[Federal Register Volume 82, Number 243 (Wednesday, December 20, 2017)]
[Rules and Regulations]
[Pages 60309-60312]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-27026]
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DEPARTMENT OF THE TREASURY
United States Mint
31 CFR Part 100
Exchange of Coin
AGENCY: United States Mint, Treasury.
ACTION: Final rule.
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SUMMARY: This final rule revises Treasury regulations relating to the
exchange of uncurrent, bent, partial, fused, and mixed coins, and to
update the regulations to comply with the requirement for orderly
codification. The revisions include updates to redemption rates and
procedures that will enhance the integrity of the acceptance and
processing of bent and partial United States coins.
DATES: Effective Date: January 19, 2018.
FOR FURTHER INFORMATION CONTACT: Sheila Barnett, Legal Counsel; Office
of the Chief Counsel; United States Mint; at (202) 354-7624 or
[email protected].
SUPPLEMENTARY INFORMATION:
I. Background
The Treasury Regulations appearing at 31 CFR part 100, subpart C,
are promulgated under 31 U.S.C. 5120, and relate to the exchange of
uncurrent, bent, partial, fused, and mixed coins. The last amendment to
31 CFR part 100, subpart C, was on August 23, 1999. Since then, the
United States Mint identified portions of the regulations in need of
revision to update redemption rates and procedures, and to enhance the
integrity of the acceptance and processing of bent and partial United
States coins. The United States Mint was also informed that the current
structure of part 100 does not meet the orderly codification
requirements of 1 CFR 8.2, 21.8, and 21.9.
The first category of revisions updates and improves the redemption
process of bent and partial coins to enhance security and ensure the
integrity of United States coinage. The revisions establish procedures
for certifying participants based on submission amounts and frequency,
sampling submissions to authenticate material, conducting site visits
for certain participants, and requiring information on how the
submission came to be bent or partial. The revisions also inform
submitters of required banking information. Lastly, the revisions
provide the United States Mint discretion to cease processing
submissions that appear to be part of an illegal scheme, or contain
material that is not identifiable as bent or partial United States
coinage.
The second category of revisions relates to the redemption rates
for uncurrent coins and bent and partial coins that have been withdrawn
from circulation. For uncurrent coins, the revisions clarify the
procedure for redemption by instructing the public to deposit the
uncurrent coins with a financial institution that will accept them, or
with a depository institution that has a direct relationship with a
Federal Reserve Bank. The revisions make clear that a Federal Reserve
Bank will redeem uncurrent coins based on the policies described in the
Federal Reserve's Operating Circular 2.
For bent or partial coins, the revisions update the redemption
rates of certain coins to reflect the current values and compositions
of coins being redeemed. For example, in the prior regulation, the
redemption rate for one-cent coins was $1.4585 per pound; this
redemption rate was derived from the weight of bronze one-cent coins
(3.11 grams or 0.1097 ounces each), which the United States Mint has
not minted and issued since 1982. In 1983, the United States Mint began
minting and issuing only copper-plated zinc one-cent coins, which weigh
2.50 grams or 0.0882 ounces each. Due to the weight difference, a pound
(the minimum weight for redemption) of copper-plated zinc one-cent
coins contains a higher quantity of coins than a pound of bronze one-
cent coins. The revisions make the redemption rate $1.8100 for a pound
consisting solely of copper-plated zinc one-cent coins. For bronze one-
cent coins, or a mix of both bronze and copper-plated zinc one-cent
coins, the lower redemption rate of $1.4585 will apply. A similar
update is made to the redemption rate for $1 coins.
The third category of revisions clarifies that the United States
Mint will not accept fused coins. The United States Mint will also not
accept mixed coins (coins of several alloy categories presented
together) for redemption, with the exception of bent or partial one-
cent coins and $1 coins that are presented in mixed years.
[[Page 60310]]
The fourth category of revisions puts the public on notice that the
Director of the United States Mint may provide information pertaining
to any bent or partial coin submission to law enforcement officials or
other third parties for purposes of investigating related criminal
activity or for purposes of seeking civil judgment. The revisions also
notify potential participants that they may be held criminally and/or
civilly liable, fined, and/or imprisoned for fraudulent submissions.
Finally, the United States Mint clarifies which of the various
offices and bureaus within the Department of the Treasury has
authorization to update the different subparts within part 100.
II. Public Participation
In 82 FR 43730, Sep. 19, 2017, the United States Mint issued a
notice of proposed rulemaking (NPRM) to revise redemption rates and
procedures relating to the exchange of uncurrent, bent, partial, fused,
and mixed coins, and requested comments on the proposed revisions. The
United States Mint received fourteen comments. The majority of comments
were from individuals and businesses who previously participated in the
exchange program. One comment was from a trade association representing
the private, for-profit recycling industry.
Most comments expressed support for the revisions. Many of the
comments raised questions about details of the exchange program that
specifically relate to operating procedures. Those instructions and
other details relating to the exchange of bent and partial coins will
be provided to the public on the United States Mint's website.
Instructions and other details related to the exchange of uncurrent
coins will be described in the Federal Reserve's Operating Circular 2.
If a comment is not addressed in the summary below, it is because the
comment was more specific to those operating procedures and details, or
the comment was not responsive to the proposed revisions.
Certification Process
The majority of comments supported a participant certification
process. A few comments expressed confusion or dissatisfaction with
certification occurring prior to submission of coins. One comment said
it would be logically inconsistent to require certification prior to
submission because the thresholds related to certification are related
to the submission. The United States Mint does not believe it is
inconsistent to require certification prior to submission. Participants
who will exceed or plan to exceed the annual weight threshold will be
required to be certified by the United States Mint prior to submission.
The annual weight threshold, along with other certification
instructions, will be provided on the United States Mint's website.
One comment asked whether a participant would be required to go
through the certification process prior to each submission. The answer
is no. A recertification will be required every three years for those
participants whose recurring submissions exceed the annual submission
threshold, unless the United States Mint decides in its discretion that
recertification is needed earlier than the three year period. Details
and instructions on the certification process will be available on the
United States Mint's website.
Foreign Participants
Two comments expressed concern with the regulations applying
equally to domestic and foreign recycling companies. Foreign
individuals and businesses will be given the same opportunity to
participate in the exchange program. The requirement to provide payment
information for a bank or other financial institution in the United
States applies equally to domestic and foreign participants.
Request To Clarify Denomination Categories
One comment requested clarity on how to separate bent or partial
coins for redemption. Specifically, the comment cited the requirement
of the prior regulation to separate bent or partial coins into the
following denomination categories of at least one pound: One-cent
coins; 5-cent coins; dime, quarter-dollar, and half-dollar coins; and
$1 coins. The United States Mint is only revising the redemption rates,
not the denomination categories themselves. Paragraph (d) is revised to
clarify that lots of at least one pound must still be separated into
the denomination categories of one-cent coins; 5-cent coins; dime,
quarter-dollar, and half-dollar coins; and $1 coins.
Conclusion
After reviewing and considering all timely comments received in
response to the NPRM, the United States Mint decided to move forward
with the proposed regulatory text, with a minor editorial change to
clarify the denomination categories. The United States Mint has
determined that this minor editorial change is consistent with the
intent that was proposed in the NPRM and does not add any additional
burden upon the public than was already proposed in the NPRM.
III. Procedural Analysis
Regulatory Planning and Review
The Office of Management and Budget determined that this rule does
not constitute a ``significant regulatory action'' under Executive
Order 12866 or Executive Order 13771.
Regulatory Flexibility Act Analysis
It is hereby certified that the revisions will not have a
significant economic impact on a substantial number of small entities.
Accordingly, a regulatory flexibility analysis under the Regulatory
Flexibility Act, 5 U.S.C. 601 et seq., is not required. First, the
regulations do not directly regulate any entities. The redemption of
uncurrent, bent, or partial coins is a discretionary service offered to
the public; participation is voluntary. Second, many of the coins
presented for redemption in the past were submitted by individuals
transacting with the United States Mint in their own names. The number
of entities tendering significant quantities of coins for redemption is
small. Even if each such individual or entity qualified as a ``small
entity'' within the meaning of 5 U.S.C. 604(a), the United States Mint
does not believe that the revisions are likely to have a significant
economic impact. The revisions do not change or limit the scope of what
may be submitted for redemption or who may submit them. The revisions
may require additional information from participants to deter potential
fraud and abuse, but the added administrative costs for participants
are expected to be minimal.
List of Subjects in 31 CFR Part 100
Coins.
Words of Issuance
For the reasons set forth in the preamble, the United States Mint
amends 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.
0
2. Amend Sec. 100.2 by designating the undesignated paragraph as
paragraph (a) and adding paragraph (b) to read as follows:
Sec. 100.2 Scope of regulations; transactions effected through
Federal Reserve banks and branches; distribution of coin and
currencies.
* * * * *
(b) The Department of the Treasury has authorized amendments to
this part by the following bureaus and offices:
[[Page 60311]]
(1) This section--Office of the Secretary.
(2) Subpart A--Office of the Secretary.
(3) Subpart B--Bureau of Engraving and Printing.
(4) Subpart C--United States Mint.
(5) Subpart D--Office of the Secretary.
0
3. Revise subpart C to read as follows:
Subpart C--Request for Examination of Coin for Possible Redemption
Sec.
100.10 Request for examination of uncurrent coin for possible
redemption.
100.11 Request for examination of bent or partial coin for possible
redemption.
100.12 Exchange of fused or mixed coin.
100.13 Notices.
Sec. 100.10 Request for examination of uncurrent coin for possible
redemption.
(a) Definition. Uncurrent coins are whole U.S. coins which are
merely worn or reduced in weight by natural abrasion yet are readily
and clearly recognizable as to genuineness and denomination and which
are machine countable.
(b) Redemption process. The United States Mint will not accept
uncurrent coins for redemption. Members of the public wishing to redeem
lawfully held uncurrent coins must deposit the uncurrent coins with a
bank or other financial institution that will accept them, or with a
depository institution that has established a direct customer
relationship with a Federal Reserve Bank. A Federal Reserve Bank will
redeem uncurrent coins, based on the policies described in the Federal
Reserve's Operating Circular 2.
(c) Criteria for acceptance. Depository institutions that redeem
uncurrent coins must sort the coins by denomination into packages in
accordance with the Federal Reserve's Operating Circular 2. The Federal
Reserve Banks have the right to reject any shipment containing objects
that are not U.S. coins or any contaminant that could render the
uncurrent coins unsuitable for coinage metal.
(d) Redemption sites. The Federal Reserve Banks and branches listed
in Sec. 100.17 are the only authorized redemption sites at which a
depository institution that has established a direct customer
relationship with a Federal Reserve Bank may redeem uncurrent coins.
Sec. 100.11 Request for examination of bent or partial coin for
possible redemption.
(a) General. Lawfully held bent or partial coins of the United
States may be submitted to the United States Mint for examination in
accordance with the provisions in this subpart. Any submission under
this subpart shall be deemed an acceptance of all provisions of this
subpart.
(b) Definitions. (1) Bent coins are U.S. coins which are bent or
deformed so as to preclude normal machine counting but which are
readily and clearly identifiable as to genuineness and denomination.
(2) Partial coins are U.S. coins which are not whole; partial coins
must be readily and clearly identifiable as to genuineness and
denomination.
(3) Participants are individuals or businesses that submit coins
through the redemption process.
(c) Redemption process. (1) Depending on submission amount and
frequency, participants may be subject to a certification process by
the United States Mint. The established annual weight threshold and
details about the participant certification process will be published
on the United States Mint's website. If certification is required, it
must be done prior to submission.
(2) All submissions for review shall include an estimate of the
value of the coins and an explanation of how the submission came to be
bent or partial. The submission should also contain the bank account
number and routing number for a checking or savings account at a bank
or other financial institution (such as a mutual fund, brokerage firm,
or credit union) in the United States.
(3) Participants may be required to provide documentation for how
the participant came into custody of the bent or partial coins.
(4) The United States Mint reserves the right to test samples from
any submission to authenticate the material. The size of the sample
will be limited to the amount necessary for authentication. Testing may
result in partial or complete destruction of the sample.
(5) The United States Mint reserves the right to conduct site
visits for participants over a certain volume threshold to verify
information provided to the United States Mint.
(6) No redemption will be made when:
(i) A submission, or any portion of a submission, demonstrates a
pattern of intentional mutilation or an attempt to defraud the United
States;
(ii) A submission appears to be part of, or intended to further,
any criminal activity;
(iii) A submission contains a material misrepresentation of facts;
(iv) Material presented is not identifiable as United States coins.
In such instances, the participant will be notified to retrieve the
entire submission, at the participant's sole expense, within 30 days.
If the submission is not retrieved in a timely manner, the entire
submission will be treated as voluntarily abandoned property, pursuant
to 41 CFR 102-41.80, and will be retained or disposed of by the United
States Mint;
(v) A submission contains any contaminant that could render the
coins unsuitable for coinage metal. In such instances, the participant
will be notified to retrieve the entire submission, at the
participant's sole expense, within 30 days. If the submission is not
retrieved in a timely manner, the entire submission will be treated as
voluntarily abandoned property, pursuant to 41 CFR 102-41.80, and will
be retained or disposed of by the United States Mint; or
(vi) A submission contains more than a nominal amount of uncurrent
coins. In such instances, the participant may be notified to retrieve
the entire submission, at the participant's sole expense, within 30
days. If the submission is not retrieved in a timely manner, the entire
submission will be treated as voluntarily abandoned property, pursuant
to 41 CFR 102-41.80, and will be retained or disposed of by the United
States Mint.
(7) The Director of the United States Mint, or designee, shall have
final authority with respect to all aspects of redemptions of bent or
partial coin submissions.
(d) Redemption rates. (1) Generally. Participants shall separate
bent or partial coins by the denomination categories listed below in
lots of at least one pound for each denomination category. The United
States Mint will redeem bent or partial coins on the basis of their
weight and denomination at the following rates:
(i) One-Cent Coins: $1.4585 per pound.
(ii) 5-Cent Coins: $4.5359 per pound.
(iii) Dime, Quarter-Dollar, and Half-Dollar Coins: $20.00 per
pound.
(iv) $1 Coins: $20.00 per pound.
(2) Exceptions. (i) The United States Mint will redeem one-cent
coins inscribed with a year after 1982 at the rate set forth at
paragraph (d)(1)(i) of this section unless such one-cent coins are
presented unmixed from one-cent coins inscribed with a year before
1983. The United States Mint will redeem unmixed one-cent coins
inscribed with a year after 1982 at a rate of $1.8100 per pound.
(ii) The United States Mint will redeem $1 coins inscribed with a
year after 1978 at the rate set forth at paragraph (d)(1)(iv) of this
section unless such $1 coins are presented
[[Page 60312]]
unmixed from $1 coins inscribed with a year before 1979. The United
States Mint will redeem unmixed $1 coins inscribed with a year after
1978 at a rate of $56.00 per pound.
(e) Redemption sites. Coins are shipped at the sender's risk of
loss and expense.
(1) Bent and partial coins submitted in quantities less than or
equal to a threshold established annually will be redeemed only at the
United States Mint at Philadelphia, P.O. Box 400, Philadelphia, PA
19105.
(2) Bent and partial coins submitted in quantities greater than a
threshold established annually should be scheduled with the United
States Mint to be sent directly to the authorized recycler(s) of the
United States Mint.
Sec. 100.12 Exchange of fused or mixed coin.
(a) Definitions. (1) Fused coins are U.S. coins which are melted to
the extent that they are bonded together.
(2) Mixed coins are U.S. coins of several alloy categories which
are presented together, but are readily and clearly identifiable as
U.S. coins.
(b) Fused and mixed coins. The United States Mint will not accept
fused coins for redemption. The United States Mint will not accept
mixed coins for redemption, except as provided for in Sec.
100.11(d)(2).
Sec. 100.13 Notices.
(a) Additional information and procedures about the United States
Mint's redemption of bent or partial coins can be found on the United
States Mint's website.
(b) Criminal penalties connected with the defacement or mutilation
of U.S. coins are provided in 18 U.S.C. 331.
(c) The Director of the United States Mint may provide information
pertaining to any bent or partial coin submissions to law enforcement
officials or other third parties for purposes of investigating related
criminal activity or for purposes of seeking a civil judgment.
(d) Whoever intentionally files a false claim seeking reimbursement
for uncurrent, bent or partial coins may be held criminally liable
under a number of statutes including 18 U.S.C. 287 and 18 U.S.C. 1341
and may be held civilly liable under 31 U.S.C. 3729, et seq.
Dated: December 11, 2017.
Jean Gentry,
Chief Counsel, United States Mint.
[FR Doc. 2017-27026 Filed 12-19-17; 8:45 am]
BILLING CODE 4810-37-P