H.R. 10167: Common Cents Act

This bill would end the Mint’s production of new one-cent coins for ordinary circulation, while still allowing the government to make pennies for collectors. It would also change how cash transactions are handled so that, when exact change cannot be given, the total amount can be rounded to the nearest 5 cents.

What happens to pennies

• The Treasury Secretary would be required to stop making pennies for general use.
• Already-existing pennies would still be legal money and could still be used to pay debts, taxes, and other charges.
• Pennies could still be produced and sold as collectible numismatic items.

How cash rounding would work

If a cash transaction cannot be made in exact cents, the bill allows rounding to the nearest 5 cents:

• Totals ending in 1, 2, 6, or 7 cents may be rounded down.
• Totals ending in 3, 4, 8, or 9 cents may be rounded up.
• Totals of 1 or 2 cents may be rounded up to 5 cents.

The bill also allows rounding in a way that favors the customer when cash is being paid out:

• If a business is paying a customer in cash, it may round up to the nearest 5 cents.
• If a customer is paying a business in cash, it may round down to the nearest 5 cents.

Limits on where rounding applies

• The rounding rules would apply only to cash transactions.
• They would not apply to payments made by check, credit card, debit card, electronic transfer, gift card, money order, or similar payment methods.
• The bill says no one is required to round; it only permits rounding in the situations described.

Employer payments to workers

If an employer chooses to round a cash wage payment to an employee, the bill says the employer must round up to the nearest 5 cents. However, it does not require employers to round at all if they are paying the exact amount.

Legal protection for using the rounding rules

The bill says businesses and financial institutions would not violate federal, state, tribal, or local laws just because they follow the bill’s cash-rounding rules. It also says the bill does not override minimum wage, overtime, or paid leave laws.

Federal Reserve reporting requirements

The bill directs the Federal Reserve Board to prepare reports on how to manage coin distribution after penny production stops. These reports would address:

• how to reduce disruptions in penny supply,
• how coin terminals and deposit systems should handle pennies,
• how stopping penny production could affect low-income, older, unbanked, underbanked, and debanked people, and
• recommendations for Congress if problems are identified.

The Fed would have to provide an initial report within 90 days, then follow-up reports later at 6 months, 18 months, and 30 months after that first report.

Future discontinuation of other coins

The bill also changes the law governing when the Treasury can stop minting any coin currently made for circulation. It would require the Treasury Secretary to give Congress notice at least 60 days before discontinuing a coin, explain the reasons, and provide a phase-out plan. The Secretary would also have to brief Congress within 30 days after sending that notice.

Relevant Companies

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