Bill Description: House Bill 513 would require businesses to accept cash as a method of payment for in-person retail transactions.
Analyst Note: House Bill 513 is similar to House Bill 256 from 2021, but it is improved by narrowing the scope of the bill to in-person retail transactions.
Does it violate the spirit or the letter of either the U.S. Constitution or the Idaho Constitution? Examples include restrictions on speech, public assembly, the press, privacy, private property, or firearms. Conversely, does it restore or uphold the protections guaranteed in the U.S. Constitution or the Idaho Constitution?
House Bill 513 amends Section 62-3620, Idaho Code, by adding a new subsection (h), which says, "A person who engages in business as a seller of goods or services via in-person retail transactions in this state shall accept cash as a method of payment along with any other methods of payment the seller may accept. As used in this subsection, 'retail transaction' means a transaction conducted in-person and does not include any telephone, mail, internet-based, or other transaction not conducted in-person."
Within the context of this statute, a seller is a "retailer engaged in business in this state" who has been issued a seller's permit.
Regulating money is one of the few powers explicitly granted to the federal government under Section 8 of the U.S. Constitution. Specifically, the federal government is granted the power to "coin money, regulate the value thereof, and of foreign coin, and fix the standard of weights and measures." It is likewise empowered to "provide for the punishment of counterfeiting the securities and current coin of the United States."
States, on the other hand, are constitutionally forbidden to "coin money" or "make any thing but gold and silver coin a tender in payment of debts."
The Coinage Act of 1965, specifically Section 31 U.S.C. 5103, entitled "Legal tender," states, "United States coins and currency (including Federal reserve notes and circulating notes of Federal reserve banks and national banks) are legal tender for all debts, public charges, taxes, and dues."
The U.S. Department of the Treasury addresses the question of whether private businesses can decide to not accept cash.
"This statute means that all United States money as identified above are a valid and legal offer of payment for debts when tendered to a creditor. There is, however, no Federal statute mandating that a private business, a person or an organization must accept currency or coins as for payment for goods and/or services. Private businesses are free to develop their own policies on whether or not to accept cash unless there is a State law which says otherwise. For example, a bus line may prohibit payment of fares in pennies or dollar bills. In addition, movie theaters, convenience stores and gas stations may refuse to accept large denomination currency (usually notes above $20) as a matter of policy."
While the federal government has constitutional authority to coin and regulate currency, it is left to the states to determine if private businesses are required to accept cash.
By requiring sellers to accept cash, House Bill 513 may serve to protect the privacy of buyers. If it targeted only the activities of credit card companies or merchants, the bill would not be a matter of individual liberty, but it goes far beyond that. It was revealed in 2013 that the widespread and warrantless data monitoring by the National Security Agency included not just mobile phone metadata — the most widely reported target of NSA activity — but credit and debit card transactions as well.
Does compelling private businesses to take a step that might protect individual privacy from unconstitutional surveillance constitute a compelling government interest for the state of Idaho? Does the value of this step outweigh the potential harm done to businesses by imposing a new regulation? Protecting individual privacy is a noble goal, but should it require revoking the freedom of a business to decide which forms of payment it will accept?
Does it give government any new, additional, or expanded power to prohibit, restrict, or regulate activities in the free market? Conversely, does it eliminate or reduce government intervention in the market?
While House Bill 513 addresses some of the objections raised last year to House Bill 256, it still would impose a new regulation on businesses conducting in-person transactions. As discussed above, there is value in protecting the privacy of Idahoans, but that value must be weighed against the harm of new regulation.