[Federal Register Volume 69, Number 90 (Monday, May 10, 2004)]
[Proposed Rules]
[Pages 25864-25865]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-10497]


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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 that define a 
postage meter and its components and a manufacturer and/or distributor 
of postage meters. The proposed rule also puts forth the 
responsibilities of any authorized person or entity to notify the 
Postal Service upon a change in ownership or control, or bankruptcy or 
insolvency, and identifies factors the Postal Service will consider in 
acting upon requests for changes of approval or ownership or control of 
an approved manufacturer or distributor.

DATES: Comments must be received on or before July 9, 2004.

FOR FURTHER INFORMATION CONTACT: Wayne Wilkerson, manager of Postage 
Technology Management, by fax at 703-292-4050.

SUPPLEMENTARY INFORMATION: Title 39, Code of Federal Regulations (CFR) 
Part 501, Authorization to Manufacture and Distribute Postage Meters, 
expands the definition of a postage meter and its components to include 
all postage evidencing systems that produce evidence of prepayment of 
postage by any method other than postage stamps or permit imprints. 
This part also expands the activities of persons or entities that must 
be approved by the Postal Service. These changes are required to 
address the evolution in postage evidencing technology in recent years. 
The events requiring notification to the Postal Service are hereby 
expanded to include changes in the financial condition of the 
authorized party, such as bankruptcy and insolvency as well as a change 
in ownership or control.

List of Subjects in 39 CFR Part 501

    Administrative practice and procedure, Postal Service.

The Amendment

    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 (Pub. L. 95-
452, as amended), 5 U.S.C. App. 3.

    2. Amend Sec.  501.1 by replacing the title and all text to read as 
follows:

[[Page 25865]]

Sec.  501.1  Postage evidencing system/infrastructure authorization.

    a. Postage evidencing systems produce evidence of prepayment of 
U.S. postage by any method other than postage stamps or permit imprint. 
They include but are not limited to postage meters and PC Postage[reg] 
systems.
    b. Due to the potential for adverse impact upon Postal Service 
revenue, the following activities may not be engaged in by any person 
or concern without prior, written approval of the Postal Service:
    i. Producing or distributing any postage evidencing system that 
generates U.S. postage.
    ii. Repairing, distributing, refurbishing, remanufacturing or 
destroying any component of a postage evidencing system that accounts 
for or authorizes the printing of U.S. postage.
    iii. Owning or operating an infrastructure that maintains operating 
data for the production of U.S. postage; maintains data concerning 
users or use of a postage evidencing systems; or accounts for U.S. 
postage purchased for distribution through a postage evidencing system.
    iv. Owning or operating an infrastructure that maintains operating 
data or data concerning existing or proposed users of a postage 
evidencing system that is used to facilitate licensing or registration 
with the Postal Service of users of a postage evidencing system.
    c. Any person or entity seeking authorization to perform any 
activity described in b must submit a request to the Postal Service in 
person or in writing.
    d. Approval shall be based upon satisfactory evidence of the 
applicant's integrity and financial responsibility and a determination 
that disclosure to the applicant of the Postal Service customer, 
financial, or other data of a commercial nature necessary to perform 
the function for which approval is sought would be appropriate and 
consistent with good business practices within the meaning of 39 U.S.C. 
410(c)(2).
    e. Qualification and approval may be based upon conditions agreed 
to by the Postal Service and the applicant. The applicant is approved 
in writing to engage in the function(s) for which authorization was 
sought and approved.
    3. Amend Sec.  501.3 by replacing the title and all text to read as 
follows:


Sec.  501.3  Changes in ownership or control, bankruptcy, or 
insolvency.

    a. Any person or entity authorized under 501.1 must promptly notify 
the Postal Service when it has a reasonable expectation that there may 
be a change in its ownership or control including changes in the 
ownership of an affiliate which exercises control over its postage 
evidencing system operations in the United States. A change of 
ownership or control within the meaning of this section includes entry 
into a strategic alliance or other agreement under which a third party 
may gain access to Postal Service customer or financial data. Any 
person or entity seeking to acquire ownership or control of a person or 
entity authorized under 501.1 must provide the Postal Service 
satisfactory evidence that it satisfies the conditions for approval 
stated in 501.1. Early notification of a proposed change in ownership 
or control will facilitate expeditious review of an application to 
acquire ownership or control under this section.
    b. Any person or entity authorized under 501.1 must promptly notify 
the Postal Service when it has a reasonable expectation that there may 
be a change in the status of its financial condition either through 
bankruptcy, insolvency, assignment for the benefit of creditors, or 
other similar financial action. Any person or entity authorized under 
501.1 who experiences a change in the status of its financial condition 
may, at the discretion of the Postal Service, have its authorization 
under 501.1 modified or terminated.

Neva Watson,
Attorney, Legislative.
[FR Doc. 04-10497 Filed 5-7-04; 8:45 am]
BILLING CODE 7710-12-P