Revisions to Standards for Annual Fees and Use of Permit Imprints

POSTAL SERVICE

39 CFR Part 111

Revisions to Standards for Annual Fees and Use of Permit Imprints

AGENCY: Postal Service.

ACTION: Proposed rule.

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SUMMARY: The Postal Service proposes changes in several Domestic Mail

Manual (DMM) standards concerning bulk and presort mailing fees and the

methods of paying postage.

E110.6.1, E312.2.6, and E411.4.0 are amended to standardize the

terms of application of bulk and presort mailing fees on First-, third-

, and fourth-class mail, by requiring payment of the fee only by the

party entering the mail, regardless of whose permit imprint,

precanceled stamp permit, or meter was used as the device for postage

payment on the mailing. A single fee payment would allow mailing at all

bulk or presort rate categories of the corresponding class of mail.

E213.4.3 is amended to change the publishing requirements for Form

3526, Statement of Ownership, Management, and Circulation, generally to

allow publication anytime during October of the filing year rather than

in a specific issue.

P040 is amended both to relax the conditions under which a company

permit imprint may be used and to strengthen concurrently the Postal

Service's ability both to identify the place of mailing of company

permit imprint mail and to obtain information about such mailings.

Generally, mailers will be allowed to use a company style imprint

without having to obtain permits at two or more post offices, but

mailers will be required to show a return address at which records of

the mailing will be made available upon request.

P040 is also amended to relax the design restrictions of permit

imprint indicia. Generally, the new standards allow for more creativity

while retaining restrictions that ensure that the indicia content is

readable and clearly identifiable as postage payment.

P200 is amended to set a sunset date for the use of key rates.

Miscellaneous other changes are made for consistency.

DATES: Comments must be received on or before June 20, 1994.

ADDRESSES: Written comments should be mailed or delivered to Manager,

Mailing Standards, USPS Headquarters, 475 L'Enfant Plaza SW.,

Washington, DC 20260-2419. Copies of all written comments will be

available for inspection and photocopying between 9 a.m. and 4 p.m.,

Monday through Friday, in Room 5610 at the above address.

FOR FURTHER INFORMATION CONTACT: Leo F. Raymond, (202) 268-5199.

SUPPLEMENTARY INFORMATION: This notice presents revisions to Domestic

Mail Manual (DMM) standards suggested during the DMM revision project

begun in 1992. DMM Issue 46 (July 1993) was the first result of that

project, but was not intended to make changes simultaneously in

substantive mailing requirements; such amendments were deferred for

subsequent action such as this rulemaking. This notice focuses on

several matters related to the use of permit imprints (for First-,

third-, and fourth-class mail) and to the method of paying postage for

second-class mail.

1. E110.6.1, E312.2.6, and E411.4.0 are amended to standardize the

assessment of bulk or presort mailing fees on First-, third-, and

fourth-class mail. Existing standards brought forward from DMM Issue 45

and earlier are inconsistent with one another. A single standard

applies to all First-Class (and Priority) Mail--that a fee must be paid

once each 12-month period by any person or organization entering mail

at other than the single-piece rates. Payment of that fee allows use of

any presort or bulk First-Class rate and the mailing of both the

payer's mail and that of its clients. By contrast, third-class

standards distinguish between postage-affixed (precanceled and meter

stamp) and permit imprint mailers. Fourth-class presents its standards

yet another way. Understandably this variation confuses both customers

and postal employees and may cause fees to be assessed incorrectly.

The revision below amends the standards cited earlier to state them

uniformly for all three classes: The mailing fee applicable to the

particular class of mail must be paid once each 12-month period at each

office of mailing (except as provided otherwise for plant-verified drop

shipments) by any person or organization entering mailings of that

class at other than a single-piece or nonpresorted rate, regardless of

whose permit imprint, precanceled stamp permit, or meter was used to

pay postage on the mail; payment of the one fee allows that person or

organization to enter its own mail (and that of its clients) at all the

bulk or presort rates available in the corresponding class of mail. By

this revision, the Postal Service believes that confusion over this

type of fee payment should be effectively eliminated.

2. E213.4.3 is amended to change the publishing requirements for

Form 3526, Statement of Ownership, Management, and Circulation. The

current standard requires each publisher of a second-class publication

to file Form 3526 by October 1 of each year for each authorized

publication. The information on that form (or a facsimile of the form)

must be published in the first issue after October 1 of the

corresponding general or requester second-class publication. Publishers

have asked that this specification be relaxed to offer more latitude on

the issue in which the information may appear. Because 39 U.S.C. 3685

allows the Postal Service the authority to administer such details as

when the form is filed or published, the Postal Service believes it can

change those criteria without adversely affecting the informational

value of what is published. The Postal Service sees no benefit from

retaining a stringent requirement when a reasonable relaxation is

sought and supported by the industry. Therefore, the cited standard is

amended as shown below to clarify its applicability and require

publication of Form 3526 in any issue published during October.

3. P040 is amended to relax the conditions under which a company

permit imprint may be used and to strengthen concurrently the Postal

Service's ability both to identify the place of mailing of company

permit imprint mail and to obtain information about such mailings.

Current standards require a permit imprint indicium to contain the

mailer's permit number and the name of the post office where the permit

is held unless, for a mailer having permit imprint authorizations at

two or more post offices, a ``company'' style indicium is used. In a

company style indicium, the name of the permit holder is substituted

for the permit number and post office name. This style is preferred and

used extensively by customers who produce large mailings for entry at

multiple sites, who may change printers or mailers regularly, who

purchase large quantities of envelope stock, or who simply prefer the

appearance of the company style over the basic format. Customers who

have no need for multiple permit imprint authorizations have noted that

it is a pointless burden on the Postal Service and its customers to

generate and maintain a second permit imprint account simply to gain

access to the company style indicium. These customers have requested

relaxation of the applicable standards to let any permit holder use the

company style format.

Current standards also require that company permit imprint

mailpieces bear a complete domestic return address, but do not specify

what that address is to represent. Consequently, the Postal Service has

found it difficult to trace such mailpieces back to the point of

mailing in situations where classification or postage matters have been

questioned. Moreover, no remedies exist for instances in which the

permit holder deliberately frustrates the Postal Service's efforts to

identify the point of mailing, what was mailed, and whether the correct

postage was paid.

Therefore, P040 is amended as shown below to allow use of a company

style permit imprint indicium by any permit mailer regardless of the

number of permits held. The Postal Service is also requiring more

information to document company permit imprint mailings (and mailings

including company permit imprint pieces), is specifying the required

return address, and is enhancing its administrative remedies when the

permit holder fails to supply mailing or permit use information on the

request of the Postal Service. No additional record-keeping

responsibilities are being added for either the mailer or the local

post office. Rather, it is proposed that mailers use the location (the

permit holder's or its agent's) at which records for the mailing will

be available to the Postal Service on request as the required return

address. The revised standards allow suspension or revocation of

permits if such records are not provided in a timely manner. The Postal

Service believes the higher standards are a prudent administrative

control and do not represent an unreasonable condition: each permit

holder should be able to detail what was mailed, where, and how much

postage was paid, and should have no legitimate reason to withhold such

details from the Postal Service. Postal Service actions against

fraudulent uses of permits should be enhanced by these proposed

measures.

4. P040 is also amended to relax the design restrictions of permit

imprint indicia. Current standards allow use of only the formats

illustrated in the DMM--basically a plain box with plain lettering.

While this format was adequate for years, contemporary marketing

techniques and competitive pressures among mail users have made the

attractiveness of the mailpiece a cornerstone of efforts to interest

the addressee in what is inside the mailpiece. As a result, mailers

have become more interested in using artistic latitude in designing the

permit imprint indicium that appears on the mailpiece.

The Postal Service understands the mailer interest in this matter

and accepts the validity of proposals for greater design flexibility.

However, those must be balanced against the needs of the Postal Service

to maintain the clear recognition of the indicium both as evidence of

postage payment and as an indicator of the mailer's identity.

Therefore, P040 is amended as shown below to allow some greater

flexibility in the preparation of permit imprint indicia. Generally,

the proposed standard reinforces the distinctiveness of an indicium but

allows its incorporation into a design of the mailer's choice. The

combined design must be in a prescribed area of the upper right corner

of the address side, area, or label on the mailpiece, must not imitate

a stamp or meter impression, and must keep the indicia free of words

and other printing not specified by the format standards. While some

mailers may prefer more latitude, the Postal Service believes the

proposed standards grant significant new flexibility to mailpiece

designers in a reasonable balance between such flexibility and the

Postal Service's legitimate interest in maintaining recognizable permit

indicia.

5. P200 is amended to set a sunset date for the use of key rates.

Key rates basically represent a simplified method of computing zone-

rate postage on issues of second-class publications having a stable

distribution pattern. Publishers and others who provided the Postal

Service with suggestions for simplifying these regulations noted the

diminishing use of key rates in an era of centralized postage,

electronic funds transfer, multiple editions, and other industry

changes. At the same time, postal personnel, noting how seldom key

rates are used and the resulting lessening of understanding and

experience in their administration, agreed that their continued

availability should be questioned.

Therefore, by the revision shown below, the Postal Service proposes

to end the use of key rates. No new users would be added after

September 30, 1994, or on adoption of a final rule, whichever is later,

and, to allow for an orderly transition for remaining key rate users,

termination of key rates would be deferred until March 31, 1995, or 6

months after adoption of a final rule, whichever is later. The Postal

Service recognizes that there are some publishers that may still use

key rates and does not wish to impact them more than necessary.

However, the Postal Service, which also recognizes the need to

eliminate nonessential regulations if the mailing community is to be

better served, feels that key rates exemplify a potential for such

action.

Although exempt from the notice and comment requirements of the

Administrative Procedure Act (5 U.S.C. 553(b), (c)) regarding proposed

rulemaking by 39 U.S.C. 410(a), the Postal Service invites comments on

the following proposed revisions of the DMM, incorporated by reference

in the Code of Federal Regulations. See 39 CFR Part 111.

List of Subjects in 39 CFR Part 111

Postal Service.

PART 111--[AMENDED]

1. The authority citation for 39 CFR part 111 continues to read as

follows:

Authority: 5 U.S.C. 552(a); 39 U.S.C. 101, 401, 403, 404, 3001-

3011, 3201-3219, 3403-3406, 3621, 5001.

2. Revise the following units of the Domestic Mail Manual as noted

below:

E110 Basic Standards

* * * * *

6.0 Fees.

6.1 Presort Mailing Fee.

A First-Class presort mailing fee must be paid once each 12-month

period at each office of mailing by any person or organization entering

mailings at other than the single-piece First-Class or Priority Mail or

Nonpresorted First-Class rates, regardless of whose permit imprint,

precanceled stamp permit, or meter was used to pay postage on the mail.

Payment of one fee allows that person or organization to enter its own

mail (and that of its clients) at all the First-Class and Priority Mail

presort rates.

* * * * *

E213 Publisher Records

* * * * *

4.0 Statement of Ownership, Management, and Circulation.

* * * * *

4.3 Publication.

During October every year, the publisher of each publication

authorized second-class mail privileges as a general or requester

publication must publish a complete statement of ownership, containing

all information required by Form 3526, in the issue of the publication

to which data reported on that statement relate. A reproduction of the

Form 3526 submitted to the USPS may be used for this purpose. Other

publications are not required to publish this statement.

* * * * *

E312 Additional Standards Applicable to Bulk Third-Class Mail

* * * * *

2.0 Standards for Rates, Fees, and Postage.

* * * * *

2.6 Bulk Mailing Fee.

A third-class bulk mailing fee must be paid once each 12-month

period at each office of mailing (except as provided otherwise for

plant-verified drop shipments) by any person or organization entering

mailings at any regular or special bulk third-class rate, regardless of

whose permit imprint, precanceled stamp permit, or meter was used to

pay postage on the mail. Payment of one fee allows that person or

organization to enter its own mail (and that of its clients) at all the

third-class bulk rates. [Delete 2.7; renumber 2.8 through 2.10 as 2.7

through 2.9, respectively.]

* * * * *

E411 Standards Applicable to All Fourth-Class Mail

* * * * *

4.0 Fees.

4.1 Special Presort and DBMC Rates.

[Combine existing 4.1 and 4.3; renumber existing 4.4 as 4.3; revise

4.1 as follows:] A mailing fee must be paid once each 12-month period

at each office of mailing by any person or organization entering

mailings at the special fourth-class presort rate or (except as

provided otherwise for plant-verified drop shipments) at the

destination BMC (DBMC) parcel post rates, regardless of whose permit

imprint, precanceled stamp permit, or meter was used to pay postage on

the mail. A separate fee is required for each rate; payment of the

applicable fee allows that person or organization to enter its own mail

(and that of its clients) at the corresponding rate.

4.2 Pickup Service.

The parcel post pickup fee must be paid every time pickup service

is provided, subject to the corresponding standards in D010.

* * * * *

P040 Permit Imprints

1.0 Basic Information

* * * * *

[Renumber existing 1.6 and 1.7 as 1.8 and 1.9; add new 1.6 and 1.7

and revise 1.8 as follows:]

1.6 Information

Upon request by the USPS, a permit holder or its agent must provide

in a timely manner complete information (as specified in 3.5) about

mailings, or including pieces, paid by company permit imprint.

1.7 Suspension.

The USPS may immediately suspend the permit holder's use of a

permit imprint if the permit holder or its agent fails to provide

information as specified in 1.6.

1.8 Revocation.

A permit is revoked for use in operating any unlawful scheme or

enterprise, for nonuse during any 12-month period, for refusal to

provide information about permit imprint use or mailings, or for any

noncompliance with the standards applicable to using permit imprints.

If revocation is for nonuse but the permit holder plans to resume

mailings within a 90-day period, the permit may be continued for 90

days. The permit holder may appeal the revocation in writing to the

postmaster within 10 days of receipt of the notice. Further appeal may

be made through the postmaster to the district manager of customer

service and sales or to the RCSC if the initial decision was made at

the district level.

* * * * *

2.0 Preparing Permit Imprints.

* * * * *

2.4 Placement.

The entire permit imprint indicium must be aligned parallel with

the address of the mailpiece and placed in the upper right corner of

the address side, of the address area, or of the address label, subject

to these conditions:

a. The indicium must not encroach on reserved space on the

mailpiece (e.g., the OCR read area) if such a standard applies to the

rate claimed.

b. The position (but not the format) of the indicium may be varied

so that data processing equipment can simultaneously print the address,

imprint, and other postal information.

* * * * *

3.0 Permit Imprint Content.

* * * * *

3.5 Company Permit Imprint.

A company permit imprint is one in which the exact name of the

company or individual holding the permit is shown in the permit imprint

indicium in place of the city, state, and permit number. A customer may

use a company permit imprint indicium if:

a. For 2 years after the last date of mailing, the permit holder

keeps records for each mailing paid by company permit imprint for USPS

review on request. These records include (for each version of what was

mailed, if applicable) a complete sample mailpiece; the weight of a

single piece; the total number of pieces mailed; the total postage; the

date(s) and post office(s) of mailing, and other records required by

the rate of postage claimed or the method of payment used.

b. Each mailpiece bears the complete domestic return address of the

mailer or the mailer's agent, that address being the physical location

at which the records listed in 3.5a are available for USPS review. On

unendorsed bulk third-class mail, the return address may be below the

permit imprint.

4.0 Formats.

[Renumber existing 4.0 as 4.1, and Exhibits 4.0a-c as 4.1a-c; amend

and add new 4.2 as follows:]

4.1 Basic Standard.

Unless prepared under the option in 4.2, permit imprint indicia for

ordinary mail, official mail, and Mailgrams must be prepared in one of

the formats shown in Exhibit 4.1a, Exhibit 4.1b, and Exhibit 4.1c, as

applicable to the rate claimed or type of mail.

4.2 Optional Format.

Permit imprint indicia may be prepared in a format other than the

basic format described in 4.1 subject to these conditions:

a. The rule that forms a box around the content of the indicium may

be omitted if the content remains as specified in 3.0 and Exhibits

4.1a-c.

b. The indicium content specified in 3.0 is placed within a clear

area no smaller than \1/2\ inch high and \1/2\ inch wide, no more than

1-\1/2\ inches below or left from the upper right corner of the

mailpiece, of the address label, or of the address area, regardless of

the processing category or the postage rate claimed.

c. No printing appears in the indicium area other than the

information required or allowed under 3.0.

d. No printing appears above or to the right of the permit

information.

e. The permit information is printed in no smaller than 4-point

type.

f. Any decorative designs intended to be part of the permit imprint

indicium design appear below or to the left of the permit information

in an area extending no farther than 4-\1/2\ inches to the left of the

right edge, and 1-\1/2\ inches below the top edge, of the mailpiece,

address area, or address label, as applicable. Such designs must not

resemble or imitate a postage meter imprint, postage stamp, postcard

postage, or other method of postage payment. No words or symbols are

included in a decorative design used by the USPS to identify a class of

mail, rate of postage, or level of service, unless such words or

symbols are correctly used under the applicable standards for the

mailpiece on which they appear and the corresponding postage and fees

have been paid.

g. All other applicable standards in 1.0 through 5.0 are met.

* * * * *

5.0 Mailings.

* * * * *

5.3 Preparation of Mailing.

All pieces in a permit imprint mailing must be faced (i.e., have

the address facing in the same direction) and meet the preparation

standards applicable to the rate claimed. Mail claimed at a rate where

postage varies by zone must be separated by zone when mailed unless

authorized by the USPS.

5.4 Place of Mailing.

Mail must be deposited and accepted at the post office that issued

the permit, at a time and place designated by the postmaster, except as

provided for plant-verified drop shipments.

* * * * *

5.6 Prepayment.

Payment must be made for each mailing, either in cash or through an

advance deposit account, before the mailing can be released for

processing. Funds to pay postage must be deposited as prescribed by the

USPS. If the funds paid or on deposit are less than that necessary to

pay for a mailing, the difference must be paid or deposited before it

or other permit imprint mailings can be accepted. Credit for postage is

not allowed. Postage may not be paid partly in money and partly by

postage stamps unless permitted by standard.

* * * * *

P200 Second-Class Mail

* * * * *

3.0 Key Rate.

* * * * *

3.5 Termination of Key Rate Option.

New authorizations to use key rates may not be granted after

September 30, 1994. Publications already authorized key rates may

continue to use them until March 31, 1995. Effective April 1, 1995, use

of key rates is eliminated and 3.0 is deleted.

An appropriate amendment to 39 CFR 111.3 to reflect these changes

will be published if the proposal is adopted.

Stanley F. Mires,

Chief Counsel, Legislative.

[FR Doc. 94-10644 Filed 5-3-94; 8:45 am]

BILLING CODE 7710-12-P