With pennies on the way out, Fiona McFarland’s cash-rounding proposal clears final committee

A proposal by Sarasota Republican Rep. Fiona McFarland establishing cash-rounding rules in a post-penny economy cleared its final House Committee, teeing it up for the House floor.

The Insurance & Banking Subcommittee voted to advance HB 951. The bill authorizes retailers to round to the nearest nickel in cash transactions if the 1-cent piece is no longer in production. 

Stuart Republican Rep. Toby Overdorf, who co-sponsored the bill, reminded Committee members that penny production stopped in November because the cost to produce the penny is “roughly 2.7 to 3 cents per penny.” He said the bill positions Florida to adapt in case customers and retailers ever catch themselves without exact change during a transaction.

“As a result, Florida needs to lead the way and we are going to do that by learning how to round to the nearest 5 or the nearest 0,” Overdorf said. 

“Yes members, you need to break out your elementary math. If your final cash transaction is a 1 or 2 cents, you’ll round down to 0. If it is a 3, a 4, a 6 or a 7 you will round to 5, the nearest nickel. If it continues to go up and is at 8 or 9, you’ll round up to the next 0.”

Committee questions were mostly meant to clear up confusion about whether the bill required rounding even if pennies are available during the transaction, or if rounding includes electronic transactions. 

McFarland emphasized that the bill does not prohibit the use of pennies if they are available.

“Don’t worry, if you have a penny you can still use it. If a retailer has a penny they can still use it to give change,” McFarland said. 

McFarland said the legislation is also designed to provide legal clarity and prevent disputes over rounding practices.

“We want to prevent against the circumstance where perhaps there’s a retailer out there that always wants to round in favor of themselves,” she said. “Most retailers that I’ve dealt with seem to round in favor of me, but if there (are) retailers that perhaps for whatever reason have decided they want to round in favor of them, we want to protect them from a potential legal situation.” 

In response to questions about electronic payments, Overdorf confirmed that credit card transactions would continue to be processed to the penny. The committee also adopted an amendment clarifying that money orders and gift cards are treated like credit cards for purposes of the bill.

“Yes, the credit card transactions will still be going to the penny” Overdorf said. 

McFarland said the proposal was developed in response to concerns raised by retailers and refined through stakeholder input.

“When I was first approached about this need from some of the retailers, I thought ‘I can’t believe we need to tell you how to round,” she said. “But in so much of what we do, the devil is in the details of passing a law like this.”

The subcommittee advanced HB 951 Wednesday. The Senate companion bill (SB 1074), sponsored by Pensacola Republican Sen. Don Gaetz, is already headed to its second Senate Committee stop, Finance and Tax, on Thursday. If approved, HB 951 would take effect immediately.