Legislature(2023 - 2024)BELTZ 105 (TSBldg)
02/08/2024 03:30 PM Senate STATE AFFAIRS
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| Audio | Topic |
|---|---|
| Start | |
| Eo 128 Separate Membership of the Board of Directors of the Alaska Energy Authority and the Alaska Industrial Development and Export Authority | |
| SB131 | |
| HB3 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | SB 131 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| *+ | HB 3 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
HB 3-GOLD AND SILVER SPECIE AS LEGAL TENDER
4:12:30 PM
CHAIR KAWASAKI announced the consideration of CS FOR HOUSE BILL
NO. 3(FIN) "An Act relating to specie as legal tender in the
state; and relating to borough and city sales and use taxes on
specie."
4:12:57 PM
REPRESENTATIVE KEVIN MCCABE, District 30, Alaska State
Legislature, Juneau, Alaska, sponsor for HB 3.
4:17:23 PM
JULIE MORRIS, Staff, Representative Kevin McCabe, Alaska State
Legislature, Juneau, Alaska, presented the sectional analysis
for HB 3:
[Original punctuation provided.]
CSHB 3\Ver. S
SECTIONAL ANALYSIS
"An Act relating to specie as legal tender in the
state; and relating to borough and city sales and
use taxes on specie."
Section 1 amends A.S. 29.45.650(a) to include a new
subsection (l) outlined under Section 2
below.
Section 2 amends AS 29.45.650 to add a new subsection
to protect "specie" from a borough sales or use tax on
the sale or exchange of specie.
Section 3 amends AS 29.45.700(a) to include a new
subsection (h) outlined under Section 4
below.
Section 4 amends AS 29.45.700 to add a new subsection
to protect "specie" from a city sales or use tax on
the sale or exchange of specie.
Section 5 amends AS 44.12 to add Article 5. Legal
Tender which defines "legal tender" in the state to
include gold and silver tender including "specie."
This section also states that person is not required
to accept gold or silver specie as tender and defines
"specie" and "legal tender."
Section 5 is further amended by adding a new section
to read: "The Legislative Budget & Audit committee
shall study the possibility of establishing additional
forms of legal tender for the payment of debts,
including public charges, taxes, and other money owed
to the state. If the committee determines that
additional forms of tender are practical and
beneficial, the committee shall prepare legislation
establishing an additional form of legal tender for
introduction."
Section 6. Section 4, ch. 100, SLA 2002, as repealed
and reenacted by sec. 9, ch. 117, SLA 2003 and sec. 2,
ch 30, SLA 2005 is repealed, reenacted, and amended to
read as outlined in Section 1 above.
4:19:16 PM
SENATOR WIELECHOWSKI asked if goldbacks are considered a specie.
4:19:31 PM
REPRESENTATIVE MCCABE replied yes.
4:19:39 PM
SENATOR WIELECHOWSKI said goldbacks don't seem to be in line
with the definition of specie since there is a reliance on the
value of metal content.
4:20:13 PM
REPRESENTATIVE MCCABE replied that the value of gold and its
purity is stamped on goldbacks.
4:20:46 PM
SENATOR WIELECHOWSKI asked if goldbacks are issued by private
companies.
4:20:51 PM
REPRESENTATIVE MCCABE replied that goldbacks are issued by
private investment companies with permission from the state that
wishes to have a goldback.
4:21:10 PM
SENATOR WIELECHOWSKI asked how specie tendered under private
governments companies fit under the definition of legal tender
under page 2, lines 12-19 of HB 3.
4:21:35 PM
REPRESENTATIVE MCCABE stated his belief that they are developed
and printed by a private company but are authorized by a state.
4:22:03 PM
SENATOR WIELECHOWSKI asked whether foreign government as a legal
definition when referring to legal tender.
4:22:18 PM
REPRESENTATIVE MCCABE replied that he would obtain that
information from the bill drafter.
4:22:32 PM
SENATOR CLAMAN said HB 3 references sales tax and other taxes
but does not include an inventory tax; he wondered how the law
would apply to a business operator who holds gold for sale.
4:23:13 PM
REPRESENTATIVE MCCABE replied it would not be inventoried unless
it was a collectible.
4:24:27 PM
SENATOR CLAMAN asked how an owner or a municipal tax assessor
could make the distinction between collectible and non-
collectible coins.
4:24:43 PM
REPRESENTATIVE MCCABE replied in the same way it is currently
done. He provided an example using two-dollar bills.
4:25:26 PM
SENATOR WIELECHOWSKI cited page 2, line 17 through 19, asked if
there have been discussions about the development of a new cause
of action.
4:25:58 PM
REPRESENTATIVE MCCABE replied that he has not had that
discussion with the bill drafter.
4:26:44 PM
CHAIR KAWASAKI opened invited and public testimony on HB 3.
4:27:50 PM
JP CORTEZ, Executive Director, Sound Money Defense League,
Charlotte, North Carolina, invited testimony for HB 3. He said
HB 3 would ensure gold and silver coins would remain tax-free at
the local level and forty-three states have already eliminated
this tax. Those states that remain have active legislation to
end this tax. The trend is not to impose any tax on gold and
silver, but to remonetize the specie; building in-state
depositories, and empowering treasurers to create the
infrastructure to accept gold and silver remittance. He
explained why a sales tax on gold and silver would be
inappropriate. He said the fiscal note admits that parsing data
is challenging and referenced a sales tax exemption that was
passed in Tennessee and its fiscal note if adjusted to Alaska's
population would have minimal fiscal impact.
4:31:21 PM
CHAIR KAWASAKI asked how other states have adopted policies on
gold and silver tender.
4:31:54 PM
MR. CORTEZ replied that origin of state-level projects began to
take form in 2011, when Utah passed the first Legal Tender Act,
which exempts gold and silver from tax liability and renders the
currency as legal tender. States are realizing they do not have
to idly stand by while the federal reserve prints money. There
is no compulsion to trade in metals.
4:33:22 PM
CHAIR KAWASAKI asked if the state treasury would be required to
take gold as a legal tender and whether ConocoPhillips could
potentially pay in gold.
4:33:40 PM
REPRESENTATIVE MCCABE replied no and said it would take a state
depository or additional bill language to compel the state to
accept gold as a legal tender. He stated that Texas is
considering taking action.
4:34:16 PM
MR. CORTEZ said that is the case in many states, especially
those with a strong mining infrastructure. He suggested that
companies could choose to pay severance taxes.
4:34:56 PM
SENATOR CLAMAN asked if the Alaska Permanent Fund Corporation
(APFC) has invested in gold.
4:35:13 PM
REPRESENTATIVE MCCABE replied that he does not believe so, but
mentioned that Senator Bishop may have introduced a bill many
years ago that would have mandated it.
4:36:51 PM
MIKE CARTER, Innovate Finance, Dallas Fort Worth, Texas, invited
testimony for HB 3. He commended Representative McCabe for
introducing the legislation. He noted his discussions are being
facilitated across America. What started as an idea among the
solution action tank he participates in is now a movement. There
are 23 states that are considering transactional gold and
silver. The technology is available to move onto the next step.
He said he could spend gold anywhere in the United States and
almost anywhere in the world on anything that can be bought with
cash. In less than 200 milliseconds, it is possible to transfer
gold into dollars or euros and convert it into currency on a
debit card and it is backed by constitutional-based gold and
silver. Eventually, the technology would enable peer-to-peer
gold payments. Until now, the wealthy have always had a pathway
to do that. The impact of inflation is being felt by everyone.
Working Americans often can't afford to own gold and silver
because it is not easily transactable. If Alaska moves forward
on this issue and removes some tax liabilities, it could be
transferred to a debit card. If there is an emergency, this
method would ensure a stable form of money backed by the state
and makes gold accessible to all people.
4:44:39 PM
CHAIR KAWASAKI asked why international banks buy gold at record
rates.
4:44:47 PM
MR. CARTER replied that it is a result of 40 trillion dollars of
record debt in the U.S. As a result, people are looking for
stability. He said is a vault in Switzerland which has
substantial pallets of gold, that are being bought by China. He
opined that if foreign countries are buying gold, states should
buy gold and be ready for when hard times happen. He stated his
belief that transactional gold and specie tender in Alaska would
strengthen the dollar. Increasing the number of currency options
stabilizes the value of the dollar does not compete with the
banking industry. Recognizing gold and silver as legal tender
protects citizens and would provide Alaskans with an economic
opportunity.
4:48:03 PM
KARL KAUFMAN, Alaska Municipal League, Anchorage, Alaska,
testified in opposition to HB 3. He said he is a tax attorney
and focuses on federal, state, and local tax. He stated his
belief that HB 3 poses a risk that Alaskans would use gold and
silver as a legal tender without understanding the federal tax
consequences of failing to keep adequate transactional records.
Many people and businesses in Alaska often make mistakes in
their tax filings due to its complex nature and therefore risk -
penalties for substantial underpayment. He discussed his
understanding of Supreme Court rulings on currency.
CHAIR KAWASAKI returned to public testimony on HB 3.
4:51:14 PM
CHAIR KAWASAKI asked if he is speaking on behalf of the Alaska
Municipal League.
4:51:20 PM
MR. KAUFMAN stated he is speaking on behalf of the Alaska
Municipal League and from his personal experience representing
Alaskan citizens and businesses.
4:51:44 PM
MELANIE GLATT, representing self, Big Lake, Alaska, testified in
support of HB 3. She shared her background in geology and
mineral exploration, and stated that her father taught her about
currency. She said HB 3 is well written and addresses the
decline in the value of the dollar.
4:53:01 PM
At ease.
4:53:16 PM
CHAIR KAWASAKI reconvened the meeting.
4:53:23 PM
MR. CARTER responded to comments from the Alaska Municipal
League by emphasizing that transactional gold and silver is not
subject to capital gains tax unless the IRS were to change the
tax code because it is functional currency. He said the
conversion of gold to dollars follows customer laws, financial
and banking rules, becomes transactional, and suggested looking
at the study.
4:55:26 PM
ROLAN RUOSS, representing self, Kodiak, Alaska, testified in
support of HB 3. He reiterated that central banks and world
governments clearly recognize the value of gold as a saving
vehicle. In 2022 and 2023, central banks exercised the highest
buying levels of gold in 75 years. People who have saved over
time are looking forward to retirement and should not be
penalized through taxation. Utah and Oklahoma established under
state statute, "a person is not required to accept gold and
silver specie as legal tender except as agreed upon by
contract." He referenced the Alaska Municipal League's
opposition letter that posed gold transactions as a "potential
legal hazard for Alaskans." He provided a counterpoint using
Arkansas law stating it would be a product amendment to HB 3.
4:58:32 PM
ED MARTIN, representing self, Kenai, Alaska, testified in
support of HB 3. He said he has owned gold mines and has traded
in gold. Property taxation is a government function to some
degree, but the government shouldn't meddle in personal and
private business. He expressed frustrations about the
perspective brought forth by the Alaska Municipal League.
5:00:54 PM
CHAIR KAWASAKI closed public testimony on HB 3.
5:01:11 PM
REPRESENTATIVE MCCABE made final comments on HB 3. He said HB 3
would allow Alaskans to store their wealth in gold and silver,
but also spend wealth directly without having to worry about
commodity taxes.
5:01:53 PM
CHAIR KAWASAKI held HB 3 in committee.
| Document Name | Date/Time | Subjects |
|---|---|---|
| SB 131 Sectional Analysis ver A.pdf |
SFIN 4/23/2024 9:00:00 AM SSTA 2/8/2024 3:30:00 PM |
SB 131 |
| SB 131 Sponsor Statement ver A.pdf |
SFIN 4/23/2024 9:00:00 AM SSTA 2/8/2024 3:30:00 PM |
SB 131 |
| SB 131 Letter of Support Amanda Sialofi 4.25.2023.pdf |
SSTA 2/8/2024 3:30:00 PM |
SB 131 |
| HB3.FiscalNote.DCCED.1.9.24.pdf |
SSTA 2/8/2024 3:30:00 PM |
HB 3 |
| HB3.FiscalNote.DOA.1.9.24.pdf |
SSTA 2/8/2024 3:30:00 PM |
HB 3 |
| HB3.VerB.SectionalAnalysis.1.9.24.pdf |
SSTA 2/8/2024 3:30:00 PM |
HB 3 |
| HB3.VerB.SupportingDocs.1.9.24.pdf |
SSTA 2/8/2024 3:30:00 PM |
HB 3 |
| HB3.VerBtoCSHB3VerS.SummaryofChanges.1.9.24.pdf |
SSTA 2/8/2024 3:30:00 PM |
HB 3 |
| HB3.VerS.SponsorStmt.1.9.24.pdf |
SSTA 2/8/2024 3:30:00 PM |
HB 3 |
| HB3.VerB.1.9.24.pdf |
SSTA 2/8/2024 3:30:00 PM |
HB 3 |
| CSHB3.VerS.1.9.24.pdf |
SSTA 2/8/2024 3:30:00 PM |
HB 3 |
| HB3.FiscalNote.DCCED.1.9.24.pdf |
SSTA 2/8/2024 3:30:00 PM |
HB 3 |
| HB3.FiscalNote.DOA.1.9.24.pdf |
SSTA 2/8/2024 3:30:00 PM |
HB 3 |
| Fiscal.note. SB 131.pdf |
SSTA 2/8/2024 3:30:00 PM |
SB 131 |
| EO 128 Letter to Senator Kawasaki.pdf |
SSTA 2/8/2024 3:30:00 PM |
EO 128 |
| Support - HB 3 .pdf |
SSTA 2/8/2024 3:30:00 PM |
HB 3 |
| Public Testimony - HB 3 8 Jan 2024.pdf |
SSTA 2/8/2024 3:30:00 PM |
HB 3 |
| HB 3.e-mails of support.2.1.24.pdf |
SSTA 2/8/2024 3:30:00 PM |
HB 3 |
| HB 3 Support e-mail 2.8.24.pdf |
SSTA 2/8/2024 3:30:00 PM |
HB 3 |
| HB 3 opposition Written Testimony.pdf |
SSTA 2/8/2024 3:30:00 PM |
HB 3 |
| SB 131 support.pdf |
SSTA 2/8/2024 3:30:00 PM |
SB 131 |
| SB 131 Support letter.pdf |
SSTA 2/8/2024 3:30:00 PM |
SB 131 |
| Letters of support HB 3.pdf |
SSTA 2/8/2024 3:30:00 PM |
HB 3 |