[Federal Register Volume 59, Number 85 (Wednesday, May 4, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-10644]


[[Page Unknown]]

[Federal Register: May 4, 1994]


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POSTAL SERVICE

39 CFR Part 111

 

Revisions to Standards for Annual Fees and Use of Permit Imprints

AGENCY: Postal Service.

ACTION: Proposed rule.

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SUMMARY: The Postal Service proposes changes in several Domestic Mail 
Manual (DMM) standards concerning bulk and presort mailing fees and the 
methods of paying postage.
    E110.6.1, E312.2.6, and E411.4.0 are amended to standardize the 
terms of application of bulk and presort mailing fees on First-, third-
, and fourth-class mail, by requiring payment of the fee only by the 
party entering the mail, regardless of whose permit imprint, 
precanceled stamp permit, or meter was used as the device for postage 
payment on the mailing. A single fee payment would allow mailing at all 
bulk or presort rate categories of the corresponding class of mail.
    E213.4.3 is amended to change the publishing requirements for Form 
3526, Statement of Ownership, Management, and Circulation, generally to 
allow publication anytime during October of the filing year rather than 
in a specific issue.
    P040 is amended both to relax the conditions under which a company 
permit imprint may be used and to strengthen concurrently the Postal 
Service's ability both to identify the place of mailing of company 
permit imprint mail and to obtain information about such mailings. 
Generally, mailers will be allowed to use a company style imprint 
without having to obtain permits at two or more post offices, but 
mailers will be required to show a return address at which records of 
the mailing will be made available upon request.
    P040 is also amended to relax the design restrictions of permit 
imprint indicia. Generally, the new standards allow for more creativity 
while retaining restrictions that ensure that the indicia content is 
readable and clearly identifiable as postage payment.
    P200 is amended to set a sunset date for the use of key rates.
    Miscellaneous other changes are made for consistency.

DATES: Comments must be received on or before June 20, 1994.

ADDRESSES: Written comments should be mailed or delivered to Manager, 
Mailing Standards, USPS Headquarters, 475 L'Enfant Plaza SW., 
Washington, DC 20260-2419. Copies of all written comments will be 
available for inspection and photocopying between 9 a.m. and 4 p.m., 
Monday through Friday, in Room 5610 at the above address.

FOR FURTHER INFORMATION CONTACT: Leo F. Raymond, (202) 268-5199.

SUPPLEMENTARY INFORMATION: This notice presents revisions to Domestic 
Mail Manual (DMM) standards suggested during the DMM revision project 
begun in 1992. DMM Issue 46 (July 1993) was the first result of that 
project, but was not intended to make changes simultaneously in 
substantive mailing requirements; such amendments were deferred for 
subsequent action such as this rulemaking. This notice focuses on 
several matters related to the use of permit imprints (for First-, 
third-, and fourth-class mail) and to the method of paying postage for 
second-class mail.
    1. E110.6.1, E312.2.6, and E411.4.0 are amended to standardize the 
assessment of bulk or presort mailing fees on First-, third-, and 
fourth-class mail. Existing standards brought forward from DMM Issue 45 
and earlier are inconsistent with one another. A single standard 
applies to all First-Class (and Priority) Mail--that a fee must be paid 
once each 12-month period by any person or organization entering mail 
at other than the single-piece rates. Payment of that fee allows use of 
any presort or bulk First-Class rate and the mailing of both the 
payer's mail and that of its clients. By contrast, third-class 
standards distinguish between postage-affixed (precanceled and meter 
stamp) and permit imprint mailers. Fourth-class presents its standards 
yet another way. Understandably this variation confuses both customers 
and postal employees and may cause fees to be assessed incorrectly.
    The revision below amends the standards cited earlier to state them 
uniformly for all three classes: The mailing fee applicable to the 
particular class of mail must be paid once each 12-month period at each 
office of mailing (except as provided otherwise for plant-verified drop 
shipments) by any person or organization entering mailings of that 
class at other than a single-piece or nonpresorted rate, regardless of 
whose permit imprint, precanceled stamp permit, or meter was used to 
pay postage on the mail; payment of the one fee allows that person or 
organization to enter its own mail (and that of its clients) at all the 
bulk or presort rates available in the corresponding class of mail. By 
this revision, the Postal Service believes that confusion over this 
type of fee payment should be effectively eliminated.
    2. E213.4.3 is amended to change the publishing requirements for 
Form 3526, Statement of Ownership, Management, and Circulation. The 
current standard requires each publisher of a second-class publication 
to file Form 3526 by October 1 of each year for each authorized 
publication. The information on that form (or a facsimile of the form) 
must be published in the first issue after October 1 of the 
corresponding general or requester second-class publication. Publishers 
have asked that this specification be relaxed to offer more latitude on 
the issue in which the information may appear. Because 39 U.S.C. 3685 
allows the Postal Service the authority to administer such details as 
when the form is filed or published, the Postal Service believes it can 
change those criteria without adversely affecting the informational 
value of what is published. The Postal Service sees no benefit from 
retaining a stringent requirement when a reasonable relaxation is 
sought and supported by the industry. Therefore, the cited standard is 
amended as shown below to clarify its applicability and require 
publication of Form 3526 in any issue published during October.
    3. P040 is amended to relax the conditions under which a company 
permit imprint may be used and to strengthen concurrently the Postal 
Service's ability both to identify the place of mailing of company 
permit imprint mail and to obtain information about such mailings. 
Current standards require a permit imprint indicium to contain the 
mailer's permit number and the name of the post office where the permit 
is held unless, for a mailer having permit imprint authorizations at 
two or more post offices, a ``company'' style indicium is used. In a 
company style indicium, the name of the permit holder is substituted 
for the permit number and post office name. This style is preferred and 
used extensively by customers who produce large mailings for entry at 
multiple sites, who may change printers or mailers regularly, who 
purchase large quantities of envelope stock, or who simply prefer the 
appearance of the company style over the basic format. Customers who 
have no need for multiple permit imprint authorizations have noted that 
it is a pointless burden on the Postal Service and its customers to 
generate and maintain a second permit imprint account simply to gain 
access to the company style indicium. These customers have requested 
relaxation of the applicable standards to let any permit holder use the 
company style format.
    Current standards also require that company permit imprint 
mailpieces bear a complete domestic return address, but do not specify 
what that address is to represent. Consequently, the Postal Service has 
found it difficult to trace such mailpieces back to the point of 
mailing in situations where classification or postage matters have been 
questioned. Moreover, no remedies exist for instances in which the 
permit holder deliberately frustrates the Postal Service's efforts to 
identify the point of mailing, what was mailed, and whether the correct 
postage was paid.
    Therefore, P040 is amended as shown below to allow use of a company 
style permit imprint indicium by any permit mailer regardless of the 
number of permits held. The Postal Service is also requiring more 
information to document company permit imprint mailings (and mailings 
including company permit imprint pieces), is specifying the required 
return address, and is enhancing its administrative remedies when the 
permit holder fails to supply mailing or permit use information on the 
request of the Postal Service. No additional record-keeping 
responsibilities are being added for either the mailer or the local 
post office. Rather, it is proposed that mailers use the location (the 
permit holder's or its agent's) at which records for the mailing will 
be available to the Postal Service on request as the required return 
address. The revised standards allow suspension or revocation of 
permits if such records are not provided in a timely manner. The Postal 
Service believes the higher standards are a prudent administrative 
control and do not represent an unreasonable condition: each permit 
holder should be able to detail what was mailed, where, and how much 
postage was paid, and should have no legitimate reason to withhold such 
details from the Postal Service. Postal Service actions against 
fraudulent uses of permits should be enhanced by these proposed 
measures.
    4. P040 is also amended to relax the design restrictions of permit 
imprint indicia. Current standards allow use of only the formats 
illustrated in the DMM--basically a plain box with plain lettering. 
While this format was adequate for years, contemporary marketing 
techniques and competitive pressures among mail users have made the 
attractiveness of the mailpiece a cornerstone of efforts to interest 
the addressee in what is inside the mailpiece. As a result, mailers 
have become more interested in using artistic latitude in designing the 
permit imprint indicium that appears on the mailpiece.
    The Postal Service understands the mailer interest in this matter 
and accepts the validity of proposals for greater design flexibility. 
However, those must be balanced against the needs of the Postal Service 
to maintain the clear recognition of the indicium both as evidence of 
postage payment and as an indicator of the mailer's identity. 
Therefore, P040 is amended as shown below to allow some greater 
flexibility in the preparation of permit imprint indicia. Generally, 
the proposed standard reinforces the distinctiveness of an indicium but 
allows its incorporation into a design of the mailer's choice. The 
combined design must be in a prescribed area of the upper right corner 
of the address side, area, or label on the mailpiece, must not imitate 
a stamp or meter impression, and must keep the indicia free of words 
and other printing not specified by the format standards. While some 
mailers may prefer more latitude, the Postal Service believes the 
proposed standards grant significant new flexibility to mailpiece 
designers in a reasonable balance between such flexibility and the 
Postal Service's legitimate interest in maintaining recognizable permit 
indicia.
    5. P200 is amended to set a sunset date for the use of key rates. 
Key rates basically represent a simplified method of computing zone-
rate postage on issues of second-class publications having a stable 
distribution pattern. Publishers and others who provided the Postal 
Service with suggestions for simplifying these regulations noted the 
diminishing use of key rates in an era of centralized postage, 
electronic funds transfer, multiple editions, and other industry 
changes. At the same time, postal personnel, noting how seldom key 
rates are used and the resulting lessening of understanding and 
experience in their administration, agreed that their continued 
availability should be questioned.
    Therefore, by the revision shown below, the Postal Service proposes 
to end the use of key rates. No new users would be added after 
September 30, 1994, or on adoption of a final rule, whichever is later, 
and, to allow for an orderly transition for remaining key rate users, 
termination of key rates would be deferred until March 31, 1995, or 6 
months after adoption of a final rule, whichever is later. The Postal 
Service recognizes that there are some publishers that may still use 
key rates and does not wish to impact them more than necessary. 
However, the Postal Service, which also recognizes the need to 
eliminate nonessential regulations if the mailing community is to be 
better served, feels that key rates exemplify a potential for such 
action.
    Although exempt from the notice and comment requirements of the 
Administrative Procedure Act (5 U.S.C. 553(b), (c)) regarding proposed 
rulemaking by 39 U.S.C. 410(a), the Postal Service invites comments on 
the following proposed revisions of the DMM, incorporated by reference 
in the Code of Federal Regulations. See 39 CFR Part 111.

List of Subjects in 39 CFR Part 111

    Postal Service.

PART 111--[AMENDED]

    1. The authority citation for 39 CFR part 111 continues to read as 
follows:

    Authority: 5 U.S.C. 552(a); 39 U.S.C. 101, 401, 403, 404, 3001-
3011, 3201-3219, 3403-3406, 3621, 5001.

    2. Revise the following units of the Domestic Mail Manual as noted 
below:
E110  Basic Standards
* * * * *
    6.0  Fees.
    6.1  Presort Mailing Fee.
    A First-Class presort mailing fee must be paid once each 12-month 
period at each office of mailing by any person or organization entering 
mailings at other than the single-piece First-Class or Priority Mail or 
Nonpresorted First-Class rates, regardless of whose permit imprint, 
precanceled stamp permit, or meter was used to pay postage on the mail. 
Payment of one fee allows that person or organization to enter its own 
mail (and that of its clients) at all the First-Class and Priority Mail 
presort rates.
* * * * *
E213  Publisher Records
* * * * *
    4.0  Statement of Ownership, Management, and Circulation.
* * * * *
    4.3  Publication.
    During October every year, the publisher of each publication 
authorized second-class mail privileges as a general or requester 
publication must publish a complete statement of ownership, containing 
all information required by Form 3526, in the issue of the publication 
to which data reported on that statement relate. A reproduction of the 
Form 3526 submitted to the USPS may be used for this purpose. Other 
publications are not required to publish this statement.
* * * * *
E312  Additional Standards Applicable to Bulk Third-Class Mail
* * * * *
    2.0  Standards for Rates, Fees, and Postage.
* * * * *
    2.6  Bulk Mailing Fee.
    A third-class bulk mailing fee must be paid once each 12-month 
period at each office of mailing (except as provided otherwise for 
plant-verified drop shipments) by any person or organization entering 
mailings at any regular or special bulk third-class rate, regardless of 
whose permit imprint, precanceled stamp permit, or meter was used to 
pay postage on the mail. Payment of one fee allows that person or 
organization to enter its own mail (and that of its clients) at all the 
third-class bulk rates. [Delete 2.7; renumber 2.8 through 2.10 as 2.7 
through 2.9, respectively.]
* * * * *
E411  Standards Applicable to All Fourth-Class Mail
* * * * *
    4.0  Fees.
    4.1  Special Presort and DBMC Rates.
    [Combine existing 4.1 and 4.3; renumber existing 4.4 as 4.3; revise 
4.1 as follows:] A mailing fee must be paid once each 12-month period 
at each office of mailing by any person or organization entering 
mailings at the special fourth-class presort rate or (except as 
provided otherwise for plant-verified drop shipments) at the 
destination BMC (DBMC) parcel post rates, regardless of whose permit 
imprint, precanceled stamp permit, or meter was used to pay postage on 
the mail. A separate fee is required for each rate; payment of the 
applicable fee allows that person or organization to enter its own mail 
(and that of its clients) at the corresponding rate.
    4.2  Pickup Service.
    The parcel post pickup fee must be paid every time pickup service 
is provided, subject to the corresponding standards in D010.
* * * * *
P040  Permit Imprints
    1.0  Basic Information
* * * * *
    [Renumber existing 1.6 and 1.7 as 1.8 and 1.9; add new 1.6 and 1.7 
and revise 1.8 as follows:]
    1.6  Information
    Upon request by the USPS, a permit holder or its agent must provide 
in a timely manner complete information (as specified in 3.5) about 
mailings, or including pieces, paid by company permit imprint.
    1.7  Suspension.
    The USPS may immediately suspend the permit holder's use of a 
permit imprint if the permit holder or its agent fails to provide 
information as specified in 1.6.
    1.8  Revocation.
    A permit is revoked for use in operating any unlawful scheme or 
enterprise, for nonuse during any 12-month period, for refusal to 
provide information about permit imprint use or mailings, or for any 
noncompliance with the standards applicable to using permit imprints. 
If revocation is for nonuse but the permit holder plans to resume 
mailings within a 90-day period, the permit may be continued for 90 
days. The permit holder may appeal the revocation in writing to the 
postmaster within 10 days of receipt of the notice. Further appeal may 
be made through the postmaster to the district manager of customer 
service and sales or to the RCSC if the initial decision was made at 
the district level.
* * * * *
    2.0  Preparing Permit Imprints.
* * * * *
    2.4  Placement.
    The entire permit imprint indicium must be aligned parallel with 
the address of the mailpiece and placed in the upper right corner of 
the address side, of the address area, or of the address label, subject 
to these conditions:
    a. The indicium must not encroach on reserved space on the 
mailpiece (e.g., the OCR read area) if such a standard applies to the 
rate claimed.
    b. The position (but not the format) of the indicium may be varied 
so that data processing equipment can simultaneously print the address, 
imprint, and other postal information.
* * * * *
    3.0  Permit Imprint Content.
* * * * *
    3.5  Company Permit Imprint.
    A company permit imprint is one in which the exact name of the 
company or individual holding the permit is shown in the permit imprint 
indicium in place of the city, state, and permit number. A customer may 
use a company permit imprint indicium if:
    a. For 2 years after the last date of mailing, the permit holder 
keeps records for each mailing paid by company permit imprint for USPS 
review on request. These records include (for each version of what was 
mailed, if applicable) a complete sample mailpiece; the weight of a 
single piece; the total number of pieces mailed; the total postage; the 
date(s) and post office(s) of mailing, and other records required by 
the rate of postage claimed or the method of payment used.
    b. Each mailpiece bears the complete domestic return address of the 
mailer or the mailer's agent, that address being the physical location 
at which the records listed in 3.5a are available for USPS review. On 
unendorsed bulk third-class mail, the return address may be below the 
permit imprint.
    4.0  Formats.
    [Renumber existing 4.0 as 4.1, and Exhibits 4.0a-c as 4.1a-c; amend 
and add new 4.2 as follows:]
    4.1  Basic Standard.
    Unless prepared under the option in 4.2, permit imprint indicia for 
ordinary mail, official mail, and Mailgrams must be prepared in one of 
the formats shown in Exhibit 4.1a, Exhibit 4.1b, and Exhibit 4.1c, as 
applicable to the rate claimed or type of mail.
    4.2  Optional Format.
    Permit imprint indicia may be prepared in a format other than the 
basic format described in 4.1 subject to these conditions:
    a. The rule that forms a box around the content of the indicium may 
be omitted if the content remains as specified in 3.0 and Exhibits 
4.1a-c.
    b. The indicium content specified in 3.0 is placed within a clear 
area no smaller than \1/2\ inch high and \1/2\ inch wide, no more than 
1-\1/2\ inches below or left from the upper right corner of the 
mailpiece, of the address label, or of the address area, regardless of 
the processing category or the postage rate claimed.
    c. No printing appears in the indicium area other than the 
information required or allowed under 3.0.
    d. No printing appears above or to the right of the permit 
information.
    e. The permit information is printed in no smaller than 4-point 
type.
    f. Any decorative designs intended to be part of the permit imprint 
indicium design appear below or to the left of the permit information 
in an area extending no farther than 4-\1/2\ inches to the left of the 
right edge, and 1-\1/2\ inches below the top edge, of the mailpiece, 
address area, or address label, as applicable. Such designs must not 
resemble or imitate a postage meter imprint, postage stamp, postcard 
postage, or other method of postage payment. No words or symbols are 
included in a decorative design used by the USPS to identify a class of 
mail, rate of postage, or level of service, unless such words or 
symbols are correctly used under the applicable standards for the 
mailpiece on which they appear and the corresponding postage and fees 
have been paid.
    g. All other applicable standards in 1.0 through 5.0 are met.
* * * * *
    5.0  Mailings.
* * * * *
    5.3  Preparation of Mailing.
    All pieces in a permit imprint mailing must be faced (i.e., have 
the address facing in the same direction) and meet the preparation 
standards applicable to the rate claimed. Mail claimed at a rate where 
postage varies by zone must be separated by zone when mailed unless 
authorized by the USPS.
    5.4  Place of Mailing.
    Mail must be deposited and accepted at the post office that issued 
the permit, at a time and place designated by the postmaster, except as 
provided for plant-verified drop shipments.
* * * * *
    5.6  Prepayment.
    Payment must be made for each mailing, either in cash or through an 
advance deposit account, before the mailing can be released for 
processing. Funds to pay postage must be deposited as prescribed by the 
USPS. If the funds paid or on deposit are less than that necessary to 
pay for a mailing, the difference must be paid or deposited before it 
or other permit imprint mailings can be accepted. Credit for postage is 
not allowed. Postage may not be paid partly in money and partly by 
postage stamps unless permitted by standard.
* * * * *
P200  Second-Class Mail
* * * * *
    3.0  Key Rate.
* * * * *
    3.5  Termination of Key Rate Option.
    New authorizations to use key rates may not be granted after 
September 30, 1994. Publications already authorized key rates may 
continue to use them until March 31, 1995. Effective April 1, 1995, use 
of key rates is eliminated and 3.0 is deleted.
    An appropriate amendment to 39 CFR 111.3 to reflect these changes 
will be published if the proposal is adopted.
Stanley F. Mires,
Chief Counsel, Legislative.
[FR Doc. 94-10644 Filed 5-3-94; 8:45 am]
BILLING CODE 7710-12-P