[Federal Register Volume 63, Number 64 (Friday, April 3, 1998)]
[Proposed Rules]
[Pages 16464-16465]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-8457]


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POSTAL SERVICE

39 CFR Part 501


Requirements for Manufacturer, Demonstration and Loaner Postage 
Meters

AGENCY: Postal Service.

ACTION: Proposed rule.

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SUMMARY: This proposal would clarify and strengthen requirements for 
manufacturers of postage meters to control meters that they use for 
demonstration and loaner purposes. The intended effect of this proposal 
is to reduce the potential for misuse and fraud.

DATES: Comments must be received on or before May 4, 1998.

ADDRESSES: Written comments should be mailed or delivered to the 
Manager, Metering Technology Management, Room 8430, 475 L'Enfant Plaza 
SW, Washington, DC 20260-2444. Copies of all written comments will be 
available at the above address for inspection and photocopying between 
9 a.m. and 4 p.m. Monday through Friday.

FOR FURTHER INFORMATION CONTACT: Nicholas S. Stankosky, (202) 268-5311.

SUPPLEMENTARY INFORMATION: Serious postal revenue protection problems 
result from inconsistent practices and procedures followed by meter 
manufacturers in controlling demonstration meters and those that are 
lent to their customers. The manufacturers' employees, dealers, and 
agents are often held accountable for the movement, tracking, and use 
of these meters in a manner consistent with policies and procedures 
that have been established and implemented for all other meters in 
order to protect postal revenue. The following procedures are proposed 
in order to reduce the potential for misuse and fraud.

List of Subjects in 39 CFR Part 501

    Administrative practice and procedure, Postal Service.

    Although exempt from the notice and comment requirements of the 
Administrative Procedure Act (5 U.S.C. 553 ((b) and (c)), regarding 
proposed rulemaking by 39 U.S.C. 410(a), the Postal Service invites 
public comments on the following proposed amendments to Part 501 of 
Title 39 of the Code of Federal Regulations.

PART 501--AUTHORIZATION TO MANUFACTURE AND DISTRIBUTE POSTAGE 
METERS

    1. The authority citation for Part 501 continues to read as 
follows:

    Authority: 5 U.S.C. 552(a); 39 U.S.C. 101, 401, 403, 410, 2610, 
2605; Inspector General Act of 1978, as amended (Pub. L. 95-452, as 
amended), 5 U.S.C. App 3.

    2. Section 501.22 is amended by adding paragraph (s) to read as 
follows:


Sec. 501.22  [Amended]

* * * * *
    (s) Implement controls over demonstration and lent meters as 
follows:
    (1) There are two conditions under which postage meters may be 
placed with a customer on a temporary basis. One involves a ``demo'' 
meter and the other is a ``loaner meter.'' For purposes of definition, 
a ``demo'' meter contains a specimen indicia and cannot be used to 
meter live mail. A ``loaner'' meter has a ``live'' indicia and may be 
used to apply postage to a mailpiece. Both are typically used in 
marketing efforts to acquaint a potential user with the features of a 
meter.
    (2) A ``demo'' meter must be recorded on internal manufacturer 
inventory records and must be tracked by model

[[Page 16465]]

number, serial number, and physical location.
    (3) ``Demo'' meters may be used only for demonstrations by the 
manufacturer's dealer/branch representative and must remain in their 
control. These meters may not be left in the possession of the 
potential customer under any circumstance.
    (4) Because ``loaner'' meters can print live postage, they must be 
licensed to the manufacturer's dealer/branch under the Postal Service 
Centralized Meter Licensing System (CMLS). Because each dealer/branch 
office may service a multitude of customers located in many different 
post office service areas, a single license issued from the appropriate 
postal district office city will cover all post offices located in that 
district. A Form 3601-C, Postage Meter Activity Report, must be 
initiated to activate a loaner meter under a dealer/branch CMLS 
license.
    (5) Loaner meters can be placed only with customers who have been 
issued a CMLS meter license.
    (6) Only electronic, remote set meters may be used as ``loaner'' 
meters. Representatives must record ascending and descending register 
readings at the time a meter is lent and when it is returned. All 
discrepancies must be reported immediately to the respective meter 
manufacturer, who will then notify Metering Technology Management. The 
meter must be inspected when returned from the customer. Any indication 
of tampering or fraudulent use also must be reported to Metering 
Technology Management. Use of the meter must immediately cease and must 
be returned to the manufacturer's QAR department via Registered mail.
    (7) As both a manufacturer's representative and a meter licensee, 
the representative is subject to the provisions of the Domestic Mail 
Manual (DMM), Part P030 and 39 CFR part 501.
    (8) The manufacturer's representative assumes all responsibilities 
under USPS meter regulations applicable to meter licensees, including 
having the meter set and examined. All losses incurred by the Postal 
Service as a result of fraudulent use of the meter by the customer are 
the responsibility of that customer, the meter licensee, and the 
manufacturer.
    (9) Loaner meters must be included in the CMLS meter tracking 
system. A Form 3601-C must be prepared by the representative for each 
``loaner'' meter installed or withdrawn. The licensee and meter 
location information must show the name of the dealer/branch and not 
the temporary user.
    (10) The city/state designation in the ``loaner'' indicia must show 
the location where the user's mail will be deposited.
    (11) The representative must ensure that ``loaner'' meters are 
available for examination by the Postal Service on demand, and are 
examined under postal policy.
    (12) A customer may have possession of a ``loaner'' meter for a 
maximum of 5 continuous business days. In order for the customer to 
possess the meter for a longer period, it must be installed 
permanently. When customer chooses to continue the use of a postage 
meter, the ``loaner'' meter must be retrieved and a new meter installed 
under the customer's license.
Stanley F. Mires,
Chief Counsel, Legislative.
[FR Doc. 98-8457 Filed 4-2-98; 8:45 am]
BILLING CODE 7710-12-P