A penny rests on fallen leaves. As the federal government stops minting pennies, an Oregon bill waiting for Gov. Tina Kotek's signature provides guidance for businesses on rounding purchases to the nearest 5 cents. (Photo by Sherman Smith/Kansas Reflector)
Oregonians who pay in cash could pay a couple cents more or less under a bill headed to Gov. Tina Kotek.
House Bill 4178, which passed the Oregon Senate on a 26-2 vote Thursday evening, would allow transactions to be rounded to the nearest five cents for cash purchases. That means cash purchases ending in 1, 2, 6 or 7 cents would be rounded down and purchases ending in 3, 4, 8 or 9 cents would be rounded up.
The bill, requested by the Northwest Grocery Retail Association and sponsored by the House Rules Committee, is meant to provide clarity for businesses after the federal government stopped minting pennies last fall. It would require stores that choose to adopt this policy to apply it consistently and to place proper notice to their storefronts about the change.
Amanda Dalton, a lobbyist and president of the Northwest Grocery Retail Association, told lawmakers stores need urgent action as businesses increasingly lack a penny supply.
“Especially for our independent grocers, I’m getting a lot of phone calls. The penny’s still in circulation, but they have been told the last couple of months from their banks that they’re no longer providing them,” Dalton explained to the Senate Rules Committee. “So while we have customers bringing pennies in, we’re having struggles providing the cash.”
Because the bill only requires rounding for cash or mixed transactions using cash and card, it also required an amendment to consumer and discrimination laws, including a 2022 Oregon law that requires businesses to accept cash or coins.
The goal for a statewide streamlined policy is to fill a gap that the federal government left behind following its November decision to stop making the penny, advocates say. After waiting for months for federal guidance, it became clear that states would need to come up with guidelines themselves, Dalton said. At least 20 other states, including Washington and Idaho, are also incorporating similar legislation.
The lack of guidance on pennies is also disproportionately affecting rural communities, small businesses and low-income consumers, Pam Leavitt, a lobbyist for credit unions, told the House Rules Committee. As these populations are more likely to use cash transactions, she said consistent guidelines and communication of changes will provide additional transparency and clarity.
The Council on State Taxation, a nonprofit trade association based in Washington, D.C., urged changes to the bill. Dylan Waits, a tax counsel for the group, listed several concerns in written testimony, including that it overlooked non-storefront businesses, like plumbers or electricians who take cash from customers to perform services.
Additionally, Waits felt that notifying customers was costly for business owners and unnecessary for consumers, who are likely already aware of the penny shortage.
In testimony to the House Rules Committee, Dalton responded to Waits’ concern about certain cash-run businesses being excluded in this bill, but noted that due to the short session, the bill prioritized other components, such as getting an exception for the Oregon cash laws.
“I think the point is valid. I guess the request from us would be let’s try to move it forward and if we can keep fixing it we can,” Dalton said. “We would like to get it right but I don’t know if we have time to get it right for everybody.”
Dalton, meanwhile, said consumer groups were concerned about notifying customers, making it a priority when writing the legislation
“We don’t always love additional signs at our point of sale or at the front of our grocery stores, we are willing to agree to that and we do think that’s a consumer-friendly approach,” Dalton said.
One key amendment to the initial bill would allow government agencies to develop a rounding system as well, a key ask for Marjorie Taylor, the executive director of the Oregon Department of Revenue.
“State and local governments also receive cash payments, and we certainly make change. So we appreciate the provisions of the measure that allow us to establish surrounding policies that are appropriate for organizations,” Taylor said to the Senate Rules Committee.
As an emergency declaration, this bill would take effect immediately after the governor’s signature.
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