Exchange of Coin, 36721-36723 [2024-09453]

Agencies

• United States Mint
• DEPARTMENT OF THE TREASURY

[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2021, at 86 FR 23877 is withdrawn.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

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1. The authority citation for part 100 continues to read as follows:

    Authority:  31 U.S.C. 321.


Sec.  100.11   [Removed and Reserved]

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2. Remove and reserve Sec.  100.11.
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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]

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4. Amend Sec.  100.13 by:
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a. Removing paragraph (a);
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b. Redesignating paragraphs (b) through (d) as paragraphs (a) through 
(c), respectively; and
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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