THE GENERAL ASSEMBLY OF PENNSYLVANIA

HOUSE BILL

INTRODUCED BY CREIGHTON, BARBIN, DENLINGER, GEIST, GINGRICH, LAWRENCE, MURT, RAPP, SWANGER AND TALLMAN, JUNE 17, 2011

REFERRED TO COMMITTEE ON FINANCE, JUNE 17, 2011  

AN ACT

Relating to legal tender.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1.  Short title.

This act shall be known and may be cited as the Legal Tender

Act.

Section 2.  Definitions.

The following words and phrases when used in this act shall

have the meanings given to them in this section unless the

context clearly indicates otherwise:

"Capital gain transaction."  A transaction that results in a

short-term capital gain or long-term capital gain as defined in

Section 1222 of the Internal Revenue Code of 1986 (Public Law

99-514, 26 U.S.C. § 1222).

"Gold and silver coin."  A gold and silver coin issued and

deemed legal tender by the Federal Government.

Section 3.  Legal tender.

(a)  General rule.--Gold and silver coins shall be considered

legal tender in this Commonwealth.  

(b)  Prohibited activity.--A person shall not compel any

other person to tender or accept gold and silver coin that is

issued and deemed legal tender by the Federal Government.

Section 4.  Sales tax exemption.

The exchange of gold and silver coins issued and deemed legal

tender by the Federal Government for another form of legal

tender shall be exempt from taxation under Article II of the act

of March 4, 1971 (P.L.6, No.2), known as the Tax Reform Code of

1971.

Section 5.  Tax credit.

(a)  General rule.--A nonrefundable credit is established for

capital gains incurred from the exchange of gold and silver

coins issued and deemed legal tender by the Federal Government

for other forms of legal tender. For taxable years beginning on

or after December 31, 2011, a claimant, estate or trust may

claim the credit, which shall be equal to 5% of the total amount

of the short-term capital gains and long-term capital gains of

exchanges for the applicable time period.

(b)  No carryforward or carryback.--Neither carryforward nor

carryback of tax credits under this section shall be permitted.

Section 6.  Study.

The Legislative Budget and Finance Committee shall conduct a

study concerning the feasibility of establishing an alternative

form of legal tender for payment of debts, public charges, taxes

and dues within this Commonwealth which, at a minimum, shall

recommend whether legislation should be drafted to establish an

alternative form of legal tender.

Section 7.  Severability clause.

The provisions of this act are severable. If a section of

this act or application thereof to any person or circumstance is

declared invalid by final decision of a court of competent

jurisdiction, the remainder of this act shall be given effect

without reference to the invalid section or application.

Section 8.  Effective date.

This act shall take in 60 days.