Idahoans are one step closer to being able to pay their state taxes with state-created medallions. The bill, sponsored by Rep. Phil Hart, R-Athol, was approved by House members on a vote of 51-14. The legislation also seeks to bring silver processing operations to the state by providing tax breaks for companies that would process the silver needed for the coin.
Hart said the bill serves several purposes, including creating jobs in Idaho, as well as giving citizens in the state a way to store wealth in what he believes is a more stable form of currency. Hart said that though the U.S. Constitution dictates that the government should use nothing but gold or silver for public currency, the federal government has essentially left that provision “in the rear view mirror.” The bill would give the state treasurer the ability to work with silver processing companies to develop a state medallion that the state would then be forced to accept as payment for taxes.
That, Hart believes, could bring hundreds, if not thousands of job to the state. In conjunction with the creation of the medallion, Hart’s bill would also try to lure silver processing companies to Idaho, and in particular, north Idaho, which, according to Hart, was once called “the silver capital of the world.” The bill would give companies that come to Idaho to process silver for the medallion a 10-year exemption from income taxes, as well as property taxes. The exemption would be open for 20 years and would sunset after that period of time.
The bill could also serve a third purpose that would be beneficial to the environment in the Kellogg area. Hart said that 14 years ago, the Environmental Protection Agency (EPA) put highly toxic material left over from the Bunker Hill Mine in what he called a large “plastic baggy.” The material inside is a silver-like substance that Hart believes could be used in production by high-tech industries. The material has an estimated worth of $200 million. The state owns that material and needs to deal with it soon because there is concern that the “baggy” is beginning to corrode and wear thin, which, if it happens, would negatively affect the water table of the area.
The coin would not have a face value determined by the state, however, because Hart believes that would violate the U.S. Constitution, which prohibits states from coining money. The price of the coin would alternatively be determined by market prices, though the value would also be pegged to the American Eagle Medallion.
Rep. Bob Nonini, R-Coeur D’Alene, told lawmakers that he grew up in Kellogg area, which was once a hotbed for mining activity. He said that parts of the area have become a ghost town, despite efforts to revitalize the local economy through tourism jobs, which Nonini said, pale in comparison to the jobs that Hart is trying to bring back to the area through his legislation.
Rep. Pete Nielsen, R-Mountain Home, said that lawmakers should do all that they can do to help bring the economy back through job creation. Nielsen explained that, according to his own research, silver could soon be in short supply due to its prevalent use in many of today’s technology.
“It would open up mines like you wouldn’t believe,” said Nielsen, speculating on what could happen if companies took advantage of the tax exemptions.
The measure now heads to the Senate for consideration.
(Note: Rep. Hart has a busy day in the Idaho Legislature. Another of Hart’s proposal’s, a bill to restrict the use of whole-body imaging machines in the state, also passed the House. View IdahoReporter.com’s coverage of the bill here.)