[Federal Register Volume 78, Number 143 (Thursday, July 25, 2013)]
[Notices]
[Pages 44982-44983]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-17838]


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POSTAL REGULATORY COMMISSION

[Docket No. PI2013-1; Order No. 1782]


Public Inquiry on Competitive Products Fund

AGENCY: Postal Regulatory Commission.

ACTION: Notice.

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SUMMARY: The Commission is establishing a proceeding to review several 
issues concerning the Competitive Products Fund. These include inter-
fund transfers (of amounts from the Postal Service Fund to the 
Competitive Products Fund); the use of amounts from the Competitive 
Products Fund to prepay certain costs; and

[[Page 44983]]

calculation and transfer of the assumed federal income tax. The 
Commission is also issuing a related issuing an information request 
directed to the Postal Service. Following receipt of the Postal 
Service's responses, the Commission may take further steps, including 
issuance of a notice of inquiry or an invitation for public comment. 
This notice informs the public of this proceeding and the information 
request and takes other administrative steps.

FOR FURTHER INFORMATION CONTACT: Stephen L. Sharfman, General Counsel, 
at 202-789-6820.

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Introduction
II. Background
III. Public Inquiry
IV. Public Representative
V. Ordering Paragraphs

I. Introduction

    In the Fiscal Year (FY) 2012 Annual Compliance Determination Report 
(ACD), the Commission found that transfers between the Postal Service 
Fund and the Competitive Products Fund raised several issues of first 
impression.\1\ The Commission stated that it would initiate a 
proceeding to review transfers from the Postal Service Fund to the 
Competitive Products Fund, the use of amounts from the Competitive 
Products Fund to prepay competitive products' future years' 
institutional costs, and the calculation and transfer of the assumed 
federal income tax. Id. (citing 39 U.S.C. 2011(h)(2)(C)(ii) and 39 CFR 
3060.42).
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    \1\ Docket No. ACR2012, Annual Compliance Determination Report 
Fiscal Year 2012, March 28, 2013, at 175 (FY 2012 ACD).
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II. Background

    In Docket No. ACR2012, the Commission found that beginning in 
October 2012, the National Trial Balance showed a zero balance for 
Account Number 12010.000 Competitive Products Investments Fund, and the 
corresponding Competitive Products Fund line item was eliminated from 
Table III-Detail of Treasury Securities Outstanding of the Monthly 
Statement of the Public Debt of the United States.\2\ The Postal 
Service informed the Commission that the zero balance likely resulted 
from a transfer of the balance in the Competitive Products Fund to the 
Postal Service Fund to prepay competitive products' shares of future 
years' institutional costs.\3\ The zero balance in the Competitive 
Products Fund raised concerns that the Postal Service would be unable 
to comply with 39 U.S.C. 3634, which requires that the Postal Service 
transfer the assumed federal income tax on competitive products for the 
previous fiscal year from the Competitive Products Fund to the Postal 
Service Fund by January 15th each year.
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    \2\ See Docket No. ACR2012, Chairman's Information Request No. 
8, February 8, 2013, at 5.
    \3\ Docket No. ACR2012, Responses of the United States Postal 
Service to Questions 1-6 and 8-13 of Chairman's Information Request 
No. 8, February 15, 2013, at question 8 (ACD CHIR Response).
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    The Postal Service explained that on October 12, 2012, it 
transferred the balance of the Competitive Products Fund to the Postal 
Service Fund. Id. The Postal Service stated that the assumed federal 
income tax transfer occurred on January 10, 2013 by transferring the 
amount representing the Net Income after Tax from the Postal Service 
Fund to the Competitive Products Fund. Id. at question 9. The Postal 
Service stated that this transfer was mathematically identical to 
transferring the Net Income before Tax from the Postal Service Fund to 
the Competitive Products Fund so that the assumed federal income tax 
could be transferred back from the Competitive Products Fund to the 
Postal Service Fund. Id. Therefore, on January 10, 2013, the Postal 
Service transferred the FY 2012 Net Income after Tax amount of 
$525,564,000 from the Postal Service Fund to the Competitive Products 
Fund. Id. On January 11, 2013, as an additional prepayment of 
competitive products' shares of future years' institutional costs, the 
Postal Service transferred the balance of the Competitive Products Fund 
to the Postal Service Fund. Id.

III. Public Inquiry

    Since the issues associated with these transfers were not within 
the scope of the ACD, the Commission stated that it would initiate a 
proceeding to review transfers of amounts from the Postal Service Fund 
to the Competitive Products Fund, the use of amounts from the 
Competitive Products Fund to prepay competitive products' future years' 
institutional costs, and the calculation and transfer of the assumed 
federal income tax. FY 2012 ACD at 175 (citing 39 U.S.C. 
2011(h)(2)(C)(ii) and 39 CFR 3060.42). To foster transparency, the 
Commission establishes Docket No. PI2013-1 to review these issues.
    Commission Information Request No. 1 (CIR No. 1) is issued 
contemporaneously with this Notice. It seeks further clarification from 
the Postal Service on the issues described in this Notice in order to 
increase transparency and develop a more complete record. After the 
Commission has received the Postal Service's responses, the Commission 
may issue a Notice of Inquiry or invite public comment.

IV. Public Representative

    Section 505 of title 39 requires designation of an officer of the 
Commission in all public proceedings to represent the interests of the 
general public. The Commission hereby designates Richard A. Oliver as 
Public Representative in this proceeding.

V. Ordering Paragraphs

    It is ordered:
    1. The Commission hereby establishes Docket No. PI2013-1 to review 
the issues related to the Competitive Products Fund set forth in the 
Commission's FY 2012 Annual Compliance Determination.
    2. Richard A. Oliver is designated as the Public Representative to 
represent the interests of the general public in this proceeding.
    3. The Secretary shall arrange for publication of this notice in 
the Federal Register.

    By the Commission.
Shoshana M. Grove,
Secretary.
[FR Doc. 2013-17838 Filed 7-24-13; 8:45 am]
BILLING CODE 7710-FW-P