99-1683. Exchange of Coin

[Federal Register Volume 64, Number 17 (Wednesday, January 27, 1999)]
[Proposed Rules]
[Pages 4063-4065]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-1683]


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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.

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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 
[phone]; (Technical) Andrew Cosgarea, Associate Director, Head, 
Circulating Coinage Business Unit [phone]

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 [phone] or sent 
by electronic mail to: [e-mail]. 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. 99-1683 Filed 1-26-99; 8:45 am]
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