[Federal Register Volume 61, Number 76 (Thursday, April 18, 1996)]
[Rules and Regulations]
[Pages 17190-17204]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-9595]



      

[[Page 17189]]


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Part VI





Postal Service





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39 CFR Part 111



Classification Reform; Implementation Standards; Final Rule

  Federal Register / Vol. 61, No. 76 / Thursday, April 18, 1996 / Rules 
and Regulations  

[[Page 17190]]



POSTAL SERVICE

39 CFR Part 111


Classification Reform; Implementation Standards

AGENCY: Postal Service.

ACTION: Supplementary final rule.

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SUMMARY: This supplementary final rule sets forth the remaining 
Domestic Mail Manual (DMM) standards adopted by the Postal Service to 
implement the Decision of the Governors of the Postal Service in Postal 
Rate Commission Docket No. MC95-1, Classification Reform I. These 
standards address the specific aspects of the final rule published in 
the Federal Register on March 12, 1996 (61 FR 10068-10217), on which 
the Postal Service had sought additional comments.

EFFECTIVE DATE: July 1, 1996.

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

SUPPLEMENTARY INFORMATION: On March 24, 1995, pursuant to its authority 
under 39 U.S.C. 3621, et seq., the Postal Service filed with the Postal 
Rate Commission (PRC) a request for a recommended decision on a number 
of mail classification reform proposals (Classification Reform). The 
PRC designated the filing as Docket No. MC95-1. The PRC published a 
notice of the filing, with a description of the Postal Service's 
proposals, on April 3, 1995, in the Federal Register (60 FR 16888-
16893).
    Following two earlier advance notices of proposed rulemaking 
seeking comments from the public (60 FR 34056-34069, June 29, 1995, and 
60 FR 45298-45323, August 30, 1995), the Postal Service published for 
public comment in the Federal Register a proposed rule (60 FR 66582-
66703, December 22, 1995) that included a complete listing of changes 
to the standards in the DMM that it proposed to adopt if the 
Classification Reform proposals requested by the Postal Service in PRC 
Docket No. MC95-1 were recommended by the PRC and approved by the 
Governors of the Postal Service.
    Pursuant to 39 U.S.C. 3624, on January 26, 1996, the PRC issued its 
Recommended Decision on Docket No. MC95-1 to the Governors of the 
Postal Service. The PRC recommendations included revisions to some of 
the mail classification structures and rates requested by the Postal 
Service. Pursuant to 39 U.S.C. 3625, the Governors acted on the PRC's 
recommendations on March 4, 1996. With the exception of the PRC's 
separate courtesy envelope mail and bulk parcel post proposals, the 
Governors determined to approve the PRC's recommendations, and the 
Board of Governors set an implementation date of July 1, 1996, for 
those rate and classification changes to take effect. (Decision of the 
Governors of the United States Postal Service on the Recommended 
Decision of the Postal Rate Commission on Classification Reform I, 
Docket No. MC95-1, Board of Governors Resolution No. 96-2.)
    To implement the Governors' decision, the Postal Service published 
a final rule containing the DMM standards adopted by the Postal Service 
in the March 12, 1996, Federal Register (61 FR 10068-10217). Except as 
specifically noted therein, the revised DMM standards take effect July 
1, 1996. As explained in that final rule, because the PRC's Recommended 
Decision, as approved by the Governors, made significant changes to the 
mail classification structure requested by the Postal Service, it was 
necessary to change some elements of the proposed rule when producing 
the final rule.
    To the extent that the final rule established standards not 
previously published for public comment, the Postal Service determined 
to seek and consider additional input from customers. That further 
opportunity for public comment was limited to matters newly introduced 
in the final rule, that were not mandated by the rate and 
classification provisions, and that were significant in their impact on 
customers compared with the corresponding elements of the proposed rule 
recommended by the PRC and approved by the Governors. Comments were 
solicited for these specific provisions:
    1. New standards applied to Regular Periodicals similar to those 
adopted in the final rule for First-Class Mail and Standard Mail:
    a. All pieces in an automation rate mailing must be delivery point 
barcoded (for letter-size pieces) or ZIP+4 or delivery point barcoded 
(for flat-size pieces).
    b. Presort and other preparation standards must be met, including a 
150-piece minimum for preparing trays of automation rate letter-size 
mail.
    c. All 5-digit ZIP Codes used in the addresses on nonautomation 
rate Regular Periodicals must be verified annually for accuracy. 
Mailers must certify this verification at the time of mailing.
    d. Letter-size reply envelopes and cards enclosed in automation 
rate pieces must meet specific standards for automation compatibility. 
Mailers must certify this automation compatibility at the time of 
mailing.
    2. Standards for documentation produced by Presort Accuracy 
Validation and Evaluation (PAVE)-certified software and for 
standardized documentation produced otherwise.
    Because the list of provisions on which comment was sought was 
limited and straightforward, because mailers were expected to have 
little difficulty evaluating the impact of those limited provisions on 
their operations and preparing comments quickly, and because the Postal 
Service wanted to ensure that mailers have sufficient time to make any 
necessary changes to their operations before the July 1, 1996, 
implementation date, the Postal Service set March 27, 1996, as the 
closing date for comments on the specific matters identified in the 
final rule.
    Part A of this supplementary final rule provides an analysis of 
comments received and the Postal Service responses. Part B provides 
policy information about plant-verified drop shipments. Significant 
changes made to the final rule since its issuance, including the 
excerpted text of revised DMM standards that have been amended based on 
comments, are at the end of this notice.

A. Summary of Comments

1. General Information

    The Postal Service received 77 pieces of correspondence offering 
comments on the identified aspects of the final rule. (Of that number, 
18 pieces were form letters received from employees of one company; 
these letters are treated as a single comment. Another 14 letters, 
based on a different form letter, were submitted by 14 different 
companies; these letters are treated as individual comments.) 
Commenters included mailers, printers, industry consultants, individual 
publishers, and major mailer associations.
    Of those items on which comment was sought, all but two commenters 
wrote on issues relevant to Periodicals. Comments on Periodicals are 
discussed in section 2 below. Only two commenters wrote about the 
portion of the final rule concerning standardized documentation. One of 
those two commenters was a major billing service; the other, a list and 
data management service. Their comments are discussed in section 3.
    Although comment was sought on only the specific listed issues and 
not on other aspects of the final rule, many commenters submitted 
comments on other issues. This group of comments is discussed in 
section 4.

[[Page 17191]]

2. Periodicals

a. 100% Barcoding
    Of the comments on those specific points for which comment was 
sought, 38 commenters focused on the Postal Service's proposal that 
automation rate Regular Periodicals mailings must be 100% barcoded. 
Commenters generally supported the concept of efficient mail and the 
Postal Service's desire to optimize the volume of such mail, but they 
generally disagreed with the feasibility of the Postal Service's 
proposed implementation of a 100% barcoding standard for Regular 
Periodicals and an implementation date for this standard. Seven of 
those commenters suggested that carrier route presorted pieces count 
toward the percentage of barcoded pieces, two urged inclusion of firm 
packages, and three recommended counting 5-digit barcoded pieces toward 
the required percentage. Twenty-eight commenters offered various 
timetables on which the Postal Service could ``ramp up'' to a higher 
percentage of barcoded pieces in Regular Periodicals mailings, but few 
accepted an eventual 100% environment. One commenter advocated 
retaining the current ``85% rule,'' whereas six other commenters stated 
that the Postal Service should defer requiring 100% barcoding until it 
can provide ZIP+4 codes for all addresses that a mailer submits for 
address matching and coding.
    The Postal Service has identified efficient mail as a major 
expected result of Classification Reform and has publicized that 
expectation since the earliest phases of the reform process. Moreover, 
the Postal Service has invested heavily in barcode-based automated 
systems as a strategy to drive cost from its mail processing 
operations, another objective set early in the reform process and 
strongly supported by customers. The rates adopted as a result of 
Docket No. MC95-1 underwrite mailers' efforts and investments in 
producing the efficient 100% barcoded mailstream needed to allow 
automated systems to yield their planned cost and service benefits.
    Throughout the years that the Postal Service's Classification 
Reform proposals were developed, a clear message was maintained, not 
only about the need for and benefits of a pure barcoded mailstream, but 
also for heightened awareness that quality address information is the 
key enabling factor for successful address matching and barcoding. In 
view of this clear record, the Postal Service has determined not to 
retain standards supporting the current inefficient mailstream (e.g., 
the ``85% rule'') and not to adopt new standards that compromise 
achievement of its automation objectives.
    For example, allowing inclusion of carrier route presort pieces or 
pieces bearing a 5-digit barcode in the percentage of barcoded mail 
does not offer a benefit consistent with the Postal Service's 
automation goal. Although presorting mail by carrier route enables 
movement of that mail directly to the carrier with minimal en route 
distribution, such preparation has no effect on the rest of the mailing 
(i.e., the remaining copies of an issue of a publication not sorted to 
carrier routes) and does not increase the volume of mail compatible 
with automation. Moreover, the 100% barcoding standard would apply only 
to automation rate pieces (an automation rate is not available for 
carrier route sorted pieces), making the coexistence of a separate 
carrier route sorted mailstream essentially irrelevant regardless of 
its volume. As a result, the final rule will not allow the quantity of 
mail prepared for carrier route rates to count toward the required 
percentage of a mailing that must be barcoded.
    Firm packages and pieces bearing only a 5-digit barcode will not be 
included either. Aside from the likely incompatibility of their 
wrapping material with automated processing, firm packages often exceed 
the physical size restrictions of automated equipment and, if included 
in automation rate mailings, would require culling for separate 
processing. This scenario is inconsistent with an efficient mailstream 
and argues for the exclusion of firm packages from an automated mailing 
(both physically and as a contributor toward the 100% barcoding level). 
The final rule will continue the exclusion of firm packages.
    Five-digit barcoded pieces represent no assurance of quality in the 
mailpiece address. Otherwise, a ZIP+4 code could have been determined 
and translated into a delivery point barcode (or a ZIP+4 barcode on a 
flat-size piece). Therefore, despite the limited processing benefit of 
a 5-digit barcode, the Postal Service remains convinced that quality 
addressing and the best possible depth of code should remain the sole 
objectives of automation rate mailers. The final rule will retain the 
specification for a delivery point barcode (or, for a flat, a ZIP+4 
barcode).
    Concerns are unfounded that nonbarcoded mail will be excluded from 
the mailstream. Nonbarcoded mail will still be acceptable but will have 
to be mailed separately from barcoded mail. However, in line with the 
basic theme of Classification Reform that mail should pay rates more 
closely aligned with the cost of the mail, nonbarcoded mail (other than 
carrier route sorted mail) will be subject to rates that are higher 
than those available for barcoded pieces. Without excluding them from 
the mail, nonbarcoded pieces not sorted to carrier routes are clearly 
priced in a manner that encourages the mailer to evaluate ways to move 
such pieces into the more efficient and economical barcoded mailstream.
    Throughout the years that Classification Reform was developed, the 
Postal Service conducted a dialogue with the mailing industry regarding 
address quality. During that time, customers defined various challenges 
that they perceived as limiting their ability to reach the quality 
standards proposed by the Postal Service. In response, the Postal 
Service worked to find solutions, either within existing address 
management strategies or by new methods tailored to the needs of 
specific customers.
    Throughout this time, there were concerns that the entirety of 
customer address lists could not be matched to postal databases. Many 
customers argued, as did the commenters mentioned above, that standards 
for a 100% barcoded mailstream should be deferred until the Postal 
Service can ``guarantee to code and match 100% of all addresses,'' as 
stated by one commenter. In response, the Postal Service determined to 
work with customers to rectify hindrances, within the customer's 
address files or elsewhere, so that 100% coding could be achieved. The 
Postal Service has not accepted a less-than-100% barcoded mailstream as 
an alternative.
    The Postal Service does not accept the general statement of some 
commenters that noncodable addresses are caused by deficiencies in the 
Postal Service's database or in the matching software used to compare 
customer address lists with that database. Rather, the Postal Service 
continues to affirm that a ZIP+4 code is available for every known and 
recorded delivery address, including addresses at institutions that 
have worked with the Postal Service to establish an internal address 
system, and that the inability to barcode some mail is based on address 
quality problems. Although the reasons vary for which specific 
addresses frustrate efforts at ZIP+4 matching (and, in some cases, 
resist easy identification), the Postal Service disagrees that most 
customers cannot meet the challenge of 100% matching after application 
of sufficient diagnostic measures. To that end, the Postal Service 
restates its

[[Page 17192]]

commitment to work with customers in identifying and applying the 
necessary tools to permit 100% coding of address lists.
    The Postal Service believes that such concerted effort is 
worthwhile to generate the efficiencies of a pure barcoded mailstream. 
Given that benefit, the Postal Service cannot agree that it is prudent 
or necessary to defer standards for 100% barcoding until all known 
address problems are resolved. Because of the importance of address 
quality and its central role in producing a barcoded mailstream, the 
Postal Service has determined to apply a 100% barcoding standard to 
automation rate Regular Periodicals just as it has to automation rate 
First-Class Mail and Standard Mail. The final rule will therefore 
retain this basic standard.
    However, despite the many months of general discussion about 100% 
barcoding, the Postal Service is aware that Regular Periodicals mailers 
have experienced a belated introduction to the 100% barcoding standard. 
(It was because of this awareness that comments were accepted on the 
cited aspects of the final rule.) Although the Postal Service does not 
believe that the address management challenges facing Regular 
Periodicals are any more daunting than those facing mailers of First-
Class Mail and Standard Mail, it acknowledges that Regular Periodicals 
mailers need time to implement internal adjustments to upgrade address 
quality and codability, to modify internal production systems, and to 
make other changes necessary to produce pure barcoded mailings. 
Therefore, while remaining firm that standards for mailstream 
efficiency (barcoding) and address quality should apply equally to all 
classes of mail, the Postal Service has concluded that mailers of all 
classes of mail should be afforded a comparable period during which to 
prepare to meet those standards. Therefore, the Postal Service will not 
fully implement the 100% barcoding standard for automation rate Regular 
Periodicals until January 1, 1997.
    From July 1, 1996, through December 31, 1996, up to 10% of the 
pieces in an automation rate Regular Periodicals mailing may bear only 
a 5-digit barcode (if a flat) or a ZIP+4 barcode or no barcode (if a 
letter). However, all pieces will have to meet the applicable standards 
for physical automation compatibility and barcode quality. Nonbarcoded 
pieces must be claimed at nonautomation rates and presorted with the 
barcoded pieces. Carrier route pieces, firm pieces, and pieces not 
bearing a delivery point barcode (or, if a flat, a ZIP+4 barcode) may 
not be counted toward the temporary 90% barcoded minimum. (In effect, 
this continues the existing mixed mailstream, only at a 90/10 level 
rather than the 85/15 level in place through June 30, 1996.) Beginning 
January 1, 1997, all pieces in an automation rate Regular Periodicals 
mailing must meet the same barcoding standard applicable to automation 
rate First-Class Mail and other-than-Nonprofit Standard Mail (i.e., 
letter-size mail must bear a delivery point barcode; flat-size mail 
must bear a ZIP+4 barcode or delivery point barcode).
b. Unique 3-Digit Cities
    One commenter suggested that the Postal Service return to package-
based rates for letter-size Periodicals until a DMCS change can be made 
to allow all 3-digit mail to qualify for the 3/5 rates. (Only unique 3-
digit cities are eligible for 3/5 (Level B) rates today. The Postal 
Service requested a redefinition of the rate to apply 3/5 rates to all 
3-digit sortations, but this was not recommended by the PRC.) Barring 
that, the commenter argued, the Postal Service should allow the 
inclusion of unique 3-digit cities in scheme groups where applicable.
    The Postal Service has reconsidered its original position on this 
matter and has amended the final rule (DMM E241.2.1a) to allow pieces 
for a unique 3-digit city to qualify for the 3/5 rate, regardless of 
volume, when included in a scheme group (where applicable) if those 
pieces are separated from the remainder of the scheme group's mail.
c. Enclosed Reply Pieces
    Three commenters opposed the standard for enclosed reply pieces, 
i.e., that enclosed letter-size reply cards and envelopes bear the 
correct FIM and delivery point or ZIP+4 barcode (as applicable). The 
commenters were particularly concerned over inserted pieces whose 
production was ``beyond [their] control,'' i.e., produced by a third 
party for inclusion in their publications. One commenter worried that 
mail would be held ``hostage'' if an enclosed piece does not meet the 
applicable standards or that the Postal Service will ``punish'' 
publications for their enclosures.
    The Postal Service does not believe fears of punishment are 
warranted. The commenters correctly noted the problems with materials 
provided by third parties for enclosure in publications, but this 
circumstance has parallels in First-Class Mail and many Standard Mail 
situations as well. In all cases, responsible persons, including at 
least one of the commenters, identified the need for preparatory steps 
to preclude problems with provided materials. The Postal Service 
deferred implementing the standard for enclosed reply mail until 
January 1, 1997, to provide sufficient time to correspond with and 
educate suppliers and printers that prepare third-party enclosures. 
Accordingly, the final rule will retain the provisions for enclosed 
reply pieces, effective January 1, 1997.
d. 150-Piece Minimum
    Four commenters opposed the imposition of 150-piece presort 
eligibility and preparation standards for automation rate letter-size 
Periodicals. These comments are similar to comments received from some 
preparers of First-Class Mail and Standard Mail during the comment 
period following the December 22 proposed rule and addressed at some 
length in the Postal Service's March 12 final rule. From a physical or 
mail processing perspective, automation rate letter-size mail is 
comparable regardless of class, and the reasons for which the Postal 
Service applied a 150-piece minimum for automation rate First-Class 
Mail and Standard Mail are equally valid for similar mailpieces mailed 
at Periodicals rates. Therefore, because the issues raised by these 
commenters have already been answered with respect to mail for other 
classes, the final rule will retain the 150-piece standard for 
automation rate Periodicals.
e. Six-Piece Minimum Per Sack
    Three commenters raised concerns over the six-piece minimum per 
sack, arguing that they will be unable to continue preparing smaller 
sack volumes to some 5-digit destinations that, they feel, give their 
publications a better service opportunity than when prepared in 3-digit 
or lesser destination sacks with six or more pieces. (Standards were 
announced in the final rule that required preparation of a sack/tray 
regardless of volume for each 3-digit served by the origin SCF (mail 
processing plant), and permitted such a sack/tray for each entry point 
for drop shipment mailers. This provision is also applicable to 
Periodicals.) The Postal Service understands customers' desire for good 
service and appreciates their efforts to facilitate such service by 
going beyond the required level of preparation. However, in this case, 
the Postal Service balanced the potential benefits of sacks with fewer 
than six pieces against the costs of handling so little mail per sack 
and determined that it is preferable to retain the minimum volume 
prescribed in the final rule. The Postal Service will strive, on a 
case-by-

[[Page 17193]]

case basis, to resolve any service problem that results from this 
required minimum volume.
f. Presort Changes
    Three commenters stated concerns over changes in sortation 
(elimination of SCF packages, elimination of the optional city sort, 
and changes to sortation standards generally). The Postal Service has 
repeatedly publicized its intention to implement major network changes 
at the same time that Classification Reform is implemented. 
Accordingly, sortation standards for all reformed classes of mail align 
with the simpler mail processing and distribution network. SCF and 
optional city sortations are two examples of levels no longer useful 
and, like state and mixed states sortations, were eliminated under 
Classification Reform. Because of the clear need to align customers' 
sortation with the pattern of the postal distribution network, and the 
impracticability of phasing in a fundamental network change or 
operating two networks concurrently, the implementation of new 
sortation standards must proceed as prescribed in the final rule.
g. Barcoded Labels
    One commenter asked for a 10% to 15% allowance for nonbarcoded 
sack/tray labels. In response to comments on the December 22 proposed 
rule, the Postal Service deferred implementation of the barcoded label 
standard for automation rate mailings until January 1, 1997. At that 
point, the Postal Service expects to improve its ability to handle such 
mail more economically by distributing trays and sacks according to the 
barcode printed on the sack or tray labels. Allowing a significant 
portion of that mailstream to have nonbarcoded labels would not only 
dilute the benefit of the remaining labels but also retain needless 
costs for the mail inside the sacks and trays. Consequently, the final 
rule will retain the standard for barcoded sack and tray labels, 
effective January 1, 1997.
h. Other Issues
    (1) One commenter asked the Postal Service to permit the continued 
use of ``second-class'' on wrappers and polywrap enclosing 
publications. Because MC95-1 renamed second-class mail as Periodicals, 
the Postal Service will not amend its standards to permit ``second-
class'' on wrappers and other enclosures. However, requests to exhaust 
stock of enclosure material already preprinted with ``second-class'' 
will be adjudicated on a case-by-case basis.
    (2) Three commenters questioned the need for a separate Form 3553, 
Coding Accuracy Support System (CASS) Report, for mailings made 
repeatedly from the same list (e.g., a list used by a daily newspaper). 
Although the basic standard for generation and submission of Form 3553 
will be retained as stated in the final rule, the Postal Service will 
consider how this standard can be most sensibly implemented in cases 
where regular mailings are submitted for a relatively stable address 
list.
    (3) Two commenters questioned the availability of ``working'' 
pallets for each entry point. The DMM standards for palletization were 
revised in a separate rulemaking concluded before the final rule on 
Classification Reform was announced, but were shown in their entirety 
in the March 12 notice. ``Working'' pallets may be prepared by the 
mailer, subject to the general 10% limit on such pallets, and may be 
deposited at those post offices that are appropriate for the mail 
contained on the pallet. To eliminate any confusion over the definition 
of ``working'' pallet, the DMM standards will be amended to remove 
``working'' in favor of ``mixed BMC'' or ``mixed ADC,'' as appropriate.
    (4) One commenter questioned the correct rate for Standard Mail (A) 
enclosed in Periodicals claimed at a carrier route presort rate. The 
applicable standards were not significantly altered in the final rule 
and continue to allow the enclosure to pay the corresponding rate paid 
for the host piece. Therefore, enclosed Standard Mail (A) would be 
charged the basic carrier route (nonautomation) rate if enclosed in a 
publication claimed at the carrier route Periodicals rates.
    (5) One commenter claimed the rate increase for some Periodicals 
was greater than stated by the PRC. He also urged elimination of 
``unique 3-digit city'' as a factor in presort or rate eligibility. The 
Postal Service did not request retention of ``unique 3-digit city'' in 
its filing, but the PRC retained this distinction in its Recommended 
Decision. A consideration of the reasons for that action is beyond the 
scope of this rulemaking.
    (6) Two commenters suggested that the rules for address matching 
should be interpreted to allow the matched list to be valid for 90 days 
beyond the ``last permissible use'' date of the Postal Service file, 
rather than 90 days after the date of matching. The Postal Service 
discussed this issue extensively in its proposed and final rules and 
determined to set the date of matching as the start of the 90-day 
clock.
    (7) Although the list of issues on which comments were sought did 
not include tabloid-size publications' eligibility for automation 
rates, both groups of form letters contained a statement on that 
subject, and the comments of one association, prepared by an executive 
of one of the form letter commenters, also mentioned tabloid-size 
publications. The one company whose employees submitted a total of 18 
identical letters urged the Postal Service to accelerate deployment of 
a next-generation flat sorter (the FSM 1000) to process tabloids. The 
remaining group of comments cited the ``injustice'' of excluding 
tabloids from barcoded rates. Those commenters' letter stated that it 
is unfair for tabloids to pay higher rates ``when we have followed the 
requirements for Periodical Class mail.''
    Although this is not an issue on which comments were sought, the 
Postal Service will respond. The final rule will contain no change 
either to redefine the physical characteristics of an automation-
compatible flat or to extend automation rate eligibility to 
incompatible flat-size pieces. The Postal Service will not consider 
allowing any publication that is incompatible with current automated 
flat mail processing equipment (the FSM 881) to have access to 
automation rates. Such a suggestion offers no benefit to the Postal 
Service and would improperly extend a cost avoidance discount to mail 
that does not offer any compensatory opportunity for cost reduction in 
postal handling. The Postal Service is deploying the FSM 1000 on a 
timetable that meets the operational needs of the Postal Service. Any 
enlargement of the current dimensions for automation-compatible flats 
will need to await the general availability of the FSM 1000.
    As always, the Postal Service will continue to work with mailers to 
assist them to qualify for the most favorable rates for which they are 
potentially eligible. However, the Postal Service notes that all 
Periodicals mailers, including those of tabloid-size publications, 
already benefit from favorable rates as a result of their compliance 
with the basic standards for Periodicals eligibility. Mailers who 
desire to participate in the added price or service benefits of 
automation should weigh those benefits against the value of the current 
format of their publications and make an appropriate business decision 
within their own best interests.

3. Documentation

    Only two commenters responded to the Postal Service's standard that 
documentation of mailings, where required to support postage statement 
data, had to be produced from software certified by Presort Accuracy 
Validation

[[Page 17194]]

and Evaluation (PAVE) or in a standardized format. Examples of 
standardized documentation were published as part of the final rule.
    One commenter, a major billing service claiming to have submitted 
its own form of computer-generated mailing documentation for PAVE 
certification, states that the final rule has caused ``PAVE 
certification [to be] taken away and made the sole property of hardware 
and software vendors,'' forcing that company ``to comply with what the 
[software] vendors and the Postal Service have agreed.''
    The other commenter, a large list and data management service, 
stated that the timetable for implementation of standardized 
documentation of Periodicals mailings was too short. Noting how much 
time in advance of the issue date a publication's address and presort 
data are developed, the current absence of completed Postal Service 
specifications for standardized documentation for Periodicals, and the 
time needed for software vendors to produce and distribute presort 
software once postal specifications are released, the commenter argued 
that software could not be developed in time to produce issues of 
publications that will appear on January 1, 1997. Instead, the 
commenter urged delay in implementing standardized documentation for 
Periodicals until September 1, 1997.
    The Postal Service has required documentation in support of postage 
statements for many years. Recently, it required documentation to 
describe the volume of pieces at various presort levels within 
automation rate mailings and the number of pieces with or without a 
barcode. As early as 1976, presort rates necessitated some form of 
proof by the mailer that mailings contained the same number of properly 
prepared, qualifying pieces as claimed at the reduced rate on the 
postage statement. In view of this history, the Postal Service does not 
believe that producing accurate documentation, keyed to the mailing 
that it accompanies, should be a significant task for most customers, 
especially given most contemporary business mailers' heavy dependence 
on computer systems for many aspects of mail production.
    With the advent of complex mailings, which in recent years include 
combinations of rate categories, presort levels, and entry discounts, 
the role of documentation has become increasingly significant both as a 
source of information for use in completing postage statements and as a 
tool for postal verification. As a result, the importance of accuracy 
has been matched by the importance of usability and clarity. If 
documentation is ambiguous or cumbersome to review, attempts to relate 
it to the physical mailing are frustrating if not unsuccessful, 
bringing into question how well the information is mirrored on the 
postage statement and defeating the purpose for the documentation's 
generation and submission for use by the Postal Service to verify the 
mailing. Therefore, the Postal Service has increasingly emphasized 
clarity and consistency in documentation, both in content and in 
format. Mailers have been required to meet specific documentation 
standards for many years, especially those mailers who mail at 
automation rates. As a result of this experience, the Postal Service 
does not believe that the documentation standards in the final rule 
present a significant hurdle for those customers already generating 
quality mailing documentation.
    Moreover, it is only reasonable to expect that the Postal Service's 
extensive discussions of documentation standards would be with those 
parties whose products will produce the documentation: providers of 
software to the mailing industry. These discussions have been neither 
exclusive nor private, and they have been designed to set criteria for 
documentation that are achievable by computer software generally, 
regardless of whose software is used, including software developed 
proprietarily by independent mailers. Because of the generality of the 
criteria for standardized documentation and the essential level of 
quality that those criteria demand, the Postal Service does not agree 
that those criteria are burdensome or beyond the ability of its 
customers. The Postal Service expects each customer to decide on a 
cost-benefit basis whether to produce software in-house or purchase it 
from the commercial market. No customer is being forced either to 
abandon proprietary software or to purchase software from a vendor. 
Standardized documentation, including that generated by PAVE-certified 
presort software, is a generic commodity and a reasonable product to 
expect from a customer producing automation mailings. As a result, the 
Postal Service finds no basis to amend the final rule to recraft its 
definition of standardized documentation's content or format.
    Regarding the timeframe for implementing standardized documentation 
requirements, the Postal Service must conclude that mailers and vendors 
attentive to the Classification Reform process are well aware of the 
reasons for a July 1 implementation date and what they each must do to 
be ready on that date. Although individual circumstances may 
necessitate individual consideration, the Postal Service finds no 
reason to conclude that, through application of adequate resources, 
most if not all customers cannot have the necessary software ready and 
in use when Classification Reform is implemented (or, for mailers of 
Periodicals, on January 1, 1997). Therefore, the final rule will not be 
amended to delay implementation of standards for documentation 
generated by PAVE-certified software or produced in a standardized 
format.

4. Other Issues

a. AUTO Marking on Automation Mail
    Six correspondents submitted statements that they would have 
difficulty complying with the standard for the marking of automation 
rate First-Class Mail and Standard Mail (i.e., that each piece be 
marked ``AUTO'' (or ``AUTOCR'' if carrier route presort) and that no 
other piece bear that marking if not paid at that rate). One commenter 
complained about the requirement that ``AUTO'' must be shown in all 
uppercase letters. This was not an issue open for further comment. The 
Postal Service will note, however, that marking of mail is essential 
for accurate identification and cost ascertainment when sampling the 
mailstream, and the effort to provide such a marking is necessary so 
that future automation mail rates will be based on a more accurate 
determination of the cost of that mail. Therefore, the Postal Service 
believes that measures required of customers to apply the appropriate 
markings on mail are consistent with and responsive to customers' 
overall desire for cost-based rates.
    The Postal Service recognizes that various mailer systems could 
produce the required markings if additional alternative methods were 
provided beyond those in the final rule. Accordingly, the DMM standards 
shown below incorporate new revisions to permit placement of ``AUTO'' 
or ``AUTOCR'' in a mailer or manifest keyline (where appropriate). 
Placement of these markings will be allowed in an MLOCR date 
correction, meter drop shipment, or manifest keyline if preceded by two 
asterisks. To correct an incorrectly applied ``AUTO'' or ``AUTOCR'' 
marking, the Postal Service has also amended the final rule to allow 
the mailer to add the marking ``Single-Piece'' or ``SNGLP'' below or to 
the left of the postage area, in a line above the

[[Page 17195]]

address, or in an ink-jet applied date line.
    The Postal Service also recognizes that some customers' systems 
might require relatively significant adjustments in order to identify 
the correct marking for a mailpiece and/or apply it and/or suppress an 
incorrect marking. Because producing the desired mailpiece marking 
might need creative solutions in some cases, the Postal Service will 
continue to discuss its marking standards with affected customers on a 
case-by-case basis. It must be emphasized, however, that such 
discussions will be solely to develop solutions about how to meet the 
marking standards.
b. Exception for Letter-Size Pieces at Automation Rate for Flats
    One commenter objected to the time limit on that portion of the 
final rule in which the Postal Service provided an exception for 
Standard Mail letter-size pieces prepared to qualify for the automation 
rate for flats. In effect, that exception allowed an entire job to be 
prepared as flats on pallets if the Regular rate portion was 10% or 
less of the combined volume of the Enhanced Carrier Route and 
automation rate pieces. (The final rule incorrectly showed this as 15%; 
that error is among the corrections noted below.) The Postal Service 
allowed this exception through the end of 1996 to give customers 
preparing such mail ample opportunity to redesign and modify production 
lines to prepare thereafter all letter-size mail in trays regardless of 
the rate paid for it.
    The consistent preparation of letter-size mail in trays is an 
important objective of the Postal Service in implementing 
Classification Reform. Such preparation is an element of the 
standardization and efficiency that reform is intended to provide.
    However, because of the problems cited by mailers of this specific 
type of mail, commonly called ``fletters'' or ``slim jim catalogs,'' 
the Postal Service has determined to explore further with the industry 
how to achieve the intended benefit for the Postal Service while 
minimizing disruption for mailers. Pending further review of the 
preparation of this type of letter-size mail, the exception cited above 
will continue in effect without an expiration date.
c. Use of CDS for Sequenced Mail
    One commenter pointed out that the Postal Service's requirement 
that a mailer document use of CASS-certified software for matching 
carrier route codes is irrelevant if the mailer uses the Postal 
Service's own Computerized Delivery Sequence (CDS) product when 
producing walk-sequenced Enhanced Carrier Route mailings.
    A mailer who uses CDS is provided Form 3553 with each product 
update so that the mailer can submit the necessary documentation with 
mailings. Rather than establish a separate procedure for CDS users, the 
Postal Service will continue to interpret DMM E632.1.4 (``another AIS 
product'') to include CDS among the appropriate tools for carrier route 
coding.
d. Postage Statement
    One commenter, a major billing service, objected to the 
``requirement for a single postage statement.'' The Postal Service is 
unable to identify the genesis of this comment but must emphasize that 
the commenter is incorrect. The final rule allows customers to report 
many separate groups of mail (commonly called ``mailings'') on a single 
statement but does not require that this be done. Customers retain the 
right to prepare a separate statement with each group of mail if that 
is their practice or preference.
e. Strapping of Trays
    One commenter asked for a delay in implementing the standards for 
tray strapping. The Postal Service explained in earlier phases of this 
rulemaking the reasons for the required strapping of trays. Those 
reasons remain and, as a result, the standards will be implemented as 
announced in the final rule.
f. Other Issues
    Various commenters offered observations or asked questions on other 
issues beyond the scope of this phase of the final rulemaking and, as 
such, will not be responded to in this supplementary final rule. 
However, the Postal Service remains interested in answering the 
questions and concerns of its customers. Mailers are asked to direct 
their questions to their respective area or district Classification 
Reform Implementation Coordinator; Manager, Business Mail Entry; or 
Rates and Classification Service Center, as appropriate.

B. Plant-Verified Drop Shipments

    The Postal Service also has formulated its policy concerning the 
rates and preparation standards that will apply to any plant-verified 
drop shipment (PVDS) that is prepared for entry during the period 
immediately surrounding the implementation date for Classification 
Reform (July 1, 1996) as follows:
    1. PVDS verified and paid for before July 1, 1996, will be accepted 
into the mailstream through July 5, 1996, if presented with appropriate 
documentation of verification and payment.
    2. PVDS may be verified and paid for beginning June 1, 1996, under 
the rates and preparation standards that take effect July 1, 1996, if 
the shipment is not accepted into the mailstream until July 1, 1996, or 
later.

List of Subjects in 39 CFR Part 111

    Postal Service.

    For the reasons discussed above, the Postal Service hereby adopts 
the following amendments to the Domestic Mail Manual, which is 
incorporated by reference in the Code of Federal Regulations (see 39 
CFR part 111).

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, 3626, 5001.

    2. The following substantive changes are made to the Domestic Mail 
Manual. (This list is to show significant revisions only and is not 
intended to detail amendments for typographical correction, 
organizational consistency, or editorial clarity.)

A  ADDRESSING

* * * * *

A900  Customer Support Services

* * * * *

A950  Coding Accuracy Support System (CASS)

1.0  BASIC INFORMATION
* * * * *

1.2  Requirement

    [Amend 1.2 by replacing ``CASS certification'' with ``CASS 
certification (including Multiple Accuracy Support System (MASS))'' to 
read as follows:]
    Any mailing claimed at an automation rate must be produced from 
address lists properly matched and coded with CASS-certified address 
matching methods listed below. Mailers using multiline optical 
character readers (MLOCRs) to print delivery point barcodes on 
mailpieces (or for flats, ZIP+4 barcodes) must also obtain CASS 
certification (including Multiline Accuracy Support System (MASS)) for 
the address matching software used on their MLOCRs.
* * * * *

[[Page 17196]]

5.0  DOCUMENTATION
* * * * *

5.5  Using Single Lists

    [Amend 5.5 by replacing ``within 1 year'' with ``within 6 months'' 
in the second sentence to read as follows:] When a mailing is produced 
from all or part of a single address list, the mailer must submit one 
Form 3553 and other required documentation reflecting the summary 
output information for the entire list, as obtained when the list was 
coded. When the same address list is used to make other mailings within 
6 months of the date it was matched and coded, an original or a copy of 
the computer-generated Form 3553 must be submitted with each.
* * * * *

C  CHARACTERISTICS AND CONTENT

* * * * *

C800  Automation-Compatible Mail

C810  Letters and Cards

* * * * *
8.0  ENCLOSED REPLY CARDS AND ENVELOPES

8.1  Basic Standard

    [Revise 8.1 to read as follows:]
    Effective January 1, 1997, all letter-size reply cards and 
envelopes (business reply, courtesy reply, and metered reply mail) 
provided as enclosures in automation First-Class Mail, automation 
Regular Periodicals, and automation Regular and Enhanced Carrier Route 
Standard Mail must meet the applicable standards in 1.0 through 7.0, 
bear a facing identification mark meeting the standards in 8.2, and 
bear the correct delivery point barcode (or, for business reply mail 
(BRM), the correct ZIP+4 barcode) for the delivery address on the reply 
piece as defined by the USPS, subject to the barcode standards in C840. 
Mailers must certify that these standards have been met when the 
corresponding mail is presented to the USPS. BRM pieces must also meet 
the applicable standards in S922.
* * * * *

E  ELIGIBILITY

* * * * *

E100  First-Class Mail

* * * * *

E130  Nonautomation Rates

* * * * *
3.0  PRESORTED RATES
* * * * *

3.3  Address Qualify
    [Revise 3.3 to read as follows:]
    Effective January 1, 1997, addresses appearing on all pieces 
claimed at the Presorted rate must be updated within 6 months before 
the mailing date by a USPS-approved address update tool (e.g., the 
``Address Correction Endorsement,'' ACS, or NCOA). Additional 
alternatives currently under development (such as FASTforward SM) 
may be used to meet this standard when they have received final 
approval. Mailers must certify that this standard has been met when the 
corresponding mail is presented to the USPS. This standard applies to 
each address individually, not to a specific list or mailing. If a 
USPS-approved address update tool is used, a valid update is obtained 
regardless of the class of mail on which the address is placed. An 
address meeting this standard may be used in mailings at any other rate 
to which the standard applies throughout the 6-month period following 
its must recent update.
* * * * *
E140  Automation Rates
1.0  BASIC STANDARDS
* * * * *
1.3 Address Quality
    [Revise 1.3 to read as follows:]
    Effective January 1, 1997, addresses appearing on all pieces 
claimed at the automation rates must be updated within 6 months before 
the mailing date by a USPS-approved address update tool (e.g., the 
``Address Correction Endorsement,'' ACS, or NCOA). Additional 
alternatives currently under development (such as FASTforward SM) 
may be used to meet this standard when they have received final 
approval. Mailers must certify that this standard has been met when the 
corresponding mail is presented to the USPS. This standard applies to 
each address individually, not to a specific list or mailing. If a 
USPS-approved address update tool is used, a valid update is obtained 
regardless of the class of mail on which the address is placed. An 
address meeting this standard may be used in mailings at any other rate 
to which the standard applies throughout the 6-month period following 
its must recent update.
* * * * *
1.5  Enclosed Reply Cards and Envelopes
    [Revise 1.5 to read as follows:]
    Effective January 1, 1997, all letter-size reply cards and 
envelopes (business reply, courtesy reply, and metered reply mail) 
provided as enclosures in automation First-Class Mail must meet the 
standards in C810 for enclosed reply cards and envelopes. Mailers must 
certify that this standard has been met when the corresponding mail is 
presented to the USPS.
2.0  RATE APPLICATION
2.1  Letters or Cards
    [Amend 2.1 by revising 2.1d to read as follows:]
    First-Class automation rates apply to each piece that is sorted 
under M810 into the corresponding qualifying groups:
* * * * *
    d. Pieces in origin/entry 3-digit/scheme trays containing fewer 
than 150 pieces and all pieces in AADC and mixed AADC trays qualify for 
the Basic automation rate.
* * * * *
E200  Periodicals
* * * * *
E230  Nonautomation Rates
E231  Regular Periodicals
* * * * *
3.0  3/5 RATES
    [Amend 3.0 by revising 3.0a to read as follows:]
    Subject to M210, 3/5 rates apply to:
    a. Letter-size pieces in 5-digit or unique 3-digit packages of six 
or more pieces each, either placed in 5-digit or unique 3-digit trays 
or in an overflow unique 3-digit tray.
* * * * *
5.0  WALK-SEQUENCE DISCOUNTS
5.1  Eligibility
    [Revise 5.1 to read as follows:]
    The High Density or Saturation rates apply to each walk-sequenced 
piece in a carrier route mailing, eligible under 2.2 and prepared under 
M210, that also meets the corresponding addressing and density 
standards in 5.4. High Density and Saturation rate mailings must be 
prepared in carrier walk sequence according to schemes prescribed by 
the USPS (see M050).
* * * * *
E240  Automation Rates
E241  Regular Periodicals
1.0  BASIC STANDARDS
1.1  All Pieces
    [Amend 1.1 by revising 1.1g to read as follows:]
    All pieces in an automation Regular Periodicals mailings must:
* * * * *
    g. Except under 1.3, bear an accurate barcode meeting the standards 
in C840, either a DPBC (if a letter) or a ZIP+4 barcode or DPBC (if a 
flat), either on the piece or on an insert showing through a barcode 
window.

[[Page 17197]]

1.2  Enclosed Reply Cards and Envelopes

    [Revise 1.2 to read as follows:]
    Effective January 1, 1997, all letter-size reply cards and 
envelopes (business reply, courtesy reply, and metered reply mail) 
provided as enclosures in automation Regular Periodicals must meet the 
standards in C810 for enclosed reply cards and envelopes. Mailers must 
certify that this standard has been met when the corresponding mail is 
presented to the USPS.

1.3  Temporary Exception to Barcoding

    [Add 1.3 to read as follows:]
    From July 1, 1996, through December 31, 1996, up to 10% of the 
pieces in an automation Periodicals mailing of flat-size pieces may 
bear only a 5-digit barcode (subject to C840); and up to 10% of the 
pieces in an automation Periodicals mailing of letter-size pieces may 
be prepared without a barcode or with only a ZIP+4 barcode (subject to 
C840). Pieces within this 10% allowance must be combined and presorted 
correctly with the balance of the mailing. Postage for pieces in the 
10% allowance must be paid at the applicable nonautomation Regular 
Periodicals rate and supported by documentation such as that required 
under M893 (letter-size) or M897 (flat-size).
2.0  RATE APPLICATION

2.1  Letters

    [Amend 2.1 by revising 2.1a and 2.1b to read as follows:]
    Automation rates apply to each letter-size piece that is sorted 
under M810 into the corresponding qualifying groups:
    a. Pieces for a unique 3-digit destination that is part of a 3-
digit scheme group in L003 qualify for the 3/5 automation rate when 
placed in a 3-digit scheme tray if grouped separately from pieces for 
other 3-digit areas.
    b. Pieces in origin/entry 3-digit/scheme trays containing fewer 
than 150 pieces and groups of 150 or more pieces in other 3-digit, 3-
digit scheme, or AADC trays or any pieces in mixed AADC trays qualify 
for the Basic automation rate.

2.2  Flats

    [Amend 2.2 by revising 2.2a to read as follows:]
    Automation rates apply to each flat-size piece that is sorted under 
M820 into the corresponding qualifying groups:
    a. Pieces in 5-digit or unique 3-digit packages of 6 or more pieces 
each qualify for the 3/5 automation rate.
* * * * *

E600  Standard Mail

E610  Basic Standards

* * * * *

E612  Additional Standards for Standard Mail (A)

* * * * *
4.0  BULK RATES
* * * * *

4.9  Preparation

    [Amend 4.9 by revising 4.9c to read as follows:]
    Each Nonprofit, Regular, or Enhanced Carrier Route rate mailing 
must be prepared under these general standards:
* * * * *
    c. The same mailing may not contain both automation and 
nonautomation rate pieces except as permitted under E649.
* * * * *
    [Revise heading of E641 to read as follows:]

E640  Automation Rates

E641  Regular and Enhanced Carrier Route Standard Mail

1.0  AUTOMATION REGULAR RATES
* * * * *

1.2  Enclosed Reply Cards and Envelopes

    [Revise 1.2 to read as follows:]
    Effective January 1, 1997, all letter-size reply cards and 
envelopes (business reply, courtesy reply, and metered reply mail) 
provided as enclosures in automation Regular Standard Mail must meet 
the standards in C810 for enclosed reply cards and envelopes. Mailers 
must certify that this standard has been met when the corresponding 
mail is presented to the USPS.

1.3  Rate Application--Letters and Cards

    [Amend 1.3 by revising 1.3c to read as follows:]
    Regular automation rates apply to each piece that is sorted under 
M810 into the corresponding qualifying groups:
* * * * *
    c. Pieces in origin/entry 3-digit/scheme trays containing fewer 
than 150 pieces and all pieces in full or overflow AADC trays and in 
all mixed AADC trays qualify for the Basic automation rate.
* * * * *
    [Revise the heading of 2.0 to read as follows:]
2.0  AUTOMATION ENHANCED CARRIER ROUTE RATES
* * * * *

2.4  Enclosed Reply Cards and Envelopes

    [Redesignate current 2.4 as 2.5 and add new 2.4 to read as 
follows:]
    Effective January 1, 1997, all letter-size reply cards and 
envelopes (business reply, courtesy reply, and metered reply mail) 
provided as enclosures in automation Enhanced Carrier Route Standard 
Mail must meet the standards in C810 for enclosed reply cards and 
envelopes. Mailers must certify that this standard has been met when 
the corresponding mail is presented to the USPS.
* * * * *

E650  Destination Entry

E651  Regular, Nonprofit, and Enhanced Carrier Route Standard Mail

* * * * *
2.0  VERIFICATION

2.1  Place

    [Amend 2.1 by revising 2.1b to read as follows:]
    As directed by the postmaster, the mailer must present destination 
entry mailings to USPS employees for verification either:
* * * * *
    b. At the destination post office or business mail entry unit.
* * * * *

M  MAIL PREPARATION AND SORTATION

M000  General Preparation Standards

M010  Mailpieces

M011  Basic Standards

1.0  TERMS AND CONDITIONS
* * * * *

1.4  Mailing

    [Revise 1.4 to read as follows:]
    A mailing is a group of pieces within the same class of mail and 
processing category that may be sorted together under the applicable 
standards. Other specific standards may define whether separate 
mailings may be combined, palletized, reported, or deposited together. 
These types of mail may not be part of the same mailing despite being 
in the same class and processing category: automation and nonautomation 
mail (except as permitted by the ``85% rule'' where applicable); 
automation Enhanced Carrier Route rate and other mail; any

[[Page 17198]]

combination of Enhanced Carrier Route, Regular, and/or Nonprofit 
Standard Mail; 3/5 and carrier route Nonprofit Standard Mail.
* * * * *

M012  Endorsements and Markings

* * * * *
2.0  METHOD

2.1  Placement

    [Amend 2.1 by revising 2.1b to read as follows:]
    Unless otherwise directed or permitted by standard, placement of 
markings is subject to these standards:
* * * * *
    b. Other rate markings (e.g., ``AUTO,'' ``Carrier Route Presort,'' 
``ECRLOT'') may be placed in the locations shown in 2.1a; or in the 
address area on the line immediately above the address or, preferably, 
two lines above the address if the marking appears alone, or if no 
other information appears on the line with the marking except postal 
optional endorsement line information under M013 or postal carrier 
route package information under M014. If preceded by two asterisks, the 
``AUTO'' or ``AUTOCR,'' or ``Single Piece'' or ``SNGLP'' information 
may also be placed in the line above or two lines above the address in 
a mailer keyline or a manifest keyline, or placed above the address and 
below the postage in an MLOCR ink jet printed date correction/meter 
drop shipment line. Alternatively, the mailer may apply ``AUTO'' or 
``AUTOCR'' to the left of the DPBC or below the postage.
* * * * *
    [Remove current 2.2 and 2.3 and renumber 2.4 and 2.5 as 2.2 and 
2.3, respectively.]
* * * * *

M013  Optional Endorsement Lines

1.0  USE

1.1  Basic Standards

    [Amend chart by revising left column under Carrier Route and SCF to 
read as follows:]
    Carrier Route
    (Automation First-Class Mail and automation Enhanced Carrier Route 
Standard Mail)
* * * * *
    SCF
    (Preferred Periodicals, Nonprofit Standard Mail, and bound printed 
matter only)
* * * * *

M014  Carrier Route Information Lines

1.0  BASIC INFORMATION
    [Amend 1.0 by removing ``carrier route'' in the last sentence to 
read as follows:]
    Packages for individual carrier routes, rural routes, highway 
contract routes, post office box sections, or general delivery units 
may be prepared without facing slips if prepared with optional 
endorsement lines under M013 or with carrier route information lines 
under 2.0. These standards apply to automation Carrier Route rate 
First-Class, carrier route and Level I/K Periodicals, automation Basic 
Carrier Route rate and Enhanced Carrier Route Standard Mail, and 
carrier route bound printed matter mailings. Carrier route information 
lines may be on all pieces in a mailing, regardless of presort level.
2.0  FORMAT AND CONTENT
* * * * *

2.4  Other Contents

    [Amend 2.4 by revising 2.4c to read as follows:]
    Other elements of the carrier route information line include:
* * * * *
    c. The carrier route information line may also contain the basic 
markings required by standard for the class of mail and rate claimed, 
prepared under M012.
* * * * *

M030 Containers

M031  Labels

1.0  SACK AND TRAY LABELS

1.1  Basic Standards

    [Revise 1.1 to read as follows:]
    Only sack labels may be used for sacks, only tray labels for trays. 
Machine-printed labels (available from the USPS) ensure legibility. 
Legible hand-printed labels are acceptable. Illegible labels are not 
acceptable. Container labels for automation rate mailings are subject 
to M032.
* * * * *
4.0   PALLET LABELS
* * * * *
    [Revise heading of 4.9 to read as follows:]

4.9  Automation and Carrier Route Rates

    [Amend 4.9 by removing heading of 4.10 and adding text from 4.10, 
redesignating 4.11 through 4.14 as 4.10 through 4.13, and revising the 
first sentence of 4.9 to read as follows:]
    Pallets containing copalletized automation rate (barcoded) and 
carrier route rate mailings must show the words BARCODED/CARRIER ROUTES 
(or authorized abbreviation) on the contents line. Pallets containing 
automation-rate flat-size mail must show the word BARCODED on the 
contents line. The word BARCODED must not be abbreviated on the 
contents line.
* * * * *
    [Revise the heading of 5.0 to read as follows:]
5.0  SECOND LINE CODES
    [Revise 5.0 to read as follows:]
    The codes shown below must be used as appropriate on Line 2 of 
sack, tray, and pallet labels.
    [Replace the chart heading ``Identifier'' with ``For these content 
types'' and the heading ``Abbreviations'' with ``Use these codes''; add 
``Barcoded'' and ``BC'' on the first line; replace ``Irregular 
Parcels'' and ``IRREG'' (Standard Mail only)'' with ``Irregular 
Parcels'' and ``IRREG (First-Class and Standard Mail only)''; replace 
``Standard Mail'' and ``3C/4C'' with ``Standard Mail'' and ``STD.'']

M032  Barcoded Labels

1.0  BARCODED TRAY LABELS

1.1  Standards

    [Revise 1.1 to read as follows:]
    Effective January 1, 1997, barcoded tray labels are required for 
automation rate mailings of First-Class, Regular Periodicals, and 
Regular and Enhanced Carrier Route Standard Mail letter-size pieces and 
for First-Class flat-size pieces. Barcoded tray labels may be used 
earlier and may be used on any other mailing. Mailer-produced barcoded 
tray labels must meet the standards below. Revisions to preprinted 
barcoded labels (e.g., handwritten changes) are not permitted.
* * * * *
2.0  BARCODED SACK LABELS

2.1  Standards

    [Revise 2.1 to read as follows:]
    Effective January 1, 1997, barcoded sack labels meeting the 
standards in this section are required for automation rate Regular 
Periodicals and Standard Mail flat-size pieces prepared in sacks. These 
sack labels may be used earlier and may be used for other Periodicals 
and Standard Mail prepared in sacks. Revisions to preprinted barcoded 
labels (e.g., handwritten changes) are not permitted.
* * * * *

[[Page 17199]]

M033  Sacks and Trays

1.0  BASIC STANDARDS
* * * * *

1.3  Tray Sizes

    [Amend 1.3 by revising 1.3a to read as follows:]
    These approximate measurements define the tray sizes that apply to 
all mail preparation standards:
    a. Letter trays:
    (1) 2-foot MM trays: 21 inches long by 10 inches wide (inside 
bottom dimensions) by 4-5/8 inches high.
    (2) 1-foot MM trays: 10-1/4 inches long by 10 inches wide (inside 
bottom dimensions) by 4-5/8 inches high.
    (3) 2-foot EMM trays: 21-3/4 inches long by 11-1/2 inches wide 
(inside bottom dimensions) by 6-1/8 inch high.
* * * * *

1.6  Exception

    [Revise 1.6 to read as follows:]
    If the processing and distribution manager gives a written waiver, 
strapping is not required for mixed ADC or mixed AADC letter trays of 
First-Class Mail; any letter tray placed on a 5-digit, 3-digit, or SCF 
pallet secured with stretchwrap; or any letter tray that originates and 
destinates in the same SCF (mail processing plant) service area.

1.7  Origin/Entry SCF/Plant Sacks and Trays

    [Revise 1.7 to read as follows:]
    Except for Nonprofit Standard and Preferred Periodicals mailings, 
after all required carrier route, 5-digit, 3-digit (and, where 
permitted, 3-digit/scheme) sacks/trays are prepared, a 3-digit (or 3-
digit/scheme) sack/tray must be prepared to contain any remaining mail 
for each 3-digit (or 3-digit/scheme) area served by the SCF (mail 
processing plant) serving the post office where the mail is verified, 
and may be prepared for each 3-digit (or 3-digit/scheme) area served by 
the SCF/plant where mail is entered (if that is different from the SCF/
plant serving where the mail is verified, e.g., a PVDS deposit site). 
In all cases, only one less-than-full sack/tray may be prepared for 
each 3-digit (or 3-digit/scheme) area.
2.0  FIRST-CLASS, REGULAR PERIODICALS, AND REGULAR AND ENHANCED CARRIER 
ROUTE STANDARD MAIL

2.1  Letter Tray Preparation

    [Amend 2.1 by revising 2.1b and 2.1i to read as follows:]
    Pieces must be prepared to result in the fewest practical number of 
packages (where required) and trays to contain the mail sorted to a 
destination. Letter tray preparation uses terms defined in M011 and is 
subject to these further standards:
* * * * *
    b. Regardless of minimum volumes that may be allowed or required 
per tray, each tray prepared must be filled before filling of the next 
tray is begun, with the contents in multiple trays relatively balanced. 
A tray with less mail may be prepared only if permitted by the 
standards in 2.1c, 2.1d, and 2.1e and for the rate claimed. Subject to 
availability, 2-foot trays must be used whenever available, except that 
1-foot trays must be used for lesser volume or as less-than-full trays.
* * * * *
    i. As a general exception, pieces do not have to be grouped by 3-
digit ZIP Code prefix in AADC trays if the mailing is prepared using an 
MLOCR/barcode sorter and standardized documentation is submitted.
* * * * *

M040  Pallets

M041  General Standards

* * * * *
4.0  PALLET BOXES
* * * * *

4.3  Securing

    [Amend 4.3 by revising 4.3a to read as follows:]
    Pallet boxes must be secured to the pallet with strapping, banding, 
stretchable plastic, shrinkwrap, or other material that ensures that 
the pallet can be safely unloaded from vehicles, transported, and 
processed as a single unit to the point where the contents are 
distributed with the load intact if:
    a. The pallet and its contents are transported by the USPS from the 
office where the mail is accepted to another postal facility where the 
contents are distributed, and
* * * * *
5.0  PREPARATION
* * * * *

5.2  Required Preparation

    [Revise 5.2 to read as follows:]
    A pallet must be prepared to a required sortation level when there 
are 500 pound of Periodicals or Standard Mail packages, sacks, or 
parcels or six layers of Periodicals or Standard Mail (A) letter trays. 
Up to 10% of the total pallets in any mailing or job may be mixed BMC 
(Standard Mail) or mixed ADC (Periodicals). Such pallets must be 
labeled to the BMC or ADC (as appropriate) serving the post office 
where mailings are accepted into the mailstream. The processing and 
distribution manager of that facility may issue a written authorization 
to the mailer to label mixed BMC or mixed ADC pallets to the post 
office or processing and distribution center serving the post office 
where mailings are entered. These pallets contain all mail remaining 
after required and optional pallets are prepared to finer levels of 
sortation under M045, as appropriate.
* * * * *

M045  Palletized Mailings

* * * * *
2.0  PACKAGES
* * * * *

2.4  Size--Standard Mail (B)

    [Amend 2.4 by revising 2.4c to read as follows:]
    Package size: 10-pound or 1,000-cubic-inch minimum (whichever 
occurs first), 40-pound maximum, except that:
* * * * *
    c. Packages must be prepared to carrier route sortations if the 
carrier route bulk bound printed matter rate is claimed. Mail at other 
rates must be sorted to 5-digit, 3-digit, optional SCF, ADC, BMC, and 
mixed ADC destinations, as appropriate.
* * * * *
5.0  PALLETS OF PACKAGES, BUNDLES, AND TRAYS OF LETTER-SIZE MAIL
* * * * *

5.5  Securing Trays

    [Revise 5.5 to read as follows:]
    Trays must be sleeved and strapped under M033, except that if the 
processing and distribution manager gives a written waiver, strapping 
is not required for mixed ADC or mixed AADC letter trays of First-Class 
Mail; any letter tray placed on a 5-digit, 3-digit, or SCF pallet 
secured with stretchwrap; or any letter tray that originates and 
destinates in the same SCF (mail processing plant) service area.
* * * * *

M100  First-Class Mail (Nonautomation)

* * * * *

M130  Presorted First-Class

* * * * *
2.0  BASIC PREPARATION--LETTER-SIZE OR CARD-SIZE PIECES
* * * * *

[[Page 17200]]

2.2  Tray Preparation

    [Amend 2.2 by revising 2.2b to read as follows:]
    Tray size, preparation sequence, and labeling:
* * * * *
    b. 3-digit: required (full trays except for required origin/
optional entry 3-digit(s)); no overflow; use L002, Column A, for Line 
1.
* * * * *
3.0  OPTIONAL PREPARATION--UPGRADABLE LETTER-SIZE OR CARD-SIZE PIECES
* * * * *

3.2  Tray Preparation

    [Amend 3.2 by revising 3.2b to read as follows:]
    Tray size, preparation sequence, and labeling:
* * * * *
    b. 3-digit: required (full trays except for required origin/
optional entry 3-digit(s)); no overflow; use L002, Column A, for Line 
1.
* * * * *
4.0  PREPARATION OF FLAT-SIZE PIECES

4.2  Tray Preparation

    [Amend 4.2 by revising 4.2b to read as follows:]
    Tray size, preparation sequence, and labeling:
* * * * *
    b. 3-digit: required (full trays except for required origin/
optional entry 3-digit(s)); no overflow; use L002, Column A, for Line 
1.
* * * * *
5.0  PREPARATION OF PARCELS
* * * * *

5.3  Sack Preparation

    [Amend 5.3 by revising 5.3b to read as follows:]
    Sack size, preparation sequence, and labeling:
* * * * *
    b. 3-digit: required (10-pound minimum except for required origin/
optional entry 3-digit(s)); no overflow; use L002, Column A, for Line 
1.
* * * * *
6.0  DOCUMENTATION
    [Amend 6.0 by revising the last sentence to read as follows:]
    A complete, signed postage statement, using the correct USPS form 
or an approved facsimile, must accompany each mailing, supported by 
documentation produced by PAVE- or MAC-certified software, or 
standardized documentation meeting the standards in P012. Documentation 
of postage is not required if the correct rate is affixed to each piece 
or each piece is of identical weight and the pieces are separated by 
rate when presented for acceptance.

M200  Periodicals (Nonautomation)

M210  Regular Periodicals

1.0  BASIC STANDARDS
* * * * *

1.3  Firm Packages

    [Revise 1.3 to read as follows:]
    A firm package is two or more copies for the same address placed in 
one package. If each copy has a delivery address, each may be claimed 
as a separate piece for presort and on the postage statement, or the 
firm package may be claimed as one piece. A firm package sorted and 
claimed as one piece must be accompanied by (but must be physically 
separate from) five other pieces packaged to the same destination to 
satisfy a six-piece package requirement when applicable, regardless of 
the number of copies in the firm package.
* * * * *
2.0  PACKAGE PREPARATION
* * * * *

2.2  Carrier Route Packages

    [Revise 2.2 to read as follows:]
    Carrier route packages may be placed only in (on) carrier route or 
5-digit carrier routes sacks or trays (or pallets). Mailers may choose 
to prepare carrier route packages at a higher level of route saturation 
(e.g., only if there are at least 15 pieces per route). Under this 
option, smaller packages of six or more pieces per carrier route not 
prepared for carrier route rates must be prepared for and paid at 
another applicable rate.
* * * * *
3.0  SACK PREPARATION (FLATS)

3.1  Sack Preparation

    [Amend 3.1 by revising 3.1d to read as follows:]
    Sack size, preparation sequence, and labeling:
* * * * *
    d. 3-digit: required at 24 pieces (no minimum for required origin/
optional entry 3-digit(s)), optional with one six-piece package 
minimum; use L002, Column A, for Line 1.
* * * * *
4.0  TRAY PREPARATION (LETTER-SIZE PIECES)

4.1  Tray Preparation

    [Amend 4.1 by revising 4.1d to read as follows:]
    Tray size, preparation sequence, and labeling:
* * * * *
    d. 3-digit: required at 24 pieces (no minimum for required origin/
optional entry 3-digit(s)), optional with one six-piece package 
minimum; use L002, Column A, for Line 1.
* * * * *

M290  Preferred Periodicals

1.0  BASIC STANDARDS
* * * * *

1.4  Firm Packages

    [Revise 1.4 to read as follows:]
    A firm package is two or more copies for the same address placed in 
one package. If each copy has a delivery address, each may be claimed 
as a separate piece for presort and on the postage statement, or the 
firm package may be claimed as one piece. A firm package sorted and 
claimed as one piece must be accompanied by (but must be physically 
separate from) five other pieces packaged to the same destination to 
satisfy a six-piece package requirement when applicable, regardless of 
the number of copies in the firm package.
* * * * *

M600  Standard Mail (Nonautomation)

M610  Single-Piece and Nonautomation Regular Standard Mail (A)

1.0  SINGLE-PIECE RATES
    [Revise 1.0 to read as follows:]
    Each piece must be legibly marked ``Standard'' or ``STD,'' or may 
also be marked ``Single-Piece'' or ``SNGLP'' under P600 to correct an 
incorrect rate marking. Unmarked pieces are treated as First-Class Mail 
and charged postage at the applicable First-Class rate.
2.0  BASIC STANDARDS--REGULAR NONAUTOMATION RATES
* * * * *

2.3  Exception--Standard Mail (A)

    [Amend 2.3 by removing ``Limited'' in the heading and the 
introductory text in italics: The following exception is applicable 
until January 1, 1997; after that time, preparation will be based 
solely on the standards for the rate claimed and the processing 
category of the pieces, whether the same standards apply to other 
pieces claimed at other

[[Page 17201]]

rates and produced as part of the same mailing job:''; change 15% to 
10% in the last sentence to read as follows:]
    When a Standard Mail (A) mailing job could, by size, qualify for 
Regular Standard Mail automation rates as either letters or flats, if 
part of the job is prepared as palletized flats at automation rates for 
flats, the remainder may be prepared as palletized flats at Enhanced 
Carrier Route rates and Regular nonletter nonautomation rates if the 
number of Regular nonletter nonautomation rate pieces does not exceed 
10% of the total number of pieces in the entire mailing job.
* * * * *
3.0  BASIC PREPARATION--REGULAR NONAUTOMATION RATE LETTER-SIZE PIECES
* * * * *

3.2  Tray Preparation

    [Amend 3.2 by revising the introductory text and 3.2c to read as 
follows:]
    Only mail eligible for the 3/5 rate (i.e., 150 or more pieces in 
total for the 3-digit area) may be prepared in 5-digit and 3-digit 
trays under 3.2a and 3.2b. Tray size, preparation sequence, and 
labeling:
* * * * *
    c. Origin 3-digit(s): required (no minimum); optional for entry 3-
digit(s) (no minimum); use L002, Column A, for Line 1.
* * * * *

4.0  OPTIONAL PREPARATION--UPGRADABLE REGULAR NONAUTOMATION RATE 
LETTER-SIZE PIECES

* * * * *

4.2  Tray Preparation

    [Amend 4.2 by revising the introductory text and 4.2c to read as 
follows:]
    Only mail eligible for the 3/5 rate (i.e., 150 or more pieces in 
total for the 3-digit area) may be prepared in 5-digit and 3-digit 
trays under 4.2a and 4.2b. Tray size, preparation sequence, and 
labeling:
* * * * *
    c. Origin 3-digit(s): required (no minimum); optional for entry 3-
digit(s) (no minimum); use L002, Column A, for Line 1.
* * * * *
5.0  PREPARATION--REGULAR NONAUTOMATION RATE FLAT-SIZE PIECES AND ALL 
IRREGULAR PARCELS
* * * * *

5.7  Sack Preparation

    [Amend 5.7 by revising 5.7b to read as follows:]
    Sack size (subject to 5.4, 5.5, and 5.6), preparation sequence, and 
labeling:
* * * * *
    b. 3-digit: required (minimum of 125 pieces/15 pounds, smaller 
volume not permitted, except for required origin/optional entry 3-
digit(s)); use L002, Column A, for Line 1.
* * * * *

M620  Enhanced Carrier Route Standard Mail

1.0  BASIC STANDARDS

1.1  All Mailings

    [Amend 1.1 by revising 1.1e to read as follows:]
    All nonautomation rate Enhanced Carrier Route mailings are subject 
to these general standards (automation rate Enhanced Carrier Route 
mailings must be prepared under M810):
* * * * *
    e. Subject to M012, all pieces must be marked ``Bulk Rate'' or 
``Blk. Rt.'' In addition, Basic, High Density, and Saturation rate 
pieces must each be marked ``ECRLOT,'' ``ECRWSH,'' or ``ECRWSS,'' 
respectively, either in the optional endorsement line under M013 or in 
the carrier route information line under M014. Pieces not claimed at 
the corresponding rate must not bear the ``ECRLOT,'' ``ECRWSH,'' or 
``ECRWSS'' marking unless paid at single-piece rate and a corrective 
single-piece rate marking is applied under P600.
* * * * *

1.4  Exception--Standard Mail (A)

    [Amend 1.4 by removing ``Limited'' in the heading and the 
introductory text in italics: The following exception is applicable 
until January 1, 1997; after that time, preparation will be based 
solely on the standards for the rate claimed and the processing 
category of the pieces, whether the same standards apply to other 
pieces claimed at other rates and produced as part of the same mailing 
job:''; change 15% to 10% in the last sentence to read as follows:]
    When a Standard Mail (A) mailing job could, by size, qualify for 
Regular Standard Mail automation rates as either letters or flats, if 
part of the job is prepared as palletized flats at automation rates for 
flats, the remainder may be prepared as palletized flats at Enhanced 
Carrier Route rates and Regular nonletter nonautomation rates if the 
number of Regular nonletter nonautomation rate pieces does not exceed 
10% of the total number of pieces in the entire mailing job.
* * * * *
2.0  PACKAGE PREPARATION
* * * * *

2.6  Sack Preparation

    [Amend 2.6 by revising 2.7b to read as follows:]
    Sack size, preparation sequence, and labeling:
* * * * *
    b. 3-digit: required at 10 pieces/20 pounds/1,000 cubic inches (no 
minimum for required origin/optional entry 3-digit(s)); smaller volume 
permitted; use L002, Column A, for Line 1.
* * * * *

M690  Nonprofit Standard Mail

M692  Basic and 3/5 Presort

* * * * *
3.0  SACK PREPARATION
* * * * *

3.2  Machinable, Irregular Parcels

    [Revise 3.2 to read as follows:]
    If a mailing consists of both machinable and irregular parcels, a 
5-digit sack must be prepared when there are 10 pounds of mail for a 5-
digit ZIP Code destination. Sacks containing less than 10 pounds of 
mail may be prepared.
* * * * *

3.5  Presort and Labeling

    [Amend 3.5 by revising 3.5e to read as follows:]
    Sack presort sequence and labeling:
* * * * *
    e. Mixed ADC (required); for Line 1, use MXD followed by the city/
state/ZIP of the ADC serving the 3-digit ZIP Code of the entry post 
office, as shown in L004 (for flats) or L604 (for irregular parcels), 
as applicable.

3.6  Line 2

    [Amend M692.3.6 by removing 3.6b and redesignating 3.6c as 3.6b and 
3.6d as 3.6c to read as follows:]
    Line 2: STD, processing category, and:
    a. 5-digit sacks of machinable and irregular parcels: MACH AND 
IRREG.
    b. Mixed ADC sacks: MIXED ADC.
    c. As required by the applicable labeling list, Line 2 processing 
code information must be right-justified under the ZIP Code on Line 1.
* * * * *

[[Page 17202]]

M800  All Automation Mail

M810  Letter-Size Mail (Except Preferred Periodicals and Nonprofit 
Standard Mail)

1.0  BASIC STANDARDS
* * * * *

1.2  Mailings

    [Revise 1.2 to read as follows:]
    All pieces in a mailing must meet the standards in C810 and must be 
sorted together to the finest extend required. A single automation rate 
mailing may include pieces prepared at 5-Digit, 3-Digit, 3/5, and Basic 
automation rates, as applicable; all may be reported on the same 
postage statement and documentation. The definitions of a mailing and 
permissible combinations are in M011.

1.3  Marking

    [Revise 1.3 to read as follows:]
    First-Class pieces must be marked ``First-Class'' or ``Presorted 
First-Class''; Standard Mail must be marked ``Bulk Rate'' or ``Blk. 
Rt.'' In addition, pieces must be marked ``AUTO'' (or ``AUTOCR'' for 
carrier route rate pieces, as appropriate). Periodicals require no 
markings. Pieces not claimed at an automation rate must not be marked 
``AUTO'' or ``AUTOCR'' unless paid at single-piece rate and a 
corrective single-piece rate marking is applied under P100 or P600.

1.4  General Preparation

    [Revise 1.4 to read as follows:]
    Grouping, packaging, and labeling are not generally required or 
permitted, except packaging is required in any mailing consisting 
entirely of card-size pieces and for pieces in overflow and less-than-
full trays; pieces must be grouped as specified in 2.0 and 3.0; and 
package labels are required only for Regular Periodicals.

1.5  Carrier Route

    [Revise 1.5 to read as follows:]
    Carrier route groups may be placed in only carrier route or 5-digit 
carrier routes trays. Preparation of mail to qualify for automation 
carrier route rates is optional for First-Class and Standard Mail (A) 
pieces, subject to E140 and E641.
* * * * *
2.0  PREPARATION--FIRST-CLASS AND STANDARD MAIL (A)
* * * * *

2.2  Tray Preparation

    [Amend 2.2 by revising 2.2d and 2.2e to read as follows:]
    Tray size, preparation sequence, and labeling:
* * * * *
    d. 3-digit/scheme: required (150-piece minimum except no minimum 
for required origin/optional entry 3-digit(s)/scheme); overflow 
allowed; for Line 1, use L002, Column B.
    e. AADC: required (150-piece minimum); overflow allowed; group 
pieces by 3-digit ZIP Code prefix (or 3-digit/scheme if applicable); 
use L801 for Line 1.
* * * * *
3.0  PREPARATION--PERIODICALS

3.1  Tray Preparation

    [Revise 3.1 to read as follows:]
    Tray size, preparation sequence, and labeling:
    a. 5-digit: required (150-piece minimum); overflow allowed; use 5-
digit ZIP Code destination of pieces for Line 1, preceded for military 
mail by the prefixes under M031.
    b. 3-digit/scheme: required (150-piece minimum except no minimum 
for required origin/optional entry 3-digit(s)/scheme); overflow 
allowed; for Line 1, use L002, Column B.
    c. AADC: required (150-piece minimum); overflow allowed; group 
pieces by 3-digit ZIP Code prefix (or 3-digit/scheme if applicable); 
use L801 for Line 1.
    d. Mixed AADC: required (no minimum); group pieces by AADC; for 
Line 1, use L802 (mail entered by the mailer at an ASF or BMC) or L803, 
as appropriate.
* * * * *
4.0  DOCUMENTATION
    [Revise 4.0 to read as follows:]
    A complete, signed postage statement, using the correct USPS form 
or an approved facsimile, must accompany each mailing, supported by 
documentation produced by PAVE-certified (or, except for Periodicals, 
MAC-certified) software or standardized documentation under P012. 
Documentation of postage is not required if the correct rate is affixed 
to each piece or if each piece is of identical weight and the pieces 
are separated by rate when presented for acceptance. Combined mailings 
of Periodicals publications must also be documented under M210. 
Periodicals are not subject to the standard for supporting 
documentation produced by PAVE-certified software or standardized 
documentation under P012 until January 1, 1997.

M820  Flat-Size Mail (Except Preferred Periodicals and Nonprofit 
Standard Mail)

1.0  BASIC STANDARDS
* * * * *

1.2  Mailings

    [Amend 1.2 by revising the second sentence to read as follows:]
    All pieces in a mailing must meet the standards in C820 and must be 
sorted together to the finest extent required. A single automation rate 
mailing may include pieces prepared at 5-Digit, 3-Digit, 3/5, and Basic 
automation rates, as applicable; all may be reported on the same 
postage statement and documentation. The definitions of a mailing and 
permissible combinations are in M011.
* * * * *

1.4  Marking

    [Revise 1.4 to read as follows:]
    First-Class pieces must be marked ``AUTO'' and either ``First-
Class'' or ``Presorted First-Class.'' Standard Mail must be marked 
``AUTO'' and either ``Bulk Rate'' or ``Blk. Rt.'' Periodicals require 
no markings. Pieces not claimed at an automation rate must not be 
marked ``AUTO'' unless paid at single-piece rate and a corrective 
single-piece rate marking is applied under P100 or P600.

1.5  Exception--Standard Mail (A)

    [Amend 1.5 by removing ``Limited'' in the heading and the 
introductory text in italics: The following exception is applicable 
until January 1, 1997; after that time, preparation will be based 
solely on the standards for the rate claimed and the processing 
category of the pieces, whether the same standards apply to other 
pieces claimed at other rates and produced as part of the same mailing 
job:''; and by replacing ``15%'' with ``10%'' in the last sentence to 
read as follows:]
    When a Standard Mail (A) mailing job could, by size, qualify for 
Regular Standard Mail automation rates as either letters or flats, if 
part of the job is prepared as palletized flats at automation rates for 
flats, the remainder may be prepared as palletized flats at Enhanced 
Carrier Route rates and Regular nonletter nonautomation rates if the 
number of Regular nonletter nonautomation rate pieces does not exceed 
10% of the total number of pieces in the entire mailing job.
* * * * *
2.0  PREPARATION--FIRST-CLASS MAIL
* * * * *

[[Page 17203]]

2.2  Tray Preparation

    [Amend 2.2 by revising 2.2b to read as follows:]
    Tray size, preparation sequence, and labeling:
* * * * *
    b. 3-digit: required full trays, no overflow, except no minimum for 
required origin/optional entry 3-digit(s); use L002, Column A, for Line 
1.
* * * * *
3.0  PREPARATION--PERIODICALS
* * * * *

3.2  Sack Preparation

    [Amend 3.2 by revising 3.2b to read as follows:]
    Sack size, preparation sequence, and labeling:
* * * * *
    b. 3-digit: required at 24 pieces, optional with one six-piece 
minimum, except no minimum for required origin/optional entry 3-
digit(s); use L002, Column A, for Line 1.
* * * * *
4.0  PREPARATION--STANDARD MAIL
* * * * *

4.3  Sack Preparation

    [Amend 4.3 by revising 4.3b to read as follows:]
    Sack size, preparation sequence, and labeling:
* * * * *
    b. 3-digit: required (125-piece/15-pound minimum, smaller volume 
not permitted, except no minimum for required origin/optional entry 3-
digit(s)); use L002, Column A, for Line 1.
* * * * *
5.0  DOCUMENTATION
    [Revise 5.0 to read as follows:]
    A complete, signed postage statement, using the correct USPS form 
or an approved facsimile, must accompany each mailing, supported by 
documentation produced by PAVE-certified (or, except for Periodicals, 
MAC-certified) software or standardized documentation under P012. 
Documentation of postage is not required if the correct rate is affixed 
to each piece or if each piece is of identical weight and the pieces 
are separated by rate when presented for acceptance. Combined mailings 
of Periodicals publications must also be documented under M210. 
Periodicals are not subject to the standard for supporting 
documentation produced by PAVE-certified software or standardized 
documentation under P012 until January 1, 1997.
* * * * *

P  POSTAGE AND PAYMENT METHODS

P000  Basic Information

P010  General Standards

* * * * *

P012  Documentation

* * * * *
2.0  STANDARDIZED DOCUMENTATION--FIRST-CLASS MAIL, REGULAR PERIODICALS, 
AND REGULAR STANDARD MAIL
* * * * *

2.3  Rate Level Column Headings

    [Amend 2.3 by revising 2.3 to read as follows:]
    The actual name of the rate level (or corresponding abbreviation) 
is used for column headings required by 2.2 and shown below:
* * * * *
    c. Enhance Carrier Route Standard Mail

------------------------------------------------------------------------
                   Rate                             Abbreviation        
------------------------------------------------------------------------
Saturation...............................  WS                           
High Density.............................  HD                           
Basic....................................  CR                           
Basic Automation [letters]...............  CB                           
------------------------------------------------------------------------

2.4  Tray, Sack, Pallet, Package Sortation Level

    [Revise 2.4 to read as follows:]
    The actual sortation level (or corresponding abbreviation) is used 
for the tray, sack, pallet, or package sortation levels required by 2.2 
and shown below:

------------------------------------------------------------------------
             Sortation level                        Abbreviation        
------------------------------------------------------------------------
Carrier Route............................  CRD                          
5-Digit Carrier Routes...................  CR5                          
5-Digit..................................  5DG                          
3-Digit..................................  3DG                          
3-Digit Scheme [barcoded letters]........  3DGS                         
ADC......................................  n/a                          
AADC.....................................  n/a                          
Mixed ADC................................  MADC                         
Mixed AADC...............................  MAAD                         
SCF [pallets]............................  n/a                          
BMC or ASF...............................  n/a                          
Mixed BMC (working)......................  MBMC                         
------------------------------------------------------------------------

* * * * *

P023  Precanceled Stamps

1.0  BASIC INFORMATION
* * * * *

1.5  Amount of Postage

    [Revise 1.5 to read as follows:]
    The value of precanceled stamps affixed to each piece in a mailing 
must be either the exact amount due or another amount permitted by 
standard. If the exact amount is not affixed to each piece, 
documentation meeting the basic standards in P012 and those applicable 
to the rate claimed must be submitted with the mailing unless excepted 
by P100 or P600. Refunds for overpayment must meet the standards in 
P014.
* * * * *

P030  Postage Meters and Meter Stamps

1.0  BASIC INFORMATION
* * * * *

1.7  Amount of Postage

    [Revise 1.7 to read as follows:]
    The value of meter stamps affixed to each piece in a mailing must 
be either the exact amount due or another amount permitted by standard. 
If the exact amount is not affixed to each piece, documentation meeting 
the basic standards in P012 and those applicable to the rate claimed 
must be submitted with the mailing unless excepted by P100 and P600. 
Refunds for overpayment must meet the standards in P014.
* * * * *

P100  First-Class Mail

1.0  BASIC INFORMATION
* * * * *

1.2  Postage Payment, Documentation

    [Revise 1.2 to read as follows:]
    A complete, signed postage statement, using the correct USPS form 
or an approved facsimile, must accompany each mailing paid by permit 
imprint or claimed at other than the single-piece First-Class or 
Priority Mail rate. The postage statement must be supported by 
documentation as required by P012 and the rate claimed unless the 
correct rate is affixed to each piece or if each piece is of identical 
weight and the pieces are separated by rate when presented for 
acceptance.
2.0  SINGLE-PIECE RATES
* * * * *

2.5  Pieces Presented With Automation or Presort Rate Mailings

    [Revise 2.5 to read as follows:]
    Regardless of the method of postage payment, pieces of single-piece 
rate First-Class Mail may be presented with and reported on the same 
postage statement as pieces claimed at automation or presort rates if 
the single-piece rate pieces are physically separated from the 
automation or

[[Page 17204]]

presort rate pieces; bear no rate marking, are marked only ``First-
Class,'' or (if not affixed with full single-piece rate postage) are 
marked ``Single-Piece'' or ``SNGLP'' under M012 in addition to any 
other marking; and either have additional postage affixed to yield the 
correct amount on each piece or (if prepared with a corrective rate 
marking) all additional postage is paid at the time of mailing.
* * * * *
4.0  PRESORTED RATES
* * * * *

4.2  Postage Affixed, Generally

    [Amend 4.2 by revising 4.2b and 4.2c to read as follows:]
    Unless permitted by other standards or RCSC authorization, when 
precanceled postage or meter stamps are used, all pieces in a single 
mailing must bear postage under one of these conditions:
* * * * *
    b. A precanceled stamp or the full correct postage at the lowest 
First-Class first ounce rate applicable to the mailing job, and full 
postage on metered pieces for any additional ounces(s) (or nonstandard 
surcharge, if applicable); postage documentation may be required by 
standard.
    c. Postage in an amount not less than the lowest available First-
Class first ounce letter or card rate (as applicable) in the mailing 
job if authorized by the RCSC, plus full postage on metered pieces for 
any extra ounce(s); postage documentation may be required by standard.
* * * * *
5.0  AUTOMATION RATES
* * * * *

5.2  Postage Affixed, Generally

    [Amend 5.2 by revising 5.2a and 5.2c to read as follows:]
    Unless permitted by other standards or RCSC authorization, when 
precanceled postage or meter stamps are used, only one payment method 
may be used in a mailing and each piece must bear postage under one of 
these conditions:
    a. Each metered piece weighing more than 1 ounce must bear the 
correct additional postage to pay for the additional ounce(s).
* * * * *
    c. Each piece must bear a precanceled stamp or meter postage in the 
exact amount or at the lowest rate applicable to pieces in the mailing 
job. If exact postage is not affixed, all additional postage must be 
paid at the time of mailing with an advance deposit account or with a 
meter strip affixed to the required postage statement.
* * * * *

P600  Standard Mail

1.0  BASIC INFORMATION
* * * * *

1.2  Postage Payment, Documentation

    [Revise 1.2 to read as follows:]
    A complete, signed postage statement, using the correct USPS form 
or an approved facsimile, must accompany each Standard Mail mailing 
paid by permit imprint or claimed at any bulk rate. The postage 
statement must be supported by documentation as required by P012 and 
the rate claimed unless the correct rate is affixed to each piece or if 
each piece is of identical weight and the pieces are separated by rate 
when presented for acceptance.

1.3  Pieces Presented With Automation or Presort Rate Mailings

    [Revise 1.3 to read as follows:]
    Regardless of the method of postage payment, pieces of single-piece 
rate Standard Mail (A) may be presented with and reported on the same 
postage statement as pieces claimed at automation or presort rates if 
the single-piece rate pieces are physically separated from the 
automation or presort rate pieces; either are marked ``Standard'' or 
``STD'' or (if not affixed with full single-piece rate postage) are 
marked ``Single-Piece'' or ``SNGLP'' under M012 in addition to any 
other marking; and either have additional postage affixed to yield the 
correct amount on each piece or (if prepared with a corrective rate 
marking) all additional postage is paid at the time of mailing.
* * * * *
3.0  AUTOMATION RATES
* * * * *

3.2  Meter or Precanceled Stamps

    [Amend 3.2 by revising 3.2a to read as follows:]
    In a metered or precanceled stamp mailing:
    a. Each piece must bear a precanceled stamp or meter postage in the 
exact postage or at the lowest rate applicable to pieces in the mailing 
job. If exact postage is not affixed, all additional postage must be 
paid at the time of mailing with an advance deposit account or with a 
meter strip affixed to the required postage statement.
* * * * *

R  RATES AND FEES

* * * * *

R600  Standard Mail

* * * * *
8.0  Special Standard Mail
    [Amend 8.0 by replacing ``Level A Presort'' with ``5-Digit'' and 
``Level B Presort'' with ``BMC.'']
* * * * *
    An appropriate amendment to 39 CFR 111.3 will be published to 
reflect these changes.
Stanley F. Mires,
Chief Counsel, Legislative.
[FR Doc. 96-9595 Filed 4-17-96; 8:45 am]
BILLING CODE 7710-12-P