determine value and authenticity as well.                                                                      
                                                                                                                                
4:55:10 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE STORY asked whether any  changes were needed to HB
  to address  education and  consumer protection.   She  further                                                               
inquired   whether  the   proposed   bill  contained   protection                                                               
mechanisms.                                                                                                                     
                                                                                                                                
REPRESENTATIVE  MCCABE  responded  that   he  believes  that  the                                                               
proposed  legislation  had all  the  consumer  protection of  any                                                               
other  piece of  this  type  of legislation.    He  said that  he                                                               
believes  that  there  were  many  things  that  were  easier  to                                                               
counterfeit  than  Goldbacks,   especially  given  the  testimony                                                               
regarding counterfeit  measures.   He said  that someone  who was                                                               
educated and wanted  to buy a Goldback would likely  use apps and                                                               
tools  to  determine pricing.    He  explained that  a  reputable                                                               
seller is the best safeguard.                                                                                                   
                                                                                                                                
4:56:52 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE STORY  said that  she was specifically  looking at                                                               
language beginning  on page 3, line  9, of the bill,  regarding a                                                               
prospective Joint Legislative Budget & Audit Committee study.                                                                   
                                                                                                                                
4:57:14 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE HOLLAND  shared that recently while  at Costco, he                                                               
noticed  someone selling  gold  bars, specifically  bullion.   He                                                               
commented  that generally  Costco is  a reputable  place to  make                                                               
purchases and  seeing gold  for sale  caught his  attention given                                                               
previous  bill  discussions.    He   added  that  gold  was  also                                                               
available for purchase  from the Costco and Amazon  websites.  He                                                               
remarked that  he found that  gold is  a commonly traded  form of                                                               
value, much like how one might  buy postage stamps at Costco.  He                                                               
clarified that he was speaking to  gold in legal tender form, not                                                               
jewelry or collectibles.                                                                                                        
                                                                                                                                
REPRESENTATIVE HOLLAND said that what  intrigued him the most was                                                               
learning about the  availability of gold in this  type of format.                                                               
He  asked at  what point  the purchase  of gold  as legal  tender                                                               
would  get exempted  from sales  tax and  noted the  distinctions                                                               
between  gold  purchased  as  tender   as  opposed  to  artistic,                                                               
historic,  or other  value-based formats.   He  said that  he saw                                                               
some gold  items resembling gold  bills or cards and  remarked on                                                               
the formatting.                                                                                                                 
                                                                                                                                
4:59:44 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE MCCABE remarked  that given his time  working as a                                                               
legislator, this  bill has been  the most fun.   He said  that if                                                               
someone went to a coin store  and bought a pre-1950 Morgan Silver                                                               
Dollar  valued  at  $2,000-$3,000,  then a  sales  tax  would  be                                                               
expected.    But  if  someone   were  to  walk  into  a  7-Eleven                                                               
convenience store  and purchase one out  of the till and  offer a                                                               
dollar bill in  exchange, that would be  an informal transaction.                                                               
He emphasized the  distinction of items being used  for money and                                                               
items being used for collection.                                                                                                
                                                                                                                                
5:01:44 PM                                                                                                                    
                                                                                                                                
CHAIR  CARRICK shared  Representative Story's  concerns regarding                                                               
consumer protection.   She asked whether  HB 1 would add  a layer                                                               
of consumer  protection that is  not already in place  for people                                                               
currently making  transactions with  these types  of items.   She                                                               
inquired that when  something is classified as legal  tender in a                                                               
state, whether there would be any additional protection laws.                                                                   
                                                                                                                                
REPRESENTATIVE  MCCABE responded  that  he was  not sure  whether                                                               
there is  any kind of  consumer protection for  a $100 bill.   He                                                               
said  that if  one is  familiar  with Goldbacks,  which would  be                                                               
assumed if a  merchant accepts them, then there would  be ways to                                                               
tell  whether it  was authentic.   When  using a  $100 bill,  one                                                               
could  use a  brown pen,  he  noted; however,  most people  don't                                                               
carry  a  brown pen  around.    He  reiterated that  he  believed                                                               
Goldbacks have  more consumer protections  built in than  do $100                                                               
dollar bills.                                                                                                                   
                                                                                                                                
REPRESENTATIVE MCCABE talked about  the protections regarding the                                                               
Costco  gold  bars;  the  protection  was that  it  came  from  a                                                               
reputable seller and it likely had the required qualifiers.                                                                     
                                                                                                                                
CHAIR CARRICK  said that  a dollar right  now, or  forever stamp,                                                               
would hold the  same inherent value, regardless of  when it would                                                               
be used.   She talked  about price fluctuations and  whether this                                                               
would be  a concern and how  to avoid any potential  lawsuits due                                                               
to the new type of legal tender.                                                                                                
                                                                                                                                
REPRESENTATIVE  MCCABE responded  that  he did  not believe  that                                                               
this was  a concern  at all; he  said it's no  more of  a concern                                                               
than dollar bills.  He speculated  that what Chair Carrick may be                                                               
getting at  is whether the value  of the Goldback goes  down.  He                                                               
said that  traditionally, gold has  continued to  track commodity                                                               
prices  in a  fashion that  the USD  has not.   He  affirmed that                                                               
market prices fluctuate  and gave an example of  purchases with a                                                               
Goldback and USD in an environment of high inflation.                                                                           
                                                                                                                                
5:06:21 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  HIMSCHOOT commented  that  when  finally doing  a                                                               
base student allocation (BSA) increase,  maybe it could be issued                                                               
in Goldbacks.  She questioned what  problem would be solved by HB
.                                                                                                                              
                                                                                                                                
REPRESENTATIVE MCCABE responded that  the problem being solved is                                                               
allowing a  mid-level investor, or  someone who cannot  afford to                                                               
buy  a  $3,400,  one-ounce  gold  coin,  the  ability  to  slowly                                                               
accumulate  Goldbacks.   He spoke  about investment  growth given                                                               
the  opportunity  to store  precious  metals  as a  value-holding                                                               
agent.  He said  that it would be a means  to fight inflation and                                                               
a   fiat   currency.     He   talked   about  future   repository                                                               
opportunities  to  hedge  against  inflation  of  the  USD.    He                                                               
described  issues with  the absence  of a  gold standard  and the                                                               
various   countries   and   states  that   are   making   similar                                                               
initiatives.                                                                                                                    
                                                                                                                                
REPRESENTATIVE  HIMSCHOOT commented  that  if  someone wanted  to                                                               
accumulate money slowly, Sound Money  could be difficult due to a                                                               
$200 membership fee.                                                                                                            
                                                                                                                                
REPRESENTATIVE MCCABE  commented that  one doesn't  need to  be a                                                               
member to buy a Goldback.                                                                                                       
                                                                                                                                
5:08:45 PM                                                                                                                    
                                                                                                                                
CHAIR CARRICK announced that HB 1 was held over.