[Federal Register Volume 76, Number 135 (Thursday, July 14, 2011)]
[Rules and Regulations]
[Pages 41413-41424]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-17529]


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POSTAL SERVICE

39 CFR Part 241


Post Office Organization and Administration: Establishment, 
Classification, and Discontinuance

AGENCY: Postal Service.

ACTION: Final rule.

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SUMMARY: The Postal Service is amending 39 CFR part 241 to improve the 
administration of the Post Office closing and consolidation process. In 
addition, certain procedures employed for the discontinuance of Post 
Offices are applied to the discontinuance of other types of retail 
facilities operated by Postal Service employees.

DATES: Effective date: July 14, 2011.

FOR FURTHER INFORMATION CONTACT: Jim Boldt, (202) 268-6799.

SUPPLEMENTARY INFORMATION: 
    On March 31, 2011, the Postal Service published a proposed rule in 
the Federal Register (76 FR 17794) to improve the process for 
discontinuing Post Offices and other Postal Service-operated retail 
facilities. The proposed rule also reflected the Postal Service's 
determination, as a matter of policy, to apply the same discontinuance 
procedures to all retail facilities operated by Postal Service 
employees. The Postal Service requested comments on the proposed rule. 
Analysis of the various comments received appears below.
    The Postal Service is currently in the process of consultation 
under 39 U.S.C. 1004(b)-(d) about certain aspects of the proposed rule. 
Therefore, the relevant proposed changes and comments relative to those 
proposed changes are not included in this final rule, but may be 
addressed in a subsequent final rule. Under 39 U.S.C. 1004(b)-(d), the 
Postal Service is obliged to consult with certain supervisory and other 
managerial organizations about the planning and development of pay 
policies and schedules, fringe benefit programs, and other programs 
related to supervisory and other managerial employees. (The Postal 
Service understands ``other programs'' to constitute those concerning 
employment, of a piece with the other enumerated subjects of 
consultation, and not programs concerning facilities or the operating 
network more generally, which may have an indirect effect on 
employees.) Because the subject matter of this final rule does not 
itself comprise any program subject to 39 U.S.C. 1004(b)-(d), the 
Postal Service considers it to fall outside the scope of those 
provisions. Nevertheless, the Postal Service has taken into account 
comments by supervisory and other managerial organizations, as it has 
comments by other members of the public.
    As explained in the proposed rule, this final rule is not 
retroactive. Therefore, any change in policy or regulations does not 
affect the procedures applicable to discontinuance processes initiated 
before the effective date of this final rule, when previous regulations 
may have been in effect.
    The Postal Service is exempt from the notice requirements of the 
Administrative Procedure Act (5 U.S.C. 553(d)) regarding final rules by 
39 U.S.C. 410(a). Moreover, the chief substance of this final rule is 
to extend to Postal Service-operated stations and branches the notice 
and comment procedures applicable to the discontinuance of Post 
Offices, thereby relieving restrictions that had previously been placed 
on public participation in the discontinuance process for stations and 
branches.

I. Response to Comments Received

    The Postal Service received approximately 257 comments in response 
to the proposed rule. Commenters included 34 Members of Congress, the 
Postal Regulatory Commission (``Commission'' or ``PRC''), five state 
legislators, three postmasters' and postal supervisors' organizations, 
one postal lessors' organization and various of its members, one 
mailing industry stakeholder, and numerous other postal customers. 
Although some comments were favorable about certain aspects of the 
proposed rule, almost all of the comments expressed concerns about 
various aspects of the proposed rule. Below we discuss the comments and 
our response to each.

A. Closure of Post Offices and Other Retail Facilities

1. Procedural Safeguards
    The overwhelming majority of comments urged the Postal Service not 
to close Post Offices (as well as, presumably, stations and branches), 
especially in small and rural communities. These commenters stated that 
cost savings would be low, that there would be undue hardship on some 
customers, and other matters. Many expressed concern about a specific 
postal retail facility. Additionally, many appeared to believe that the 
proposed rule would eliminate procedures and make it easier to close 
retail facilities, including for reasons prohibited by statute. See, 
e.g., 39 U.S.C. 101(b) (``No small post office shall be closed solely 
for operating at a deficit[.]''). To the contrary, the Postal Service 
has long been and remains focused on the need for customers in less 
populated locales to have regular and effective access to delivery and 
retail services, thereby helping to bind all customers and the nation 
together through written correspondence.
    These comments seem to overlook the actual scope of the changes. 
This rulemaking does not reduce or abolish any transparency attained 
through, for example, public notice, public input, and consideration of 
all comments received before any Post Office may be discontinued. In 
fact, transparency will be enhanced. Nor does the rulemaking change any 
of the criteria for discontinuing a Post Office, which are set forth in 
the statute and include consideration of cost savings, the effects on 
employees and the community, and the prohibition on closing small Post 
Offices solely for financial reasons. It should be noted that the 
statutes in question apply only to the justifications for actually 
discontinuing a facility; they do not restrict Postal Service 
discretion to evaluate its retail network and identify specific 
facilities for formal study.
    To highlight the distinction between initiation of a preliminary 
feasibility study and the development of an official proposal, the 
Postal Service is adding

[[Page 41414]]

language to 39 CFR 241.3(a)(4)(i) that specifies circumstances 
justifying a responsible Vice-President's decision to initiate a 
feasibility study, as specified elsewhere in 39 CFR 241.3(a)(4). At the 
same time, this language does not provide that officer an official 
decision-making role in any resulting discontinuance proposal.
    An initial feasibility study need not lead to evaluation for 
potential discontinuance. If it does, the public will receive expanded 
opportunity for comment as the Postal Service considers all of the 
requisite factors en route to any final determination, just as it has 
in the past. Although this rulemaking expands the range of factors that 
can justify a discontinuance study, any formal discontinuance decisions 
must still be based upon the same considerations as before. Opportunity 
for public participation will actually increase, because the Postal 
Service will ensure broad public awareness by sending written notice in 
the form of a ``Dear Customer'' letter and questionnaire to all 
delivery points in the ZIP Code area served by the facility being 
studied.
    As described in the proposed rule, the rulemaking will actually 
expand application of the most rigorous process for discontinuance of 
Postal Service-operated retail facilities beyond independent Post 
Offices. While Congress applied the criteria in 39 U.S.C. 101(b) and 
404(d) only to independent Post Offices, and not to stations or 
branches, the Postal Service is making that same process applicable to 
the discontinuance of all Postal Service-operated retail facilities, 
thereby encompassing subordinate stations and branches. Contrary to 
many commenters' perception that the rulemaking would remove ``due 
process'' protections for stations and branches, the rulemaking will 
actually increase scrutiny and transparency for such facilities by 
using the process previously applicable only to independent Post 
Offices.
2. Role of Economic Indicators
    While some commenters express concern about the possible evaluation 
by the Postal Service of discontinuance candidates using economic 
indicators like population or volume trends, applicable law (39 U.S.C. 
404(d)) already requires that the Postal Service consider economic 
savings in any final determination to discontinue a Post Office. Of 
course, population and volume trends may also inform evaluation of 
likely impact on the community, which is another mandatory criterion 
for evaluation in the discontinuance process.
    To be sure, Postal Service plans to close or consolidate Post 
Offices must be consistent with the statutory requirement in 39 U.S.C. 
101(b) that ``[n]o small post office shall be closed solely for 
operating at a deficit, it being the specific intent of the Congress 
that effective postal services be insured to residents of both urban 
and rural communities.'' As a result, a proposed discontinuance of a 
small Post Office may not proceed to a final determination if the sole 
reason is that the facility operates at a loss. Consistent with this 
statutory prohibition, the Postal Service provided in proposed 39 CFR 
241.3(a)(4)(ii)(D) that no initial feasibility study of a small Post 
Office may commence, absent other permissible criteria, if the sole 
justification is that the office operates at a deficit. This provision 
is maintained in the final rule.
    Many comments offer general support for the continued existence of 
rural Post Offices; the Postal Service itself remains committed to 
serving customers in all areas, including rural ones, and Post Offices 
constitute one key tool for doing so. The primary customer need, 
however, is access to postal services to the extent consistent with 
reasonable economies of postal operations, which is possible today 
without using rural Post Offices alone. 39 U.S.C. 403(b)(3). By no 
means are Post Offices the sole conduit for access to postal services. 
The best example, well known to customers served by non-city delivery, 
consists of carriers themselves, who can and do provide retail 
services. The Postal Service recognizes that it may not close small 
Post Offices solely for operating at a deficit, just as it recognizes 
that access options continue to expand for all customers. Alternative 
channels for access to retail services continue their growth in all 
areas; wherever retail traffic in Post Offices drops below minimal 
levels, it follows that customers must be obtaining the access they 
need without utilizing Post Offices. The Postal Service accordingly 
maintains its focus upon providing all customers the access they 
require, whether it be via Post Offices or the available alternatives.
3. Discontinuance of Specific Facilities
    Many commenters articulated concerns about particular retail 
facilities, thus reflecting a misunderstanding of the instant 
rulemaking's scope. Such comments are either premature or misdirected; 
they may become germane when the subject facilities are studied, or 
should be directed to those conducting studies affecting the subject 
facilities. This rulemaking concerns only nationwide criteria and 
procedures, not specific facilities. If and when a particular facility 
is evaluated in a discontinuance study, the public will have full 
notice and opportunity to provide input, as under the previous 
regulations.

B. Redefinition of ``Consolidation'' and Appeal Rights

    Several commenters expressed concern about the proposed rule's 
reinterpretation of ``consolidation,'' such that the term would no 
longer apply to the conversion of an independent Post Office into a 
Postal Service-operated station or branch. In particular, these 
commenters claim that this approach, combined with the fact that 39 
U.S.C. 404(d)(5) does not confer appeal rights for closings or 
consolidations of stations and branches, could result in an effective 
denial of appeal rights if the Postal Service were to convert a Post 
Office into a station or branch and then proceed to close or 
consolidate the facility.
1. Definition of ``Consolidation''
    The Postal Service is currently in the process of consultation 
under 39 U.S.C. 1004(b)-(d) about the proposed reinterpretation of 
``consolidation,'' among other aspects of the proposed rule. Therefore, 
the Postal Service is deferring the relevant changes for the time 
being. Comments on this aspect of the proposed rule will be taken into 
consideration and may be addressed in a subsequent final rule.
2. Appeal Rights and Notice Thereof
    The Commission recommended that the Postal Service provide notice 
of appeal rights when proposing or determining to discontinue a station 
or branch. This Commission noted that the Postal Service proposed to 
apply procedures to facilities beyond the statutory scope of 
applicability and suggested that the Postal Service could similarly 
extend appeal rights.
    With respect to notice of appeal rights concerning stations and 
branches, the Postal Service does not believe that the authority exists 
to extend the Commission's grant of jurisdiction in 39 U.S.C. 404(d)(5) 
to the closure or consolidation of a station or branch. This is true 
regardless of how ``consolidation'' is interpreted. This rulemaking 
does not and can not alter the scope of the Commission's jurisdiction, 
so it does not change when the public is entitled to notice of appeal 
rights. At the same time, it should be emphasized that this rulemaking 
does

[[Page 41415]]

not affect interested persons' extant opportunity to seek any 
administrative appeal. The Postal Service recognizes in the proposed 
rule that the Commission and other stakeholders interpret 39 U.S.C. 
404(d)(5) differently. Notwithstanding the actual limits of statutory 
jurisdiction, discontinuances of stations and branches have been 
appealed to the Commission, and the Commission has entertained those 
appeals as though they concerned independent Post Offices subject to 39 
U.S.C. 404(d)(5). E.g., PRC Docket Nos. A2011-4 (University Station, 
Eugene, OR 97403), A2011-5 (Penobscot Station, Detroit, MI 48231); see 
also SBOC Opinion at 66 (``The Commission already believes it is 
required to accept such appeals.'').
    This rulemaking does not change Postal Service regulations as to 
whether discontinuances of stations or branches may be appealed, nor 
does it add measures to preclude such appeals from being filed. While 
the Postal Service maintains that the Commission does not have appeal 
jurisdiction over stations and branches under current law, the 
rulemaking does introduce an explicit recognition that the Postal 
Service may, in its discretion, decline to challenge the Commission's 
jurisdiction in certain (or even, if it chooses, all) cases, which 
contrasts with its previous practice of asserting jurisdictional 
defenses in all cases. Accordingly, to the extent that commenters 
believe they would lose the practical ability to seek accountability of 
station and branch discontinuances through appeal (or through the 
Postal Service's awareness of the prospect of appeal) to the 
Commission, such criticisms are overstated.
    One commenter stated a belief that the proposed rule would make the 
discontinuance process more ``administrative'' by empowering the 
Commission to modify the Postal Service's final determination. In 
actuality, however, these aspects of the proposed rule have not changed 
from prior regulations. Moreover, the nature of the Commission's appeal 
jurisdiction and the general administrative nature of the 
discontinuance process were established by Congress in the Postal 
Reorganization Act Amendments of 1976 (Pub. L. 94-421), the Postal 
Service's regulations merely track this language.
    Finally, one commenter agreed with the Postal Service's analysis of 
39 U.S.C. 404(d)(5), but objected to the proposed rule's ultimate 
framing of the matter in terms of a right to object or not to object to 
the Commission's assertion of jurisdiction. While the commenter's views 
are understood and appreciated, it is axiomatic that a party may 
decline to assert valid jurisdictional defenses in specific cases, 
without prejudicing its assertion of the same objections in other cases 
or contexts. To recognize Postal Service counsel's discretion over 
litigation strategy does not diminish the validity of the general 
principle that the Commission is without legal authority to entertain 
purported appeals of station and branch discontinuances.

C. Community Meetings

    Several commenters took issue with proposed 39 CFR 241.3(d)(2), 
which provides that a community meeting is required unless otherwise 
instructed by the responsible Vice President or the Area Manager, 
Delivery Programs Support. These commenters expressed the belief that 
this would undermine a current standard of allowing public input 
through community meetings in all cases.
    Previous Postal Service regulations, however, have not required a 
community meeting for every Post Office discontinuance. The most recent 
version of 39 CFR 241.3(d)(3) listed ``meeting with community groups'' 
as exemplifying options available if deemed ``necessary'' to a larger 
transparency effort. Moreover, sections 243 and 721 of Handbook PO-101, 
Post Office Discontinuance Guide, have provided only that community 
meetings are one option for public input, alongside questionnaires and 
other methods. The new regulations accordingly impel community meetings 
more forcefully than before, because community meetings will be 
required absent instructions to the contrary from senior management. In 
practice, it is expected that community meetings would be offered 
unless some exceptional circumstance (such as a community's demise) 
makes a meeting an impractical tool for gathering customer input. The 
final rule includes an additional clarification limiting exceptions 
from the community meeting requirement.

D. Role of Vice President

    Several commenters also recommended against the proposed approach 
whereby a feasibility study could be initiated by a responsible Vice 
President, as well as by a District Manager. These commenters advised 
that a national-level Vice President is less likely than a District 
Manager to have an appropriately nuanced understanding of community-
specific conditions.
    To clarify, the Vice President's role in proposed 39 CFR 
241.3(a)(2) and (a)(4) is to trigger an exploration of possible 
discontinuance. Thereafter, the District Manager oversees the follow-up 
investigation and determines whether to proceed with a formal proposal 
to discontinue the facility. As noted above, the final rule includes 
additional language in 39 CFR 241.3(a)(4)(i) to clarify the distinction 
between the initial feasibility study, which a responsible Vice 
President or a District Manager may initiate, and the formal proposal, 
for which a Vice President is not responsible.
    Concern about the Vice President's role may have been driven by the 
inclusion of an erroneous reference to a Vice President's discretion in 
39 CFR Sec.  241.3(c)(1), which might have suggested that the Vice 
President could directly determine whether to post a proposal, 
independent from the District Manager. This error has been corrected in 
the final rule.
    The District Manager evaluates public comments on the proposal and 
decides whether to forward a recommended final determination to the 
responsible Vice President for ultimate review and decision. As such, 
the local knowledge vested in district postal personnel becomes a 
strength of the foundation for any decision to pursue discontinuance of 
a retail facility. As such, a Vice President's role at this latter 
stage extends only to a final check on a District Manager's 
recommendation that a discontinuance move forward.
    Thus, the proposed rule and final rule recognize the importance of 
the District Manager's assessment of local conditions. Under the final 
rule, the District Manager accordingly retains significant discretion 
to take account of local conditions before deciding whether to proceed 
with a proposal or final determination to discontinue a facility.

E. Staffing of Post Offices

    Many commenters expressed the view that the Postmaster Equity Act, 
Public Law 108-86 (2003), precludes the proposed change to 39 CFR 
241.1, such that, in their view, a Post Office may not be operated or 
managed by anyone but a postmaster. As codified in 39 U.S.C. 
1004(i)(3), the Postmaster Equity Act defines a ``postmaster'' as ``an 
individual who is the manager in charge of the operations of a post 
office, with or without the assistance of subordinate managers or 
supervisors.'' The Postal Service is currently in the process of 
consultation under 39 U.S.C. 1004(b)-(d) about this aspect of the 
proposed rule. Therefore, the Postal Service is deferring the relevant 
changes for the time being. Comments on this aspect of the proposed 
rule will be taken into

[[Page 41416]]

consideration and may be addressed in a subsequent final rule.
    One commenter opined that a previous rule change required a 
postmaster to reside in the delivery area of the Post Office in which 
he or she served, and that the Postal Service's regulations should 
revert to that rule. It is true that local residence was a former 
requirement for postmaster eligibility, but this requirement did not 
derive from Postal Service regulations. Rather, it existed in a statute 
that Congress repealed when the Postal Reorganization Act established 
the current merit-based system for postmaster appointments. See Public 
Law 86-682, 74 Stat. 578, 710 (1960) (formerly codified at 39 U.S.C. 
3312) (repealed 1970). The Postal Service does not intend to revisit 
such a policy in light of the Congressional repeal of the pertinent 
statute, so the commenter's proposed change is not included in this 
final rule.

F. Alternatives to Discontinuance

    One commenter requested that the Postal Service include in 39 CFR 
241.3 a provision to allow for the possibility that, where the 
financial viability of a retail facility is a factor in a 
discontinuance study, the local government can offer to make up the 
projected shortfall as a means for preserving retail service at the 
facility. This suggestion is already accounted for in existing 
discontinuance processes and practice, wherein communities have ample 
opportunity to offer views and alternatives that might address 
justifications for a specific discontinuance. The Postal Service takes 
that input into account as it determines whether a proposal is 
warranted. It is plausible that an agreement by a municipality or 
agency to incur certain costs or burdens can be decisive and lead the 
Postal Service to forgo a discontinuance study. Contractor-operated 
retail facilities or other arrangements are also possible. Because 
current practice and the proposed rule already address these concerns, 
no further revision to the final rule appears warranted.
    Another commenter advised that customers should be ensured 
alternative access channels before the Postal Service proceeds with 
discontinuance. The Postal Service believes its processes adequately 
meet this concern. Under the proposed rule, the availability and use of 
alternative access channels would help inform local officials regarding 
the necessity for a fully staffed postal facility. Today, retail 
services are available to customers through a variety of channels 
beyond traditional brick-and-mortar facilities, such as the http://www.usps.com Web site, Automated Postal Centers, non-city delivery 
carriers, stamp consignment locations such as grocery stores, and 
Stamps by Mail, Fax, and Phone.
    Moreover, before the Postal Service can reach any final 
determination on a proposed discontinuance, 39 U.S.C. 404(d) requires 
the Postal Service to consider (among other things) the effect on the 
community and the statutory policy of providing a maximum degree of 
effective and regular postal services to rural areas, communities, and 
small towns where Post Offices are not self-sustaining. In virtually 
all cases, this means careful consideration of the utility provided by 
alternative access channels, including services available through 
letter carriers, particularly as this tends to be a focus of customer 
input. Therefore, the commenter and other customers may rest assured 
that the continued availability of retail services will remain a key 
point of consideration whenever the Postal Service studies a 
community's needs.

G. Redaction of Personally Identifiable Information

    One commenter voiced suspicion that the Postal Service would 
impermissibly edit or conceal information in publicly available 
documents under cover of the proposed provision that would allow for 
redaction of personally identifiable information. Another commenter 
characterized this change as inappropriate because submitters of public 
comments to a public administrative record do not have a privacy 
interest in their identities.
    Rather than being a substantive change that the Postal Service 
could somehow exploit to willfully edit an administrative record, the 
proposed provision merely updates 39 CFR 241.3 to reflect other 
statutes and regulations that authorize, on a discretionary basis, the 
withholding of personally identifiable information from public 
disclosure. See 39 U.S.C. 410(c)(1). Limited redaction, performed on a 
discretionary, as-needed basis to protect customers' personally 
identifiable information in the discontinuance and other contexts, is 
well-established and has been uncontroversial before the Commission. 
See, e.g., United States Postal Service Notice of Filing and 
Application for Non-Public Status, PRC Docket No. A2011-1, January 6, 
2011; Order Affirming Final Determination, PRC Docket No. A2011-1, 
February 15, 2011, at 3 n.7 (acknowledging the Postal Service's filing 
of administrative record with redactions of, among other things, 
personally identifiable information). However, the Postal Service is 
mindful of the limited purpose of this important privacy protection.

H. Notice to Customers Served by Suspended Facility

    One commenter suggested that customers formerly served by a 
suspended retail facility should be notified of discontinuance-related 
actions by mail, not just by posting at other retail facilities. The 
Postal Service intends to mail notice and a questionnaire to customers 
formerly served by a Postal Service-operated retail facility whose 
operations have undergone an emergency suspension to the same extent 
that it would have if the facility were not suspended. Because this 
intention may not have been sufficiently clear, the Postal Service 
incorporates the commenter's suggestion with clarifying language in new 
paragraph 241.3(a)(4)(iii).

I. Inapplicability of Procedures to Contractor-Operated Facilities

    One commenter notes that, in at least one case, postal customers 
were informed that a contractor-operated Community Post Office (CPO) 
would provide many of the same services as a Postal Service-operated 
retail facility, except for some services such as permit mailing 
acceptance. The commenter then advises that the same discontinuance 
procedures should apply to contractor-operated retail facilities, 
particularly in locations where a CPO may be the only postal retail 
facility.
    Another commenter opined that services provided by a contractor-
operated retail facility can, in certain cases, be equivalent to or 
better than services provided by a Post Office or other Postal Service-
operated retail facility. As a result of more flexible office hours or 
parking, for example, contractor-operated retail facilities may offer 
more ready access to essential postal services and thereby a handier 
method to ensure compliance with 39 U.S.C. 403(b)(3). Hence, the 
commenter concludes that distinctions based on the identity of the 
retail facility operator might not have universal validity.
    The Postal Service acknowledged in the proposed rule that customers 
of contractor-operated retail facilities may experience and expect 
comparable (or better) levels of service relative to those at Postal 
Service-operated retail facilities. However, the Postal Service also 
explained that exigencies of contracting relationships make it 
generally impractical to harmonize their discontinuance procedures with 
the deliberative timeframe and procedures

[[Page 41417]]

required for discontinuance of Postal Service-operated facilities. For 
example, management's ability to negotiate reasonable terms for the 
operation of a contract unit, or to require satisfactory contract 
performance, would be harmed if parties were permitted to appeal those 
discontinuances for alleged procedural defects. Postal management's 
right of termination of a CPO operator's contract would be impaired, 
particularly in communities in which the CPO operator is the only 
person capable of operating a CPO. This would cause unnecessary delay 
prior to termination, and thereby force the Postal Service to continue 
a contract where sound business judgment and effective oversight would 
require otherwise.
    CPO operators would also gain substantial bargaining leverage 
against the Postal Service, if the Postal Service's ability to change 
the contractual provision of postal services in the affected community 
were subject to the lengthy and costly discontinuance study, if not 
also litigation. Moreover, assuming a formal discontinuance study were 
required, the CPO operator might demand additional compensation for 
participating in the study. If a study were not conducted because 
replacement services would not provide the maximum degree of regular 
and effective service, a CPO operator might also gain a significant 
bargaining advantage for negotiating a price increase.
    As noted throughout this rulemaking, the legislative history and 
text of 39 U.S.C. 404(d) limit that statute's scope to independent Post 
Offices. The Postal Service does not currently believe that it would be 
prudent to apply the same procedures, as a policy matter, to 
contractor-operated retail facilities. This policy distinction does not 
cast a value judgment on the quality of service available from 
contractor-operated retail facilities or on whether such facilities may 
be suitable replacements for Postal Service-operated retail facilities.

J. Status of Postmasters Affected by Facility Type Conversion

    Two commenters asked whether a postmaster of an independent Post 
Office would become a station or branch manager where the Post Office 
is converted into another Postal Service-operated retail facility type, 
or whether the Postal Service would use such conversions to eliminate 
postmaster positions. Facility-specific staffing is outside the scope 
of this rulemaking and is subject to local management discretion, as 
guided by any applicable laws, regulations, policies and agreements.

K. Emergency Suspensions

    One commenter recommended that, where a discontinuance study is 
related to expiration or cancellation of a lease without suitable 
alternative quarters in the community, the Postal Service should 
initiate the discontinuance study sufficiently in advance of the 
lease's end date to allow the lessor and customers an opportunity to 
explore alternatives and provide input. Alternatively, the commenter 
suggested that the retail facility in question could be kept open as 
long as necessary to gather information in a discontinuance study. The 
Postal Service agrees with the general thrust of this comment and 
includes a new paragraph 241.3(a)(4)(iii) in the final rule to 
encourage local management accordingly. This new provision is framed as 
guidance to be followed wherever possible, rather than a universal 
requirement, because a single solution can never be made to fit every 
challenge or suspension.
    One commenter asserted numerous allegations about the Postal 
Service's handling of emergency suspensions: Disregard for existing 
rules, manipulation of lease renewal and termination processes, and 
maintenance of facilities in suspended status without undergoing a 
formal discontinuance. Allegations of failure to comply with 
regulations are beyond the scope of this rulemaking. The improved 
process for discontinuance actions provided in this final rule may, 
however, address the timely and final disposition of many suspended 
offices and diminish pressure to seek solutions outside current policy.
    One commenter also noted that the emergency suspension form in 
Handbook PO-101, Post Office Discontinuance Guide, currently does not 
include a line item indicating that Postal Service management actually 
considered alternative access channels. The Postal Service is issuing a 
revised version of Handbook PO-101 that will, among other things, 
direct identification of available alternative access channels when 
conducting any emergency suspension and notification of customers about 
their availability. Additional tools may also be brought to bear on 
this set of issues.

L. Comment Periods and Waiting Periods

    One commenter objected to the change from a 90-day waiting period 
to a 60-day waiting period after posting of the final determination. 
This commenter opined that the change would diminish the public's 
opportunity to provide input. The pertinent change to 39 CFR 
251.3(g)(2) concerns the period between posting by the Postal Service 
of its final determination and when operational discontinuance takes 
effect (barring an appeal to the Commission). At that point, two rounds 
of public input on a possible discontinuance, and responses to 
each,will already have been undertaken before the Postal Service 
reached a final decision. Therefore, the need for additional public 
input does not affect, and is unrelated to, the length of time the 
final determination is posted or the duration before final action. This 
change by the Postal Service merely harmonizes the waiting period with 
the 60-day statutory posting requirement established by Congress in 39 
U.S.C. 404(d)(4).
    Three other commenters asked more generally that the Postal Service 
reverse proposed changes believed to shorten time periods for comment. 
Aside from the revision of the final determination posting period 
discussed above (which does not concern comment periods), the Postal 
Service has not proposed any adjustment to comment periods in 39 CFR 
241.3. Nor is it evident that the existing 60-day comment period on 
discontinuance proposals, which has been in effect for decades, 
provides insufficient opportunity for public participation as 
envisioned by 39 U.S.C. 404(d). See 39 U.S.C. 404(d)(1) (``The Postal 
Service, prior to making a determination * * * as to the necessity for 
the closing or consolidation of any post office, shall provide adequate 
notice of its intention to close or consolidate such post office at 
least 60 days prior to the proposed date of such closing or 
consolidation[.]''). While the proposed rule and final rule are aimed 
at enhancing opportunities for public input, there does not appear to 
be a need to expand comment periods at this time.
    Finally, one commenter stated a belief that the 30-day period for 
appeals of Post Office discontinuances is too short and should be 
extended to a 60-day period. Congress has provided that a final 
determination to discontinue a Post Office can be appealed only within 
30 days after the final determination is made available. 39 U.S.C. 
404(d)(5). The Postal Service does not have the power to change a 
jurisdictional limitation set by Congress.

M. Relocations

    One commenter urged the Postal Service to end relocations of retail 
facilities, which the commenter advised could result in curtailed 
services to customers near the original location. Relocations of 
existing facilities that do not result in an actual closure or

[[Page 41418]]

consolidation are not subject to 39 U.S.C. 404(d). The Postal Service 
regulations for relocations are at 39 CFR 241.4, and they include 
requirements for public outreach and input comparable to those 
applicable to discontinuance actions. Accordingly, the Postal Service 
finds that its relocation regulations are beyond the scope of this 
rulemaking.

N. Effect of Discontinuances on Overall Service Network

    Two postal supervisors' organizations cautioned that extensive 
closures of Post Offices could result in gaps and delays in service and 
could erode public confidence in the Postal Service generally. In 
offering this advice, the commenters assume that the intent of the 
rulemaking is to usher in sweeping closures of small and rural Post 
Offices.
    The rulemaking establishes and updates procedures and 
considerations for discontinuance of all Postal Service-operated retail 
facilities, not just small and rural Post Offices. The Postal Service 
does not believe that the proposed rule's innovations, such as allowing 
an initial feasibility study to commence on the basis of volume trends 
or upon the identification of a facility by a Headquarters Vice 
President, necessarily target small or rural Post Offices. A large or 
medium-sized urban Post Office can be equally subject to declining 
volume or population trends that warrant reconsideration of its role in 
the postal retail network.
    Even if the Postal Service were, in the future, to develop a 
program to study the discontinuance of large numbers of retail 
facilities that had the potential to effect a nationwide or 
substantially nationwide change in service, the Postal Service would 
intend to seek an advisory opinion from the Commission under 39 U.S.C. 
3661(b)-(c). Parties would have a full opportunity to raise their 
concerns and assess the impact of such a program on service levels and 
public confidence at that time. Unless and until such a program is 
developed and presented to the Commission, however, such concerns are 
speculative and premature. In the meantime, impact on service is 
necessarily taken into account in each discontinuance study.

O. Procedural Recommendations

    In its comments, the Commission incorporated by reference all of 
the detailed recommendations in its SBOC Opinion, while highlighting 
certain of them. The Commission's recommendations have indeed had a 
major influence on the Postal Service's larger effort to revise its 
discontinuance procedures, of which this rulemaking is a part. Most of 
the resulting changes will be reflected in a corresponding revision to 
Handbook PO-101, which contains detailed internal regulations; the 
Postal Service does not necessarily consider 39 CFR part 241 to be a 
suitable repository for such extensive and fine-grained rules. As a 
more specific response to the Commission's comments, the Postal Service 
provides the following summation:
    Commission recommendation: The Postal Service should mail actual 
notice to all potential retail customers in the vicinity of a facility 
under consideration for discontinuance, in addition to P.O. Box 
customers and customers that receive carrier delivery service based out 
of the facility.
    Postal Service response: In consonance with the Commission's 
recommendation, the Postal Service is adding a new 39 CFR 
241.3(a)(4)(iii) to broaden customer notice that the feasibility of a 
possible discontinuance is being explored. The rule requires that 
customer notices and questionnaires be mailed to all delivery addresses 
physically located in the ZIP Code of the retail facility under study, 
as well as any delivery addresses served by the studied facility for 
allied delivery services such as mail pick-up. For those retail 
customers who might visit the studied facility, notices and 
questionnaires will continue to be available in the facility lobby. 
Local management will also have the discretion to provide notice via 
local media outlets, where appropriate.
    Commission recommendation: Notice should be posted at nearby retail 
facilities, not just the facility subject to potential discontinuance.
    Postal Service response: Under the revised Handbook PO-101, the 
proposal and final determination will be posted at the retail facility 
under study, the retail facility proposed to serve as the supervising 
facility, and any facility likely to serve a significant number of 
customers of the retail facility under study.
    Commission recommendation: Questionnaire forms should be posted 
online for customers to download and print.
    Postal Service response: The Postal Service is exploring the 
feasibility of various electronic access tools for public input.
    Commission recommendation: Discontinuance study notices or proposal 
notices should contain information about distance to nearby retail 
facilities, their hours, alternative access channels, and how to 
request curbside delivery.
    Postal Service response: Information of this sort will become a 
standard feature of initial feasibility study notices and proposal 
notices. The Postal Service recently introduced online tools, to which 
affected customers will be directed, that provide more detailed 
information about alternate access channels in the vicinity of a 
customer's location.
    Commission recommendation: The methodology for evaluating cost 
savings should be revised to address personnel costs not eliminated, 
revenue leakage, and costs inherent to the facility's discontinuance 
(e.g., equipment disposal).
    Postal Service response: The cost savings methodology used by 
management will be upgraded. The Postal Service is still examining the 
feasibility of including net labor cost savings and equipment disposal 
costs. The inclusion of these factors could be implemented without 
further change in the regulations at issue in this rulemaking. Although 
the Commission's input on these factors has been helpful, situation-
dependent and speculative factors like revenue leakage are difficult to 
quantify.
    Commission recommendation: The Postal Service should provide more 
information in its public notices about the analysis that management 
will use to evaluate discontinuance criteria.
    Postal Service response: Because of the mixed qualitative and 
quantitative nature of local management's evaluation, it is difficult 
to determine how much analytical detail can reasonably be provided in a 
written notice while retaining the reader's interest and attention. 
However, the Postal Service's standard community meeting presentation 
materials will include a list of factors that local management will 
analyze, such as current office needs, proximity to other retail 
facilities and alternate access locations, lease terms and real estate 
market conditions, retail revenue, community input, impact on customers 
and the community, effect on employees, cost savings, environmental 
impact, and the long-term needs of the Postal Service. It should be 
noted that, as explained above, community meetings should be held in 
virtually all instances.
    Commission recommendation: Discontinuance processes should be 
coordinated with evaluation of replacement retail options, and the 
availability of replacement retail options should be an express factor 
in discontinuance studies.
    Postal Service response: Consideration of replacement retail and

[[Page 41419]]

other alternate access channels will be expressly incorporated in the 
processes set forth in Handbook PO-101.
    Commission recommendation: Management should use uniform 
information-gathering and analysis tools.
    Postal Service response: The discontinuance study process will be 
standardized through use of new electronic tools.
    Commission recommendation: Community needs should be evaluated 
separately from ``other needs.''
    Postal Service response: The final rule maintains the requirements 
in 39 CFR 241.3(c)(4)(i), (ii), and (v) for separate consideration of 
community needs, the effect on the community, and other factors. These 
distinct requirements will be reflected in the updated instructions in 
Handbook PO-101 as well. The updated customer questionnaire will 
solicit input on specific community factors, such as concentrations of 
senior citizens and proximity to bus stops.
    Commission recommendation: Management should be instructed to 
conduct outreach with local elected officials, military and educational 
installation representatives, and community development organizations.
    Postal Service response: The standard communications package 
provided to management will contain specific outreach materials for 
local elected officials. Other groups will receive notice in their 
capacity as local retail and delivery customers.

II. Explanation of Changes From Proposed Rule

    The final rule includes the following changes to the proposed rule.
    As explained in the preceding sections, certain issues are 
currently subject to consultation under 39 U.S.C. 1004(b)-(d) and 
further consideration by the Postal Service. These include the types of 
personnel that may be responsible for operations in a Post Office, and 
the definition of consolidation as not pertaining to personnel changes 
or to reclassification of Post Offices as other types of Postal 
Service-operated retail facilities. Therefore, the second sentence of 
39 CFR 241.1(a) and the entirety of 39 CFR 241.3(a)(1)(iii), as 
proposed or modified, are not included in the final rule at this time. 
Other provisions pertinent to consolidations will, for the time being, 
remain as they were under previous regulations, with modifications only 
to reflect the inclusion of Postal Service-to-contractor conversions in 
the meaning of ``consolidation.'' The initially proposed modifications, 
or modifications thereto, may be included in the regulations upon the 
conclusion of the ongoing deliberations, in which case the Postal 
Service will issue a further final rule. Until then, the Postal Service 
will continue applying existing discontinuance procedures according to 
39 CFR 241.3. A new clause 241.3(a)(1)(i)(D) is added to reflect this 
interim state of affairs.
    Consistent with disclaimers in the proposed rule and this final 
rule, a new paragraph 241.3(a)(1)(iii) is added to clarify that the 
revised regulations are mandatory only for discontinuance actions 
commenced on or after the regulations' effective date. The previous 
regulations shall continue to apply to discontinuance actions initiated 
earlier, unless management directs utilization of the new rules.
    For reference, a new paragraph 241.3(a)(2) is added to provide 
definitions of ``USPS-operated retail facility,'' ``contractor-operated 
retail facility,'' ``closing,'' ``consolidation,'' and 
``discontinuance.'' ``USPS-operated retail facility'' and ``contractor-
operated retail facility'' are defined as in the proposed rule. 
``Closing'' and ``discontinuance'' are defined in accordance with the 
definitions in the most recent version of Handbook PO-101; these 
definitions do not represent a substantive change from previous 
regulations. ``Consolidation'' incorporates the meaning under both the 
previous regulations (conversion of a Post Office into a Classified 
Station or Classified Branch) and the proposed rule (conversion of a 
USPS-operated retail facility into a contractor-operated retail 
facility). The remaining paragraphs in subsection 241.3(a) are 
renumbered accordingly.
    The introductory language to paragraph 241.3(a)(4) (renumbered as 
(a)(5)) has been reorganized and revised to clarify that the initial 
feasibility study constitutes a distinct phase preliminary to any 
development of a written proposal. The justification for initiating a 
feasibility study, and the Vice-President's discretion to direct such 
action, therefore pertain only to the initial phase. Other references 
throughout 39 CFR 241.3 have been changed to ``initial feasibility 
study,'' where appropriate, in order to clarify the intended scope of 
the relevant provision.
    The phrase ``severe safety and health hazards'' in proposed clause 
241.3(a)(4)(i)(B) (renumbered as (a)(5)(i)(B)) has been restated as 
``irreparable damage when no suitable alternate quarters are available 
in the community,'' in order to avoid potentially conflicting 
implications under Sec.  241.3(a)(5)(ii).
    Section 241.3(a)(4)(ii) (renumbered as Sec.  241.3(a)(5)(ii)) has 
been revised somewhat to express more clearly the distinction between 
the circumstances in clauses (A) through (C), none of which can justify 
an initial feasibility study, and those in clause (D), which can 
justify an initial feasibility study but only in the presence of one or 
more of the permissible circumstances listed in Sec.  241.3(a)(5)(i). 
This distinction tracks that in the governing statute. Compare 39 
U.S.C. 404(d)(2)(B) (barring the Postal Service from considering 
compliance with any provision of the Occupational Safety and Health Act 
of 1970 (29 U.S.C. 651 et seq.) in making a determination to 
discontinue a Post Office), with 39 U.S.C. 101(b) (providing that no 
small post office may be closed solely for operating at a deficit).
    A new Sec.  241.3(a)(5)(iii) has been added to specify how 
customers will receive notice and questionnaires for the initial 
feasibility study. Notice and questionnaires will be provided to retail 
customers at the Postal Service-operated retail facility under study, 
as well as by mail to customers in the five-digit ZIP Code delivery 
area of the facility and to certain other customers. In addition, local 
management may determine whether notification through media outlets is 
appropriate.
    A new Sec.  241.3(a)(5)(iv) has been added with guidance to the 
effect that when an initial feasibility study is to be initiated due to 
an emergency suspension (for example, when it is anticipated that a 
lease or rental agreement will be cancelled with no suitable alternate 
quarters available in the community), responsible personnel should, 
wherever possible, initiate the discontinuance process sufficiently in 
advance of the circumstance prompting the emergency suspension to allow 
a meaningful opportunity for public input to be taken into account 
prior to the suspension taking effect. If necessary to continue 
gathering information, responsible personnel should also seek to extend 
operations for the necessary duration, to the extent possible. 
Paragraph 241.3(a)(5)(iv) also clarifies that customers formerly served 
by a Postal Service-operated retail facility in suspension status 
should receive the same level of notice throughout the discontinuance 
process, including notice by mail, as they would have if the facility 
were not in suspension status.
    Paragraph 241.3(b)(4) has been revised to acknowledge that a 
contractor-operated retail facility can, but need not necessarily, 
retain the name of the pre-consolidation Postal Service-operated retail 
facility, if appropriate. For example, some

[[Page 41420]]

contractor-operated retail facilities may be integrated into the 
contractor's business establishment, and the nature of the contract and 
level of service provided to customers might not be consistent with a 
separate name for the postal retail facility.
    Paragraph 241.3(c)(1) has been amended to delete the reference to 
the responsible Vice President as having discretion to initiate a 
discontinuance proposal. This phrase had been erroneously included in 
the proposed rule.
    Paragraph 241.3(c)(3) has been revised such that postmasters and 
officers in charge must be invited to submit comments, rather than 
indicating that they must do so. The previous phrasing gave rise to 
confusion as to whether such personnel have the option of avoiding 
submission of comments.
    Paragraph 241.3(d)(1) has been revised to specify in greater detail 
the Postal Service-operated retail facilities at which the proposal and 
comment notice must be posted, and to require additional copies of the 
proposal and comment notice to be given to customers upon request. The 
description of the comment notice, which had also been in paragraph 
241.3(d)(1), has been moved to a new paragraph 241.3(d)(2), and the 
succeeding paragraphs have been renumbered accordingly.
    Paragraph 241.3(d)(2) (renumbered as (d)(3)) has been revised to 
clarify that a community meeting should be forgone only when 
exceptional circumstances make a community meeting infeasible, such as 
where the community no longer exists because of a natural disaster or 
because residents have moved elsewhere. The revised paragraph also 
explains that the purpose of the community meeting is to provide public 
outreach and to gain public input, and that it should occur during the 
comment period after a proposal has been posted. Finally, one class of 
personnel authorized to make exceptions to the community meeting 
requirement is changed from the Manager, Delivery Programs Support, to 
the applicable Vice President, Area Operations.
    In the interest of consistency and clarity, references to locations 
where materials are to be posted in Sec.  241.3(d)(3)(v) (renumbered as 
(d)(4)(v), (e)(2)(i), (f)(3), (g)(1)(i), (g)(1)(ii)(A), and 
(g)(1)(ii)(B) have been revised to refer back to the locations now 
specified in Sec.  241.3(d)(1).
    References throughout the proposed rule to ``responsible Vice 
President'' have been changed to ``responsible Headquarters Vice 
President,'' in order to avoid confusion with Vice Presidents, Area 
Operations.
    The Postal Service has determined that the changes described herein 
are necessary to standardize and clarify the procedures of Part 241 
with regard to the discontinuance of USPS-operated retail facilities 
and to eliminate potential confusion regarding the policies governing 
these matters. Accordingly, the Postal Service has determined that this 
final rule should take effect upon publication. The Postal Service 
hereby adopts the following changes to 39 CFR part 241.

List of Subjects in 39 CFR Part 241

    Organization and functions (government agencies), Postal Service.

    Accordingly, 39 CFR Part 241 is amended as follows:

PART 241--RETAIL ORGANIZATION AND ADMINISTRATION: ESTABLISHMENT, 
CLASSIFICATION, AND DISCONTINUANCE

0
1. The authority citation for 39 CFR Part 241 is revised to read as 
follows:

    Authority: 39 U.S.C. 101, 401, 403, 404, 410, 1001.


0
2. Revise Sec.  241.1 to read as follows:


Sec.  241.1  Post offices.

    (a) Establishment. Post offices are established and maintained at 
locations deemed necessary to ensure that regular and effective postal 
services are available to all customers within specified geographic 
boundaries.
    (b) Classification. As of October 1 of each year, Post Offices are 
categorized through a cost ascertainment grouping (CAG) process based 
on allowable postal revenue units for the second preceding fiscal year 
as follows:
    (1) CAG A-G. Post offices having 950 or more revenue units.
    (2) CAG H-J. Post offices having 190 but less than 950 revenue 
units.
    (3) CAG K. Post offices having 36 but less than 190 revenue units.
    (4) CAG L. Post offices having less than 36 revenue units.

0
3. Revise Sec.  241.3 to read as follows:


Sec.  241.3  Discontinuance of USPS-operated retail facilities.

    (a) Introduction--(1) Coverage. (i) This section establishes the 
rules governing the Postal Service's consideration of whether an 
existing retail Post Office, station, or branch should be discontinued. 
The rules cover any proposal to:
    (A) Replace a USPS-operated post office, station, or branch with a 
contractor-operated retail facility;
    (B) Consolidate a USPS-operated post office, station, or branch by 
combining it with another USPS-operated retail facility; or
    (C) Discontinue a USPS-operated post office, station, or branch 
without providing a replacement facility.
    (ii) The regulations in this section are mandatory only with 
respect to discontinuance actions for which initial feasibility studies 
have been initiated on or after July 14, 2011. Unless otherwise 
provided by responsible personnel, the rules under section 241.3 as in 
effect prior to July 14, 2011 shall apply to discontinuance actions for 
which initial feasibility studies have been initiated prior to July 14, 
2011.
    (2) Definitions. As used in this section, the following terms have 
the following meanings:
    (i) ``USPS-operated retail facility'' includes any Postal Service 
employee-operated post office, station, or branch, but does not include 
any station, branch, community post office, or other retail facility 
operated by a contractor.
    (ii) ``Contractor-operated retail facility'' includes any station, 
branch, community post office, or other facility, including a private 
business, offering retail postal services that is operated by a 
contractor, and does not include any USPS-operated retail facility.
    (iii) ``Closing'' means an action in which Post Office operations 
are permanently discontinued without providing a replacement facility 
in the community.
    (iv) ``Consolidation'' means either an action that converts a 
Postal Service-operated retail facility into a contractor-operated 
retail facility, or an action that converts an independent Post Office 
into a Classified Station or Classified Branch. A resulting contractor-
operated retail facility reports to a Postal Service-operated retail 
facility; a resulting Classified Station or Classified Branch reports 
to an administrative Post Office.
    (v) ``Discontinuance'' means either a closure or a consolidation.
    (3) Requirements. A District Manager or the responsible 
Headquarters Vice President, or a designee of either, may initiate a 
feasibility study of a USPS-operated facility for possible 
discontinuance. Any decision to close or consolidate a USPS-operated 
retail facility may be effected only upon the consideration of certain 
factors. These include the effect on the community served; the effect 
on employees of the USPS-operated retail facility; compliance with 
government policy established by law that the Postal Service must 
provide a maximum degree of effective and regular postal services to 
rural areas, communities,

[[Page 41421]]

and small towns where post offices are not self-sustaining; the 
economic savings to the Postal Service; and any other factors the 
Postal Service determines necessary. In addition, certain mandatory 
procedures apply as follows:
    (i) The public must be given 60 days' notice of a proposed action 
to enable the persons served by a USPS-operated retail facility to 
evaluate the proposal and provide comments.
    (ii) After public comments are received and taken into account, any 
final determination to close or consolidate a USPS-operated retail 
facility must be made in writing and must include findings covering all 
the required considerations.
    (iii) The written determination must be made available to persons 
served by the USPS-operated retail facility at least 60 days before the 
discontinuance takes effect.
    (iv) Within the first 30 days after the written determination is 
made available, any person regularly served by a Post Office subject to 
discontinuance may appeal the decision to the Postal Regulatory 
Commission. Where persons regularly served by another type of USPS-
operated retail facility subject to discontinuance file an appeal with 
the Postal Regulatory Commission, the General Counsel reserves the 
right to assert defenses, including the Commission's lack of 
jurisdiction over such appeals. For purposes of determining whether an 
appeal is filed within the 30-day period, receipt by the Commission is 
based on the postmark of the appeal, if sent through the mail, or on 
other appropriate documentation or indicia, if sent through another 
lawful delivery method.
    (v) The Commission may only affirm the Postal Service determination 
or return the matter for further consideration but may not modify the 
determination.
    (vi) The Commission is required to make any determination subject 
to 39 U.S.C. 404(d)(5) no later than 120 days after receiving the 
appeal.
    (vii) The following table summarizes the notice and appeal periods 
defined by statute.

                        Public Notice of Proposal
------------------------------------------------------------------------
 
-------------------------------------------------------------------------
                              60-day notice
------------------------------------------------------------------------


                  Public Notice of Final Determination
------------------------------------------------------------------------
 
------------------------------------------------------------------------
30 days for filing any appeal            Wait at least 60 days from
Up to 120 days for appeal consideration   first day after posting final
 and decision                             determination before closing
                                          or consolidating USPS-operated
                                          retail facility.
------------------------------------------------------------------------

    (4) Additional requirements. This section also includes:
    (i) Rules to ensure that the community's identity as a postal 
address is preserved.
    (ii) Rules for consideration of a proposed discontinuance and for 
its implementation, if approved. These rules are designed to ensure 
that the reasons leading to discontinuance of a particular USPS-
operated retail facility are fully articulated and disclosed at a stage 
that enables customer participation to make a helpful contribution 
toward the final decision.
    (5) Initial feasibility study. A District Manager, the responsible 
Headquarters Vice President, or a designee of either may initiate a 
feasibility study of a USPS-operated retail facility's potential 
discontinuance, in order to assist the District Manager in determining 
whether to proceed with a written proposal to discontinue the facility.
    (i) Permissible circumstances. The initial feasibility study may be 
based upon circumstances including, but not limited to, the following:
    (A) A postmaster vacancy;
    (B) Emergency suspension of the USPS-operated retail facility due 
to cancellation of a lease or rental agreement when no suitable 
alternate quarters are available in the community, a fire or natural 
disaster, irreparable damage when no suitable alternate quarters are 
available in the community, challenge to the sanctity of the mail, or 
similar reasons;
    (C) Earned workload below the minimum established level for the 
lowest non-bargaining (EAS) employee grade;
    (D) Insufficient customer demand, evidenced by declining or low 
volume, revenue, revenue units, local business activity, or local 
population trends;
    (E) The availability of reasonable alternate access to postal 
services for the community served by the USPS-operated retail facility; 
or
    (F) The incorporation of two communities into one or other special 
circumstances.
    (ii) Impermissible circumstances. The following circumstances may 
not be used to justify initiation of an initial feasibility study:
    (A) Any claim that the continued operation of a building without 
handicapped modifications is inconsistent with the Architectural 
Barriers Act (42 U.S.C. 4151 et seq.);
    (B) The absence of running water or restroom facilities;
    (C) Compliance with the Occupational Safety and Health Act of 1970 
(29 U.S.C. 651 et seq.); or
    (D) In the absence of any circumstances identified in paragraph 
(a)(5)(i) of this section, the operation of a small Post Office at a 
deficit.
    (iii) Notice to customers. Local management must provide 
notification and questionnaires to customers at the USPS-operated 
retail facility under study. Local management may determine whether 
notification is appropriate through media outlets. In addition, the 
following customers that receive delivery service from the USPS-
operated retail facility must receive notification and questionnaires 
by mail:
    (A) Post Office Box customers at the USPS-operated retail facility 
under study;
    (B) Customers whose delivery carrier is stationed out of the USPS-
operated retail facility under study;
    (C) Customers in the delivery area of the same ZIP Code as the 
retail facility under study, regardless of whether the delivery 
carriers for those customers are stationed out of the retail facility 
under study or out of a nearby facility; and
    (D) Customers whom the retail facility under study serves for 
allied delivery services such as mail pick-up.
    (iv) Initial feasibility study due to emergency suspension. 
Wherever possible when an initial feasibility study is to be initiated 
under Sec.  241.3(a)(4)(i)(B) (for example, when it is anticipated that 
a lease or rental agreement will be cancelled with no suitable 
alternate quarters available in the community), responsible personnel 
should initiate the initial feasibility study sufficiently in advance 
of the circumstance prompting the emergency suspension to allow a 
meaningful opportunity for public input to be taken into account. If 
public input cannot be

[[Page 41422]]

sought sufficiently in advance of the end date of the lease or rental 
agreement, responsible personnel should endeavor, to the extent 
possible, to continue operation of the USPS-operated retail facility 
for the duration necessary to gather public input and make a more fully 
informed decision on whether to proceed with a discontinuance proposal. 
Customers formerly served by the suspended facility should receive 
notice under paragraph (a)(4)(iii) of this section, including by mail, 
to the same extent that they would have if the facility were not in 
suspended status at the time of the initial feasibility study, 
proposal, or final determination.
    (b) Preservation of community address--(1) Policy. The Postal 
Service permits the use of a community's separate address to the extent 
practicable.
    (2) ZIP Code assignment. The ZIP Code for each address formerly 
served from the discontinued USPS-operated retail facility should be 
kept, wherever practical. In some cases, the ZIP Code originally 
assigned to the discontinued USPS-operated retail facility may be 
changed if the responsible District Manager receives approval from his 
or her Vice President, Area Operations, before any proposal to 
discontinue the USPS-operated retail facility is posted.
    (i) In a consolidation, the ZIP Code for the replacement 
contractor-operated retail facility, classified station, or classified 
branch is the ZIP Code originally assigned to the discontinued 
facility.
    (ii) If the ZIP Code is changed and the parent or gaining USPS-
operated retail facility covers several ZIP Codes, the ZIP Code must be 
that of the delivery area within which the facility is located.
    (3) USPS-operated retail facility's city name in address. If all 
the delivery addresses using the city name of the USPS-operated retail 
facility being discontinued continue to use the same ZIP Code, 
customers may continue to use the discontinued facility's city name in 
their addresses, instead of that of the new delivering USPS-operated 
retail facility.
    (4) Name of facility established by consolidation. If a post office 
is to be consolidated with one or more other post offices by 
establishing in its place a classified station or classified branch 
affiliated with another post office, the replacement unit is usually 
given the same name of the facility that is replaced. If a USPS-
operated retail facility is to be consolidated by establishing in its 
place a contractor-operated retail facility, the replacement unit can 
be given the same name of the facility that is replaced, if appropriate 
in light of the nature of the contract and level of service provided.
    (c) Initial proposal--(1) In general. If a District Manager 
believes that the discontinuance of a USPS-operated retail facility 
within his or her responsibility may be warranted, the District 
Manager:
    (i) Must use the standards and procedures in Sec.  241.3(c) and 
(d).
    (ii) Must investigate the situation.
    (iii) May propose the USPS-operated retail facility be 
discontinued.
    (2) Consolidation. The proposed action may include a consolidation 
by replacement of a USPS-operated retail facility with a contractor-
operated retail facility. The proposed action may also include a 
consolidation by replacement of a post office with a classified station 
or classified branch if:
    (i) The communities served by two or more post offices are being 
merged into a single incorporated village, town, or city; or
    (ii) A replacement facility is necessary for regular and effective 
service to the area served by the post office considered for 
discontinuance.
    (3) Views of postmasters. Whether the discontinuance under 
consideration involves a consolidation or not, the District Manager 
must discuss the matter with the postmaster (or the officer in charge) 
of the USPS-operated retail facility considered for discontinuance, and 
with the postmaster of any other USPS-operated retail facility affected 
by the change. The District Manager should make sure that these 
officials are invited to submit written comments and suggestions as 
part of the record when the proposal is reviewed.
    (4) Preparation of written proposal. The District Manager, or a 
designee, must gather and preserve for the record all documentation 
used to assess the proposed change. If the District Manager thinks the 
proposed action is warranted, he or she, or a designee, must prepare a 
document titled ``Proposal to (Close) (Consolidate) the (Facility 
Name).'' This document must describe, analyze, and justify in 
sufficient detail to Postal Service management and affected customers 
the proposed service change. The written proposal must address each of 
the following matters in separate sections:
    (i) Responsiveness to community postal needs. It is the policy of 
the Government, as established by law, that the Postal Service will 
provide a maximum degree of effective and regular postal services to 
rural areas, communities, and small towns where post offices are not 
self-sustaining. The proposal should:
    (A) Contrast the services available before and after the proposed 
change;
    (B) Describe how the changes respond to the postal needs of the 
affected customers; and
    (C) Highlight particular aspects of customer service that might be 
less advantageous as well as more advantageous.
    (ii) Effect on community. The proposal must include an analysis of 
the effect the proposed discontinuance might have on the community 
served, and discuss the application of the requirements in Sec.  
241.3(b).
    (iii) Effect on employees. The written proposal must summarize the 
possible effects of the change on postmasters and other employees of 
the USPS-operated retail facility considered for discontinuance.
    (iv) Savings. The proposal must include an analysis of the economic 
savings to the Postal Service from the proposed action, including the 
cost or savings expected from each major factor contributing to the 
overall estimate.
    (v) Other factors. The proposal should include an analysis of other 
factors that the District Manager determines are necessary for a 
complete evaluation of the proposed change, whether favorable or 
unfavorable.
    (vi) Summary. The proposal must include a summary that explains why 
the proposed action is necessary, and assesses how the factors 
supporting the proposed change outweigh any negative factors. In taking 
competing considerations into account, the need to provide regular and 
effective service is paramount.
    (vii) Notice. The proposal must include the following notices:
    (A) Supporting materials. ``Copies of all materials on which this 
proposal is based are available for public inspection at (Facility 
Name) during normal office hours.''
    (B) Nature of posting. ``This is a proposal. It is not a final 
determination to (close) (consolidate) this facility.''
    (C) Posting of final determination. ``If a final determination is 
made to close or consolidate this facility, after public comments on 
this proposal are received and taken into account, a notice of that 
final determination will be posted in this facility.''
    (D) Appeal rights. ``The final determination will contain 
instructions on how affected customers may appeal a decision to close 
or consolidate a post office to the Postal Regulatory Commission. Any 
such appeal must be received by the Commission within 30 days of the 
posting of the final

[[Page 41423]]

determination.'' The notice in this clause is provided when the USPS-
operated retail facility under study is a post office. For purposes of 
this clause, the date of receipt by the Commission is based on the 
postmark of the appeal, if sent through the mail, or on other 
appropriate documentation or indicia, if sent through another lawful 
delivery method.
    (d) Notice, public comment, and record--(1) Posting proposal and 
comment notice. A copy of the written proposal and a signed invitation 
for comments must be posted prominently, with additional copies to be 
given to customers upon request, in the following locations:
    (i) The USPS-operated retail facility under study, unless service 
at the facility has been suspended;
    (ii) The USPS-operated retail facility proposed to serve as the 
supervising facility;
    (iii) Any USPS-operated retail facility likely to serve a 
significant number of customers of the USPS-operated retail facility 
under study; and
    (iv) If service at the facility under study has been suspended, any 
USPS-operated retail facility providing alternative service for former 
customers of the facility under study.
    (2) Contents of comment notice. The invitation for comments must:
    (i) Ask interested persons to provide written comments within 60 
days, to a stated address, offering specific opinions and information, 
favorable or unfavorable, on the potential effect of the proposed 
change on postal services and the community.
    (ii) State that copies of the proposal with attached optional 
comment forms are available in the affected USPS-operated retail 
facilities.
    (iii) Provide a name and telephone number to call for information.
    (3) Other steps. In addition to providing notice and inviting 
comment, the District Manager must take any other steps necessary to 
ensure that the persons served by affected USPS-operated retail 
facilities understand the nature and implications of the proposed 
action. A community meeting must be held to provide outreach and gain 
public input after the proposal is posted, unless otherwise instructed 
by the responsible Headquarters Vice President or the applicable Vice 
President, Area Operations. Authorization to forgo a community meeting 
should issue only where exceptional circumstances make a community 
meeting infeasible, such as where the community no longer exists 
because of a natural disaster or because residents have moved 
elsewhere.
    (i) If oral contacts develop views or information not previously 
documented, whether favorable or unfavorable to the proposal, the 
District Manager should encourage persons offering the views or 
information to provide written comments to preserve them for the 
record.
    (ii) As a factor in making his or her decision, the District 
Manager may not rely on communications received from anyone unless 
submitted in writing for the record.
    (4) Record. The District Manager must keep, as part of the record 
for consideration and review, all documentation gathered about the 
proposed change.
    (i) The record must include all information that the District 
Manager considered, and the decision must stand on the record. No 
written information or views submitted by customers may be excluded.
    (ii) The docket number assigned to the proposal must be the ZIP 
Code of the office proposed for closing or consolidation.
    (iii) The record must include a chronological index in which each 
document contained is identified and numbered as filed.
    (iv) As written communications are received in response to the 
public notice and invitation for comments, they are included in the 
record.
    (v) A complete copy of the record must be available for public 
inspection during normal office hours at the USPS-operated retail 
facilities where the proposal was posted under paragraph (d)(1) of this 
section, beginning no later than the date on which notice is posted and 
extending through the posting period. When appropriate, certain 
personally identifiable information, such as individual names or 
residential addresses, may be redacted from the publicly accessible 
copy of the record.
    (vi) Copies of documents in the record (except the proposal and 
comment form) are provided on request and on payment of fees as noted 
in chapter 4 of Handbook AS-353, Guide to Privacy, the Freedom of 
Information Act, and Records Management.
    (e) Consideration of public comments and final local 
recommendation--(1) Analysis of comments. The District Manager or a 
designee must prepare an analysis of the public comments received for 
consideration and inclusion in the record. If possible, comments 
subsequently received should also be included in the analysis. The 
analysis should list and briefly describe each point favorable to the 
proposal and each point unfavorable to the proposal. The analysis 
should identify to the extent possible how many comments support each 
point listed.
    (2) Re-evaluation of proposal. After completing the analysis, the 
District Manager must review the proposal and re-evaluate all the 
tentative conclusions previously made in light of additional customer 
information and views in the record.
    (i) Discontinuance not warranted. If the District Manager decides 
against the proposed discontinuance, he or she must post, in the USPS-
operated retail facilities where the proposal was posted under 
paragraph (d)(1) of this section, a notice stating that the proposed 
closing or consolidation is not warranted.
    (ii) Discontinuance warranted. If the District Manager decides that 
the proposed discontinuance is justified, the appropriate sections of 
the proposal must be revised, taking into account the comments received 
from the public. After making necessary revisions, the District Manager 
must:
    (A) Transmit the revised proposal and the entire record to the 
responsible Headquarters Vice President.
    (B) Certify that all documents in the record are originals or true 
and correct copies.
    (f) Postal Service decision.--(1) In general. The responsible 
Headquarters Vice President or a designee must review the proposal of 
the District Manager and decide on the merits of the proposal. This 
review and the decision must be based on and supported by the record 
developed by the District Manager. The responsible Headquarters Vice 
President can instruct the District Manager to provide more information 
to supplement the record. Each instruction and the response must be 
added to the record. The decision on the proposal of the District 
Manager, which must also be added to the record, may approve or 
disapprove the proposal, or return it for further action as set forth 
in this paragraph (f).
    (2) Approval. The responsible Headquarters Vice President or a 
designee may approve the proposed discontinuance, with or without 
further revisions. If approved without further revision, the term 
``Final Determination'' is substituted for ``Proposal'' in the title. A 
copy of the Final Determination must be provided to the District 
Manager. The Final Determination constitutes the Postal Service 
determination for the purposes of 39 U.S.C. 404(d).
    (i) Supporting materials. The Final Determination must include the 
following notice: ``Copies of all materials on which this Final 
Determination is based are available for

[[Page 41424]]

public inspection at the (Facility Name) during normal office hours.''
    (ii) Appeal rights. If the USPS-operated retail facility subject to 
discontinuance is a post office, the Final Determination must include 
the following notice: ``Pursuant to Public Law 94-421 (1976), this 
Final Determination to (close) (consolidate) the (Facility Name) may be 
appealed by any person served by that office to the Postal Regulatory 
Commission, 901 New York Avenue, NW., Suite 200, Washington, DC 20268-
0001. Any appeal must be received by the Commission within 30 days of 
the first day this Final Determination was posted. If an appeal is 
filed, copies of appeal documents prepared by the Postal Regulatory 
Commission, or the parties to the appeal, must be made available for 
public inspection at the (Facility Name) during normal office hours.''
    (3) Disapproval. The responsible Headquarters Vice President or a 
designee may disapprove the proposed discontinuance and return it and 
the record to the District Manager with written reasons for 
disapproval. The District Manager or a designee must post, in each 
affected USPS-operated retail facility where the proposal was posted 
under paragraph (d)(1) of this section, a notice that the proposed 
closing or consolidation has been determined to be unwarranted.
    (4) Return for further action. The responsible Headquarters Vice 
President or a designee may return the proposal of the District Manager 
with written instructions to give additional consideration to matters 
in the record, or to obtain additional information. Such instructions 
must be placed in the record.
    (5) Public file. Copies of each Final Determination and each 
disapproval of a proposal by the responsible Headquarters Vice 
President must be placed on file in the Postal Service Headquarters 
library.
    (g) Implementation of final determination--(1) Notice of final 
determination to discontinue USPS-operated retail facility. The 
District Manager must:
    (i) Provide notice of the Final Determination by posting a copy 
prominently in the USPS-operated retail facilities in each affected 
USPS-operated retail facilities where the proposal was posted under 
paragraph (d)(1) of this section, including the USPS-operated retail 
facilities likely to be serving the affected customers. The date of 
posting must be noted on the first page of the posted copy as follows: 
``Date of posting.''
    (ii) Ensure that a copy of the completed record is available for 
public inspection during normal business hours at each USPS-operated 
retail facility where the Final Determination is posted for 30 days 
from the posting date.
    (iii) Provide copies of documents in the record on request and 
payment of fees as noted in chapter 4 of Handbook AS-353, Guide to 
Privacy, the Freedom of Information Act, and Records Management.
    (2) Implementation of determinations not appealed. If no appeal is 
filed, the official closing date of the office must be published in the 
Postal Bulletin and effective, at the earliest, 60 days after the first 
day that Final Determination was posted. A District Manager may request 
a different date for official discontinuance in the Retail Change 
Announcement document submitted to the responsible Headquarters Vice 
President or a designee. However, the USPS-operated retail facility may 
not be discontinued sooner than 60 days after the first day of the 
posting of the notice required by paragraph (g)(1) of this section.
    (3) Actions during appeal--(i) Implementation of discontinuance. If 
an appeal is filed, only the responsible Headquarters Vice President 
may direct a discontinuance before disposition of the appeal. However, 
the USPS-operated retail facility may not be permanently discontinued 
sooner than 60 days after the first day of the posting of the notice 
required by paragraph (g)(1) of this section.
    (ii) Display of appeal documents. The Office of General Counsel 
must provide the District Manager with copies of all pleadings, 
notices, orders, briefs, and opinions filed in the appeal proceeding.
    (A) The District Manager must ensure that copies of all these 
documents are prominently displayed and available for public inspection 
in the USPS-operated retail facilities where the Final Determination 
was posted under paragraph (g)(1)(i) of this section. If the operation 
of that USPS-operated retail facility has been suspended, the District 
Manager must ensure that copies are displayed in the USPS-operated 
retail facilities likely to be serving the affected customers.
    (B) All documents except the Postal Regulatory Commission's final 
order and opinion must be displayed until the final order and opinion 
are issued. The final order and opinion must be displayed at the USPS-
operated retail facility to be discontinued for 30 days or until the 
effective date of the discontinuance, whichever is earlier. The final 
order and opinion must be displayed for 30 days in all other USPS-
operated retail facilities where the Final Determination was posted 
under paragraph (g)(1)(i) of this section.
    (4) Actions following appeal decision --(i) Determination affirmed. 
If the Commission dismisses the appeal or affirms the Postal Service's 
determination, the official closing date of the office must be 
published in the Postal Bulletin, effective anytime after the 
Commission renders its opinion, if not previously implemented under 
Sec.  241.3(g)(3)(i). However, the USPS-operated retail facility may 
not be discontinued sooner than 60 days after the first day of the 
posting of the notice required under Sec.  241.3(g)(1).
    (ii) Determination returned for further consideration. If the 
Commission returns the matter for further consideration, the 
responsible Headquarters Vice President must direct that either:
    (A) Notice be provided under paragraph (f)(3) of this section that 
the proposed discontinuance is determined not to be warranted or
    (B) The matter be returned to an appropriate stage under this 
section for further consideration following such instructions as the 
responsible Headquarters Vice President may provide.

Stanley F. Mires,
Chief Counsel, Legislative.
[FR Doc. 2011-17529 Filed 7-13-11; 8:45 am]
BILLING CODE 7710-12-P