HB 167-GOLD AND SILVER SPECIE AS LEGAL TENDER  9:14:06 AM CO-CHAIR SCHRAGE announced that the next 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." CO-CHAIR SCHRAGE welcomed invited testimony. 9:14:55 AM JP CORTEZ, Policy Director, Sound Money Defense League, gave invited testimony in support of HB 167, which is a measure that ensures that gold and silver coin remain tax free in boroughs and cities across Alaska. He said that people are looking for ways to save their wealth, and it is paramount to be able to preserve the purchasing power of their money. He strongly encouraged Alaska and the committee to approve HB 167, and he offered to answer any questions. 9:16:58 AM CO-CHAIR HANNAN asked Mr. Cortez whether he provided any research or data for the bill sponsor on what it would do to local governments' taxation base. She also asked how one would bifurcate one piece of gold from another, which could raise substantial concerns. MR. CORTEZ explained that currently his company is also working on legislation in Tennessee, which had an associated fiscal note that ensures that the loss of revenue to cities and boroughs would likely not be substantial. He further explained that conventions and coin shows tend to stay away from districts or areas that charge sales tax. In regard to jewelry, there is a percentage threshold in most states with similar legislation, he said. 9:20:27 AM CO-CHAIR HANNAN commented that she had two large operational gold processors in her district and expressed curiosity, being they are the largest private property taxpayers in her district. She asked if they decided to mill on site and change half in to process before bringing it into town, whether they would get a "workaround" from taxation. REPRESENTATIVE MCCABE stated that this is gold to be used as legal tender, adding that one would not tax a $50 bill. For example, if they were sold as collectibles, then they would be taxed, he shared. 9:22:07 AM CO-CHAIR HANNAN provided an example of Alaska Mint and asked whether the bill would authorize that product to be legal tender; further, whether it would be exempt from or included in local taxation. REPRESENTATIVE MCCABE believed that's where the 90 percent would come in; for example, if the Alaska Mint mints a copper coin and it is gold plated offered as a collectible, it would likely be taxed. 9:23:29 AM LARRY HILTON, Co-founder/General Counsel, Goldback Inc., stated he believed he was looking at the current version of HB 167, which has a specific definition of specie and seemed clear to him. As Mr. Cortez had pointed out, he said, the vast majority of states do not impose a tax on gold and silvers, and beyond that, there has been judicial action, which he gave a brief example of. He also touched on using silver or gold coin for paying taxes. As for taxable and non-taxable gold, he noted that in Utah the legislature adopted an exemption stating that coin is used as currency. He stated the proposed legislation is broad enough to capture legal and non-legal tender currencies and would bring Alaska into line with fellow states. He highly recommended the adoption of the legislation. 9:29:19 AM CO-CHAIR HANNAN assumed that Goldback Inc. was a producer of specie or a company advocating for it. MR. HILTON confirmed yes, that is what Goldback distributes throughout the country. CO-CHAIR HANNAN referred to page 2, line 24, and interpreted the language to indicate that gold and silver bullion would be exempt from taxation at the 90 percent threshold. MR. HILTON explained that if the gold and silver product being produced by these mines is intended for circulation as money, that might be an issue, but severance tax would be untouched by the bill. 9:35:35 AM CO-CHAIR HANNAN questioned whether any states are accepting Goldbacks as their taxation obligation for cannabis taxes. MR. HILTON offered his understanding that it had not occurred in any states. 9:37:06 AM REPRESENTATIVE MCCABE brought up a subject mentioned "last time," about counterfeiting, and asked Mr. Hilton whether he could give a quick "thumbnail" on why these bills are hard to counterfeit. 9:38:10 AM MR. HILTON explained that there are a few anti-counterfeiting security measures built into the bill itself, and on the back of the Goldback, it is a structured, thin gold, and can be proven to be actual gold. 9:40:17 AM REPRESENTATIVE PRAX sought to clarify whether Juneau is charging any sales tax or a severance tax. CO-CHAIR HANNAN clarified that Juneau is not charging a sales tax. 9:41:03 AM MR. HILTON continued on the subject of a royalty or severance tax, and said they could not do that without fraud, and would still be liable for severance tax. 9:41:47 AM JOHN NELSON, Financial Advisor, Edward Jones, said he started looking for ways to protect his clients' net worth, which lead him to the public banking institute that speaks to local economy, currencies, and banking systems that are not tied with federal reserves. He stated he is an advocate; however, it needs to be separated from the federal reserve and the way to do that is local control. He recalled when he was introduced to the Goldback and thought it was an incredible way to take back control of and protect currency. He suggested that if the bill was adopted, consider adding a "c" and adding "Goldback Bucks" on the bill to recognize Goldbacks as legal tendered currency. 9:47:08 AM CO-CHAIR SCHRAGE announced that HB 167 was held over.