Summary of the Committee Version of the Bill

HCS HB 1637 -- MISSOURI SOUND MONEY ACT OF 2012

SPONSOR: Koenig (Curtman)

COMMITTEE ACTION: Voted "do pass" by the Committee on Ways and

Means by a vote of 7 to 5.

This substitute establishes the Missouri Sound Money Act of 2012

which changes the laws regarding legal tender. In its main

provisions, the substitute:

(1) Specifies that gold and silver issued by the federal

government is legal tender in Missouri; however, no person can

compel any other person to tender or accept gold and silver

coins, except for contractual obligations;

(2) Exempts the exchange of gold and silver coins issued by the

federal government for another form of legal tender from state

and local sales and use taxes, state individual and corporate

income taxes and capital gains taxes;

(3) Prohibits these provisions from being used to impair

contractual obligations and, except in the case of governmentally

assessed taxes, fees, duties, imposts, dues, penalties, or

sanctions, the government may not compel payment in any

particular form of legal tender inconsistent with the express

written or verbal agreement of transacting parties, thereby

frustrating the parties' manifest intent and impairing their

contractual obligations;

(4) Prohibits the composition of a person’s monetary holdings,

including those on deposit with any nonbank depository, from

being disclosed, searched, or seized except upon strict adherence

to due process safeguards;

(5) Specifies that when the federal government requires

surrender of gold or silver, the nonbank depository must return

the gold and silver deposits to their owners who will then

surrender the gold and silver to the federal government. The

depository is not permitted to act without written authority from

the owners of the gold and silver;

(6) Requires the legal tender issued in exchange for the deposit

of U.S. minted gold and silver coins not exceed 80% of the value

of gold and silver as determined by the London PM fix for that

day’s transaction; and

(7) Requires any nonbank depository to be subject to the rules

and regulations of the Director of the Division of Finance within

the Department of Insurance, Financial Institutions and Professional Registration.

FISCAL NOTE: Estimated Net Cost on General Revenue Fund of

Unknown in FY 2013, FY 2014, and FY 2015. No impact on Other

State Funds in FY 2013, FY 2014, and FY 2015.

PROPONENTS: Supporters say that the bill is designed to set up

the storage of U.S. minted gold and silver coins in a statutory

private depository similar to Utah. Utah became the first state

last year to recognize the value of gold and silver coins minted

by the federal government as legal tender. More than a dozen

other states are considering similar measures and are expected to

follow Utah’s example. There are historical, constitutional, and

economic reasons to support this choice of currency for Missouri

citizens in light of our current economic environment including

declining faith in the U.S. monetary system and concern about

rising inflation. The fiat money in use today is backed by

nothing but debt. Each time money is issued, it creates more

debt. The bill opens the door for expanded economic development

by attracting capital to the state. The benefits of using a

depository include a debit card system based on 80% of the market

value of coins deposited and the commerce created backed by the

gold and silver in the depository.

Testifying for the bill were Representative Curtman; Douglas Tjadon, Sound Money Center; and Greg Franco, Utah Gold and Silver

Depository, LLC.

OPPONENTS: There was no opposition voiced to the committee.

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