[Federal Register Volume 66, Number 32 (Thursday, February 15, 2001)]
[Proposed Rules]
[Pages 10408-10411]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-3845]


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POSTAL SERVICE

39 CFR Part 551


Semipostal Stamp Program

AGENCY: Postal Service.

ACTION: Proposed rule.

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SUMMARY: This proposed rule would create implementation regulations for 
the Semipostal Authorization Act, which authorizes the Postal Service 
to issue and sell semipostal postage stamps. Semipostal stamps are 
intended to raise funds for causes determined by the Postal Service to 
be in the public interest and appropriate. The proposed regulations 
relate to the selection procedures for causes and recipient executive 
agencies, the offices and authorities responsible for making decisions 
related to causes and recipient executive agencies, the criteria to be 
applied in evaluating proposals for causes and recipient executive 
agencies, sales limitations, the calculation of amounts to be 
transferred to executive agencies, and the determination of costs to be 
offset from differential revenue.

DATES: Comments must be received on or before March 19, 2001.

ADDRESSES: Written comments should be mailed or delivered to the 
Manager, Stamp Services, ATTN: Semipostal Proposed Rules, 475 L'Enfant 
Plaza SW., Room 5670, Washington, DC 20260-2435, or sent via e-mail at 
the address posted on the Postal Service's Internet Web site at 
www.usps.com. Copies of all written comments will be available for 
inspection and photocopying between 9 a.m. and 4 p.m., Monday through 
Friday, in the Postal Service Library, at the above address. 
Arrangements should be made in advance for inspection by contacting 
(202) 268-2900.

FOR FURTHER INFORMATION CONTACT: Cindy Tackett, (202) 268-6555.

SUPPLEMENTARY INFORMATION:

I. Introduction

    The Semipostal Authorization Act, Pub. Law No. 106-253, 114 Stat. 
634 (2000) (hereinafter ``Act''), authorizes the Postal Service to 
establish a ten-year program to sell semipostal stamps. The 
differential between the price of a semipostal stamp and the First-
Class Mail\ service rate, less an offset for the reasonable costs of 
the Postal Service, consists of an amount to fund causes that the 
``Postal Service determines to be in the national public interest and 
appropriate.'' By law, revenue from sales, net of postage and the 
reasonable costs of the Postal Service, is to be transferred to 
selected executive agencies within the meaning of 5 U.S.C. 105.
    The Governors of the Postal Service are authorized to set prices 
for semipostal stamps according to a formula prescribed in the Act. 
Specifically, the Act prescribes that the price of a semipostal stamp 
is the ``rate of postage that would otherwise regularly apply,'' plus a 
differential, i.e., the difference between sales revenue and postage, 
of not to exceed 25 percent. This is essentially the same formula 
prescribed by the Stamp Out Breast Cancer Act, Pub. L. No. 105-41, 111 
Stat. 1119 (1997).

II. Statutory Requirements for Regulations

    The Act provides that the Postal Service is to promulgate certain 
regulations via a notice and comment rulemaking. Specifically, the 
Postal Service must identify the ``office or other authority within the 
Postal Service'' to make decisions on the ``appropriate causes and 
agencies'' eligible to receive amounts becoming available from 
differential revenue less an offset for the reasonable costs of the 
Postal Service. The Postal Service is also directed to issue 
regulations on the ``criteria and procedures'' to be applied in making 
decisions on recipient executive agencies and causes. The Act further 
requires the Postal Service to identify ``what limitations shall apply, 
if any, relating to the issuance of semipostals (such as whether more 
than one semipostal may be offered for sale at the same time).'' 
Finally, the Postal Service's regulations must ``specifically address 
how the costs incurred by the Postal Service . . . shall be computed, 
recovered, and kept to a minimum.''

III. Summary of Proposed Regulations

    The proposed rules are intended to enable the Postal Service to 
fulfill the Act's objectives. Proposed section 551.1 provides that the 
office of Stamp Services is primarily responsible for the Semipostal 
Stamp Program, and that the office of Controller has primary 
responsibility for financial issues related to the program.
    Proposed section 551.2 describes semipostal stamps, and defines the 
differential to be the difference between the sales price and the 
postage value of semipostal stamps at the time of purchase.
    Proposed section 551.3 establishes a procedure for the selection of 
causes and recipient executive agencies. From time to time, the Postal 
Service will publish a request for proposals in the Federal Register 
inviting interested persons to submit proposals for consideration. 
Proposals will be reviewed by the office of Stamp Services for 
consistency with the selection criteria in proposed section 551.4. 
Those proposals deemed to be eligible for consideration will be 
forwarded to the Citizens' Stamp Advisory Committee (CSAC).\1\ CSAC 
will review the eligible proposals and make recommendations to the 
Postmaster General, who will act on those recommendations. Special 
rules would apply if more than one proposal is submitted for the same 
cause, with different executive agencies proposed to receive the funds. 
In those cases, the funds would be evenly divided, unless an agency can 
demonstrate it is entitled to a larger share. In those instances, the 
Postal Service's vice president and Consumer Advocate would determine 
the share for each executive agency.
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    \1\ CSAC is an advisory body created by the Postal Service to 
provide technical information, advice, and recommendations to the 
Postal Service on subjects for postage stamps. See ``Administrative 
Support Manual'' Sec. 644.5. It also provides broad judgment and 
experience on various factors that lead to the issuance of stamps 
and establishes criteria for selecting stamp subjects. CSAC's 
fifteen members reflects a wide range of educational, artistic, 
historical, and professional expertise. Members are appointed by, 
and serve at the pleasure of, the Postmaster General.
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    Proposed section 551.4 would establish the submission requirements 
and selection criteria. Interested persons, defined to include 
individuals, corporations, associations, and executive agencies, may 
submit proposals. Proposals must satisfy certain technical 
requirements, and provide a description of the cause to be funded. The 
submission must also demonstrate that the cause has broad national 
appeal, and the cause is in the national public interest and furthers 
human welfare. Submissions must be accompanied by a letter from an 
executive agency designated to receive the funds. The letter provides 
assurance that the agency is qualified to receive

[[Page 10409]]

funds under the Act, and also ensures that the proposal can be 
successfully executed if it is selected. Consideration would not be 
given to proposals that support a number of enumerated factors, 
including: anniversaries; historical events; public works; people; 
specific organizations or associations; commercial enterprises or 
products; cities, towns, municipalities, counties, or secondary 
schools; hospitals, libraries, or similar institutions; religious 
institutions; any cause that has been previously supported by a 
semipostal stamp, including the stamp issued pursuant to 39 U.S.C. 
Sec. 414; causes that do not further human welfare; or causes 
determined by the Postal Service or the Citizens' Stamp Advisory 
Committee to be inconsistent with the spirit, intent, or history of the 
Semipostal Authorization Act. These enumerated factors are intended to 
give effect to the Act's intent that only causes in the national public 
interest should be funded. Proposed section 551.4 also makes clear that 
proposal submissions become the property of the Postal Service.
    Proposed section 551.5 specifies the frequency and other 
limitations on semipostal stamps. The Act provides that the period 
within which the Postal Service may sell semipostal stamps under 39 
U.S.C. 416 is limited to ten years. The sales period will commence 
after sales of the Breast Cancer Research Stamp are discontinued. The 
sales period of the Breast Cancer Research Stamp was extended by the 
Semipostal Authorization Act to July 29, 2002. New semipostal stamps 
will accordingly not be issued until after this time. To ensure that 
the Semipostal Stamp Program reflects the broad spectrum of causes that 
further the national public interest, proposed section 551.5 specifies 
that the sales period for any given semipostal would be limited to no 
more than two years. While the Postal Service expects that most 
semipostal stamps will be offered for the full two-year period, changes 
in the sales period may be made by the office of Stamp Services to 
coincide with changes in the First-Class Mail service single-
piece first ounce rate. To minimize costs, avoid customer confusion, 
and facilitate ease of administration, no more than one semipostal 
stamp would be offered for sale at any given time. Proposed 551.5 also 
reserves the right to withdraw a semipostal stamp.
    Proposed section 551.6 establishes that the price of semipostal 
stamps will be based on the First-Class Mail service single-
piece first-ounce rate. Prices are to be determined by the Governors of 
the Postal Service in accordance with the requirements of 39 U.S.C. 
416.
    Proposed section 551.7 identifies the procedure for calculation of 
the funds to be transferred to executive agencies. A special account 
identifier code (AIC) will be used to record sales revenue. The amounts 
to be transferred consist of the differential revenue less an amount 
for the reasonable costs of the Postal Service. Funds are to be 
transferred to recipient executive agencies pursuant to mutual 
agreement.
    Proposed section 551.8 sets forth the Postal Service's policy to 
recover from the differential those costs determined to be attributable 
to the semipostal and that would not normally be incurred for 
commemorative stamps having similar sales objectives; physical 
characteristics; and marketing, promotional, and public relations 
activities. Such commemorative stamps are defined as ``comparable 
stamps.'' The office of the Controller will identify comparable stamps 
and develop a cost profile for purposes of comparison. Costs that may 
be recovered from the differential include packaging costs in excess of 
those for comparable stamps, printing costs for flyers or special 
receipts, costs of changes to equipment, costs of developing and 
executing marketing and promotional plans in excess of those for 
comparable stamps, and other costs that would not normally have been 
incurred for comparable stamps. Other specified costs would not be 
recovered from the differential, but rather would be ``recovered'' 
through retention of revenue from the postage portion of semipostal 
stamps. The office of the Controller would bear responsibility for 
tracking specified costs in proposed section 551.8. The Postal Service 
intends to maximize differential revenues by avoiding, to the extent 
practicable, promotional costs that exceed those of comparable stamps, 
establishing restrictions on the number of concurrently issued 
semipostals, and making financial and retail system changes in 
conjunction with regularly scheduled revisions.

IV. Conclusion

    In accordance with 39 U.S.C. 416(e)(2), the Postal Service invites 
public comment on the following proposed amendments to the ``Code of 
Federal Regulations.''
    An appropriate amendment to 39 CFR part 551 to reflect these 
changes will be published if the proposal is adopted.

List of Subjects in 39 CFR Part 551

    Administrative practice and procedure, Postal Service.
    For the reasons set out in this document, the Postal Service 
proposes to add 39 CFR part 551 as follows:

PART 551--SEMIPOSTAL STAMP PROGRAM

Sec.
551.1   Semipostal stamp program.
551.2   Semipostal stamps.
551.3   Procedure for selection of causes and recipient executive 
agencies.
551.4   Submission requirements and selection criteria.
551.5   Frequency and other limitations.
551.6   Pricing.
551.7   Calculation of funds for recipient executive agencies.
551.8   Cost offset policy.

    Authority: 39 U.S.C. 101, 201, 203, 401, 403, 404, 410, 414, and 
416.


Sec. 551.1  Semipostal stamp program.

    The Semipostal Stamp Program is established under the Semipostal 
Authorization Act, Pub. Law No. 106-253, 114 Stat. 634 (2000). The 
office of Stamp Services has primary responsibility for administering 
the Semipostal Stamp Program. The office of the Controller has primary 
responsibility for financial aspects of the Semipostal Stamp Program.


Sec. 551.2  Semipostal stamps.

    Semipostal stamps are stamps that are sold for a price that exceeds 
the postage value of the stamp. The difference between the price and 
postage value of semipostal stamps, also known as the differential, 
less an offset for reasonable costs, as determined by the Postal 
Service, consists of a contribution to fund causes determined by the 
Postal Service to be in the national public interest and appropriate. 
Funds are to be transferred to selected recipient executive agencies, 
as defined under 5 U.S.C. 105. The office of Stamp Services determines 
the print quantities of semipostal stamps.


Sec. 551.3  Procedure for selection of causes and recipient executive 
agencies.

    The Postal Service is authorized to select causes and recipient 
executive agencies to receive funds raised through the sale of 
semipostal stamps. The procedure for selection of causes and recipient 
executive agencies is as follows:
    (a) In advance of the issuance of a semipostal stamp, the office of 
Stamp Services will publish a request for proposals in the Federal 
Register inviting interested persons to submit proposals for a cause 
and recipient executive agency for a future semipostal stamp. The 
notice will specify the beginning and ending dates of the period during 
which proposals may be

[[Page 10410]]

submitted. The notice will also specify the approximate period in which 
the semipostal stamp for which proposals are solicited is to be sold. 
The office of Stamp Services may publicize the request for proposals 
through other means, as it determines in its discretion.
    (b) Proposals will be received by the office of Stamp Services, 
which will review each proposal under Sec. 551.4.
    (c) Those proposals that the office of Stamp Services determines 
satisfy the requirements of Sec. 551.4 will be forwarded to the 
Citizens' Stamp Advisory Committee for consideration.
    (d) The Citizens' Stamp Advisory Committee will review eligible 
proposals forwarded by the office of Stamp Services. Based on the 
proposals submitted, the Citizens' Stamp Advisory Committee will make 
recommendations to the Postmaster General on a cause and eligible 
recipient executive agency(ies) to the Postmaster General. If no 
eligible proposals are recommended, the Postal Service will solicit 
additional proposals through publication of a notice in the Federal 
Register and through other means as it determines in its discretion.
    (e) Meetings of the Citizens' Stamp Advisory Committee are closed, 
and deliberations of the Citizens' Stamp Advisory Committee are 
predecisional in nature.
    (f) The Postmaster General will act on the recommendations of the 
Citizens' Stamp Advisory Committee. The decision of the Postmaster 
General shall consist of the final agency decision.
    (g) The office of Stamp Services will notify the executive 
agency(ies) in writing of a decision designating the agency(ies) as 
recipients of funds from a semipostal stamp.
    (h)(1) A proposal submission may designate one or two recipient 
executive agencies to receive funds, but if more than one executive 
agency is proposed, the proposal must specify the percentage shares of 
differential revenue, net of the Postal Service's reasonable costs, to 
be given to each agency. If percentage shares are not specified, it is 
presumed that the proposal intends that the funds be split evenly 
between the agencies. If more than two recipient executive agencies are 
proposed to receive funds and the proposal is selected, the proposal is 
treated as prescribed by paragraph (h)(3) of this section.
    (2) If more than one proposal is submitted for the same cause, and 
the proposals would have different executive agencies receiving funds, 
the funds would be evenly divided between the executive agencies, with 
no more than two agencies being designated to receive funds, as 
determined by the vice president and Consumer Advocate.
    (3) Within ten days of receipt of a notice indicating that it has 
been selected to receive funds, a selected agency could request a 
proportionately larger share if it can demonstrate that its share of 
total funding of the cause from other sources (excluding any additional 
funds available as a result of the semipostal stamp) exceeds that of 
the other recipient executive agency. The request must be in writing 
and must be sent to the Manager of Stamp Services. In those cases, the 
determination regarding the proportional share to be divided among the 
recipient executive agencies is made by the Postal Service's vice 
president and Consumer Advocate.
    (i) As either a separate matter, or in combination with 
recommendations on a cause and a recipient executive agency(ies), the 
Citizens' Stamp Advisory Committee will recommend to the Postmaster 
General a design (i.e., artwork) for the semipostal stamp. The 
Postmaster General will make a final determination on the design to be 
featured.


Sec. 551.4  Submission requirements and selection criteria.

    (a) Proposals on recipient executive agencies and causes must 
satisfy the following requirements:
    (1) An original and twenty copies of the proposal submission must 
be timely submitted by an interested person. For purposes of this 
section, interested persons include, but are not limited to, 
individuals, corporations, associations, and executive agencies under 5 
U.S.C. 105. Interested persons submitting proposals are also encouraged 
to submit an Adobe Acrobat (.pdf) file saved on a 3.5 inch diskette or 
CD-ROM diskette containing the entire contents of the submission. In 
extraordinary circumstances, the office of Stamp Services may, in its 
discretion, consider a late-filed proposal.
    (2) The proposal submission must be signed by the individual or a 
duly authorized representative and must provide the mailing address, 
phone number, fax number (if available), and e-mail address (if 
available) of a designated point of contact.
    (3) The submission must describe the cause and the purposes for 
which the funds would be spent.
    (4) The submission must demonstrate that the cause to be funded has 
broad national appeal, and that the cause is in the national public 
interest and furthers human welfare. Respondents are encouraged to 
submit supporting documentation demonstrating that funding the cause 
would benefit the national public interest.
    (5) The submission must be accompanied by a letter from an 
executive agency on agency letterhead representing that:
    (i) It is an executive agency as defined under 5 U.S.C. 105,
    (ii) It is willing and able to implement the proposal, and
    (iii) It is willing and able to meet the requirements of the 
Semipostal Authorization Act, if it is selected. The letter must be 
signed by a duly authorized representative of the agency.
    (b) Proposal submissions become the property of the Postal Service 
and are not returned to interested persons who submit them. Interested 
persons who submit proposals are not entitled to any remuneration, 
compensation, or any other form of payment, whether their proposal 
submissions are selected or not, for any reason.
    (c) The following persons are disqualified from submitting 
proposals:
    (1) Any contractor of the Postal Service that may stand to benefit 
financially from the Semipostal Stamp Program; or
    (2) Members of the Citizens' Stamp Advisory Committee and their 
immediate families, and employees or contractors of the Postal Service, 
and their immediate families, who are involved in any decisionmaking 
related to causes, recipient agencies, or artwork for the Semipostal 
Stamp Program.
    (d) Consideration for evaluation would not be given to proposals 
that request support for the following: anniversaries; historical 
events; public works; people; specific organizations or associations; 
commercial enterprises or products; cities, towns, municipalities, 
counties, or secondary schools; hospitals, libraries, or similar 
institutions; religious institutions; any cause that has been 
previously supported by a semipostal stamp, including the stamp issued 
pursuant to 39 U.S.C. 414; causes that do not further human welfare; or 
causes determined by the Postal Service or the Citizens' Stamp Advisory 
Committee to be inconsistent with the spirit, intent, or history of the 
Semipostal Authorization Act.
    (e) Artwork and stamp designs should not be submitted with 
proposals.


Sec. 551.5  Frequency and other limitations.

    (a) The Postal Service is authorized to issue semipostal stamps for 
a ten-year period beginning on the date on which semipostal stamps are 
first sold to the public under 39 U.S.C. 416. The ten-year period will 
commence after the sales period of the Breast Cancer Research Stamp is 
concluded in

[[Page 10411]]

accordance with the Stamp Out Breast Cancer Act, as amended by the 
Semipostal Authorization Act. The office of Stamp Services will 
determine the date of commencement of the ten-year period.
    (b) The Postal Service will offer only one semipostal stamp for 
sale at any given time during the ten-year period.
    (c) The sales period for any given semipostal stamp is limited to 
no more than two years, as determined by the office of Stamp Services.
    (d) Prior to or after the issuance of a given semipostal stamp, the 
Postal Service reserves the right to withdraw the semipostal stamp from 
sale, or to reduce the sales period, if, inter alia:
    (1) Its sales or revenue statistics are lower than expected,
    (2) The sales or revenue projections are lower than previously 
expected, or
    (3) The cause or recipient executive agency does not further, or 
comply with, the statutory purposes or requirements of the Semipostal 
Authorization Act. The decision to withdraw a semipostal stamp is to be 
made by the Postmaster General, after review of supporting 
documentation prepared by the office of Stamp Services.


Sec. 551.6  Pricing.

    (a) The Semipostal Authorization Act prescribes that the price of a 
semipostal stamp is the ``rate of postage that would otherwise 
regularly apply.'' For purposes of this provision, the First-Class Mail 
single-piece first-ounce rate of postage will be considered ``the rate 
of postage that would otherwise regularly apply.''
    (b) The prices of semipostal stamps are determined by the Governors 
of the United States Postal Service in accordance with the requirements 
of 39 U.S.C. 416.


Sec. 551.7  Calculation of funds for recipient executive agencies.

    (a) The Postal Service is to determine its reasonable costs in 
executing its responsibilities pursuant to the Semipostal Authorization 
Act, as specified in Sec. 551.8. These costs are offset against the 
revenue received through sale of each semipostal stamp in excess of the 
First-Class Mail single-piece first-ounce rate in effect at the time of 
purchase.
    (b) Any reasonable costs offset by the Postal Service shall be 
retained by it, along with revenue from the sale of the semipostal 
stamps, as recorded by sales units through the use of a specially-
designated account information code.
    (c) The Postal Service is to pay designated recipient executive 
agency(ies) the remainder of the differential revenue less an amount to 
recover the reasonable costs of the Postal Service, as determined under 
Sec. 551.8.
    (d) The amounts for recipient executive agencies are transferred in 
a manner and frequency determined by mutual agreement, consistent with 
the requirements of 39 U.S.C. 416.


Sec. 551.8  Cost offset policy.

    (a) Postal Service policy is to recover from the differential 
revenue for each semipostal stamp those costs determined to be 
attributable to the semipostal stamp and that would not normally be 
incurred for commemorative stamps having similar sales objectives; 
physical characteristics; and marketing, promotional, and public 
relations activities (hereinafter ``comparable stamps'').
    (b) Overall responsibility for tracking costs associated with 
semipostal stamps will rest with the office of the Controller. 
Individual organizational units incurring costs will provide supporting 
documentation to the office of the Controller.
    (c) For each semipostal stamp, the office of the Controller shall, 
based on judgment and available information, identify the comparable 
commemorative stamp(s) and create a profile of the typical cost 
characteristics of the comparable stamp(s), thereby establishing a 
baseline for cost comparison purposes. The determination of comparable 
commemorative stamps may change during or after the sales period, if 
the projections of stamp sales differ from actual experience.
    (d) Except as specified, all costs associated with semipostal 
stamps will be tracked by the office of the Controller. Costs that will 
not be tracked include:
    (1) Costs that the Postal Service determines to be 
inconsequentially small;
    (2) Costs for which the cost of tracking would be burdensome (e.g., 
costs for which the cost of tracking exceeds the cost to be tracked);
    (3) Costs attributable to mail to which semipostal stamps are 
affixed (which are attributable to the appropriate class and/or 
subclass of mail); and
    (4) Administrative and support costs that the Postal Service would 
have incurred whether or not the Semipostal Stamp Program had been 
established.
    (e) Cost items recoverable from the differential revenue may 
include, but are not limited to, the following:
    (1) Packaging costs in excess of the cost to package comparable 
stamps;
    (2) Printing costs for flyers and special receipts;
    (3) Cost of changes to equipment;
    (4) Cost of developing and executing marketing and promotional 
plans in excess of the cost for comparable stamps; and
    (5) Other costs specific to the stamp that would not normally have 
been incurred for comparable stamps.
    (f) The Semipostal Stamp Program incorporates the following 
provisions that are intended to maximize differential revenues 
available to the selected causes. These include, but are not limited 
to, the following:
    (1) Avoiding, to the extent practicable, promotional costs that 
exceed those of comparable stamps;
    (2) Establishing restrictions on the number of concurrently issued 
semipostals; and
    (3) Making financial and retail system changes in conjunction with 
regularly scheduled revisions.
    (g) Other costs attributable to semipostals but which would 
normally be incurred for comparable stamps would be recovered through 
the postage component of the semipostal stamp price. These include, but 
are not limited to, the following:
    (1) Costs for stamp design (including market research);
    (2) Costs for stamp production and printing;
    (3) Costs of stamp shipping and distribution;
    (4) Estimated training costs for field staff, except for special 
training associated with semipostal stamps;
    (5) Costs of stamp sales (including employee salaries and 
benefits);
    (6) Costs associated with the withdrawal of the stamp issue from 
sale;
    (7) Costs associated with the destruction of unsold stamps; and
    (8) Costs associated with the incorporation of semipostal stamp 
images into advertising for the Postal Service as an entity.

Stanley F. Mires,
Chief Counsel, Legislative.
[FR Doc. 01-3845 Filed 2-14-01; 8:45 am]
BILLING CODE 7710-12-P