[Federal Register Volume 67, Number 85 (Thursday, May 2, 2002)]
[Proposed Rules]
[Pages 22025-22027]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-10783]


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POSTAL SERVICE

39 CFR Part 501


Authorization To Manufacture and Distribute Postage Meters

AGENCY: Postal Service.

ACTION: Proposed rule.

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SUMMARY: This proposed rule amends the regulations for checking postage 
meters out of service and for handling faulty meters.

DATES: The Postal Service must receive your comments on or before June 
3, 2002.

ADDRESSES: Mail or deliver written comments to 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: Wayne Wilkerson at 703-292-3704 or by 
fax at 703-292-4050.

SUPPLEMENTARY INFORMATION: The United States Postal Service is seeking 
to improve the secure handling of faulty postage meters by the approved 
postage meter providers and to enhance the accuracy of determinations 
by the

[[Page 22026]]

postage meter providers of the proper amounts of postage to be refunded 
from faulty postage meters. We are proposing to amend the regulations 
for checking postage meters out of service and for handling faulty 
meters to address these concerns and to align the regulations with 
changes to the Domestic Mail Manual (DMM) regarding postage meters 
published in the Federal Register (66 FR 56432-56447) on November 8, 
2001. Additionally, we deleted references to mechanical meters from the 
amended section since all mechanical postage meters have been 
decertified since 1999 and should no longer be in service. We will 
amend the remaining sections of CFR part 501 in the near future so that 
they all reflect the changes in the postage meter population and 
changes in the DMM.

List of Subjects in 39 CFR Part 501

    Administrative practice and procedure, Postal Service.

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 Code of Federal 
Regulations (CFR). For the reasons set out in this document, the Postal 
Service is proposing to amend 39 CFR part 501 as follows:

PART 501--AUTHORIZATION TO MANUFACTURE AND DISTRIBUTE POSTAGE 
METERS

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

    Authority: 5 U.S.C. 552(a); 39 U.S.C. 101, 401, 403, 404, 410, 
2601, 2605; Inspector General Act of 1978, as amended (Public Law 
95-452, as amended), 5 U.S.C. App. 3.

    2. Revise paragraphs (g) and (h) of Sec. 501.23 to read as follows:


Sec. 501.23  Distribution controls.

* * * * *
    (g) Check a nonfaulty meter out of service in accordance with the 
procedures that the Postal Service has approved for that meter when the 
meter is to be removed from service for any reason. Ensure that a 
Postal Service employee certifies the register readings and clears the 
descending register when the meter is checked out of service, unless 
the Postal Service has approved other procedures for the specific meter 
model. Complete the check-out process in a timely manner and transmit 
the required data to the appropriate Postal Service information 
systems. Ensure that no employee of the meter manufacturer or any third 
party changes, interferes with, or performs any element of the postal 
employee's established check-out and withdrawal process for any meter, 
unless approval for the change in procedures is granted in writing by 
the Postal Service.
    (h) Handle faulty meters, including those that are misregistering, 
are defective, show any evidence of tampering, or are defective in any 
other way, as follows:
    (1) Ensure that all functions required to handle faulty meters are 
completed in a timely manner and in accordance with Postal Service 
regulations and procedures.
    (2) Ensure that faulty meters are not presented to the licensing 
Post Office for checkout or withdrawal.
    (3) Begin the process to retrieve any faulty meter within 2 
business days of being notified of a problem.
    (4) Complete PS Form 3601-C, Postage Meter Activity Report, in the 
presence of the licensee and obtain the licensee's signature on the 
form confirming that the information is accurate.
    (i) When the registers can be read, the manufacturer or the 
manufacturer's agent must include the register information on the form.
    (ii) When the register values cannot be read, the manufacturer or 
the manufacturer's agent must print the system report, if available for 
the meter, and must attach the report to PS Form 3601-C.
    (iii) When the register values cannot be read, the licensee must 
provide any original daily usage logs with PS Form 3601-C for refund 
calculation.
    (5) Identify and tag the meter as faulty as soon as the 
manufacturer or the manufacturer's agent receives it from the customer. 
Keep the identification tag and the PS Form 3601-C completed under 
paragraph (h)(4) of this section with the faulty meter until processing 
is completed and the meter is returned to service or is scrapped.
    (6) Secure all faulty meters and maintain the integrity of the 
meter and of the information residing on the meter.
    (7) When there is evidence or suspicion of tampering, secure the 
meter and maintain it in its original state until it is returned for 
processing under paragraph (h)(10) of this section.
    (8) Maintain a record of the faulty meter and all changes in its 
custody, state, and condition (including availability of register 
information) from the time the meter is reported as faulty until 
processing is completed under paragraphs (h)(13), (14), or (15) of this 
section. Make the record available to the Postal Service for its review 
upon request.
    (9) Maintain a dedicated secure facility, approved by the Postal 
Service, for handling faulty meters.
    (10) Have faulty meters returned directly to the dedicated secure 
facility described in paragraph (h)(9) of this section for processing. 
Have all faulty meters shipped via registered mail, Express 
Mail service, or Priority Mail service with 
Delivery ConfirmationTM service.
    (11) Ensure that registers on a faulty meter are not cleared and no 
funds are refunded or transferred until after the meter is returned to 
the dedicated secure facility described in paragraph (h)(9) of this 
section and approved procedures are followed.
    (12) Examine each meter withdrawn for faulty operation to determine 
if the registers can be read and if there is any evidence of tampering.
    (13) If there is no evidence of tampering and the registers can be 
read or a summary report of the appropriate redundant electronic 
register memory readouts is available using Postal Service approved 
methods:
    (i) Check out the meter and withdraw it from service under 
paragraph (g) of this section.
    (ii) Submit a report to the Postal Service by the 15th of each 
month listing all faulty meters with readable displays received in the 
prior month, identifying the meter and including an explanation of the 
meter malfunction.
    (14) If there is no evidence of tampering, if the meter registers 
cannot be read, and if a summary report of the appropriate redundant 
electronic register memory readouts cannot be retrieved:
    (i) Develop other data to support the request for Postal Service 
approval of a postage adjustment amount, such as a manual calculation 
of the estimated value of the descending register based on estimated 
highest average daily usage, or applicable system-generated register 
documentation. Include the original daily usage logs maintained by the 
customer, if any, with the supporting data.
    (ii) Furnish a report explaining the malfunction to the Postal 
Service within 5 days of receiving the meter. Accompany the report with 
a recommendation of the postage adjustment amount that includes all 
data developed to support the recommendation.
    (iii) Maintain control of those meters that have unreadable 
registers and hold them in the manufacturer's dedicated secure facility 
described in paragraph

[[Page 22027]]

(h)(9) of this section until a representative of the Postal Service 
approves the postage adjustment amount or verifies the condition of the 
meter before proceeding with the meter repair or destruction.
    (iv) Ensure that under no circumstance is a refund issued or funds 
transferred for any postage value said to remain in a meter that has 
unreadable registers until the Postal Service has reviewed and analyzed 
the manufacturer's report and determined the appropriate postage 
adjustment, if any.
    (15) If there is evidence or suspicion of tampering:
    (i) Maintain control of the meter and place it in a secure area.
    (ii) Ensure that the meter is handled in a secure manner and 
maintained in its original state until the Postal Service or its agent 
can be present during the examination.
    (iii) Ensure that under no circumstance is a refund issued or funds 
transferred for any postage value said to remain in a meter that shows 
evidence of tampering until the Postal Service has reviewed and 
analyzed the manufacturer's report and determined the appropriate 
postage adjustment, if any.
    (iv) After examination, if approved by the Postal Service or its 
agent, process the meter under paragraphs (h)(13) or (14) of this 
section.
    (16) In some instances, even though the registers can be read, 
there is information or other indication that the meter has some 
mechanical or electrical malfunction that affects the accuracy of the 
registers or the accuracy of the value printed. Such a meter must be 
handled under paragraph (h)(14) of this section.
    (17) Issue the refund of any postage value said to remain in a 
faulty meter, after Postal Service approval of the amount of the 
refund, when the Postal Service requires it. Request reimbursement from 
the Postal Service for these refunds by periodically submitting a 
reimbursement request letter to the Postal Service. The letter must be 
accompanied by listings and support documentation for each refund and 
must indicate the cause of failure for each incident.
* * * * *

Stanley F. Mires,
Chief Counsel, Legislative.
[FR Doc. 02-10783 Filed 5-1-02; 8:45 am]
BILLING CODE 7710-12-P