[Federal Register Volume 66, Number 158 (Wednesday, August 15, 2001)]
[Proposed Rules]
[Pages 42820-42831]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-20558]


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POSTAL SERVICE

39 CFR Part 111


Production, Distribution, and Use of Postage Meters (Postage 
Evidencing Systems) and Postal Security Devices

AGENCY: Postal Service.

ACTION: Proposed rule.

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SUMMARY: The Postal Service is proposing to revise Domestic Mail Manual 
(DMM) P030 to include policies and regulations pertaining to more 
secure postage evidencing systems, such as those that use a Postal 
Security Device (PSD), those that generate information-based indicia 
(IBI), and PC Postage (TM). The term ``postage evidencing systems'' is 
the collective term used when referring to these systems.
    This proposed rule replaces current DMM P030, Postage Meters and 
Meter Stamps, and the proposed DMM P050, Information-Based Indicia, 
that was published for public comment in the October 2, 2000, Federal 
Register (65 FR 58682). That Federal Register notice proposed the 
addition of a new section to the DMM for systems that generate IBI and 
included regulations pertaining to PSDs and PC Postage. In developing 
the current proposal the Postal Service considered the public comments 
received in response to the October 2 notice, advances in postage 
evidencing system technology and security, and the experience we gained 
by testing and implementing the first postage evidencing systems to 
generate information-based indicia (IBI).
    The Postal Service is issuing this proposal for public comment. We 
will revise the proposed policies and regulations, if required, and 
publish a final rule. Since all comments will be made available for 
public inspection, any marked ``proprietary'' or ``confidential'' will 
be returned to the sender without consideration.
    The Postal Service will publish proposed revisions to Title 39, 
Code of Federal Regulations (CFR) part 501, Authorization to 
Manufacture and Distribute Postage Meters, to include policies and 
regulations pertaining to more secure postage evidencing systems, such 
as those that use a PSD, those that generate IBI, and PC Postage, in a 
future issue of the Federal Register.

DATES: The Postal Service must receive your comments on or before 
September 14, 2001. No extensions on the comment period will be 
granted.

ADDRESSES: Mail or deliver written comments to the Manager, Postage 
Technology Management, 1735 N Lynn Street, Room 5011, Arlington, VA 
22209-6050. You can view and copy all written comments at the same 
address between 9 a.m. and 4 p.m., Monday through Friday.

FOR FURTHER INFORMATION CONTACT: James Luff, 703-292-3693.

SUPPLEMENTARY INFORMATION: Proposed DMM P030 extends the regulations 
for postage meters to all secure postage evidencing systems. ``Postage 
evidencing systems'' is an umbrella term that includes traditional 
postage meters, PSD Meters, IBI Meters, and PC Postage systems, as 
defined in P030.1.0. Unless otherwise noted, the regulations apply to 
all postage evidencing systems. Exceptions were made where necessary to 
distinguish the policies and regulations that apply to the newer 
postage evidencing systems, such as PC Postage. We added new topics and 
reorganized the text to enable users to find information more easily. 
The Postal Service will continue to refer to the mail produced by 
postage evidencing systems as ``metered mail.'' The payment forms given 
in current P030 for traditional remote reset meters (electronic funds 
transfer and checks) are extended to PSD Meters and IBI Meters. PC 
Postage systems will be limited to the payment forms proposed in the 
Federal Register notice of October 2, 2000, namely credit cards and 
automated clearing house (ACH) debit. The Postal Service will 
separately publish revisions to P014, Refunds and Exchanges, to 
incorporate the changes made to P030.
    The following is a summary of the major changes made in this 
proposal in comparison with current P030, Postage Meters and Meter 
Stamps, and the proposed P050, Information-Based Indicia, as published 
October 2, 2000.
    1. The regulations define the basic characteristics of all secure 
postage evidencing systems and identify the distinguishing features of 
the different system types.
    2. Indicia generated by any USPS-approved secure postage evidencing 
system may be used on all classes of mail except Periodicals. Such mail 
is called ``metered mail'' and is entitled to all privileges and 
subject to all conditions applying to the various classes of mail.
    3. We revised the regulations throughout to reflect the reduced 
role of the licensing post office in license applications, postage 
evidencing system check in and check out, and postage evidencing system 
resetting. These customer transactions shift from the licensing post 
office to the provider.
    4. We are retiring manually reset meters. Such a meter may be 
installed only as replacement for an existing manually reset meter of 
the same type to fulfill the remaining lease or rental period. We no 
longer allow alternative meter resetting locations for manually reset 
meters.
    5. We replaced the section in DMM 56 on meter setting with four 
separate sections, one for each distinct set of

[[Page 42821]]

financial transactions and procedures, depending on system type.
    6. A license may be cancelled if there is no postage evidencing 
system applied to it for 30 days or more.
    7. Postage evidencing systems returned to the provider can be 
shipped via Priority Mail.
    8. We extended from every 6 months to every 12 months the time 
between required submissions for envelopes that must be submitted for 
quality assurance evaluation for certain PC Postage systems.
    9. We now use the term ``fraud warning'' for the cautionary labels 
on postage evidencing systems that contain basic reminders on use of 
the system, warn against system tampering or misuse, and note 
penalties.
    10. Physical inspections by the provider and examinations by the 
licensing post office have been extended from every 6 months to every 
12 months for postage evidencing systems used outside the country.
    11. Procedures for the refund of unused postage value remaining in 
a postage evidencing system checked out of service are included for 
each type of system.
    12. We added a new regulation that different forms of postage may 
not be mixed on a mailpiece since stamps, indicia printed with 
fluorescent ink or on labels with fluorescence, and indicia that 
include a facing identification mark (FIM) are each treated differently 
in facing and cancellation.
    13. The detailed requirements for tagging labels with fluorescence 
that were included in P050 as published in the Federal Register October 
2, 2000, were replaced by a requirement that the fluorescent tagging on 
the label be sufficient to face and process the mail.
    14. There is now an option to identify the licensing post office in 
the indicia using only the 5-digit ZIP Code.
    15. The revised regulations for date accuracy allow customers the 
same options whether the metered mail is submitted at the retail window 
or deposited in a collection box.
    16. We no longer limit deposit of single-piece-rate mail outside 
the area served by the licensing post office to a ``handful'' of mail.

Notice and Comment

    Although exempt from the notice and comment requirements of the 
Administrative Procedure Act (5 U.S.C. 553(b), (c)) regarding proposed 
rulemaking by 39 U.S.C. 410(a), the Postal Service invites public 
comments on the following proposed amendments to the Domestic Mail 
Manual, incorporated by reference in the Code of Federal Regulations. 
See 39 CFR part 111.

List of Subjects in 39 CFR Part 111

    Administrative practice and procedure, Postal Service.

    For reasons stated in the preamble, the Postal Service proposes to 
amend 39 CFR part 111 as follows:

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. Revise the Domestic Mail Manual (DMM) as follows:

P  Postage and Payment Methods

P000  Basic Information

* * * * *
    [Revise the title and text of P030 as follows:]

P030  Postage Meters (Postage Evidencing Systems)

    Summary: P030 describes the use and regulations for postage meters 
(postage evidencing systems) to prepare metered mail.
1.0  BASIC INFORMATION

1.1  Definition

    Postage evidencing systems are secure postage metering systems that 
generate indicia imprinted on or affixed to a mailpiece to evidence 
prepayment of postage. The USPS regulates these systems and their use 
to protect postal revenue. Only USPS-authorized manufacturers or 
product service providers (``providers'') may design, produce, and 
distribute the systems. Misuse of a postage evidencing system to avoid 
payment of postage is punishable by law. The major components of a 
postage evidencing system are:
    a. Funds registers and accounting functions to store and maintain 
postal financial data. Two funds registers are required:
    (1) The descending register that records the postage value 
remaining in the postage evidencing system.
    (2) The ascending register that increases as postage is printed. 
This register records the total value of all postage printed during the 
life of the postage evidencing system unless it is reset to zero by the 
provider during servicing between customers or if it reaches its 
maximum limit.
    b. Indicia generated by the system to show evidence of postage 
prepayment on the mailpiece.
    c. USPS and provider infrastructure to support user licensing and 
customer information, ensure proper payment for postage, set and reset 
the system with postage value, and provide for inventory management. 
Provider and USPS interface to accomplish these functions.

1.2  Types

    Generation 1 postage evidencing systems use industry-standard 
electronic components for managing the registers and accounting for 
postal funds. Generation 2 postage evidencing systems use a USPS-
approved electronic component called a ``Postal Security Device'' 
(``PSD'') for managing the registers and accounting for postal funds. 
All PSDs must meet USPS performance criteria and must have a self-
disabling feature that prohibits the printing of postage when specific 
programmed requirements are not met. For all Generation 2 postage 
evidencing systems the provider and USPS infrastructure must interface 
to support licensing and customer information, ensure proper payment 
for postage, and provide for inventory management. The systems are 
categorized as follows:
    a. Traditional postage meter--a Generation 1 postage evidencing 
system:
    (1) The industry-standard electronic components used for managing 
registers and accounting for postal funds may or may not include a 
self-disabling feature that prohibits the printing of postage when 
specific programmed requirements are not met.
    (2) Indicia are printed either by a letterpress or digital printing 
process. Letterpress indicia are generated by the impact of a hard, 
inked printing die on the print surface. Digital indicia are generated 
electronically and produced on the print surface by a nonimpact 
technology, such as an ink jet, thermal, or laser printing process.
    (3) The provider and USPS infrastructure systems for all Generation 
1 postage evidencing systems interface to support licensing and 
customer information and to provide for inventory management. 
Generation 1 postage meters can be either manually reset (the meter 
must be physically taken to the USPS for resetting) or remotely reset. 
Remotely reset meters are replacing manually reset meters in accordance 
with a phased USPS retirement plan. The USPS infrastructure currently 
supports payment for postage for all Generation 1 postage evidencing 
systems, both manually reset and remotely reset. The provider 
infrastructure supports payment for postage for remotely reset meters 
but does not support payment for postage for manually reset meters.

[[Page 42822]]

    b. PSD Meter--a Generation 2 postage evidencing system:
    (1) A PSD Meter must use a USPS-approved PSD.
    (2) The indicia generated by a PSD Meter must be digital indicia 
approved by the USPS.
    (3) A PSD Meter must be reset using an electronic connection 
between the provider's postage resetting system and the postal 
registers in the PSD.
    c. Information-Based Indicia (IBI) Meter--a Generation 2 postage 
evidencing system:
    (1) An IBI Meter must use a USPS-approved PSD.
    (2) An IBI Meter must generate information-based indicia (IBI). IBI 
are digital indicia that include human-readable information and a USPS-
approved two-dimensional barcode or other USPS-approved symbology, with 
a digital signature and other required data fields.
    (3) An IBI Meter must be reset with an electronic connection 
between the provider's postage resetting system and the postal 
registers in the PSD.
    d. PC Postage (TM) system--a Generation 2 postage evidencing 
system:
    (1) A PC Postage system must use a USPS-approved electronic PSD.
    (2) The indicia generated by a PC Postage system must be IBI.
    (3) A PC Postage system must be reset with postage value using a 
personal computer to establish an electronic connection between the 
provider's postage resetting system and the postal registers in the 
PSD. The user must employ a personal computer to access critical 
infrastructure functions.

1.3  Authorized Providers

    Postage evidencing systems are available only from authorized 
providers. All postage evidencing systems and PSDs remain the property 
of the USPS-authorized provider and are available only through a lease 
or rental agreement with the provider or its authorized agent. The USPS 
holds providers responsible for the control, secure operation, 
distribution, maintenance, inspection where required, and replacement 
of postage evidencing systems and PSDs throughout their entire life 
cycle. The provider is also responsible for the secure disposal or 
destruction of postage evidencing systems and PSDs at the end of their 
useful life. The following providers are authorized:

Ascom Hasler Mailing Systems Inc, 19 Forest Pkwy, Shelton Ct 06484-
6140, 800-243-6275, www.ascom-usa.com
Francotyp-Postalia Inc, 140 N Mitchell Ct Ste 200, Addison Il 60101-
5629, 800-341-6052, www.fp-usa.com
Neopost 30955 Huntwood Ave, Hayward Ca 94544-7084, 800-624-7892, 
www.neopostinc.com
Neopost Online, 3400 Bridge Pkwy Ste 201, Redwood City Ca 94065-1168, 
www.neopostonline.com
Pitney Bowes Inc, 1 Elmcroft Rd Stamford Ct 06926-0700, 800-322-8000, 
www.pitneybowes.com
Psi Systems Envelope Manager Software, 247 High St, Palo Alto Ca 94301-
1041, 800-576-3279 x140, www.envmgr.com
Stamps.Com, 3420 Ocean Park Blvd Ste 1040,Santa Monica Ca 90405-3035 
www.stamps.com

1.4  Licensee

    The licensee of a postage evidencing system is the person or entity 
authorized by the USPS to lease and use a system. The licensee cannot 
own a postage evidencing system or PSD and may possess a postage 
evidencing system only under a valid lease or rental agreement with an 
approved provider or its agent. The licensee is responsible for the 
control, maintenance, and use of the postage evidencing system in 
accordance with USPS regulations.

1.5  Possession of a Postage Evidencing System

    No person or entity other than an authorized provider, its 
authorized agent, the USPS, or a licensee may have a postage evidencing 
system or PSD in their possession. Any other person or entity in 
possession of a postage evidencing system or PSD must immediately 
surrender it to the provider or to the USPS.

1.6  Use of a Postage Evidencing System

    No person or entity other than an authorized provider may use a 
postage evidencing system until the provider initializes the system or, 
where applicable, the USPS sets and seals the system, performs the 
required validations, and checks the system into service. Once the 
postage evidencing system is properly in service, it may be used by the 
licensee or others authorized by the licensee. The licensee is 
responsible for control and use of the system.

1.7  Classes of Mail

    Postage may be paid by imprinting or affixing indicia generated by 
a USPS-approved postage evidencing system on any class of mail except 
Periodicals. Such mail is called ``metered mail'' and is entitled to 
all privileges and subject to all conditions applying to the various 
classes of mail.
2.0  LICENSING

2.1  Procedures

    To possess and use a postage evidencing system, the user must 
register with the USPS and be granted a license. A single license 
allows the licensee to use multiple postage evidencing systems for 
metered mail deposited in the licensing post office in accordance with 
11.0. A postage evidencing system can be licensed to only one post 
office. The user must submit a separate registration, be granted a 
separate license authorization, and have a separate postage evidencing 
system for each licensing post office where the user intends to deposit 
mail. The procedures are as follows:
    a. The applicant submits to the provider all data required for the 
license, including the ZIP Code of the licensing post office where the 
user intends to deposit the metered mail.
    b. The provider submits the required information to the USPS 
electronically.
    c. The USPS notifies the provider after granting the license.
    d. The USPS can cancel the licensee's authorization to lease and 
use postage evidencing systems if an active system is not associated 
with the license for 30 days or more. The customer must reregister for 
a license to resume the use of a postage evidencing system.

2.2  Licensee's Agreement

    By registering for a USPS license to rent or lease and use a 
postage evidencing system, the applicant agrees that the license may be 
revoked immediately and the provider notified by the USPS to withdraw 
the postage evidencing system from service for the following reasons:
    a. The postage evidencing system is used in any fraudulent or 
unlawful scheme or enterprise.
    b. The postage evidencing system is not used for 12 consecutive 
months.
    c. The licensee fails to exercise sufficient control of the postage 
evidencing system or PSD or fails to comply with the regulations for 
its care or use.
    d. The postage evidencing system or PSD is taken or used outside 
the United States, its territories or possessions, except as 
specifically authorized under these regulations by the manager of 
Postage Technology Management, USPS Headquarters.
    e. Mail is deposited at other than the licensing post office 
(except as permitted under 11.0 or D072).

2.3  Refusal to License a User

    The USPS notifies both the applicant and the provider in writing 
when

[[Page 42823]]

authorization for a license is refused. Any applicant refused 
authorization may appeal the decision under 2.5. The USPS may refuse 
authorization for a license for the following reasons:
    a. The applicant submitted false information on the license 
application.
    b. The applicant violated any regulation regarding the care or use 
of a PSD, postage evidencing system, or the indicia generated by a 
system that resulted in the revocation of the applicant's postage meter 
or postage evidencing system license within 5 years before the date the 
applicant submits the application.
    c. There is sufficient reason to believe that the applicant will 
use the postage evidencing system or PSD in violation of USPS 
regulations.

2.4  Revocation of a License

    The USPS can revoke the user's license when the user does not 
fulfill the responsibilities for the care and use of a PSD, postage 
evidencing system, or the indicia generated by a system. The USPS 
notifies the licensee's provider(s) of the revocation so that the 
provider(s) can notify the licensee, cancel the lease or rental 
agreement(s), and withdraw all postage evidencing systems from service. 
The notification is sent by certified mail. Revocation takes effect 10 
calendar days after the licensee receives the revocation notice unless, 
within that time, the licensee appeals the decision under 2.5. A 
license is subject to revocation if it is used for any illegal scheme 
or enterprise, or there is probable cause to believe that it is to be 
used in violation of USPS regulations.

2.5  Appeal Process

    An applicant who is refused a license, or a licensee whose license 
is revoked, may file a written appeal with the manager of Postage 
Technology Management, USPS Headquarters (see G043), within 10 calendar 
days after receiving notification of the decision.
3.0  LICENSED USER'S RESPONSIBILITIES

3.1  Signed Lease or Rental Agreement With Financial Agreement for 
Resetting

    The licensee must enter into a signed lease or rental agreement 
with the provider that includes provisions for resetting the postage 
evidencing system with postage and a Postage Payment Agreement under 
which the licensee agrees to make payment for postage using a payment 
method approved by the USPS. The USPS is not a party to the lease or 
rental agreement but use of a postage evidencing system is subject to 
the regulations of the USPS and the terms and conditions of the Postage 
Payment Agreement.

3.2  Custody

    A postage evidencing system or PSD that is in the possession or 
custody of a licensee must remain in that user's custody until it is 
returned to the authorized provider or to the USPS, or is seized by the 
U.S. Postal Inspection Service for violation of Federal law.

3.3  Update Licensee Information

    The licensee must update required license registration information 
with the provider whenever there is any change in the licensee's name, 
address, telephone number, licensing post office, location of the 
postage evidencing system, or PSD. The USPS will update the license 
information based on the receipt of updated information submitted by 
the provider.

3.4  Relocation of Licensee

    When a licensee notifies the provider of a change of the licensing 
post office in accordance with 3.3, the provider will perform the 
appropriate accounting functions to withdraw the postage evidencing 
system from service at the original licensing post office and install 
it and reauthorize it for use at the new licensing post office, or 
issue another postage evidencing system for use at the new location.

3.5  Required Resetting

    All postage evidencing systems must be reset at least once every 3 
months. A zero value reset will meet this requirement.

3.6  Transaction Files

    Some postage evidencing systems generate records of transactions 
relating to indicia creation, funds transfer (including postage value 
downloads), and system or PSD audits. For postage evidencing systems 
that do not maintain automated transaction records, licensees are 
encouraged to maintain their own records of the readings of the 
ascending and descending registers for each day of operation. 
Transaction records are important in the validation of requests for 
refunds in the case of system malfunction.

3.7  Inspection and Examination

    The licensee must, upon request, make immediately available for 
examination and audit by the provider or by the USPS any postage 
evidencing system or PSD in the licensee's possession and any 
corresponding transaction records. The USPS can perform physical or 
remote examination of any postage evidencing system or PSD. The 
licensee must meet the requirements for provider inspections and USPS 
examinations. Postage evidencing systems located within the United 
States are inspected in accordance with the Postage Evidencing Systems 
Inspection and Examination Schedule below. For postage evidencing 
systems located outside the country, see 3.15.

                         Postage Evidencing Systems Inspection and Examination Schedule
----------------------------------------------------------------------------------------------------------------
                                                                                          USPS examination
    Security level       Postage evidencing system         Provider inspection              requirements
----------------------------------------------------------------------------------------------------------------
1....................  Manually reset postage meter.  Every 6 months..............  Must bring to post office
                                                                                     for examination when not
                                                                                     reset within 3 months.
2....................  Remote reset postage meter     Annually or every 6 months    Examinations in special
                        with letterpress or digital    when there is no setting      circumstances.
                        indicia, but without self-     activity in 6 months.
                        disabling feature.
3....................  Remote reset meter with        Every 2 years or every 6      Examinations in special
                        letterpress indicia and self-  months when there is no       circumstances.
                        disabling feature.             setting activity in 6
                                                       months.
4....................  Remote reset postage meter     Every 2 years or enhanced     Examinations in special
                        with digital indicia and       inspection process when       circumstances.
                        self-disabling feature.        approved by USPS.
5....................  PSD Meter, IBI Meter, or a PC  Inspections in special        Examinations in special
                        Postage system.                circumstances.                circumstances.
----------------------------------------------------------------------------------------------------------------


[[Page 42824]]

3.8  Quality Assurance

    Some PC Postage systems print indicia with a printer that may also 
be used for nonpostal applications. Users of such systems must forward 
a mailpiece bearing an indicium produced by the postage evidencing 
system and associated printer to the provider for quality assurance 
evaluation. The licensee must forward a quality assurance mailpiece to 
the provider when the system is installed, when there is a change to 
the printer connected to the system, and at least once every 12 months 
thereafter, in accordance with provider directions.

3.9  Labels With Fraud Warning and Serial Number

    The licensee must ensure that the fraud warning label placed by the 
provider on the postage evidencing system or its housing is not removed 
or destroyed while the postage evidencing system is in the licensee's 
possession. The fraud warning contains basic reminders on leasing or 
rental and use of the postage evidencing system, warnings against 
system tampering or misuse resulting in nonpayment of postage owed, and 
the penalties for such system misuse. The USPS does not authorize 
postage evidencing systems for use without this fraud warning. When the 
postage evidencing system has a serial number or barcode equivalent on 
the system housing, the user must ensure that neither the serial number 
nor the barcode is removed or destroyed while the postage evidencing 
system is in the licensee's possession.

3.10  Custody of Suspect Postage Evidencing Systems or PSDs

    The USPS may conduct unannounced, on-site examinations of postage 
evidencing systems or PSDs reasonably suspected of being manipulated or 
defective. A postal inspector may immediately withdraw a suspect 
postage evidencing system or PSD from service for physical and/or 
laboratory examination. The inspector withdrawing a suspect postage 
evidencing system or PSD issues the licensee a written acknowledgement 
of receipt of the item; forwards a copy to the provider; and, if 
appropriate, assists in obtaining a replacement postage evidencing 
system or PSD. Unless there is reason to believe that the postage 
evidencing system or PSD is fraudulently set with postage, existing 
postage in the postage evidencing system or PSD is refunded to the 
licensee, in accordance with established refund procedures, when it is 
withdrawn from service.

3.11  Defective Postage Evidencing System or PSD

    A defective postage evidencing system is one that is inoperable or 
inaccurately reflects its proper status. A faulty postage evidencing 
system or PSD may not be used under any circumstance. The procedures 
for dealing with a defective system are as follows:
    a. The licensee must immediately report any defective postage 
evidencing system or PSD to the provider.
    b. The provider must retrieve any defective postage evidencing 
system or PSD within 3 business days of notification by the licensee.
    c. The provider may supply the licensee with a replacement postage 
evidencing system unless there is a reasonable basis for suspecting 
actual or attempted tampering.
    d. The provider may not authorize or issue a refund for monies 
remaining on the faulty postage evidencing system until the faulty 
system is in the possession of the provider and has been carefully 
inspected.

3.12  Missing Postage Evidencing Systems or PSDs

    The licensee must immediately report to the provider the loss or 
theft of any postage evidencing system or PSD or the recovery of any 
missing postage evidencing system or PSD. The report must include the 
system identification number and the date, location, and details of the 
loss, theft, or recovery. In the case of suspected theft, the licensee 
must submit a copy of the police report to the provider upon request. 
The provider will report all details of the incident to the manager of 
Postage Technology Management, USPS Headquarters, in accordance with 
established procedures.

3.13  Returning a Postage Evidencing System or PSD

    A licensee in possession of a faulty, misregistering, retired, or 
withdrawn postage evidencing system or PSD, or a licensed user who no 
longer plans to keep a postage evidencing system or PSD in their 
possession for any reason, must return it within 3 business days to the 
provider to be withdrawn from service. Postage evidencing systems and 
PSDs must be shipped by Priority Mail unless the manager of Postage 
Technology Management, USPS Headquarters, gives written permission to 
ship at another rate or special service.

3.14  Approval for Use of Postage Evidencing Systems at Military 
Post Offices

    A person authorized by the Department of Defense to use the 
services of an overseas military post office, such as an APO or FPO, 
can use a USPS-approved postage evidencing system. For such users, the 
APO or FPO will be designated as the licensing post office on their 
user license. These users must deposit the mail prepared with their 
system at the licensing post office. All USPS policies and regulations 
regarding postage evidencing systems apply.

3.15  Approval for Use of Postage Evidencing Systems Outside the 
United States

    With written approval from the manager of Postage Technology 
Management, USPS Headquarters (see G043), licensees may use postage 
evidencing systems outside the customs territory of the United States 
to print evidence of U.S. postage. Any exceptions must be specifically 
approved in writing by the manager of Postage Technology Management, 
USPS Headquarters. The procedures and conditions are as follows:
    a. Licensees must maintain a permanent, established business 
address in the United States.
    b. Postage evidencing systems used in foreign locations may be 
leased only from those providers who have an authorized dealer or 
representative in the country where the postage evidencing system is to 
be located. The only exception is for those PC Postage systems for 
which the PSD remains in the custody and possession of the provider 
rather than the licensee.
    c. Licensees are subject to all USPS regulations and U.S. statutes 
pertaining to mail, mail fraud, and misuse of postage evidencing 
systems.
    d. All postage evidencing systems authorized by the USPS for use in 
foreign locations must have enhanced security features that include 
remote reset, a self-disabling feature that prevents printing of 
postage when specific programmed requirements are not met, and digital 
indicia. Only those systems specifically approved in writing by the 
manager of Postage Technology Management, USPS Headquarters, may be 
used outside the customs territory of the United States.
    e. Potential users must submit all data required for a license to 
lease and use postage evidencing systems to the provider. The provider 
will annotate the registration to state that it is for the foreign use 
of a U.S. postage evidencing

[[Page 42825]]

system and show where the system is to be located. The provider must 
submit the registration to the manager of Postage Technology 
Management, USPS Headquarters, for review and approval. Once a 
registration is approved and the license authorized, Postage Technology 
Management will designate the licensing post office and notify the 
provider and the licensee. A foreign license can be used for multiple 
postage evidencing systems as long as they all belong to the same 
licensed user and are licensed at the same licensing post office. 
Mailers who currently have a USPS license to lease and use postage 
evidencing systems must apply for a separate foreign license to 
participate in this program.
    f. The provider selected by the licensee must agree in writing to 
all terms and conditions established by the USPS pertaining to the 
distribution of U.S. postage evidencing systems outside of the United 
States. Once the postage evidencing system is installed, the provider 
must provide the information on system placement directly to the 
manager of Postage Technology Management, USPS Headquarters.
    g. Mail to be metered must be metered with U.S. postage and must be 
entered at the licensing post office.
    h. Postage evidencing systems located outside the United States 
must be remotely reset at least once every 3 months. A reset for zero 
postage satisfies this requirement. In addition, the provider must 
physically inspect all postage evidencing systems located outside the 
United States every 6 months, unless the system is security level 4 or 
higher on the Postage Evidencing Systems Inspection and Examination 
Schedule (3.7). The provider must physically inspect systems that are 
security level 4 or higher every 12 months. Failure to make the postage 
evidencing system available for inspection may result in the revocation 
of the foreign use license.
    i. Postage evidencing systems must be physically brought to the 
licensing post office for examination once every 12 months on a day and 
time set by the licensing post office. The licensing post office has 
the option of calling for more frequent examinations. The provider will 
notify the user of the post office to which the system must be brought 
for inspection. Failure to present the postage evidencing system at the 
appointed time and place may result in the revocation of the foreign 
use license.

3.16  Address Management System CD-ROM

    For postage evidencing systems designed to access the USPS Address 
Management System (AMS) CD-ROM, the licensed user must maintain address 
quality by ensuring the CD-ROM is updated at least once every 6 months.
4.0  MANUALLY RESET POSTAGE METERS

4.1  Initial Setting, Check In, and Installation

    A manually reset meter may be installed only as a replacement to 
complete the current lease term for an existing meter of the same make 
and model. Before delivering a manually reset postage meter to the 
licensee, the provider must present the meter and a completed PS Form 
3601-C, Postage Meter Activity Report, to the licensing post office to 
have the meter set, sealed (if applicable), and checked into service by 
the post office where it is to be regularly set or examined, unless the 
meter is serviced through the on-site meter service program described 
in 4.5. The installation process for manually reset meters is completed 
when the data from PS Form 3601-C is transmitted to the appropriate 
postal information systems.

4.2  Check Out and Withdrawal

    When a manually reset meter is withdrawn from a user, the provider 
must present the meter and a completed PS Form 3601-C to the licensing 
post office to have the meter checked out of service by the post office 
where it was regularly set or examined, unless the meter was serviced 
through the on-site meter service program described in 4.5. The 
withdrawal process for manually reset meters is completed when the data 
from PS Form 3601-C is transmitted to the appropriate postal 
information systems.

4.3  Location of Setting

    Except under 4.5, a manually reset meter must be set at the 
licensing post office. Alternative meter setting locations are no 
longer allowed. A meter may not be set at a contract postal unit.

4.4  Payment for Postage Settings

    Payment must be made for postage at the time of resetting. Payment 
may be in cash or by check, USPS-approved debit card, or money order. 
Payment is subject to USPS standards and procedures.

4.5  On-Site Meter Service Program

    The on-site meter service program, where available, allows 
qualified USPS employees to set or examine manually reset meters and 
check them into or out of service at a licensee's place of business 
within the area served by the licensing post office, or at a provider's 
branch office. Only the licensee's meters participating in the on-site 
meter service program may be serviced at that location. A fee is 
charged for each meter set, examined, or checked into or out of service 
at a licensee's place of business, unless a USPS employee qualified to 
service meters is regularly assigned to that licensee's location for 
other postal administrative duties. The licensee must pay applicable 
postage and on-site meter service fees in R900 by check at the time of 
the meter service for manually reset meters. A fee is charged for each 
meter examined or checked into or out of service at a provider's 
facility. The provider must pay applicable postage and on-site meter 
service fees in R900 by check at the time of the meter service. Fees 
are charged in accordance with R900.14.

4.6  Postage Transfer or Refund

    After USPS verification, unused postage in a manually reset meter 
checked out of service may be transferred to another of the licensee's 
meters licensed at the same post office, or the licensee may request a 
refund. Refunds are granted in accordance with P014.

4.7  Postage Adjustment for a Faulty Meter

    To request a postage adjustment for a faulty or misregistering 
manually reset meter, the licensee must present to the provider the 
meter and the licensee's transaction records, if any. After examining a 
meter to be checked out of service for apparent faulty operation 
affecting registration, the provider must notify the USPS with a report 
of the malfunction. The report must contain all applicable meter 
documentation (including the setting history and transaction records, 
if any) and a recommendation about the appropriate postage adjustment, 
if any. When the electronic redundant memory data, as examined by the 
provider, is inconclusive with respect to the appropriate postage 
adjustment, the provider must include an analysis of the licensee's 
recent mailing history supporting the recommended postage adjustment. 
At the same time the report is made to the USPS, the provider must 
notify the licensee of the proposed postage adjustment. A licensee may 
appeal a postage adjustment to the manager of Postage Technology 
Management, USPS Headquarters (see G043), within 60 calendar days of 
the date that the provider submitted the postage adjustment 
recommendation to the USPS and notified the user.

[[Page 42826]]

5.0  REMOTE RESET GENERATION 1 POSTAGE METERS

5.1  Initial Setting, Check in, and Installation

    A remote reset Generation 1 postage meter is checked into service 
in the presence of a postal employee qualified to check in postage 
evidencing systems. The provider must furnish the postal employee with 
the meter and a completed PS Form 3601-C. The check in process for a 
remote reset Generation 1 postage meter is completed when the required 
data is transmitted to the appropriate postal information systems, and 
may be completed concurrently with or prior to installation of the 
meter at the licensee's location. The manager of Postage Technology 
Management, USPS Headquarters, may allow the provider to check in a 
specifically designated meter model without USPS participation when the 
provider uses a USPS-approved process in which the information to 
complete the check in process is captured directly from the postage 
evidencing system. The installation process for these meters is 
completed when the provider transmits required data to the appropriate 
postal information systems.

5.2  Check Out and Withdrawal

    A remote reset Generation 1 postage meter is checked out of service 
in the presence of a postal employee qualified to check out postage 
evidencing systems. The provider must furnish the postal employee with 
the meter and a completed PS Form 3601-C. The check out process for a 
remote reset Generation 1 postage meter is completed when the required 
data is transmitted to the appropriate postal information systems. The 
manager of Postage Technology Management, USPS Headquarters, may allow 
the provider to check out a specifically designated meter model from 
service without USPS participation when the provider uses a USPS-
approved process in which the information to complete the check out 
process is captured directly from the postage evidencing system. In 
this instance, the provider must examine the meter before a refund can 
be issued for the postage remaining in the meter. The withdrawal 
process for remote reset meters is completed when the provider 
transmits required data to the appropriate postal information systems.

5.3  Location of Setting

    A remote reset Generation 1 postage meter is reset electronically 
at the location of the meter.

5.4  Payment for Postage Settings

    For a remote reset Generation 1 postage meter the licensee may 
deposit funds only by check, electronic funds, or automated clearing 
house transfer, in accordance with USPS standards and procedures.

5.5  Resetting

    To reset a remote reset Generation 1 postage meter, the following 
conditions must be met:
    a. The licensee's account must have sufficient funds to cover the 
desired postage increment, or the provider must have agreed to advance 
funds to the licensee.
    b. The licensee must give the provider identifying information and 
system audit data as required by the USPS and in accordance with the 
provider's resetting specifications. Before completing the resetting, 
the provider must verify the identifying data, authenticate the user's 
license, conduct the postage evidencing system audit, and ascertain 
whether the user's account contains sufficient funds to cover the 
desired postage increment.
    c. After the resetting transaction is completed, the provider must 
document the transaction for the licensee, including the balance 
remaining in the licensee's account, unless the provider gives the user 
a monthly statement documenting all transactions for the period and the 
balance after each transaction.

5.6  On-Site Meter Service Program

    The on-site meter service program, where available, allows 
qualified USPS employees to check remote reset Generation 1 meters into 
or out of service at the provider's branch offices. Meters to be 
serviced are accompanied by PS Form 3601-C. A fee is charged for each 
meter examined or checked into or out of service at a provider's 
facility. The provider must pay applicable postage and on-site meter 
service fees in R900 by check at the time of the meter service for 
remote reset Generation 1 meters. Fees are charged in accordance with 
R900.14.

5.7  Postage Transfer or Refund

    After USPS verification, unused postage in a remote reset 
Generation 1 postage meter checked out of service may be transferred by 
the USPS to another of the licensee's postage evidencing systems 
licensed at the same post office, or the licensee may request a refund. 
Refunds for unused postage in the meter and for any unused balance in 
the licensee's account are granted in accordance with P014.

5.8  Postage Adjustment for Faulty Meters

    To request a postage adjustment for a faulty or misregistering 
remote reset Generation 1 postage meter, the licensee must present to 
the provider the meter and the licensee's transaction records, if any. 
After examining a meter checked out of service for apparent faulty 
operation affecting registration, the provider must notify the USPS 
with a report of the malfunction. The report must contain all 
applicable meter documentation and a recommendation regarding the 
appropriate postage adjustment, if any. When the electronic redundant 
memory data, as examined by the provider, is inconclusive as to the 
need for a postage adjustment, the provider must include an analysis of 
the licensee's recent mailing history supporting the recommended 
postage adjustment. At the same time the report is made to the USPS, 
the provider must notify the licensee of the proposed postage 
adjustment. A licensee may appeal a postage adjustment to the manager 
of Postage Technology Management, USPS Headquarters (see G043), within 
60 calendar days of the date that the provider submitted the postage 
adjustment recommendation to the USPS and notified the user.
6.0  PSD METERS AND IBI METERS

6.1  Initialization, Authorization, and Installation

    All PSD Meters and IBI Meters use a PSD to maintain postal 
registers and authorize the printing of evidence of postage. Before the 
licensee can print evidence of postage, these postage evidencing 
systems must be initialized and authorized by the provider. The 
initialization process installs PSD-specific information that does not 
change over the life cycle of the PSD. The authorization process sets 
user-specific information. The provider reauthorizes the PSD when 
certain user-specific information changes. PSD Meters and IBI Meters 
are checked into service by the provider. The check in process is 
automated. The information necessary to complete the check in process 
is captured directly from the postage evidencing system. The 
installation process for these meters is completed when the required 
data is transmitted to the appropriate postal information systems.

6.2  Check Out and Withdrawal

    When a PSD Meter or IBI Meter is no longer used, the licensee 
notifies the provider and arranges to return the meter to the provider. 
The provider checks the meter out of service. The

[[Page 42827]]

provider must examine the meter before a refund can be issued for any 
postage remaining on the meter. The check out process is automated. The 
information to complete the check out process is captured directly from 
the postage evidencing system. The withdrawal process for a PSD Meter 
or IBI Meter is completed when the required data is transmitted to the 
appropriate postal information systems.

6.3  Location of Setting

    A PSD Meter or IBI Meter is reset remotely at the location of the 
meter by means of a connection between the provider's resetting system 
and the postal registers in the PSD.

6.4  Payment for Postage Settings

    For PSD Meters and IBI Meters the licensee may deposit funds only 
by check, electronic funds transfer, or automated clearing house 
transfer, in accordance with USPS standards and procedures.

6.5  Resetting

    To reset a PSD Meter or IBI Meter the following conditions must be 
met:
    a. The licensee's account must have sufficient funds to cover the 
desired postage increment, or the provider must have agreed to advance 
funds to the licensee.
    b. The licensee must provide identifying information and system 
audit data as required by the USPS and in accordance with the 
provider's resetting specifications. Before completing the resetting, 
the provider must verify the identifying data, authenticate the user's 
license, conduct a remote postage evidencing system audit, and 
ascertain whether the user's account contains sufficient funds to cover 
the desired postage increment.
    c. After the resetting transaction is completed, the provider must 
document the transaction for the licensee, including the balance 
remaining in the licensee's account, unless the provider gives the user 
a monthly statement documenting all transactions for the period and the 
balance after each transaction.

6.6   Postage Refund

    Unused postage in a PSD Meter or IBI Meter will be refunded to the 
licensed user along with any unused balance in their account under 
P014.

6.7  Postage Adjustment for Faulty or Misregistering PSD Meters and 
IBI Meters

    When the licensee requests a postage adjustment for a faulty or 
misregistering PSD Meter or IBI Meter, the meter must first be 
withdrawn from service and physically examined by the provider. The 
provider will compare the data in the PSD registers with the data from 
the system transaction records. After examining a PSD Meter or IBI 
Meter withdrawn from service for apparent faulty operation affecting 
the ascending or descending registers, the provider must notify the 
licensee of the proposed postage adjustment, if any. At the same time 
the user is notified, the provider must report the malfunction to the 
manager of Postage Technology Management, USPS Headquarters. The report 
must contain all applicable documentation (including a copy of the 
transaction records) and a recommendation for any appropriate postage 
adjustment. The licensee may appeal a postage adjustment to the manager 
of Postage Technology Management, USPS Headquarters (see G043), within 
60 calendar days of the date that the user is notified of the proposed 
postage adjustment recommendation.
7.0  PC POSTAGE SYSTEMS

7.1  Initialization, Authorization, and Installation

    All PC Postage systems use a PSD to maintain postal registers and 
perform postal functions. Before the licensee can print evidence of 
postage using a PC Postage system, the system's PSD must be initialized 
and authorized by the provider. The initialization process installs 
PSD-specific information that does not change over the life cycle of 
the PSD. The authorization process sets user-specific information. The 
provider reauthorizes the PC Postage system PSD when certain user-
specific information changes. The installation process for a PC Postage 
system is completed when the data required by the USPS is transmitted 
to the appropriate postal information systems.

7.2  Check Out and Withdrawal

    When a PC Postage system is no longer used, the licensee notifies 
the provider. The provider withdraws the system from service and 
transmits the required data to the appropriate postal information 
systems. A PSD in the custody of the licensee must be returned to the 
provider for examination before a refund can be issued for any postage 
remaining on the PSD.

7.3  Location of Setting

    A PC Postage system is reset remotely using a personal computer 
with a connection between the provider's resetting system and the 
postal registers in the PSD.

7.4  Payment for Postage Settings

    For a PC Postage system, the USPS will accept payment only in the 
form of credit card or automated clearing house (ACH) debit, in 
accordance with USPS standards and procedures.

7.5  Resetting

    To reset a PC Postage system the following conditions must be met:
    a. The licensee must initiate payment to the USPS sufficient to 
cover the desired postage increment before requesting a postage value 
download to reset the system.
    b. The licensee must provide identifying information and system 
audit data as required by the USPS and in accordance with the 
provider's resetting specifications. Before completing the resetting, 
the provider must verify the identifying data, authenticate the user's 
license, conduct a postage evidencing system audit, and ascertain 
whether payment to the USPS sufficient to cover the requested postage 
value download was initiated by the licensee.
    c. The provider will supply the licensee with documentation of the 
reset transaction and the balance in the descending register, if any.

7.6  Postage Refunds

    The USPS provides refunds for the entire postage value balance 
remaining on the PSD of a PC Postage system that is withdrawn from 
service and is in the possession of the provider. Refunds are requested 
and paid through the provider in accordance with P014.

7.7  Postage Adjustment for Faulty or Misregistering PSD

    When the licensee requests a postage adjustment for a faulty or 
misregistering PSD of a PC Postage system, the PSD must first be 
withdrawn from service and physically examined by the provider. The 
provider will compare the data in the PSD registers with the data from 
the system transaction records. After examining a PSD withdrawn from 
service for apparent faulty operation affecting the ascending or 
descending registers, the provider must notify the licensee of the 
proposed postage adjustment, if any. At the same time the user is 
notified, the provider must report the malfunction to the manager of 
the Postage Technology Management, USPS Headquarters. The report must 
contain all applicable documentation (including a copy of the 
transaction records) and a recommendation for any appropriate postage 
adjustment. The licensee may appeal a postage adjustment to the manager 
of the Postage Technology Management, USPS

[[Page 42828]]

Headquarters (see G043), within 60 calendar days of the date that the 
user is notified of the proposed postage adjustment recommendation.
8.0  INDICIA--GENERAL INFORMATION

8.1  Amount of Postage

    The value of the indicia affixed to each mailpiece must be either 
the exact amount due or another amount permitted by standard. Refunds 
for overpayment must meet the standards in P014.

8.2  Refunds for Unused Indicia

    Refunds for indicia amounts already printed on an envelope or label 
but not mailed are made in accordance with P014.

8.3  Mixed Forms of Postage Evidencing

    Different forms of evidence of prepayment of postage may not be 
mixed on a mailpiece. In particular, postage stamps and indicia 
generated by a postage evidencing system may not be used on the same 
mailpiece; indicia generated by a postage evidencing system that uses a 
facing identification mark (FIM) to face the mail may not be used on 
the same mailpiece as indicia printed with fluorescent ink; and IBI may 
not be used on the same mailpiece as letterpress indicia or non-IBI 
digital indicia.

8.4  Use of Indicia

    Valid indicia produced by a postage evidencing system can be used 
only to show evidence of payment for postage or other services provided 
by the USPS. Indicia for zero postage must not be affixed to any item 
delivered by another carrier. In any illustration of information-based 
indicia (IBI) produced by an IBI Meter or a PC Postage system, and not 
intended to be used as postage, the two-dimensional barcode must be 
rendered unreadable.
9.0  INDICIA

9.1  Approved Designs

    The manager of Postage Technology Management, USPS Headquarters, 
must approve the design (type, format, and content) of all indicia that 
will be produced by a postage evidencing system. This approval shall 
include all elements in the indicium required by USPS regulations and 
the postage evidencing system performance criteria and applies to the 
entire area within the indicium boundary (9.4). The approved indicia 
are illustrated in Exhibit 9.1. [Exhibit 9.1, which shows all approved 
indicia designs, will be included when these regulations are published 
in the Domestic Mail Manual.]

9.2  Legibility

    Indicia must be legible. Illegible indicia are not acceptable as 
payment of postage. Should there be a need to place multiple indicia on 
an envelope (e.g., for redate or postage correction) the indicia must 
not overlap each other. Overlapping indicia are not acceptable as 
payment of postage. Reflectance measurements of the indicia and the 
background material must meet the standards in C840.5.

9.3  Position

    Indicia must be printed or applied in the upper right corner of the 
envelope or address label. Indicia must be at least \1/4\ inch from the 
right edge of the mailpiece and \1/4\ inch from the top edge of the 
mailpiece, and must not infringe on the areas reserved for the FIM, 
POSTNET barcode, or optical character reader (OCR) clear zone. Indicia 
must be oriented with the longest dimension parallel to the address. 
When a FIM is printed with the indicia, the position of the FIM must 
meet the requirements in C100.5.0.

9.4  Boundaries

    The USPS controls what is printed within the boundaries of indicia. 
The boundaries are defined as follows:
    a. For letterpress indicia, the boundaries are determined by the 
dimensions of the printing die used by the postage evidencing system to 
print postal information. Licensees may obtain an additional printing 
die from the provider, often called the ``ad plate,'' for additional 
text to be included when printing indicia. The ad plate may contain 
postal markings (9.7) or other printed matter (9.8).
    b. For digital indicia, including IBI, the boundaries are defined 
by the right edge of the envelope, the top edge of the envelope, and 
the bottom edge and the left edge of any USPS-required indicium element 
printed by the postage evidencing system. A 1/2-inch clear zone, within 
which nothing shall be printed by the postage evidencing system, must 
surround the indicium boundaries to the left of and below all elements 
of the indicium.

9.5  Contents

    Unless otherwise approved by the manager of Postage Technology 
Management, USPS Headquarters, the following information must be 
included in indicia:
    a. The city, state, and 5-digit ZIP Code of the licensing post 
office; the postage evidencing system serial number or PSD 
identification number; the date of mailing; the words ``US Postage,'' 
and the postage amount.
    b. As an alternative to the city, state, and 5-digit ZIP Code of 
the licensing post office, just the ZIP Code of the licensing post 
office; in this case, the words ``Mailed from ZIP Code'' may be added 
to the indicia.
    c. For multiple indicia on a given mailpiece, information showing 
the licensing post office in each indicium.
    d. For digital indicia, including IBI, the class of mail and 
presort level.
    e. For IBI, the required data elements of the two-dimensional 
barcode in accordance with the performance criteria for the given 
postage evidencing system.
    f. For special indicia, including the date correction or redate 
indicia, the postage correction indicia, indicia for APO/FPO, and the 
indicia for prepaid reply mail, information as required by 10.0.

9.6  Format

    Arial font must be used for all postal information in the indicia. 
The postage amount must be at least 10-point type size. For all other 
required information, the type size must be at least 8 points. The mail 
class or endorsement, the postage amount, and the words ``US Postage'' 
must be in bold type and all letters must be capital letters. The words 
``US Postage'' must be the most prominent and conspicuous printed 
matter in the indicia other than the postage amount. The remaining 
required information (city, state, and 5-digit ZIP Code; the date; and 
the Postal Security Device ID) need not be capitalized or bold. The 
type size used for all other text printed in the indicia must be no 
greater than 8 points and must not be in bold type.

9.7   Postal Markings

    The postal marking that may be included in indicia vary by indicia 
type, as follows:
    a. Letterpress indicia may include postal markings related to the 
class of mail and presort level, or ancillary service endorsement, in 
accordance with postal regulations. When placed in the ad plate area, 
only the postal marking may be printed, and it must fill the ad plate 
area as much as possible. All words must be in bold capital letters at 
least 1/4 inch high or 18-point type, and legible. Exceptions are not 
made for small ad plates that cannot accommodate a permissible marking.
    b. Digital indicia may include ancillary service endorsements.

[[Page 42829]]

9.8   Other Matter Printed by Postage Evidencing Systems

    Other printed matter must not infringe on the areas reserved for 
the FIM, POSTNET barcode, or optical character reader (OCR) clear zone. 
The matter that may be printed is based on indicia type, as follows:
    a. For letterpress indicia only, advertising matter, slogans, and 
return addresses may be printed with the indicia within space 
limitations. Licensed users must obtain the ad plates for printing this 
matter from the authorized provider. Ad plate messages must be 
distinguished by the inclusion of the name of the mailer or words such 
as ``Mailer's Message.'' The ad plate must not be obscene, defamatory 
of any person or group, or deceptive, nor may it advocate unlawful 
action.
    b. For postage evidencing systems that print digital indicia, 
including IBI, an approved indicium shall include within its boundaries 
only postal markings and text required or recommended by USPS 
regulation, except that the indicium may identify the provider. Other 
matter may be printed only outside the boundaries of the clear zone 
(9.4) surrounding the indicium. Such printed matter may not be obscene, 
defamatory of any person or group, or deceptive, and it must not 
advocate any unlawful action.

9.9   Ink

    All indicia printed by Generation 1 postage evidencing systems must 
be printed with fluorescent ink. Failure to use fluorescent ink may 
lead to the revocation of the user's license. Generation 2 postage 
evidencing systems must use fluorescence to ensure that the mail is 
faced during processing, unless otherwise approved by the manager of 
Postage Technology Management (G043). Generation 2 postage evidencing 
systems that do not print with fluorescent ink must use an alternative 
USPS-approved method to ensure that the mail is faced during 
processing. Approved methods include use of a facing identification 
mark (FIM) for indicia printed directly on letter-size First-Class Mail 
(9.10) or printing indicia on USPS-approved labels (9.11). The ink or 
alternative facing method used is specified in the indicia approval 
granted by the manager of Postage Technology Management, USPS 
Headquarters.

9.10   Facing Identification Mark

    The facing identification mark (FIM) serves to orient and separate 
certain types of First-Class Mail during the facing and canceling 
process. Letter-size First-Class Mail with IBI printed with 
nonfluorescent ink directly on the envelope by an IBI Meter or a PC 
Postage system must bear a USPS-approved FIM D unless it is courtesy 
reply mail. The FIM must meet the format, dimensions, print quality, 
and placement specified in C100.5.

9.11   Adhesive Label or Tape

    When indicia are printed on adhesive tape or on a label for 
application to the mailpiece, the tape or label used, including the 
label stock itself as well as the use of fluorescent ink to print 
indicia and the format and placement of any fluorescence on the label 
stock, must be approved by the manager of Postage Technology 
Management, USPS Headquarters. Failure to use the label approved by the 
USPS may result in revocation of the postage evidencing system license. 
The label must meet the following requirements:
    a. The label must be a pressure-sensitive, permanent label. The 
label is subject to the corresponding standards in C810.6.2 for minimum 
peel adhesion. The applied label must adhere well enough that it cannot 
be removed in one piece. A face stock/liner label (also called a 
``sandwich'' label) must not be used for printing indicia for postage 
evidencing.
    b. The label must meet the reflectance requirements in C840.5.0.
    c. The label must be large enough to contain the entire indicia.
    d. Indicia printed on a label must be the same as the indicia 
approved by the manager of Postage Technology Management for printing 
directly on an envelope. The label must not include any image or text 
other than those allowed by USPS regulation, unless approved by the 
manager of Postage Technology Management.
    e. For labels or tapes applied to standard letter-size envelopes 
and postcards sent as First-Class Mail, the indicia must be printed 
with fluorescent ink (9.9), or the label must have fluorescent tagging 
that is sufficient to enable the USPS to face and process the mail, as 
verified by postal testing of each label design. The fluorescent 
tagging must meet a minimum fluorescent emission intensity of at least 
20 phosphor meter units (PMUs), with a maximum of 70 PMUs. The visible 
color of the fluorescent tagging may be any color that meets the 
fluorescence requirements. The fluorescent tagging shall exhibit no 
noticeable change (i.e., no more than 10%) in its emission when exposed 
to elevated temperature and high humidity conditions.
    f. The label must be placed on the envelope so that the position of 
the indicium meets the requirements in 9.3.
    g. When a label is applied to an envelope that already has a FIM, 
the label must not cover the existing FIM.

9.12   Complete Date

    Indicia must include the month, day, and year for all First-Class 
Mail, registered, certified, insured, COD, and special handling mail, 
whether the indicia is printed directly onto the mailpiece or onto a 
separate label or tape. For prepaid reply postage see 10.4. The date 
format must be in accordance with 9.6. The year must be represented by 
four digits. The date (day, month, or year) may be shown in indicia for 
Standard Mail and Package Services, except that labels for use with a 
PC Postage system must include the month, day, and year in all uses.

9.13   Date Accuracy

    The date of mailing in the indicium must be the actual date of 
deposit, except that mail entered after the day's last scheduled 
collection from the licensing post office or collection box may bear 
the actual date of entry or the date of the next scheduled collection 
from the licensing post office or collection box. Authorized dispatch-
prepared presort mail accepted after midnight may bear the previous 
day's date. When the licensee knows the mail will not be tendered to 
the USPS on the date of mailing shown in the indicium, the user should 
use a date correction indicium (10.1).
10.0   SPECIAL INDICIA

10.1  Date Correction or Redate

    A date correction or redate indicium is required for any mailpiece 
not deposited by the date of mailing in the indicium as required by 
9.13. Only one date correction indicium is permitted on a mailpiece. 
The date correction or redate indicium may be printed on a USPS-
approved label instead of directly on the mailpiece. Formats are as 
follows:
    a. For all postage evidencing systems except PC Postage systems, a 
date correction must show the actual date of deposit and zero postage 
value (``0.00''). The date correction is placed on the nonaddress side 
in the upper right corner or on the address side in the lower left 
corner of letter-size mail. On flats or parcels, it must be placed next 
to the original indicium. The mailer may use an ink jet printer to 
correct the date in the indicia on pieces in barcoded mailings if the 
text, preceded by two asterisks and showing the actual

[[Page 42830]]

date of deposit, city, state, and 3-digit ZIP Code of the mailing 
office, is placed above the address block and below the indicia.
    b. For PC Postage systems, a date correction or redate indicium 
includes only the actual date of deposit and the word ``REDATE,'' 
instead of a postage value. On letter-size mail, redate indicia must be 
placed on the nonaddress side at least 3/4 inch from the bottom edge of 
the mailpiece and not on an envelope flap. On flats or parcels, it must 
be placed next to the original indicium. The redate or date correction 
must not include the FIM or the two-dimensional barcode.

10.2   Postage Correction

    Indicia for additional postage must be placed on a shortpaid 
mailpiece to correct postage. The postage correction may be printed on 
a USPS-approved label instead of directly on the mailpiece and must 
contain all of the elements required for indicia in 9.5. Formats are as 
follows:
    a. For all postage evidencing systems except for PC Postage 
systems, the postage correction indicium is placed on the nonaddress 
side in the upper right corner or on the address side in the lower left 
corner of letter-size mail. On flats or parcels, it must be placed next 
to the indicium.
    b. For a PC Postage system, the word ``CORRECTION'' must be printed 
in the postage correction and it must not include a FIM. On letter-size 
mail, the PC Postage correction indicium must be printed on the 
nonaddress side at least 3/4 inch from the bottom edge of the mailpiece 
and not on an envelope flap. On flats or parcels, it must be placed 
next to the original indicium. The postage correction indicium may be 
printed on a USPS-approved label instead of directly on the mailpiece.

10.3   APO/FPO Meters

    Postage evidencing systems used by military (APO/FPO) post offices 
must show the military branch and address format for each location 
(e.g., ``ARMY APO AE 09102''). Exceptions are made only for postage 
evidencing systems used in fleet post offices on board U.S. naval 
vessels that may show the name of the ship instead of the standard 
wording for Navy meters (e.g., ``USS SARATOGA (CV-60) 34078-2740'').

10.4   Reply Postage

    Indicia generated by any postage evidencing system may be used to 
prepay reply postage on Express Mail; on Priority Mail when the rate is 
the same for all zones; on First-Class Mail cards, letters, and flats 
up to a maximum of 13 ounces; and on single-piece-rate Media Mail and 
Library Mail, under the following conditions:
    a. The postage amount must be enough to prepay the postage in full.
    b. Indicia may be printed directly on the mailpiece or on a label 
and must be positioned in accordance with 9.3. An applied label must 
meet the standards in 9.11 and must adhere well enough that it cannot 
be removed in one piece.
    c. Indicia used to prepay reply postage, except for IBI generated 
by a PC Postage system, must not show the date.
    d. IBI generated by a PC Postage system to prepay reply postage 
must show the date the licensee printed the indicium and must include 
the words ``REPLY POSTAGE.''
    e. The mailpiece must be pre-addressed for return to the licensee. 
Prepaid reply mail is delivered only to the address of the licensee. 
When the address is altered, the mail is held for postage.
    f. Except for those PC Postage systems with the capability to print 
an address for the given class or size of mailpiece, the address side 
of reply mail may be prepared by any photographic, mechanical, or 
electronic process or combination of such processes (other than 
handwriting, typewriting, or handstamping). For those PC Postage 
systems with the capability to print destination addresses for the 
given size and class of mailpiece, the address must be prepared using 
the PC Postage system.
    g. The words ``NO POSTAGE STAMP NECESSARY POSTAGE HAS BEEN PREPAID 
BY'' must be printed above the address.
    h. For barcoded letter-size First-Class Mail reply mail for all 
postage evidencing systems except PC Postage, FIM C is used (C100.5). 
For PC Postage, FIM D is required for prepaid reply mail when the 
indicium is printed directly on the mailpiece.
    i. The address side must follow the style and content as described 
in this section and shown in the example below. Nothing may be added 
except a return address, FIM, or barcode.
[GRAPHIC] [TIFF OMITTED] TP15AU01.000

11.0  MAILINGS

11.1  Preparation of Metered Mail

    Metered mail is subject to the preparation standards that apply to 
the class of mail and rate claimed.

11.2  Notification of Metered Mailings Presented in Bulk

    Mailers who present presorted First-Class Mail, Standard Mail, 
Parcel Post in bulk quantities, Presorted Bound Printed Matter, Carrier 
Route Bound Printed Matter, or Presorted Media Mail using metered 
postage must complete Form 3615. Completion of this form is for record 
keeping only. If an applicant has a completed Form 3615 on file for 
other services, notification to present metered mail in bulk is 
annotated on the existing application. There is no fee for this 
service.

[[Page 42831]]

11.3  Combination

    Metered mail may be combined in the same mailing with mail paid by 
other methods only if authorized by the USPS.

11.4  Where To Deposit

    Except as noted below, the licensee must deposit metered mail at a 
post office acceptance unit, retail unit, or other location designated 
by the postmaster of the licensing post office (i.e., the post office 
shown in the indicia) and may not give it to a delivery employee or 
deposit it in a street collection box, mailchute, receiving box, 
cooperative mailing rack, or other mail collection receptacle. The USPS 
allows the following exceptions to this general standard:
    a. Express Mail, Priority Mail (in a weight category for which 
rates do not vary by zone), and single-piece-rate First-Class Mail may 
be deposited in any street collection box or other such place where 
mail is accepted, except that certain special services require that the 
mail be presented directly to a USPS employee (see S900).
    b. If facilities for acceptance are not available locally, 
customer-metered Express Mail may be mailed at an Express Mail 
acceptance facility under the jurisdiction of another office.
    c. Metered mail may be deposited at other than the licensing post 
office under D072.
    d. International mail weighing less than 16 ounces may be deposited 
in any street collection box in accordance with the regulations for 
domestic mail.
    e. International mail that requires a customs declaration, or that 
weighs 16 ounces or more, must be given directly to a USPS employee at 
the licensing post office or other location designated by the 
postmaster. Otherwise, the mail will be returned to the sender for 
proper entry and acceptance. See the International Mail Manual (IMM) 
for additional information.
    f. A licensed user authorized to use an APO or FPO as the licensing 
post office can deposit mail only at the licensing APO or FPO.
    g. All other licensee's who have USPS approval to use a postage 
evidencing system outside the country can deposit mail only at their 
domestic licensing post office.

11.5  Irregularities

    The USPS examines metered mail to detect irregularities in 
preparation and dating.
12.0  AUTHORIZATION TO PRODUCE AND DISTRIBUTE METERS (POSTAGE 
EVIDENCING SYSTEMS)
    Title 39, Code of Federal Regulations, part 501, contains 
information concerning authorization to produce and distribute postage 
meters (postage evidencing systems); the suspension and revocation of 
such authorization; performance standards, test plans, testing, and 
approval; required production security measures; and standards for 
distribution and maintenance. Further information may be obtained from 
the manager of Postage Technology Management, USPS Headquarters (see 
G043 for address).
    An appropriate amendment to 39 CFR part 111 to reflect these 
changes will be published if the proposal is adopted.

Stanley F. Mires,
Chief Counsel, Legislative.
[FR Doc. 01-20558 Filed 8-14-01; 8:45 am]
BILLING CODE 7710-12-P