In 2010, Congress drafted the Coin Modernization, Oversight and Continuity Act, authorizing the Secretary of the Treasury to undertake research into alternative metallic materials for all circulating coins, with a view to reducing production costs. That act also would require the Secretary to make a report to Congress every two years, detailing current coin production costs and analyses of possible alternative metallic content.
Before the act took its final form, the National Automatic Merchandising Association was invited to testify about the effects that changing the metallic composition of coins might have on the vending industry. Then-NAMA chairman Craig Hesch, A.H. Vending & Food Service (Rolling Meadows, IL), explained that the association's cost estimate for reprogramming or replacing coin validation equipment on vending machines was from $100 to $500 per machine.
NAMA was effective in influencing the language of the final version of the bill, which was signed into law by President Obama. Among other things, it requires that the Treasury Department (and the U.S. Mint, which is its producer of coins) shall include "[f]actors relevant to the ease of use and ability to co-circulate new coinage materials, including the effect on vending machines and commercial coin processing equipment" in its evaluation of possible new metallic composition. The Treasury is instructed to "[make] certain, to the greatest extent practicable, that any new coins work without interruption in existing coin acceptance equipment without modification."
The first of the required biennial reports was delivered to the Congress in December 2012. This report concluded that the Mint needed an extension of time to further study the issue through more research and development.
During NAMA's 2013 Public Policy Conference, industry leaders held successful meetings with the U.S. Mint and Congressional leaders to provide further input on the potential effects on the industry. Both were very receptive and responsive to industry concerns.
NAMA looks forward to continuing its positive working relationship with the Mint and providing formal comments to the agency before the next Biennial Report is presented to Congress this fall. It is important to remember that the Mint is only tasked with making a recommendation to Congress. Once that recommendation is presented, a change in coinage cannot be completed until passed in legislation by Congress and signed by the President.
About NAMA Government Affairs: The National Automatic Merchandising Association's government affairs team includes Eric Dell, senior vice-president; Sheree Edwards, regional legislative director; and Sandy Larson, senior director and counsel. The three legislative experts work with government officials to obtain fair and equitable treatment for the vending, office coffee service and foodservice management industry.
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Editor's Note: In 1965, the United States experienced a shortage of circulating coins. This was partly caused by the steady increase in the price of silver as the U.S. dollar's value diminished among international currencies. Silver then was a principal component of the alloy from which quarters and dimes were struck. Congress requested the U.S. Treasury Department's Mint to conduct research into metals other than silver that might be used for the nation's coin supply.
The National Automatic Merchandising Association played a major role in working with the Mint to make sure that the metallic composition ultimately chosen would produce coins compatible with existing vending machine coin validation systems. The resulting Coinage Act of 1965, which gave us the present "clad" cupronickel dime and quarter, was endorsed by the National Automatic Merchandising Association. It was signed into law by President Lyndon B. Johnson on July 23, 1965.
In the 49 years that have passed since then, NAMA has continued to work closely with the U.S. Treasury to insure the compatibility of the nation's currency with increasingly prevalent automated banknote acceptance and processing equipment. And coins are in the news again, as NAMA reports above.