Summary of HR 3074 - Common Cents Act

Bill Overview

• Bill Number: HR 3074
• Title: Common Cents Act
• Status: Reported (Amended) by the Committee on Financial Services (H. Rept. 119-235)
• Introduced: April 29, 2025
• Primary Sponsor: Representative Lisa C. McClain (MI-09)
• Cosponsor: Representative Robert Garcia
• Related Bills: S 1525 (companion), HR 4459 (companion)

Purpose and Intent

The Common Cents Act aims to modernize U.S. coinage by eliminating the production of the one-cent coin (penny) and adjusting the composition of the five-cent coin (nickel). The bill seeks to address the increasing costs associated with penny production and streamline cash transactions by rounding amounts to the nearest five cents.

Key Provisions

1. Elimination of the Penny:

   • Directs the Secretary of the Treasury to cease the production of one-cent coins within one year of enactment.
   • Allows for the continued production of pennies solely for numismatic purposes (collectible coins), provided that the sales cover production costs.

2. Rounding Cash Transactions:

   • Requires cash transactions to be rounded to the nearest five cents, simplifying cash handling and reducing the need for pennies in everyday transactions.

3. Nickel Composition Changes:

   • Authorizes a new composition for nickels, allowing for a zinc inner layer and a nickel outer layer, with the Secretary determining the specific ratio.
   • The bill maintains the current nickel composition of 75% copper and 25% nickel until the new composition is tested and evaluated for cost-effectiveness.

Background and Need for Legislation

• The penny has been criticized for its increasing production costs, which have exceeded its face value for 19 consecutive years. In FY 2024, the cost to produce a penny was 3.69 cents, resulting in a loss of approximately $85.3 million for the U.S. Mint.
• Legislative efforts to eliminate the penny date back to the 1980s, driven by both parties due to its diminishing purchasing power and economic inefficiency.
• The bill also recognizes the cultural and economic significance of numismatic coins, which contribute to the U.S. Mint's revenue and support the collectibles market.

Impact

• Affected Parties: The bill primarily impacts consumers, businesses that handle cash transactions, and the U.S. Mint.
• Economic Efficiency: By eliminating the penny and rounding cash transactions, the bill aims to reduce costs associated with cash handling and improve the efficiency of the currency system.
• Cultural Considerations: The continued production of numismatic pennies allows for the preservation of historical and educational aspects of coin collecting.

Procedural Timeline

• April 29, 2025: Introduced and referred to the House Committee on Financial Services.
• July 23, 2025: Ordered to be reported in the nature of a substitute (Amended) by a vote of 35-13.
• September 4, 2025: Reported (Amended) by the Committee on Financial Services and placed on the Union Calendar.

The Common Cents Act represents a significant shift in U.S. currency policy, aiming to modernize coinage and improve economic efficiency while preserving cultural heritage through numismatic coins.