House passes permissive cash-rounding bill as penny production stops

The Tennessee House on Feb. 25 passed House Bill 17-44, a bill that creates a permissive cash-rounding system private businesses may use when pennies are no longer a practical means to make exact change.

Chairman Baum, sponsor of the bill, told members the federal government has stopped producing pennies and at some point pennies may no longer be in circulation. Under the bill’s framework, private sellers may round cash transactions: amounts ending in 1–2 cents would round down, 3–4 cents round up, and similar rules for other cent values to the nearest nickel. Baum said the measure provides a "safe harbor" so businesses adopting the rounding approach would not face liability under the 1977 Consumer Protection Act.

Members asked whether a uniform standard should be mandated so consumers would be treated the same across businesses and whether receipts should disclose rounding in order to provide transparency. Representative Powell suggested requiring businesses to show on receipts whether a purchase was rounded up or down; Baum responded the system is permissive and businesses can choose alternative rounding methods (including always rounding down to favor consumers) but only those using the statutory system would receive liability protection.

Representative Love confirmed the bill applies only to cash transactions and does not affect electronic payments. Representative Hawk observed the loss of penny production is a jobs issue in his district, noting the historical manufacture of penny slugs in Greene County.

After brief floor discussion, members voted to pass HB 17-44. The clerk recorded the tally in favor and the presiding officer declared the bill passed on third and final consideration.

The bill creates an optional compliance pathway for businesses to handle cash-change rounding in a penny-scarce environment; sponsors said it protects businesses from consumer-protection claims, while members asked for continued transparency for consumers.