Common Cents Act

Bill Summary: Common Cents Act (S. 1525)

Overview

The Common Cents Act is a legislative proposal designed to eliminate the production of the one-cent coin (the penny) in the United States. The bill seeks to reduce the costs associated with minting coins that often cost more to produce than their face value, while introducing a standardized rounding system for cash transactions to ensure the economy continues to function smoothly without the penny.

Key Provisions

1. Cessation of Penny Production

• Elimination of Minting: The Secretary of the Treasury is required to stop minting and issuing one-cent coins no later than one year after the Act is enacted.
• Numismatic Exception: The Treasury will continue to produce pennies specifically for collectors. These coins must be sold such that the net receipts cover the total cost of production (including both fixed and variable costs).
• Legal Tender Status: The bill explicitly states that all existing one-cent coins already in circulation will remain legal tender. This means they can still be used to pay debts, taxes, and duties.

2. Cash Transaction Rounding

To compensate for the lack of pennies in cash transactions, the bill mandates a specific rounding system for any payment made with physical cash (including cash wages).

• Rounding Down: If a total ends in 1, 2, 6, or 7 cents, the amount is rounded down to the nearest 5-cent increment.
• Rounding Up: If a total ends in 3, 4, 8, or 9 cents, the amount is rounded up to the nearest 5-cent increment.
• Minimum Transaction: If a transaction totals only $0.01 or $0.02, it must be rounded up to $0.05.

3. Important Exceptions

The rounding requirements do not apply to non-cash payments. Transactions made via the following methods will still be processed to the exact cent:
* Credit and debit cards
* Electronic fund transfers (EFT)
* Checks, money orders, or gift cards
* Other negotiable instruments

Affected Parties

• The U.S. Treasury: Will cease large-scale production of the penny and manage a limited numismatic production line.
• Retailers and Businesses: Must implement the mandated rounding system for all cash-based sales and payroll.
• Consumers: Will experience a shift in how cash totals are calculated, though electronic payments will remain unchanged.
• Collectors: Will still have access to new pennies, provided they pay a price that covers production costs.

Timeline and Procedural Status

• Implementation: The cessation of minting and the new rounding rules both take effect one year after the date of enactment.
• Current Status: The bill was introduced in the Senate on April 30, 2025, and has been referred to the Committee on Banking, Housing, and Urban Affairs.