To modernize the legal tender of the United States, and for other purposes.

July 17, 2001

Mr. KOLBE introduced the following bill; which was referred to the Committee on Financial Services

To modernize the legal tender of the United States, and for other purposes.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the `Legal Tender Modernization Act'.

SEC. 2. REDESIGN AND ISSUANCE OF COMMEMORATIVE CIRCULATING $2 FEDERAL RESERVE NOTES.

(a) IN GENERAL- Notwithstanding the authority of the Secretary of the Treasury under the 8th undesignated paragraph of section 16 of the Federal Reserve Act, during the 5-year period beginning January 1, 2003, $2 Federal reserve notes issued or otherwise placed into circulation by any Federal reserve bank shall have such designs and be in such form and tenor as the Secretary may select in accordance with this section.

(b) ISSUANCE OF NEW DESIGN EACH YEAR- A new design shall be selected for $2 Federal reserve notes issued or otherwise placed into circulation by any Federal reserve bank during each year of the 5-year period referred to in subsection (a).

(c) SELECTION OF DESIGN-

(1) IN GENERAL- Each of the 5 designs required under this section for $2 Federal reserve notes shall--

(A) be emblematic of the history of the United States; and

(B) be selected by the Secretary of the Treasury, after consultation with the Commission of Fine Arts.

(2) PROHIBITION ON CERTAIN REPRESENTATIONS- No portrait of a living person may be included in the design of any $2 Federal reserve note under this subsection.

(d) PRODUCTION- Except as provided in subsection (a), the 8th undesignated paragraph of section 16 of the Federal Reserve Act shall apply to all $2 Federal reserve notes to which this section applies.

(e) RETURN TO OTHER DESIGN- After the end of the 5-year period referred to in subsection (a), the $2 Federal reserve note shall bear such design, and be in such form and tenor, as the Secretary of the Treasury may determine to be appropriate in accordance with the 8th undesignated paragraph of section 16 of the Federal Reserve Act, except that, in making any such determination, the Secretary shall take into account the 5 designs selected for such 5-year period and shall give such designs priority in making the final determination.

SEC. 3. CASH TRANSACTION ROUNDING.

(a) ROUNDING OF CASH TRANSACTION VALUES TO NEAREST 5 CENTS REQUIRED- Notwithstanding any other provision of law, any person selling goods or services shall determine the total transaction value of such goods or services in the following manner:

(1) TOTAL TRANSACTION VALUES- The transaction values of goods and services shall be totaled, any discount or deduction therefor made, and sales tax or other tax imposed, if any, added to that total in accordance with the law of the State in which such goods or services are sold.

(2) ROUNDING-

(A) ROUNDING DOWN- If 1 cent, 2 cents, 6 cents, or 7 cents shall be contained in the resulting sum, that sum shall be rounded down to the nearest amount divisible by 5 for those individuals seeking to make payment with legal tender.

(B) ROUNDING UP- If 3 cents, 4 cents, 8 cents, or 9 cents shall be contained in the resulting sum, that sum shall be rounded up to the nearest amount divisible by 5 for any person seeking to make payment with legal tender.

(b) EXCEPTION- The provisions of subsection (a)(2) shall not apply to--

(1) transactions the total amount of which is 2 cents or less, or

(2) transactions for which payment is made by any demand or negotiable instrument, electronic fund transfer, money order, credit card, or other like instrument.

(c) NO EFFECT ON LEGAL TENDER- All coins and currencies of the United States, regardless of when coined,

printed, or issued, shall continue to be legal tender for all debts, public and private, public charges, taxes, duties, and dues, in accordance with law.

(d) COORDINATION WITH CERTAIN STATE OR LOCAL TAX LAWS- Any tax imposed by any State or municipal taxing authority shall not apply to gains or losses resulting from rounding.

(e) NUMISMATIC ITEMS- The Secretary of the Treasury may produce so many one-cent pieces as the Secretary determines are sufficient to include in uncirculated sets, proof sets, and other collector sets as, from time to time, the Secretary shall determine.

(f) EFFECTIVE DATE-

(1) IN GENERAL- Except as provided in paragraph (2), this section shall take effect at the end of the 180-day period beginning on the date of the enactment of this Act.

(2) DELAYED EFFECTIVE DATE- If the end of the 180-day period referred to in paragraph (1) occurs during the 3-month period beginning on November 1 of any year, this section shall take effect on February 1 of the year immediately following such year.

(g) RULE OF CONSTRUCTION- No provision of this section shall be construed as evidence of any intention to eliminate the pricing of goods or services to the nearest cent or mill or to alter the amount of sales tax collected or paid to any State or municipal taxing authority.

SEC. 4. PRODUCTION OF DOCUMENTS FOR FOREIGN GOVERNMENTS.

(a) IN GENERAL- Section 5114(a) of title 31, United States Code (relating to engraving and printing currency and security documents) is amended--

(1) by striking `(a) The Secretary of the Treasury' and inserting:

`(a) AUTHORITY TO ENGRAVE AND PRINT-

`(1) IN GENERAL- The Secretary of the Treasury'; and

(2) by adding at the end the following new paragraph:

`(2) ENGRAVING AND PRINTING FOR FOREIGN GOVERNMENTS- The Secretary of the Treasury may, if the Secretary determines that it will not interfere with engraving and printing needs of the United States--

`(A) produce currency, postage stamps, and other security documents for foreign governments, subject to a determination by the Secretary of State that such production would be consistent with the foreign policy of the United States; and

`(B) produce security documents for States and their political subdivisions.'.

(b) PAYMENT FOR SERVICES- Section 5143 of title 31, United States Code (relating to payment for services of the Bureau of Engraving and Printing) is amended--

(1) in the 1st sentence, by inserting `, any foreign government, any State, or any political subdivision of any State' after `agency'; and

(2) in the last sentence, by inserting `, foreign government, State, or political subdivision of a State' after `agency'.

SEC. 5. CLARIFICATION OF EXISTING LAW REGARDING INCLUSION OF SEIGNIORAGE IN BUDGET.

The 9th proviso of section 522 of Public Law 104-52 (31 U.S.C. 5136) is amended by inserting `and such amount shall be included as an estimated receipt of the Government and a receipt of the Government under paragraphs (6) and (7), respectively, of section 1105(a) of title 31, United States Code, in any budget submitted under such section' before the colon after `miscellaneous receipts'.

SEC. 6. REDESIGN OF $1 FEDERAL RESERVE NOTE PROHIBITED.

Notwithstanding the authority of the Secretary of the Treasury under the 8th undesignated paragraph of section 16 of the Federal Reserve Act, the Secretary may not select or approve any new design for, or implement any change in the design of, $1 Federal reserve notes after the date of the enactment of this Act.

END