Exchange of paper currency and coin: Melting discontinuance and substitution of mechanical means to destroy mutilated coins,

[Federal Register: January 27, 1999 (Volume 64, Number 17)]

[Proposed Rules]

[Page 4063-4065]

From the Federal Register Online via GPO Access [wais.access.gpo.gov]

[DOCID:fr27ja99-12]

DEPARTMENT OF THE TREASURY

United States Mint

31 CFR Part 100.11, 100.12

RIN 1525-ZA00

Exchange of Coin

AGENCY: Department of the Treasury, United States Mint.

ACTION: Proposed Rule; Request for Comments.

SUMMARY: In furtherance of the U.S. Mint's efforts to improve the environment, reduce energy consumption and enhance workplace safety and efficiency, the Mint wishes to discontinue melting and instead employ mechanical means as a means of destroying mutilated coins. These mechanical means cannot be used to process fused or mixed coins, which represent a very small percentage of the coins redeemed annually by the Mint. Accordingly, the proposed amendment would also allow the Mint to discontinue accepting fused or mixed coins for redemption, and require that all bent or partial coins submitted for redemption be separated by denomination in order to be acceptable.

DATES: Submit comments on or before March 29, 1999.

ADDRESSES: Address all comments concerning this proposed rule to Gwen H. Mattleman, United States Mint, 633 Third Street NW , Washington DC 20220. See Supplementary Information for electronic access and filing information.

FOR FURTHER INFORMATION CONTACT: (Legal) Kenneth Gubin, Chief Counsel (202) 874-5953; (Technical) Andrew Cosgarea, Associate Director, Head, Circulating Coinage Business Unit (202) 874-6100

SUPPLEMENTARY INFORMATION:

Background

Part 100, Subpart C of Treasury Regulations 31 CFR, promulgated under 31 U.S.C. 5120, provides among other things for the exchange of bent, partial, fused and mixed coins. Bent, partial and mixed coins (i.e., coins of several alloy categories presented together) which are submitted and accepted for redemption are currently separated by alloy, melted and cast into ingots or bars by the United States Mint. These bars are furnished to the Mint's suppliers and used to fabricate coinage strip in lieu of virgin copper and nickel. Fused coins are also melted and cast into bars, but since this material has been contaminated with base elements such as lead and arsenic it is unsuitable for using in fabricating coinage strip and is instead sold as scrap through the General Services Administration. The Mint has identified and is actively pursuing initiatives to improve the environment, reduce energy consumption and enhance efficiency and workplace safety. Melting coins submitted for redemption by the Mint's current heat induction procedures is not energy efficient and adds to the Mint's annual electrical expenses. It is also a physically challenging process for the Mint's employees. As metal is heated and poured in its molten state into ingots, it can reach 1500 degrees Celsius. Ingots weighing 60 lbs. must be lifted and moved manually. Therefore, the Mint wishes to discontinue melting and use mechanical means (such as a hammer mill or rolling mill) to destroy mutilated coins. However, as the proposed mechanical destruction process requires that coins be separated by alloy, these mechanical methods cannot be used to process fused coins or unsorted (mixed) coin lots. Because mutilated coins delivered in lots of mixed alloy categories often are in a condition which precludes machine sorting, redemption of mixed coins can be labor-intensive and inefficient. As shown by the charts below, fused and mixed coins represent a very small component of the United States Mint's annual coin redemptions.

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For the foregoing reasons, the Mint wishes to amend Part 100 of 31 CFR to discontinue acceptance of fused and mixed coins for redemption, and require that all bent or partial coins be separated by denomination when submitted for redemption.

Certifications

This proposed regulation is not a significant regulatory action for purposes of Executive Order 12866. The Mint has paid out less than $8 million in total annual mutilated coin redemptions for each of 1996, 1997 and the seven-month period ending July 31, 1998. For each such period, fused and mixed coins as a group constitute less than 1% of total coins redeemed, and approximately 1% or less of the total lots redeemed. Fused and mixed coins are currently redeemed at metal rates lower than the rates paid for sorted coins. For these reasons, the United States Mint does not believe that the proposed regulation will have an annual effect on the economy of $100 million or more or materially adversely affect any sector of the economy, productivity, competition, jobs, the environment, public health, or State, local, or tribal governments or communities. The Mint does not anticipate that the rule will result in inconsistency, interfere with another agency's actions, materially alter the budgetary impact of entitlements, grants, user fees, or loan programs or the rights and obligations of recipients thereof, or raise novel legal or policy issues arising out of legal mandates, the President's priorities, or the principles set forth in Executive Order 12866. It is hereby certified that this proposed regulation will not have a significant economic impact on a significant number of small entities. Accordingly, a regulatory flexibility analysis is not required. Lots of fused and mixed coins recorded together as a group constituted approximately 1% or less of the total coin lots redeemed for each of calendar 1996, 1997 and the period ending July 31, 1998, amounting to 23, 19 and 13 lots, respectively, of fused and mixed coins. Although the Mint does not maintain records which consistently indicate the business or personal nature of the transactions conducted by individuals or entities tendering coins for redemption, the majority of these lots were submitted by individuals transacting with the Mint in their own name. Even if each such individual were a ``small entity'' within the meaning of 5 USC 604(a), the Mint does not believe that this quantity of lots indicates that a significant number of small entities will be significantly impacted if the Mint were to require sorting of coins previously accepted as mixed and discontinue accepting fused coins.

Comments

In lieu of hand-delivery, comments on the proposed rules may be faxed to the attention of Gwen H. Mattleman at (202) 874-6479 or sent by electronic mail to: legal@usmint.treas.gov. Hand delivery, U.S. mail or fax are preferred.

List of Subjects in 31 CFR Part 100 Subpart C

Currency.

For the reasons set forth in the preamble, the United States Mint proposes to amend 31 CFR Part 100 substantially as follows:

PART 100--EXCHANGE OF PAPER CURRENCY AND COIN

Subpart C--Exchange of Coin

1. The authority citation for Part 100 Subpart C is revised to read as follows:

   Authority: 31 U.S.C. 321.

2. Revise 100.11(b) to read as follows:

   Sec. 100.11 Exchange of bent and partial coins.

   * * * * *

   (b) Redemption basis. Bent and partial coins shall be presented separately by denomination category in lots of at least one pound for each category. Bent and partial coins shall be redeemed on the

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   basis of their weight and denomination category rates (which is the weight equivalent of face value). If not presented separately by denomination category, bent and partial coins will not be accepted for redemption. Denomination categories and rates are: Cents, @ $1.4585 per pound; Nickels, @ $4.5359 per pound; Dimes, Quarters, Halves, and Eisenhower Dollars @$20.00 per pound; and Anthony Dollars @ $56.00 per pound. Copper plated zinc cents shall be redeemed at the face value equivalent of copper one cent coins. * * * * *

3. Revise 100.12(b) to read as follows:

   Sec. 100.12 Exchange of fused and mixed coins.

   * * * * *

   (b) The United States Mint will not accept fused or mixed coins for redemption. Philip N. Diehl, Director.

   [FR Doc. 99-1683Filed1-26-99; 8:45 am]

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