Exchange of Coin

Published date03 May 2024
Record Number2024-09453
Citation89 FR 36721
CourtUnited States Mint
SectionProposed rules
Federal Register, Volume 89 Issue 87 (Friday, May 3, 2024)
[Federal Register Volume 89, Number 87 (Friday, May 3, 2024)]
                [Proposed Rules]
                [Pages 36721-36723]
                From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
                [FR Doc No: 2024-09453]
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                DEPARTMENT OF THE TREASURY
                United States Mint
                31 CFR Part 100
                Exchange of Coin
                AGENCY: United States Mint, Department of the Treasury.
                ACTION: Notice of proposed rulemaking; withdrawal of proposed rule.
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                SUMMARY: The United States Mint proposes to remove its regulations
                relating to the exchange of bent and partial coin. The proposed removal
                will end the exchange program for bent and partial coin. This document
                also withdraws the notice of proposed rulemaking relating to these same
                regulations that was published in the Federal Register for May 5, 2021.
                DATES:
                 Comment due date: July 2, 2024.
                 Withdrawal: As of May 3, 2024 the proposed rule published May 5,
                2021, at 86 FR 23877 is withdrawn.
                ADDRESSES: The United States Mint invites comments on all aspects of
                this proposed revision. You may send comments by any of the following
                methods:
                 Federal eRulemaking Portal: www.regulations.gov. Follow
                the instructions for sending comments.
                 Mail: Submit all written comments to Mutilated Coin
                Redemption Program; Manufacturing Directorate; United States Mint; 801
                9th Street NW; Washington, DC 20220.
                 Hand Delivery/Courier: Same as mail address.
                 Instructions: All submissions received must include the agency name
                for this rulemaking. All comments received will be posted without
                change to regulations.gov, including any personal information provided.
                FOR FURTHER INFORMATION CONTACT: Apryl Whitaker, Senior Legal Counsel,
                Office of the Chief Counsel, United States Mint, at (202) 354-7938 or
                [email protected].
                SUPPLEMENTARY INFORMATION:
                I. Background
                 The Treasury regulations appearing at 31 CFR 100.11, are
                promulgated under 31 U.S.C. 5120, and relate to the exchange of bent
                and partial coin. The last amendment to 31 CFR part 100, subpart C, was
                on December 20, 2017. On May 5, 2021, the United States Mint issued a
                notice of proposed rulemaking, proposing certain revisions to these
                regulations (86 FR 23877). Since then, the United States Mint has
                decided to close the bent and partial coin exchange program.
                II. This Proposed Rule
                 For many years, the United States Mint has redeemed bent and
                partial coins for full face value. However, in recent years, the volume
                of coins submitted for possible redemption has greatly increased, and
                there is no practical way for the United States Mint to expand the
                resources devoted to the program to meet the full level of demand. This
                is particularly true where submissions must be carefully evaluated to
                ensure that counterfeit coins are not accepted to the program and where
                the condition of many coins, particularly large volumes of coins
                damaged by recycling or industrial processes, makes authentication
                difficult and time-consuming. An increasing number of counterfeits has
                been identified in imported coins intercepted by law enforcement in
                recent years, as well in as several large submissions to the Mutilated
                Coin Redemption Program. The United States Mint Philadelphia facility's
                capacity to process mutilated coins is limited by physical storage
                capacity, caseload complexity, and workload. Authentication procedures
                require extensive time and resources. The United States Mint has
                dedicated substantial time and resources to the bent and partial coin
                exchange program, in addition to operating the program at a loss by
                paying out face value for redemptions. With the closure of the exchange
                program, these resources could instead be redirected toward the United
                States Mint's core mission of manufacturing and distributing
                circulating, precious metal, and collectible coins and national medals,
                and providing security over assets entrusted to the United States Mint.
                 The melting of dimes, quarters, half-dollar, and dollar coins is
                not regulated by the United States Mint. The public may melt and reuse
                certain coins consistent with 31 CFR part 82. While there is a
                prohibition against melting pennies and nickels, there is a specific
                exception at 31 CFR 82.2 for coins melted or treated incidental to
                recycling other materials if (1) the coins were not added to the other
                materials for their metallurgical value, (2) the volumes of the coins,
                relative to the volumes of the other materials recycled, makes it clear
                that the presence of such coins is merely incidental, and (3) the
                separation of the coins from the other materials would be impracticable
                or cost prohibitive. See 31 CFR 82.2(c). This exception extends to the
                melting of coins that become mutilated due to treatment that is itself
                within the scope of the exception. If an
                [[Page 36722]]
                exception does not apply, then applications for licenses to melt
                pennies and nickels should be transmitted to the Director, United
                States Mint; 801 9th Street NW; Washington, DC 20220. See 31 CFR
                82.2(f).
                III. Procedural Analysis
                Regulatory Planning and Review
                 The Office of Management and Budget has determined that this
                proposed rule does not constitute a ``significant regulatory action''
                under Executive Order 12866, as amended.
                Regulatory Flexibility Act Analysis
                 Congress enacted the Regulatory Flexibility Act (RFA) (5 U.S.C. 601
                et seq.) to address concerns related to the effects of agency rules on
                small entities, and the United States Mint is sensitive to the impact
                its rules may impose on small entities. In this case, the United States
                Mint believes that the proposed rule likely would not have a
                ``significant economic impact on a substantial number of small
                entities.'' 5 U.S.C. 605(b). First and foremost, the regulations do not
                directly regulate any entities. The redemption of bent and or partial
                coins is a discretionary service offered to the public; participation
                is voluntary. Comments are requested on whether the proposed rule would
                have a significant economic impact on a substantial number of small
                entities.
                 The RFA requires agencies either to provide an initial regulatory
                flexibility analysis with a proposed rule or to certify that the
                proposed rule will not have a significant economic impact on a
                substantial number of small entities. In accordance with section 3(a)
                of the RFA, the United States Mint has reviewed the proposed
                regulation. While the United States Mint believes that the proposed
                rule--or in this case--the removal thereof, likely would not have a
                significant economic impact on a substantial number of small entities
                given that the regulations do not directly regulate any entities, the
                United States Mint has prepared an Initial Regulatory Flexibility
                Analysis in accordance with 5 U.S.C. 603. The United States Mint will,
                if necessary, conduct a final regulatory flexibility analysis after
                consideration of comments received during the public comment period.
                1. Statement of the Need for, Objectives of, and Legal Basis for, the
                Proposed Rule
                 The regulations at 31 CFR part 100, subpart C, are promulgated
                under 31 U.S.C. 5120, and provide for the exchange of uncurrent, bent,
                partial, fused, and mixed coins. For the reasons discussed in this
                preamble, the United States Mint has decided to close the bent and
                partial coin exchange program, which is a discretionary program that is
                not mandated by law.
                2. Small Entities Affected by the Proposed Rule
                 The number of entities tendering significant quantities of coins
                for redemption in the past has been small. A large number of entities
                redeeming coins in the past were individuals--not businesses. A wide
                variety of businesses, such as municipal entities, recyclers, coin
                processors, amusement parks, auto shops, and waste management companies
                have applied for coins to be redeemed in the past. The United States
                Mint invites information and comment on the number of small entities to
                which the proposed rule would apply and the extent to which the
                proposed rule may affect them, including any costs such as lost
                revenue.
                3. Projected Reporting, Recordkeeping, and Other Compliance
                Requirements
                 The United States Mint has not identified any reporting,
                recordkeeping, or other compliance requirements associated with the
                proposed rule.
                4. Identification of Duplicative, Overlapping, or Conflicting Federal
                Rules
                 The United States Mint has not identified any Federal rules that
                duplicate, overlap, or conflict with the proposed rule. The United
                States Mint seeks comment regarding any statutes or regulations that
                would duplicate, overlap, or conflict with the proposed rule or in this
                case--the removal thereof.
                5. Significant Alternatives to the Proposed Rule
                 The United States Mint considered alternatives to the proposed
                regulations. For example, the United States Mint considered re-opening
                the program under the new parameters identified in the May 5, 2021,
                Federal Register notice (86 FR 23877), proposing certain revisions to
                these regulations that would establish weight and shipment limits per
                participant and would prohibit the submission of certain kinds of coins
                or coins with certain kinds of damage. Re-opening the program--even
                with these restrictions--would entail costs to the United States Mint.
                Further, the volume of coins submitted for possible redemption has
                greatly increased over the years, and there is no practical way for the
                United States Mint to expand the resources devoted to the program to
                meet the full level of demand. In response to the United States Mint's
                May 5, 2021, Federal Register Notice (86 FR 23877), several commenters
                expressed concern with the proposed 1,000 lb. per month submission
                limit, indicating that businesses have large volumes of coins to be
                redeemed that well exceed the monthly or annual limit. For example, one
                vendor alone indicated that at a rate of 1,000 lbs. per month, it would
                take over seven years just to redeem a portion of its inventory. The
                prior rulemaking indicated that, under these limits, participants would
                not be guaranteed the right to submit 1,000 lbs. per month; nor would
                the United States Mint have capacity even at this low rate to evaluate
                more than a small number of submissions per month.
                 The United States Mint considered re-opening the program for a
                short, limited time period under the new parameters identified in the
                May 5, 2021, Federal Register notice (86 FR 23877) with a published
                sunset date to allow those who have stored their mutilated coins in
                anticipation of the program reopening to submit their mutilated coins.
                It is clear, however, that there is no practical way for the United
                States Mint to expand the resources devoted to the program to meet the
                full level of demand, even for a limited time.
                IV. Request for Comment
                 Before the proposed removal of the Treasury regulations at 31 CFR
                100.11 are adopted as final regulations, the United States Mint will
                consider any comments that are submitted to the bureau as prescribed in
                this preamble under the DATES and ADDRESSES sections. The United States
                Mint and the Department of the Treasury request comments on all aspects
                of the proposed revisions to these regulations and the end of the
                exchange program.
                List of Subjects in 31 CFR Part 100
                 Coins.
                 For the reasons set forth in the preamble, the United States Mint
                proposes to amend 31 CFR part 100 as follows:
                PART 100--EXCHANGE OF PAPER CURRENCY AND COIN
                0
                1. The authority citation for part 100 continues to read as follows:
                 Authority: 31 U.S.C. 321.
                Sec. 100.11 [Removed and Reserved]
                0
                2. Remove and reserve Sec. 100.11.
                0
                3. Amend Sec. 100.12 by revising paragraph (b) to read as follows:
                [[Page 36723]]
                Sec. 100.12 Exchange of fused or mixed coin.
                * * * * *
                 (b) Fused and mixed coins. The United States Mint will not accept
                fused or mixed coins for redemption.
                Sec. 100.13 [Amended]
                0
                4. Amend Sec. 100.13 by:
                0
                a. Removing paragraph (a);
                0
                b. Redesignating paragraphs (b) through (d) as paragraphs (a) through
                (c), respectively; and
                0
                c. In newly redesignated paragraph (b), removing the phrase ``to any
                bent or partial''.
                Ventris C. Gibson,
                Director, United States Mint.
                [FR Doc. 2024-09453 Filed 5-2-24; 8:45 am]
                BILLING CODE 4810-37-P
                

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