58682 Federal Register / Vol. 65, No. 191 / Monday, October 2, 2000 / Proposed Rules

PART 39ÐAIRWORTHINESS Issued in Fort Worth, Texas, on September ADDRESSES: Written comments should DIRECTIVES 25, 2000. be mailed or delivered to the Manager, Eric Bries, Postage Technology Management, USPS 1. The authority citation for part 39 Acting Manager, Rotorcraft Directorate, Headquarters, 475 L’Enfant Plaza SW, continues to read as follows: Aircraft Certification Service. Room 8430, Washington, DC 20260– Authority: 49 U.S.C. 106(g), 40113, 44701. [FR Doc. 00–25154 Filed 9–29–00; 8:45 am] 2444. Copies of all written comments BILLING CODE 4910±13±P will be available at this address for § 39.13 [Amended] inspection and photocopying between 9 a.m. and 4 p.m., Monday through 2. Section 39.13 is amended by Friday. adding a new airworthiness directive to POSTAL SERVICE read as follows: FOR FURTHER INFORMATION CONTACT: 39 CFR Parts 111 and 502 Nicholas S. Stankosky, 202–268–5311. Bell Helicopter Textron, Inc.: Docket No. SUPPLEMENTARY INFORMATION: Postage 2000–SW–16–AD. Production, Distribution, and Use of evidencing systems covered by these Applicability: Model 204B helicopters with Postal Security Devices and Information-Based Indicia regulations include all those systems main rotor mast assembly, part number (P/N) that generate information-based indicia 204–011–450–001, installed, certificated in AGENCY: Postal Service. (IBI) and use a postal security device any category. ACTION: Proposed rule. (PSD). The characteristics of these Note 1: This AD applies to each helicopter systems enable the Postal Service to identified in the preceding applicability SUMMARY: The Postal Service is scan indicia to detect fraud. Core provision, regardless of whether it has been proposing to add new sections to the security functions, such as digital otherwise modified, altered, or repaired in Domestic Mail Manual (DMM) and to signature generation, digital signature the area subject to the requirements of this title 39, Code of Federal Regulations verification, and the management of AD. For helicopters that have been modified, (CFR), to reflect policies and regulations altered, or repaired so that the performance postage registers are performed by the pertaining to all postage evidencing PSD. The IBI contains a two- of the requirements of this AD is affected, the systems that generate information-based owner/operator must request approval for an dimensional barcode that incorporates a indicia (IBI). We originally published cryptographic digital signature. The alternative method of compliance in policies and regulations for public accordance with paragraph (b) of this AD. component of these postage evidencing review and comment in the March 28, The request should include an assessment of systems that controls the registered user the effect of the modification, alteration, or 1997, Federal Register (62 FR 14833). In infrastructure for system authorization, repair on the unsafe condition addressed by the September 2, 1998, Federal Register system audits, remote postage resetting, this AD; and if the unsafe condition has not (63 FR 46719) we published a revision and production of the indicia is called been eliminated, the request should include of those proposed policies and the client system. specific proposed actions to address it. regulations which included changes Authorized postage evidencing Compliance: Required within 25 hours made in response to the comments systems are available from authorized, time-in-service, unless accomplished received from the public. commercial product service providers. previously. This publication of proposed policies The provider’s infrastructure supports To prevent failure of the main rotor mast and regulations includes extensive user registration (formerly ‘‘licensing’’), assembly (mast) and subsequent loss of changes. We based the changes since the PSD management and life cycle support, control of the helicopter, accomplish the 1998 publication on public comments and an interface between the client following: and on the experience we gained by system and the Postal Service (a) Remove any mast, P/N 204–011–450– testing and implementing the first infrastructure. The Postal Service 001, from service and replace it with an postage evidencing systems to generate infrastructure supports the issuance of airworthy mast. Accomplishing the information-based indicia (IBI). One user registrations, updating user requirement of this paragraph constitutes significant proposed change is the registration information, PSD inventory terminating action for the requirements of establishment by the Postal Service of and tracking, resetting, account this AD. P/N 204–011–450–001 is not eligible the Electronic Funds Resetting System reconciliation, lost and stolen/ for installation on any helicopter. (EFRS) to process resetting data for irregularity monitoring, and the (b) An alternative method of compliance or these systems. We will continue to assignment of digital certificates. adjustment of the compliance time that process data for traditional postage provides an acceptable level of safety may be meters under the Computerized Meter The Following is a Summary of the used if approved by the Manager, Rotorcraft Resetting System (CMRS). Other Postal Service’s Position on Some Certification Office, Rotorcraft Directorate, proposed changes include modifying General Interest Policy Issues for FAA. Operators shall submit their requests the forms of payment the Postal Service Postage Evidencing Systems That through an FAA Principal Maintenance Generate IBI Inspector, who may concur or comment and will accept, and changing the policy for then send it to the Manager, Rotorcraft refunds for unused IBI postage and for 1. Any proposed postage evidencing Certification Office. the balance remaining on a postal system that generates IBI must be Note 2: Information concerning the security device (PSD) that is withdrawn submitted to the Postal Service for existence of approved alternative methods of from service. approval under the then current version compliance with this AD, if any, may be We are reissuing the policies and of the postage evidencing product obtained from the Rotorcraft Certification regulations in this proposal for public submission procedures. These Office. comment because we made extensive procedures include specifics on letters (c) Special flight permits may be issued in changes. We will revise the proposed of intent, nondisclosure agreements, the accordance with sections 21.197 and 21.199 IBI policies and regulations, if required, product service provider’s concept of of the Federal Aviation Regulations (14 CFR and publish them as a final rule after we operations and infrastructure, 21.197 and 21.199) to operate the helicopter review the comments. documentation requirements, product to a location where the requirements of this DATES: Comments must be received on submissions, and testing activities. AD can be accomplished. or before December 1, 2000. Information pertaining to these

VerDate 112000 12:38 Sep 29, 2000 Jkt 194001 PO 00000 Frm 00011 Fmt 4702 Sfmt 4702 E:\FR\FM\02OCP1.SGM pfrm02 PsN: 02OCP1 Federal Register / Vol. 65, No. 191 / Monday, October 2, 2000 / Proposed Rules 58683 procedures may be accessed through the 11. The Postal Service will provide (PSD) that performs core security USPS Web site. refunds through the product service functions such as digital signature 2. The user must register with the providers, in accordance with Postal generation and verification, as well as Postal Service before using a postage Service procedures, for printed but the management of postage registers. evidencing system that generates IBI. unused postage and for the full postage The component of these postage 3. PSDs remain the property of the value balance remaining on a PSD that evidencing systems that controls the USPS-authorized product service is withdrawn from service. registered user infrastructure for system provider and are available only through 12. The provider must supply authorization, system audits, remote a lease agreement with the provider. registered users with modifications postage resetting, and production of the The software component of these reflecting rate changes and must indicia is called the client system. The postage evidencing systems is licensed implement new rates as of the effective PSD and the client system interact to to the registered user by the provider. date for the new rates established by the generate the indicia. Indicia consist of a 4. Until the Postal Service has Postal Service. USPS-approved two-dimensional recorded sufficient data on reliability 13. There are provisions in the barcode and certain human-readable and security, the total amount of postage regulations for the correction of postage information. Authorized postage in a descending register, which shows and dates. For date correction, the evidencing systems are available from the amount of postage available, will be facing identification mark (FIM) and authorized, commercial product service limited to an amount established by the two-dimensional barcode will be providers. Avoiding the payment of Postal Service. suppressed; for postage correction, the postage by misusing a postage 5. Authorized providers must keep FIM will be suppressed. evidencing system is punishable by law. records of the distribution, 14. The provider will make the registered user aware of the applicable 1.2 Product Service Provider maintenance, replacement, and disposal Responsibilities of all PSDs throughout the complete life Postal Service regulations pertaining to cycle of the PSD. All PSDs must be use of the information-based indicia and Postal security devices (PSDs) remain tracked, including newly produced of the postage evidencing system that the property of the USPS-authorized PSDs; active leased PSDs; and inactive generates them through cautionary product service provider and are unleased PSDs; and lost, stolen, and statements in the system software, available only through a lease agreement scrapped PSDs. system documentation, and product with the provider. The software 6. Indicia produced by these postage labeling, as appropriate. component of these postage evidencing systems is licensed to the registered user evidencing systems may be used to List of Subjects in 39 CFR Part 111 indicate postage for single-piece rate by the provider. The Postal Service Administrative practice and First-Class Mail (including Priority holds providers responsible for the procedure, Postal Service. Mail), single-piece rate International control, operation, distribution, Although exempt from the notice and Mail, Standard Mail (B); and Express maintenance, and replacement of the comment requirements of the Mail, Express Mail International PSD throughout the entire life cycle of Administrative Procedure Act (5 U.S.C. Service, Global Priority Mail, and the PSD. The provider is also 553(b), (c)) regarding proposed Priority Mail Global Guaranteed. Mail responsible for the secure disposal or rulemaking by 39 U.S.C. 410(a), the bearing the indicia is entitled to all destruction of the PSD at the end of its Postal Service invites public comments privileges and subject to all conditions useful life. on the following proposed amendments applying to these classes of mail. to the Domestic Mail Manual, 1.3 Product Service Providers 7. Providers are responsible for audit incorporated by reference in the Code of Postage evidencing systems that functions. The Postal Service will not Federal Regulations. See 39 CFR part generate IBI are available from take over this function, but may at times 111. authorized providers. The following participate in or review the audit providers have been approved as of process. PSDs must be audited at least PART 111Ð[AMENDED] September 2000: once every 3 months. 1. The authority citation for 39 CFR E-Stamp Corporation, 2051 Stierlin Court, 8. To ensure the quality and Mountain View, CA 94043–4655, readability of the indicia, providers part 111 continues to read as follows: www.estamp.com must perform an analysis of the Authority: 5 U.S.C. 552(a); 39 U.S.C. 101, Neopost Online, 3400 Bridge Parkway, Suite mailpieces that registered users submit 401, 403, 404, 3001–3011, 3201–3219, 3403– 201, Redwood City, CA 94065–1168, every 6 months for the provider’s 3406, 3621, 3626, 5001. www.neopostonline.com Pitney Bowes, Inc., 40 Lindeman Drive, mailpiece quality assurance program. 2. Add the following sections to the The provider must notify the registered Trumbull, CT 06611–4785, Domestic Mail Manual as set forth www.pitneybowes.com/soho/ user and the Postal Service of any below: Stamps.com, 3420 Ocean Park Boulevard, deficiencies and provide guidance to the P050 Information-Based Indicia (IBI) Suite 1040, Santa Monica, CA 90405–3035, user to correct any deficiencies that are www.stamps.com discovered. 1.0 BASIC INFORMATION 9. All postage downloads or settings 1.4 Possession will be made under the provisions of the 1.1 Description of Postage Evidencing No one other than an authorized Electronic Funds Resetting System Systems that Generate Information- product service provider may possess or (EFRS). The Postal Service will conduct Based Indicia (IBI) use a PSD without a valid USPS-issued periodic audits of the provider’s Postage evidencing systems that postage evidencing system user resetting system to ensure that the generate information-based indicia (IBI) registration and a valid lease agreement system is operating correctly and that are secure systems that print USPS- with the provider. Any person in postal revenues are protected. authorized, digitally signed indicia to possession of a PSD without meeting 10. The Postal Service may physically show payment of postage. These these conditions must immediately inspect a PSD if it has a reason to systems include as a primary surrender it to the provider or to the suspect a security problem. component a postal security device USPS.

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1.5 Classes of Mail 1.7 Reply Postage user must be prepared using that A postage evidencing system that system. Information-based indicia (IBI) e. For those postage evidencing produced by an authorized postage generates IBI may be used to prepare prepaid reply postage for the following systems without the capability to print evidencing system may be used to domestic mail classes: All single-piece an address for the given class or size of indicate postage for single-piece rate rate First-Class Mail (including Priority mailpiece, the address side of reply mail First-Class Mail (including Priority Mail), Standard Mail (B), and Express may be prepared by any photographic, Mail), single-piece rate International Mail. The prepaid reply mail must meet mechanical, or electronic process or Mail, and single-piece rate Standard the following conditions: combination of such processes (other Mail (B); also Express Mail, Express a. The postage amount in the than handwriting, typewriting, or hand Mail Military Service, Express Mail indicium must be enough to prepay the stamping). International Service, Global Priority postage in full. f. The address side of the mailpiece Mail, and Priority Mail Global b. Indicium showing postage must follow the style and content of the Guaranteed. The indicia can be used to evidencing may be printed directly on example below. Nothing may be added pay for special services. Mail prepared the mailpiece or on a label and must be except a return address and facing using such a system is entitled to all applied to a mailpiece in accordance identification mark (FIM). privileges and subject to all conditions with the directions in 4.4. An applied g. If the reply mailpiece is letter-sized that apply to the various mail classes label must adhere well enough that it First-Class Mail, a FIM D is required and services. cannot be removed in one piece. when the indicium for reply postage is c. The mailpiece must be pre- printed directly on the mailpiece. 1.6 Amount of Postage addressed for return to the registered h. Prepaid reply mail is delivered user. only to the address of the registered The value of the indicia affixed to d. If the postage evidencing system user. If the address is altered, the mail each mailpiece must equal or exceed the used to prepare the return postage is held for postage. exact amount due for the piece when indicium has the capability to print i. IBI used to prepay reply postage mailed. Refunds for overpayment must destination addresses for the given size must show the date the indicium was meet the standards in P014. and class of mailpiece, the address for printed by the registered user, and must returning the mailpiece to the registered include the words ‘‘REPLY POSTAGE’’.

2.0 USER REGISTRATION registration is processed through the applicant for the same post office, but a separate application must be submitted 2.1 Procedures Centralized Registration System (CRS), formerly the Centralized Meter for each post office where the applicant The user must register with the Postal Licensing System. The provider intends to deposit mail. A single PSD Service before using a postage electronically transmits the required can be registered to only one post office evidencing system that generates IBI. An information to CRS in the USPS- at any one time; it must be reauthorized applicant must apply for a user specified format. There is no fee for the by the provider for use at a different registration through the provider and application or user registration. After post office. submit to the provider all data required for a registration to lease and use approving an application, the Postal 2.2 Registered User’s Agreement postage evidencing systems. The Service issues a postage evidencing By submitting an application for a application must show the post office system user registration, and notifies the user registration, the applicant agrees where the applicant intends to deposit appropriate provider. A single user that the registration may be revoked the mail. This is called the registration registration covers all postage immediately and that the postage post office. An application for a user evidencing systems for the same evidencing system may be withdrawn

VerDate 112000 12:38 Sep 29, 2000 Jkt 194001 PO 00000 Frm 00013 Fmt 4702 Sfmt 4702 E:\FR\FM\02OCP1.SGM pfrm02 PsN: 02OCP1 Federal Register / Vol. 65, No. 191 / Monday, October 2, 2000 / Proposed Rules 58685 from service by the provider or the registration is subject to revocation for d. The registered user must reset the USPS for the following reasons: any of the following reasons: PSD at least once every 3 months to a. The postage evidencing system is a. The postage evidencing system is meet provider audit and examination used in any fraudulent or unlawful used for any illegal scheme or enterprise requirements. A zero value reset will scheme or enterprise. or there is probable cause to believe that meet this requirement. b. The postage evidencing system is the system is to be used in violation of e. The registered user must update not used for 12 consecutive months. the applicable standards. information with the provider whenever c. The registered user fails to exercise b. The user registration does not have there is any change in the user’s name, sufficient control of the postage a postage evidencing system applied address, telephone number, location of evidencing system or fails to comply against it or the registered user’s postage the PSD, registration post office, or any with the standards for system care or evidencing system has not been reset other required user registration use. within the last 12 months. information. The Postal Service will d. The postage evidencing system is c. Sufficient control of the postage issue a revised user registration based used outside the United States, its evidencing system is not exercised or on the transmission of updated territories or its possessions, except as the standards for its care or use are not information from the provider. specifically authorized by these followed. f. The registered user must report a regulations or by the manager of Postage d. The postage evidencing system is misregistering or otherwise defective Technology Management, USPS kept or used outside the customs PSD to the provider under 2.8, and must Headquarters. territory of the United States or those ensure that the defective PSD is not e. IBI mail is deposited at other than U.S. territories and possessions where used. Anyone in possession of a the registration post office (except as the Postal Service operates, except as misregistering or otherwise defective permitted under 5.0 or D072). specified in 2.11 or 2.12. PSD must return it to the provider f. The registered user fails to forward e. IBI mail is deposited at other than within 3 business days. mailpieces to the provider for quality the registration post office (except as g. For postage evidencing systems that assurance as required in 2.6.h. permitted under 5.0 or D072). generate IBI and access the USPS f. The registered user fails to forward Address Management System (AMS) 2.3 Refusal to Register a User mailpieces to the provider for quality CD–ROM, the registered user must The Postal Service notifies both the assurance as required in 2.6.h. maintain address quality by ensuring applicant and the provider when an the CD–ROM is updated at least once 2.5 Appeal Process application for user registration is every 6 months. refused. The notification is in writing An applicant who is refused a user h. The registered user must forward a and is sent certified mail, return receipt registration, or a registered user whose mailpiece with an indicium produced requested. Any applicant refused a user registration is revoked, may file a by the postage evidencing system to the registration may appeal the decision written appeal with the manager of provider for quality assurance when the under 2.5. The Postal Service may Postage Technology Management, USPS system is installed and at least once refuse to register a user for the following Headquarters, within 10 calendar days every 6 months thereafter, in accordance reasons: after receiving or refusing to receive with provider directions. a. The applicant submitted false notification of the decision. i. The registered user must enter into information on the user registration a signed lease agreement with the 2.6 Registered User’s Responsibilities application. provider that includes a financial b. The applicant violated any The registered user’s responsibilities agreement for resetting the PSD with standard for the care or use of a PSD, for the care and use of a postage postage and the Postage Payment postage evidencing system, information- evidencing system that generates IBI Agreement. The Postal Service is not a based indicia, or postage meter that include the following: party to the lease agreement, except to resulted in the revocation of that a. A PSD that is delivered to a the extent that it may enforce the applicant’s user registration or postage registered user must remain in the Postage Payment Agreement. meter license within 5 years preceding registered user’s custody until it is j. The registered user must ensure that submission of the application. returned to the authorized provider, or the cautionary information placed by c. There is sufficient reason to believe to the Postal Service, or is removed by the provider in system documentation, that the postage evidencing system is to the U.S. Postal Inspection Service. on the opening screens at system start- be used in violation of Postal Service b. Some postage evidencing systems up, or on labels attached to the PSD or regulations. maintain a log file that automatically its housing, is not removed or destroyed records all transactions relating to while the postage evidencing system is 2.4 Revocation of a User Registration indicia creation, funds transfer in the registered user’s possession. The The Postal Service notifies the (including postage value download), cautionary information contains basic registered user of any revocation. The and postal security device audits which reminders on ownership and use of the Postal Service also notifies the is transmitted automatically to the PSD, warnings against system tampering registered user’s provider of the provider by the system with each or misuse resulting in non-payment of revocation so that the provider can connection. The registered user may not postage owed, and the penalties for such cancel the lease agreement and manipulate these log files to reflect an system misuse. Postage evidencing withdraw the postage evidencing system inaccurate record of transactions or systems without this cautionary from service. The notification is in prevent the transmission of these log information shall not be authorized for writing and is sent certified mail, return files to the provider. use. receipt requested. Revocation takes c. The registered user must, upon effect 10 calendar days after the request, make immediately available for 2.7 Custody of Suspect PSDs registered user receives or refuses to review and audit by the provider or by The Postal Service may conduct receive the revocation notice unless, the Postal Service any PSD in the user’s unannounced, on-site examinations of within that time, the registered user custody and the corresponding PSDs reasonably suspected of being appeals the decision under 2.5. A user transaction records. manipulated or otherwise defective. A

VerDate 112000 12:38 Sep 29, 2000 Jkt 194001 PO 00000 Frm 00014 Fmt 4702 Sfmt 4702 E:\FR\FM\02OCP1.SGM pfrm02 PsN: 02OCP1 58686 Federal Register / Vol. 65, No. 191 / Monday, October 2, 2000 / Proposed Rules postal inspector also may immediately same regulations that apply to domestic registration to participate in this withdraw a suspect PSD from service for users. For such users, the APO or FPO program. physical and/or laboratory examination. will be designated as the registration e. The provider selected by the The inspector withdrawing a suspect post office on their user registration. registered user must agree in writing to PSD issues the registered user a receipt These users must deposit the mail all terms and conditions established by for the PSD; forwards a copy to the prepared with their system at the the Postal Service pertaining to the provider; and, if necessary, assists in registration post office. distribution of U.S. postage evidencing systems outside of the United States. obtaining a replacement PSD. Where 2.12 Approval for Use of Postage possible, the Inspection Service gives Once the postage evidencing system is Evidencing Systems Outside the installed, the provider must provide the advance notice to the provider that a Country PSD is to be inspected. Unless there is information required for Form 3601–C, reason to believe that the PSD is Under certain conditions, with Postage Evidencing System Activity fraudulently set with postage, existing specific approval from the manager of Report, and submit it directly to the postage in the PSD is refunded to the Postage Technology Management, USPS manager of Postage Technology registered user, in accordance with Headquarters, registered users (other Management, USPS Headquarters (see established refund procedures, when it than those with access to an overseas G043). is withdrawn from service. military post office) may use postage f. Mail to which an IBI is applied as evidencing systems that generate IBI postage evidencing must use domestic 2.8 Defective PSD outside the customs territory of the U.S. postage and must be entered at the The registered user must immediately United States to print evidence of U.S. registration post office. postage. The procedures and conditions report any defective PSD to the 3.0 SETTING provider. The provider must retrieve are as follows: any defective PSD in a user’s possession a. The potential users must maintain 3.1 Initialization and Authorization of within 3 business days of notification by a permanent, established business the PSD the registered user, and must notify the address in the United States. Any Before the registered user can print manager of Postage Technology exceptions must be specifically evidence of postage, the PSD must be approved in writing by the manager of Management, USPS Headquarters, initialized and authorized by the Postage Technology Management, USPS immediately. A faulty PSD may not be provider. The initialization process used under any circumstance. The Headquarters (see G043). b. All registered users who use a installs PSD-specific information that provider supplies the registered user does not change over the life cycle of with a replacement PSD only if the USPS-approved postage evidencing system outside the customs territory of the PSD. The authorization process is faulty PSD is in the provider’s the setting of user-specific information. possession. the United States are subject to all Postal Service regulations and U.S. The PSD is reauthorized by the provider 2.9 Missing PSD statutes pertaining to mail, mail fraud, when certain user-specific information and misuse of postage evidencing changes. Settings are made in The registered user must immediately accordance with the provisions of the report to the provider the loss or theft systems. c. All postage evidencing systems USPS Electronic Funds Resetting of any PSD or the recovery of any System (EFRS). missing PSD. Reports must include the authorized by the USPS for use in postal security device identification foreign locations must have enhanced 3.2 Relocation of Registered User security features. Only those systems number of the PSD; the date, location, If a registered user changes the post specifically approved in writing by the and details of the loss, theft, or recovery; office at which IBI mail is to be manager of Postage Technology and a copy of any police report. The deposited, the provider must Management, USPS Headquarters, may provider will report all details of the reauthorize the PSD for the new be used outside the customs territory of incident to the manager of Postage registration post office. The user must the U.S. Technology Management, USPS notify the provider and must be Headquarters. d. Potential users must submit all data required for the application for a registered at the new registration post 2.10 Returning a PSD registration to lease and use postage office before the provider can reauthorize the PSD. A registered user in possession of a evidencing systems to the provider. The faulty or misregistering PSD, or who no provider will annotate the application to 3.3 Payment for Postage longer wants to keep a PSD, must return state that it is for the foreign use of a The Postal Service will accept the PSD to the provider to be withdrawn U.S. postage evidencing system and payment only in the following forms: from service. PSDs must be shipped by show where the system is to be located. Automated Clearinghouse (ACH) debit Priority Mail unless the manager of The provider must submit the and credit card. Postage Technology Management, USPS application to the manager of Postage Headquarters, gives written permission Technology Management, USPS 3.4 Resetting to ship at another rate or special service. Headquarters, for review and approval. To reset a PSD the following Once an application is approved, conditions must be met: 2.11 Approval for Use of Postage Postage Technology Management will a. The registered user shall initiate Evidencing Systems at Military Post designate the registration post office and payment to the Postal Service sufficient Offices notify the provider and the registered to cover the desired postage increment A person authorized by the user. Multiple foreign postage before requesting a postage value Department of Defense to use the evidencing systems for the same download to reset the PSD. services of an overseas military post registered user at the same registration b. As part of the resetting procedure, office, such as an APO or FPO, is post office may be covered by one the registered user must provide allowed to use a USPS-approved foreign user registration. Mailers who identifying information and PSD audit postage evidencing system that currently have a user registration must data as required by the Postal Service generates IBI in accordance with the apply for a separate foreign user and in accordance with the provider’s

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For labels applied to standard audit, and ascertain whether payment to Postal Service, for a given registered letter-sized envelopes and postcards the Postal Service sufficient to cover the user at any time. sent as First-Class Mail, the label must requested postage value download was have fluorescent striping that meets the initiated by the registered user. 4.0 INDICIA following requirements: c. The provider will supply the 4.1 Designs (1) A stripe along the right side (leading edge) of the label that is 1⁄4 inch registered user with documentation of The indicia designs (types, sizes, and wide and extends a minimum of 1⁄2 inch the reset transaction and the balance on styles) must be those that the provider the PSD. and a maximum of 11⁄2 inches from the specified when the postage evidencing top of the label. system was approved by the Postal 3.5 Postage Refunds (2) A stripe along the top edge of the Service for production and distribution label that is 1⁄4 inch wide and extends The Postal Service provides refunds (see Exhibit 4.1). a minimum of 1⁄2 inch and a maximum for the entire postage value balance [Exhibit 4.1, which shows all of 11⁄2 inches from the right edge of the remaining on a PSD that is withdrawn approved indicia designs, will be label. from service and is in the possession of included when these regulations are the provider. Refunds are requested and published in final form in the Domestic (3) All stripes must have a minimum paid through the provider. Refunds for Mail Manual.] fluorescent emission intensity of at least 20 phosphor meter units (PMU), with a postage already printed onto an * * * * * envelope or label are made in maximum of 70 PMU. The visible color accordance with P014. Postage losses 4.2 Legibility of the fluorescent tagging may be any due to malfunctions are the The indicia must be legible. Illegible color that meets the fluorescence responsibility of the provider. indicia are not acceptable for the requirements. payment of postage. Should there be a (4) The fluorescent tagging shall 3.6 Postage Adjustment for Faulty or need to place multiple indicia on an exhibit no noticeable change (i.e., no Misregistering PSD envelope (e.g., for redate and/or postage more than 10 percent) in its emission correction) the indicia must not overlap when exposed to elevated temperature If the registered user requests a and/or high humidity conditions. postage adjustment for a faulty or each other. The address and POSTNET barcode must meet the specifications f. The label must be placed on the misregistering PSD, then the PSD must envelope such that the position of the be withdrawn from service and must be listed in C840. Reflectance measurements of the indicia and the indicia meets the requirements in 4.4. in the possession of the provider for g. If the label is applied to an examination. The provider will examine background material must meet the standards in C840.5. envelope that already has a FIM, then the PSD in comparison with the data the existing FIM cannot be covered by from the registered user’s log files. After 4.3 On an Adhesive Label the label. examining a PSD withdrawn from A label used to apply information- service for apparent faulty operation 4.4 Position based indicia to a mailpiece for postage affecting the ascending or descending evidencing must be approved by the The indicia must be printed or registers, the provider must report the manager of Postage Technology applied in the upper right corner of the malfunction to the manager of Postage Management, USPS Headquarters. envelope. The indicia must be at least Technology Management, USPS Failure to use a USPS-approved label 1⁄4 inch from the right edge of the Headquarters. The report must contain may result in revocation of the user mailpiece and 1⁄4 inch from the top edge all applicable documentation (including registration for the postage evidencing of the mailpiece. The barcode in the a copy of the registered user’s log files) system. The label must meet the indicia must be horizontally oriented. If and a recommendation for the following requirements: a FIM is printed with the indicia, the appropriate postage adjustment. At the a. The label must be a pressure- position of the FIM must meet the same time the report is made to the sensitive, permanent label. The label is requirements in C100.5.0. The indicia Postal Service, the provider must notify subject to the corresponding standards must not infringe on the areas reserved the registered user of the proposed in C810.6.2 for minimum peel adhesion. for the FIM, POSTNET barcode, or postage adjustment. A registered user The applied label must adhere well optical character reader (OCR) clear may appeal a postage adjustment to the enough that it cannot be removed in one zone. manager of Postage Technology piece. A face stock/liner, or Management, USPS Headquarters, 4.5 Content and Format ‘‘sandwich,’’ label must not be used for within 60 calendar days of the date that printing information-based indicia. The boundaries of the indicium are the provider submitted the postage b. The label must meet the reflectance defined by the right-hand edge of the adjustment recommendation to the requirements in C840.5.0. envelope, the top edge of the envelope, Postal Service. c. The label must be large enough to the bottom edge of the two-dimensional 3.7 Periodic Examinations contain the entire information-based barcode or any indicium element below indicia. the barcode, and the left-most edge of The registered user must reset the d. Information-based indicia printed the two-dimensional barcode or any PSD at least once every 3 months. A on a label must be the same as the indicium element to the left of the zero-value reset meets this requirement. indicia approved by the manager of barcode. A 1⁄2 inch clear zone, within The Postal Service reserves the right to Postage Technology Management for which nothing shall be printed by the examine PSDs by remote access or printing directly on an envelope. The postage evidencing system, must otherwise. label must not include any image or text surround the indicium boundaries to

VerDate 112000 12:38 Sep 29, 2000 Jkt 194001 PO 00000 Frm 00016 Fmt 4702 Sfmt 4702 E:\FR\FM\02OCP1.SGM pfrm02 PsN: 02OCP1 58688 Federal Register / Vol. 65, No. 191 / Monday, October 2, 2000 / Proposed Rules the left of and below all elements of the 4.6 Complete Date information-based indicia, or for any indicium. The month, day, and year must be other non-postal use, the two- The manager of Postage Technology shown in human-readable form in the dimensional barcode shall be rendered Management, USPS Headquarters, must indicia. The year must be represented unreadable, for example by printing approve the contents and format of all by four digits. ‘‘VOID’’ or similar text across the indicia that will be produced by a barcode. 4.7 Date Accuracy postage evidencing system. This 4.11 Other Printed Matter approval shall include all elements in The date of mailing in the indicium An approved indicium shall include the indicium required by the IBI must be the actual date of deposit, within its boundaries only postal performance criteria and/or Postal except that mail deposited in a markings and text required or Service regulations and applies to the collection box after the day’s last recommended by Postal Service entire area within the indicium scheduled collection may bear the regulation, except that the indicium boundaries. The USPS-approved indicia actual date of deposit or the date of the next scheduled collection. may identify the product service supplied by the provider consist of provider. Other printed matter may be human-readable information and two- If the registered user knows the mail will not be tendered to the Postal printed only outside the boundaries of dimensional barcoded information. For the clear zone (see 4.5) surrounding the the contents of indicia used for prepaid Service on the date of mailing shown in the indicium, the user should use a date indicium. Such printed matter may not reply mail, see 1.7; for the contents of be obscene, defamatory of any person or redate indicia, see 4.8; and for the correction indicium (see 4.8) or have the postage evidencing system advance the group, or deceptive, and it must not contents of postage correction indicia, advocate any unlawful action. see 4.9. The contents of other indicia is date and print the intended date of as follows: deposit in the indicium. 4.12 Postal Markings a. Unless otherwise approved by the 4.8 Date Correction Postal markings related to the mail manager of Postage Technology If date correction is required, indicia class, subclass, or category of mail are Management, USPS Headquarters, the showing only the actual date of mailing required in the indicia. required human-readable information and the word ‘‘REDATE’’ instead of the 4.13 Facing Identification Mark (FIM) must show, at a minimum, the city, postage amount shall be used. On letter- state, and 5-digit ZIP Code of the sized mail, date correction indicia must The facing identification mark (FIM) registration post office; the postal be placed on the nonaddress side at serves to orient and separate certain types of First-Class Mail during the security device ID; date of mailing; least 3⁄4 inch from the bottom edge of the endorsement or mail class; the words mailpiece and not on an envelope flap. facing and canceling process. Letter- ‘‘US Postage’’; and the postage amount. On flats or parcels, it must be placed sized First-Class Mail with the IBI The Arial font must be used for this next to the original indicium. Date printed directly on the envelope must information. The postage amount must correction indicia must not include the bear a USPS-approved FIM D unless it use at least 10-point type size. For all FIM or the two-dimensional barcode. is courtesy reply mail. The FIM must other required information, the type size The redate indicium may be printed on meet the dimensions, print quality, and must be at least 8 points. The mail class a USPS-approved label instead of placement specified in the C100.5. or endorsement, the postage amount, directly on the mailpiece. 5.0 MAILINGS and the words ‘‘US Postage’’ must be in bold type and all letters must be capital 4.9 Postage Correction 5.1 Preparation of IBI Mail letters. The remaining required Indicia for additional postage may be Mail is subject to the preparation information (city, state and 5-digit ZIP placed on a shortpaid mailpiece to standards that apply to the class of mail Code, the date, and the postal security correct postage. On letter-size mail, and rate claimed. device ID) need not be capitalized or correction indicia must be printed on 5.2 Where to Deposit bold. The type size used for all other the nonaddress side at least 3⁄4 inch information printed in the indicia must from the bottom edge of the mailpiece Single-piece rate First-Class Mail be no greater than 8 points and must not and not on an envelope flap. On flats or (including Priority Mail), Standard Mail be in bold type. parcels, it must be placed next to the (B), and expedited mail may be b. As an alternative to the city, state, original indicium. The postage deposited in any street collection box or and 5-digit ZIP Code of the registration correction indicium must contain all of other place where mail is accepted and post office, the indicia may show the the elements required for the indicium that is served by the registration post ZIP Code rather than the city and state in 4.5 except for the destination delivery office. International mail weighing less designation. In this case, the words point. The word ‘‘CORRECTION’’ must than 16 ounces may be deposited in any ‘‘Mailed From ZIP Code’’ and the ZIP be added to the human readable street collection box in accordance with Code of the registration post office may information. Postage correction indicia the regulations for domestic mail. appear in place of the city and state, must not include the FIM. To meet two- Limited quantities (i.e., a handful) of respectively. dimensional barcode readability single-piece rate First-Class Mail requirements, postage correction indicia including Priority Mail, expedited mail, c. When it is necessary to print may be printed on a USPS-approved and international mail may be deposited multiple indicia on a given mailpiece, label instead of directly on the at offices other than the registration post the human-readable information mailpiece. office to expedite dispatch, with the showing the registration post office following exceptions: must be included in each. 4.10 Use of Indicia a. Certain Special Postal Services d. The requirements for the data Valid information-based indicia require that the mail be presented elements of the two-dimensional produced by postage evidencing directly to a Postal Service employee barcode are found in the performance systems shall be used only to show (see S900). criteria for the given postage evidencing evidence of payment for postage or b. A registered user authorized to use system. postal services. In any illustration of an APO or FPO as the registration post

VerDate 112000 12:38 Sep 29, 2000 Jkt 194001 PO 00000 Frm 00017 Fmt 4702 Sfmt 4702 E:\FR\FM\02OCP1.SGM pfrm02 PsN: 02OCP1 Federal Register / Vol. 65, No. 191 / Monday, October 2, 2000 / Proposed Rules 58689 office shall deposit mail only at the 502.5 Provider authorization. infrastructure for system authorization, registration APO or FPO. 502.6 Changes in ownership or control. system audits, remote postage resetting, c. All other registered users who have 502.7 Burden of proof standard. and production of the indicia is called Postal Service approval to use a postage 502.8 Suspension and revocation of the client system. The PSD and the evidencing system that generates IBI authorization. 502.9 Information-based indicia program client system interact to generate the outside the country shall deposit mail (IBIP) performance criteria. indicia. The PSD is remotely set with only at their domestic registration post 502.10 Product submission procedures and postage value and requires the user to office. testing. initiate payment to the Postal Service d. International mail that requires a 502.11 Security testing. sufficient to cover the desired postage customs declaration, or that weighs 16 502.12 Postage evidencing system approval. increment before initial setting or ounces or over, must be given directly 502.13 Conditions for approval. resetting. to a Postal Service employee at the 502.14 Suspension and revocation of registration post office or other location approval. § 502.3 Definition and use of PC Postage designated by the postmaster. 502.15 Reporting. trademark. 502.16 Administrative sanction on (a) ‘‘PC Postage’’ is the Postal Service Otherwise, the mail will be returned to reporting. the sender for proper entry and trademark for Postal Service-approved, 502.17 Materials and workmanship. secure, postage evidencing systems that acceptance. See the International Mail 502.18 Destruction of information-based Manual for additional information. indicia. generate information-based indicia and 502.19 Inspection of new postage allow registered users to purchase and 6.0 AUTHORIZATION TO PRODUCE evidencing systems. print postage using their personal AND DISTRIBUTE POSTAGE 502.20 Distribution facilities. computers and the Internet. EVIDENCING SYSTEMS THAT 502.21 Distribution controls. (b) Use of the PC Postage trademark GENERATE INFORMATION-BASED 502.22 Administrative sanction. on USPS-approved postage evidencing INDICIA (IBI) 502.23 Postage evidencing system systems and other products must be maintenance. Title 39, Code of Federal Regulations, specifically approved by the manager of 502.24 Access or changes to secure Postage Technology Management part 502, contains information components. concerning authorization to produce 502.25 Inspection of postal security devices (PTM), USPS Headquarters. The and distribute postage evidencing (PSDs) in use. provider must sign a trademark systems that generate information-based 502.26 PSDs not located. licensing agreement with the Postal indicia (IBI), the suspension and 502.27 Electronic Funds Resetting System Service for each product the Postal revocation of such authorization; (EFRS). Service authorizes to use the PC Postage performance standards, test plans, 502.28 Indicia quality assurance. trademark. testing, and approval; required 502.29 Refunds for postage evidencing systems that generate information-based § 502.4 Product service provider production security measures; and indicia. qualifications. standards for distribution and 502.30 Registered user information. For authorization from the Postal maintenance. Further information may 502.31 Intellectual Property. Service to produce and/or lease PSDs be obtained from the manager of Postage Authority: 5 U.S.C. 552(a); 39 U.S.C. 101, and postage evidencing systems that Technology Management, USPS 401, 403, 404, 410, 2601, 2605; Inspector generate information-based indicia (IBI) Headquarters. General Act of 1978, as amended (Pub. L. 95– for use by registered users under List of Subjects in 39 CFR Part 502 452, as amended), 5 U.S.C. App 3. Domestic Mail Manual P050, a potential Administrative practice and § 502.1 Applicability of regulations. provider must: (a) Satisfy the Postal Service of its procedure, Postal Service. The regulations in this section apply integrity and fiscal responsibility. Although exempt from the notice and to all postage evidencing systems that (b) Obtain approval of at least one comment requirements of the print information-based indicia (IBI) to postage evidencing system Administrative Procedure Act (5 U.S.C. show payment of postage. 553(b), (c)) regarding proposed incorporating all the features and rulemaking by 39 U.S.C. 410(a), the § 502.2 Description of postage evidencing safeguards specified in § 502.9, in Postal Service invites public comments systems that generate information-based accordance with the procedures indicia (IBI). on the following proposed amendments outlined in § 502.10. to the Code of Federal Regulations. For (a) Postage evidencing systems that (c) Have, or establish, and keep under the reasons set out in this document, the generate IBI are secure systems that its supervision and control adequate Postal Service proposes to add 39 CFR print USPS-authorized, digitally-signed production facilities suitable to carry part 502 as follows: indicia as evidence of payment of out the provisions of §§ 502.17 through postage. Indicia consist of a USPS- 502.19, to the satisfaction of the Postal PART 502ÐAUTHORITY TO PRODUCE approved two-dimensional barcode and Service. The production facilities must AND DISTRIBUTE POSTAGE certain human-readable information. be subject to unannounced inspection EVIDENCING SYSTEMS THAT Authorized postage evidencing systems by representatives of the Postal Service. GENERATE INFORMATIONÐBASED are available from authorized, If the production facilities are INDICIA (IBI) commercial product service providers. established by the provider outside the (b) These postage evidencing systems customs territory of the United States, Sec. include as a primary component a the provider shall be responsible for all 502.1 Applicability of regulations. postal security device (PSD) that costs incurred by the Postal Service to 502.2 Description of postage evidencing performs core security functions such as conduct the inspections. systems that generate information-based indicia (IBI). digital signature generation and (d) Have, or establish, and keep under 502.3 Definition and use of PC Postage verification, as well as the management its supervision and control adequate trademark. of postage registers. The component of facilities for the control, distribution, 502.4 Product service provider these postage evidencing systems that and maintenance of postage evidencing qualifications. controls the registered user systems that generate IBI, and their

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The decision shall authorized in writing by the manager of authorization to produce and/or also advise the provider that it may Postage Technology Management, USPS distribute a specific postage evidencing appeal that determination within 30 Headquarters, as a provider of postage system, or a family of system models, calendar days after the provider receives evidencing systems that generate IBI may be imposed under paragraph (c)(2) or refuses to receive written notification and will be allowed to lease authorized of this section. The notification is in of the decision, unless a shorter period PSDs and systems to users registered by writing and is sent certified mail, return is deemed necessary, as specified the Postal Service. The written receipt requested. Except in cases of therein. The appeal must include all authorization defines the conditions willful violation, the provider shall be supporting evidence and specify the under which the postage evidencing given an opportunity to correct reasons the provider believes that the system may be marketed and deficiencies and achieve compliance decision is erroneous. distributed. with all requirements within a time (f) An order or final decision under § 502.6 Changes in ownership or control. limit, determined by the Postal Service, this section does not preclude any other Any person, entity, or concern corresponding to the potential risk to criminal or civil statutory, common law, wanting to acquire ownership or control postal revenue. or administrative remedy that is of a provider of an authorized postage (2) In cases of willful violation, or if available by law to the Postal Service, evidencing system must provide the the Postal Service determines that the the United States, or any other person Postal Service with satisfactory provider has failed to correct cited or concern. deficiencies within the specified time evidence of that person’s, entity’s, or § 502.9 Information-based indicia program concern’s integrity and financial limit, the Postal Service shall issue a (IBIP) performance criteria. responsibility. written notice setting forth the facts and reasons for the decision to suspend and (a) The performance criteria § 502.7 Burden of proof standard. the effective date if a written defense is applicable to the given postage The burden of proof is on the Postal not presented as provided in paragraph evidencing system relate to the data Service in adjudications of suspensions (d) of this section. The notification is in contents and format of the indicia, the and revocations under § 502.8 and writing and is sent certified mail, return PSD (which implements digital § 502.14 and administrative sanctions receipt requested. signature technology for the creation and verification of digital signatures), under § 502.16 and § 502.22. Except as (3) If, upon consideration of the the client system (which supports the otherwise indicated in those sections, defense as provided in paragraph (e) of creation of the indicia and the interface the standard of proof shall be the this section, the Postal Service deems with the PSD and the provider), and preponderance-of-evidence standard. that the suspension is warranted, the cryptographic key management. suspension shall remain in effect for up § 502.8 Suspension and revocation of (b) The information-based indicia to 90 days unless withdrawn by the authorization. program (IBIP) performance criteria Postal Service, as provided in paragraph (a) The Postal Service may suspend describe required system elements that (c)(4)(iii) of this section. and/or revoke authorization to provide include the provider infrastructure and (4) At the end of the 90-day and/or distribute any or all of a the registered user infrastructure, and suspension, the Postal Service may: provider’s postage evidencing systems if their interface to the Postal Service the provider engages in any unlawful (i) Extend the suspension to allow infrastructure. The Postal Service scheme or enterprise, fails to comply more time for investigation or to allow infrastructure supports user registration, with any provision in this part 502, or the provider to correct the problem; postage evidencing system audit, fails to implement instructions issued in (ii) Make a determination to revoke postage resetting, total population accordance with any final decision authorization to provide and/or management, key management support, issued by the Postal Service within its distribute the provider’s postage financial reconciliation, PSD life cycle authority over the IBI program. evidencing systems that generate IBI in tracking, lost and stolen/irregularity (b) The decision to suspend or revoke part or in whole; or management functions and other a provider’s authorization shall be based (iii) Withdraw the suspension based reporting. The provider infrastructure on the nature and circumstances of the on identification and implementation of will support all IBIP functions. The violation (e.g., whether the violation a satisfactory solution to the problem. registered user infrastructure will was willful, whether the provider Provider suspensions may be consist of the PSD and a client system. voluntarily admitted to the violation, withdrawn before the end of the 90-day The Postal Service will evaluate and test whether the provider cooperated with period if the Postal Service determines postage evidencing systems for the Postal Service, or whether the that the provider’s solution and compliance with this infrastructure. provider implemented successful implementation are satisfactory. Contact the manager of Postage remedial measures) and on the (d) The provider may present the Technology Management, USPS provider’s performance history. Before Postal Service with a written defense to Headquarters for these criteria. determining whether a provider’s any suspension or revocation authorization to produce and/or determination within 30 calendar days § 502.10 Product submission procedures distribute postage evidencing systems after receiving or refusing to receive the and testing. should be revoked, the procedures in written notice, unless a shorter period is (a) Each postage evidencing system paragraph (c) of this section shall be deemed necessary. The defense must that generates IBI is submitted for Postal followed. include all supporting evidence and Service approval and will be tested and (c) Suspension in all cases shall be as specify the reasons for which the order evaluated in accordance with the follows: should not be imposed. requirements and provisions of the most

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Particular postage evidencing systems, as well as (b)(4)(iii) of this section. attention must be given to the the current design documentation, user (4) At the end of the 90-day requirement to submit identical postage manuals, and specifications applicable suspension, the Postal Service may: evidencing systems simultaneously to to such systems and any revisions (i) Extend the suspension to allow the Postal Service and to a laboratory thereof, be submitted to the manager of more time for investigation or to allow accredited under the National Voluntary Postage Technology Management, USPS the provider to correct the problem; Laboratory Accreditation Program Headquarters. (ii) Make a determination to revoke (NVLAP) for FIPS 140–1 certification. (b) Upon request by the Postal the approval of the provider’s postage Contact the manager of Postage Service, additional postage evidencing evidencing system or family of system Technology Management, USPS systems must be submitted to the Postal models, or Headquarters for these requirements. Service for testing, at the expense of the (iii) Withdraw the suspension based Information pertaining to these provider. on identification and implementation of procedures may be accessed through the a satisfactory solution to the problem. USPS website. § 502.14 Suspension and revocation of Provider suspensions may be (b) The indicia design must be approval. withdrawn before the end of the 90-day approved by the manager of Postage (a) The Postal Service may suspend period if the Postal Service determines Technology Management, USPS approval of a postage evidencing system that the provider’s solution and Headquarters, and must comply with under § 502.12 if the Postal Service has implementation are satisfactory. the requirements in the Domestic Mail probable cause to believe that the (c) The provider may present the Manual and the applicable IBI postage evidencing system or the family Postal Service with a written defense to performance criteria. of system models poses an unacceptable any suspension or revocation (c) Any change to an approved risk to postal revenue. Suspension of determination within 30 calendar days postage evidencing system must be approval to produce or distribute a after receiving or refusing to receive submitted to the Postal Service for postage evidencing system or a family of notice, unless a shorter period is evaluation in accordance with the most system models, in whole or in part, deemed necessary. The defense must current postage evidencing product shall be based on the potential risk to include all supporting evidence and submission procedures. postal revenue. Before determining specify the reasons for which the order (d) Where complete evaluation of all whether approval of a postage should not be imposed. security-related components of a evidencing system or a family of system (d) After receipt and consideration of postage evidencing system requires models, should be revoked, the the written defense, the Postal Service USPS review of data located outside the procedures in paragraph (b) of this shall advise the provider of the decision customs territory of the United States, section shall be followed. and the facts and reasons for it. The the provider shall be responsible for all (b) Suspension procedures: decision shall be effective on receipt costs incurred by the USPS in (1) Upon determination by the Postal unless it states otherwise. The decision conducting that review. Service that a postage evidencing shall also advise the provider that it system poses an unacceptable risk to § 502.11 Security testing. may appeal that determination within postal revenue, the Postal Service shall 30 calendar days after the provider The Postal Service reserves the right issue a written notice of proposed receives or refuses to receive written to require or conduct additional suspension citing deficiencies for which notice, unless a shorter period is examination and testing at any time, suspension may be imposed under deemed necessary, as specified therein. without cause, of any postage paragraph (b)(2) of this section. The The appeal must include all supporting evidencing system submitted to the notification is in writing and is sent evidence and specify the reasons that Postal Service for approval or certified mail, return receipt requested. the provider believes that the decision previously approved by the Postal The provider shall be given an Service for production and distribution. is erroneous. opportunity to correct deficiencies and (e) An order or final decision under § 502.12 Postage evidencing system achieve compliance with all this section does not preclude any other approval. requirements within a time limit criminal or civil statutory, common law, As provided in § 502.15, the provider determined by the Postal Service, or administrative remedy that is has a duty to report security weaknesses corresponding to the potential risk to available by law to the Postal Service, to the Postal Service to ensure that every postal revenue. the United States, or any other person postage evidencing system in service (2) If the Postal Service determines or concern. protects the Postal Service against loss that the provider has failed to correct of revenue at all times. An approval of cited deficiencies within the USPS- § 502.15 Reporting. a system does not constitute an specified time limit, the Postal Service (a) For purposes of this section, irrevocable determination that the shall issue a written notice setting forth ‘‘provider’’ refers to an entity authorized Postal Service is satisfied with its the facts and reasons for the decision to under § 502.5 and its foreign or revenue-protection capabilities and all suspend and the effective date if a domestic affiliates, subsidiaries, assigns, other features of the system. After written defense is not presented as dealers, independent dealers, approval is granted to produce and provided in paragraph (c) of this employees, and parent corporations. distribute a postage evidencing system, section. The notification is in writing (b) Each provider authorized under no change affecting the features or and is sent certified mail, return receipt § 502.5 must submit a preliminary safeguards may be made except as requested. report to notify the Postal Service authorized or required by the Postal (3) If, upon consideration of the promptly (in no event more than 21 Service in writing. defense as provided in paragraph (d) of calendar days of discovery) of the this section, the Postal Service deems following: § 502.13 Conditions for approval. that the suspension is warranted, the (1) All findings or results of any (a) The Postal Service may require, suspension shall remain in effect for up testing known to the provider and reserves future rights to require, to 90 days unless withdrawn by the concerning the security or revenue

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The provider destroyed by the provider to prevent failings of any postage evidencing shall be responsible to the Postal unauthorized use. system or PSD sold, leased, or Service for all such costs and losses (net distributed by the provider that has of any amount collected by the Postal § 502.19 Inspection of new postage evidencing systems. been approved for sale, lease, or Service from the registered users) with distribution by the Postal Service or by interest when the Postal service issues The provider shall inspect all new any foreign postal administration; or a written notice to the provider setting postage evidencing systems that have been submitted for approval by the forth the facts and reasons on which the generate IBI to ensure proper provider to the Postal Service or to a determination to impose the sanction is functioning of all operational foreign postal administration. based. The notification is in writing and capabilities of each system before (2) All potential security weaknesses is sent certified mail, return receipt distribution. or methods of system tampering of the requested. The notice shall advise the § 502.20 Distribution facilities. postage evidencing systems that the provider of the date that the action takes (a) An authorized provider must keep provider distributes, of which the effect if a written defense is not adequate facilities for and records of the provider knows or should know, and presented within 30 calendar days of distribution, control, maintenance, the system or model subject to each receipt of the notice. replacement, and disposal or weakness or method. These potential (c) The provider may present the security weaknesses include, but are not destruction of all PSDs throughout their Postal Service with a written defense to entire life cycle. Recordkeeping is limited to suspected equipment defects, the proposed action within 30 calendar suspected abuse by a registered user or required for all PSDs, including newly days after receiving or refusing to produced PSDs, active leased PSDs and provider employee, suspected security receive notification. The defense must breaches of the Electronic Funds inactive, unleased PSDs, as well as lost include all supporting evidence and and stolen PSDs. All such facilities and Resetting System, cryptographic key specify the reasons for which the compromises, occurrences outside records are subject to inspection by sanction should not be imposed. Postal Service representatives. normal performance, or any repeatable (d) After receipt and consideration of deviation from normal postage (b) If the provider uses a third party the defense, the Postal Service shall to control, distribute, maintain, replace, evidencing system performance (within advise the provider of the decision and the same model family and/or by the repair, or dispose of PSDs or postage the facts and reasons for it; the decision evidencing systems, all aspects of the same registered user). shall be effective on receipt unless it (c) Within 45 calendar days of the arrangement between the parties must states otherwise. The notification of the preliminary notification to the Postal be specifically authorized in writing by decision is in writing and is sent Service under § 502.15(b), the provider the manager of Postage Technology certified mail, return receipt requested. must submit a written report to the Management, USPS Headquarters. The decision shall also advise the Postal Service. The report must include (1) The third party relationship shall provider that it may, within 30 calendar the circumstances, proposed not compromise any security element of days of receiving the decision, appeal investigative procedure, and the the postage evidencing system. The that determination as specified therein. anticipated completion date of the functions of the third party with respect investigation. The provider must also (e) The provider may submit a written to these systems are subject to the same provide periodic status reports to the appeal to the Postal Service within 30 scrutiny as the functions of the Postal Service during subsequent calendar days of receiving or refusing to provider. investigation and, on completion, must receive notification of the decision. The (2) Any authorized third party must submit a summary of the investigative appeal must include all supporting keep adequate facilities for and records findings. evidence and specify the reasons that of PSDs and postage evidencing systems (d) The provider must establish and the provider believes that the in accordance with the USPS-authorized adhere to timely and efficient administrative sanction was erroneously arrangement with the provider. All such procedures for internal reporting of imposed. The submission of an appeal facilities and records are subject to potential security weaknesses. The stays the effectiveness of the sanction. inspection by Postal Service provider is required to submit a copy of (f) The imposition of an representatives, in so far as they are internal reporting procedures and administrative sanction under this used to control, distribute, store, instructions to the Postal Service for section does not preclude any other maintain, replace, repair, or dispose of review. criminal or civil statutory, common law, PSDs or postage evidencing systems. or administrative remedy that is (3) The Postal Service holds the § 502.16 Administrative sanction on available by law to the Postal Service, provider fully responsible for any reporting. the United States, or any other person deficiencies found in third party (a) Notwithstanding any act, or concern. facilities, records, or procedures and can admission, or omission by the Postal require termination of the third party Service, an authorized provider may be § 502.17 Materials and workmanship. arrangement if deficiencies are found. subject to an administrative sanction for All postage evidencing systems that failing to comply with § 502.15. generate IBI must continuously § 502.21 Distribution controls. (b) The Postal Service shall determine maintain the quality in materials and Each authorized provider must do the all costs and revenue losses measured workmanship of the production model following: from the date that the provider knew, or approved by the Postal Service. (a) Hold title permanently to all PSDs should have known, of a potential that print U.S. postage, except those security weakness, including, but not § 502.18 Destruction of information-based purchased by the Postal Service. limited to, administrative and indicia. (b) On behalf of applicants, investigative costs and documented All indicia created in the process of electronically transmit information revenue losses that result from any testing the postage evidencing system by required to apply for a user registration postage evidencing system for which the the provider, or its agent, must be to the designated Postal Service central provider failed to comply with any collected and securely controlled or registration processing facility.

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(c) On behalf of users registered to use Postal Service by completing a (o) Communicate to all registered their postage evidencing systems, standardized Lost and Stolen Postage users of a postage evidencing system the forward to the Postal Service any Evidencing System Incident Report and required cautionary statements that changes to user registration information filing it with the Postal Service by the provide the registered user with basic when the user submits such changes to tenth day of the month following when reminders that the postal security the provider. The provider must follow a PSD is scrapped or the provider device is leased, the actions needed on authorized USPS procedures for moving determines the loss, theft, or recovery of relocation of the postage evidencing the system when a registered user a PSD. For lost or stolen PSDs, the system, and warnings against system changes the registration post office. The provider must complete all preliminary misuse. provider must also notify the Postal location activities specified in § 502.26 (1) The cautionary statements must be Service following any event that before including a given incident on this visually presented to the registered user indicates the need to update registered report. upon each start-up of the postage user information, such as the return of (h) Provide to the Postal Service upon evidencing system. The user must an invoice or the inability to request an electronic file or database of actively acknowledge the statements communicate with the user. all postage evidencing systems in before proceeding with system use. In (d) Lease PSDs only to parties that service, including the PSD identification addition, the statements shall be have valid user registrations issued by number, the registered user’s name and included prominently in the user the Postal Service to use a postage address, the date that the system was documentation provided with each evidencing system. placed in service, and the ZIP Code of system. PSDs that are in the possession (e) Unless otherwise authorized by the the registration post office. This Postal Service, immediately withdraw of a user shall include the cautionary information is to be provided to the statements on a label attached to the from service any PSD that the registered Postal Service in USPS-specified format, user no longer wants, or that is to be PSD, to the housing of the PSD, or to the at times to be determined by the Postal postage evidencing system containing removed from service for any other Service. reason. The provider shall retrieve any the PSD, if the physical dimensions of (i) Keep accurate records and the equipment will accommodate them. withdrawn PSD that is in the possession reconcile differences between their of the registered user. All resetting Postage evidencing systems provided to records and Postal Service databases. requests for a withdrawn PSD must be registered users without this cautionary (j) Keep at provider’s headquarters an denied. The provider must keep in its information shall not be authorized for electronic file or database with a possession for at least 1 year from the use. complete record of all PSDs produced, date of withdrawal a copy of the (2) In every presentation of the showing all movements of each from the information on the registered user’s PS cautionary statements to the registered time that the PSD is produced until it Form 3601–C, Postage Evidencing user, the words shown below in capital System Activity Report. is scrapped. The records shall be letters should be emphasized. If the (f) Retrieve any misregistering, faulty, organized by PSD identification number cautionary statement can be placed on or defective PSD and withdraw it from and shall include the reading on the the PSD or other equipment, it shall be service within 3 business days of being ascending register each time the PSD is placed in a conspicuous and highly notified by the registered user of the authorized for a new registered user or visible location. The minimum width of defect. The provider must examine each is withdrawn from service. These the text block containing the statement PSD withdrawn from service for records must be available for inspection should be 3.25 inches, and the apparent faulty operation affecting the by Postal Service officials at any time minimum height should be 1.75 inches. ascending or the descending register, or during normal business hours. The The statement shall read as follows: record for each PSD must be maintained for other failure to record its operations POSTAL SERVICE NOTICE correctly and accurately. After for 3 years after the PSD is scrapped. examining the withdrawn PSD, the (k) Submit other reports as required LEASED POSTAGE EVIDENCING SYSTEM— provider must compile a written report by the Postal Service. NOT FOR SALE explaining the malfunction to the (l) Cancel a lease agreement with any PROPERTY OF [NAME OF PROVIDER] lessee whose registration to use a manager of Postage Technology Use of this system is permissible only Management, USPS Headquarters. The postage evidencing system is revoked by under a U.S. Postal Service postage report must include an explanation of the Postal Service. evidencing system user registration. the malfunction that resulted in the (m) Promptly withdraw from service Call [NAME OF PROVIDER] at phone faulty operation or other failure to any PSD that the Postal Service number ### ###–#### to relocate or return record operations correctly and indicates should be withdrawn from this Postage Evidencing System. accurately, all applicable system service for revocation of user WARNING! POSTAGE EVIDENCING documentation, including log files, and registration or for any other reason, and SYSTEM TAMPERING OR MISUSE IS A a recommendation for the appropriate retrieve the PSD if it is in the possession FEDERAL OFFENSE. of the registered user. When a user IF YOU SUSPECT POSTAGE EVIDENCING postage adjustment, if applicable. At the SYSTEM TAMPERING, CALL INSPECTOR same time the report is made to the registration is revoked, the provider GENERAL’S HOTLINE AT 1–800–654–8896 Postal Service, the provider must notify must retrieve all PSDs in the possession OR YOUR LOCAL POSTAL INSPECTOR. the registered user of the proposed of the registered user and must REWARD UP TO $50,000 for information postage adjustment. The provider may withdraw from service all PSDs leading to the conviction of any person who supply the registered user with a employed by the registered user. misuses a postage evidencing system replacement PSD only if the faulty PSD (n) Take reasonable precautions in the resulting in the Postal Service not receiving is in the provider’s possession. transportation and storage of PSDs to correct postage payments. (g) Report promptly the loss or theft prevent use by unauthorized (3) Exceptions to the formatting of of any PSD, the recovery of any PSD individuals. Providers must ship all required cautionary labeling are previously reported as lost or stolen, or PSDs by Postal Service Priority Mail determined on a case-by-case basis. The the scrapping of any PSD by the unless given written permission by the manager of Postage Technology provider. The provider must notify the Postal Service to use another method. Management, USPS Headquarters, must

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The submission of an appeal timely efforts to locate the PSD by responsible for the entire life cycle of stays the effectiveness of the sanction. following a series of Postal Service- their postage evidencing systems, (g) The imposition of an specified actions designed to locate the including control, distribution, administrative sanction under this PSDs. If these efforts are unsuccessful operation, maintenance, replacement, section does not preclude any other and a PSD is determined to be lost or and secure disposal. criminal or civil statutory, common law, stolen, the provider must notify the (a) ‘‘Postage evidencing system,’’ for Postal Service in accordance with purposes of this section, means any or administrative remedy that is available by law to the Postal Service, § 502.21. system that is produced by a provider (a) If a user registered to use a postage authorized under § 502.5 that is not the United States, or any other person or concern. evidencing system cannot be located, owned or leased by the Postal Service. the provider must, at a minimum, (b) An authorized provider that, § 502.23 Postage evidencing system complete the following actions: without just cause, fails to conduct or maintenance. (1) Call the registered user’s last perform adequately any of the controls (a) The provider must keep its postage known telephone number. required by § 502.21, to follow (2) Call directory assistance for the standardized lost and stolen incident evidencing systems that generate IBI in proper operating condition by user’s new telephone number. reporting in § 502.26, or to conduct the (3) Contact the registered user’s local inspections required by § 502.25 in a maintaining or replacing them when necessary or desirable to prevent post office for current change of address timely fashion is subject to an information. administrative sanction based on the electronic failure, malfunction, expiration of the life of the battery for (4) Contact Postage Technology investigative and administrative costs Management to verify the location of the and documented revenue losses (net of the clock or timer, or mechanical breakdown. PSD and the registered user as currently any amount collected by the Postal maintained in Postal Service records. Service from the registered user), with (b) The provider must provide the (5) Contact the rental agency interest per occurrence measured from registered users with modifications responsible for the property where the the date on which the cost and/or loss reflecting rate changes and must registered user was located, if occurred, as determined by the Postal implement new rates as of the effective applicable. Service. Sanctions shall be based on the date for the new rates established by the (6) Visit the registered user’s last costs and revenue losses that result from Postal Service. known address to see whether the the provider’s failure to comply with § 502.24 Access or changes to secure building superintendent or a neighbor these requirements. components. knows the user’s new address. (c) The Postal Service may impose an (7) Mail a certified letter with return administrative sanction under this Postage evidencing system receipt to the registered user at the last section by issuing a written notice to the maintenance involving access or known address with the endorsement provider setting forth the facts and changes to secure components must be ‘‘Forwarding and Address Correction reasons on which the determination to done only within a secure facility under Requested’’. impose the sanction is based. The the provider’s direct control and (8) If new address information is notification is in writing and is sent supervision. PSDs must be withdrawn obtained during these steps, any missed certified mail, return receipt requested. from service before any such or delinquent scheduled PSD audit must The Postal Service shall determine all maintenance is performed. be completed immediately. costs and losses. The notice shall advise § 502.25 Inspection of postal security (b) If a PSD is reported to be lost or the provider of the date that the action devices (PSDs) in use. stolen by the registered user, the shall take effect if a written defense is provider must, at a minimum, complete not presented within 30 calendar days (a) The provider must conduct an the following actions: of receipt of the notice. audit of each PSD at least once every 3 (1) Discontinue postage value (d) The provider may present to the months in conjunction with the postage downloads to the lost or stolen PSD. Postal Service a written defense to the value resetting requirements in § 502.27. (2) Ensure that the registered user has proposed action within 30 calendar A zero-value reset will satisfy this filed a police report for a stolen PSD and days of receiving or refusing to receive requirement. The PSD must have a lock- that copies have been provided to the the notice. The defense must include all out feature that prevents use of the appropriate Inspection Service supporting evidence and specify the system if an audit is not completed in Contraband Postage Identification reasons for which the sanction should accordance with this regulation. Program (CPIP) specialist. not be imposed. (b) Postage evidencing systems that (3) Withhold issuance of a (e) After receipt and consideration of generate IBI, other than PC Postage, replacement PSD until the missing PSD the written defense, the Postal Service shall be inspected by the provider every has been properly reported to the police shall advise the provider of the decision 2 years. Registered user mail-in of and to the appropriate Inspection and the facts and reasons for it. The indicia may substitute for the provider Service CPIP specialist. decision shall be effective on receipt inspection, with Postal Service (c) If the provider later learns that the unless it states otherwise. approval. The provider shall inspect or PSD has been located and/or recovered, (f) The provider may submit a written sample PC Postage products under the provider must take the following appeal of the decision within 30 special circumstances, as directed by actions before returning the PSD to calendar days of receiving or refusing to the Postal Service. The Postal Service service or allowing a postage value receive the decision, addressed to the examines postage evidencing systems download: manager of Postage Technology when warranted by special (1) Submit a new Lost and Stolen Management, USPS Headquarters. The circumstances. Postage Evidencing System Incident

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Report that references the initial report (i) Credit Cards. The provider must identification number, the registered and outlines the details of how the PSD offer the registered user the option to user account number, and the ascending was recovered, in accordance with use all of the credit cards approved for and descending register readings on the § 502.21. The provider is responsible for use by the Postal Service for payment PSD at the time of the request. The keeping records of these reports as for postage. Each provider must receive provider must verify that the submitted to the Postal Service for a authorization from the Postal Service to information entered by the registered minimum of 3 years after submission. offer credit card options to registered user is accurate and matches the (2) Retrieve the recovered PSD from users and must sign a vendor credit card provider’s records. Providers must also the registered user and examine it for pilot test agreement, a legal agreement verify that the registered user has apparent faulty operation that could with the Postal Service on credit card initiated payment to the Postal Service affect its ability to record its operations payment, which addresses security sufficient to cover the postage value correctly and result in a questionable requirements, payment of transaction download requested before proceeding accurate registration. costs, reconciliation requirements, and with the resetting transaction. (3) Recommend a postage adjustment retrieval and chargeback requests. The Immediately following the completion or refund, if appropriate. provider must use a certified credit card of each transaction, the provider must (4) Withdraw the PSD from service if payment process approved for use by give the user a statement documenting a replacement PSD has been supplied to the Postal Service’s designated card the transaction. the registered user or if there is an issue processor. All credit card transactions (d) Revenue protection. The Postal of questionable accurate registration. must be sent through the designated Service shall conduct periodic audits and reviews of the EFRS revenue (d) Any authorized provider that fails Postal Service card processor, with each protection safeguards employed by each to comply with standardized lost and provider working as an agent with the provider and shall reserve the right to stolen reporting procedures and Postal Service as the merchant of record. revoke a provider’s authorization if they instructions is subject to an (ii) ACH Debit. All ACH debit do not meet all EFRS requirements set administrative sanction under § 502.22, payments for postage must be forth by the Postal Service. In addition, as determined by the Postal Service. electronically transferred directly from the registered user’s account resident in the Postal Service shall reserve the right § 502.27 Electronic Funds Resetting a financial institution that is neither to suspend the operation of the System (EFRS). owned, nor controlled, nor contracted, provider, as provided in § 502.14, for (a) Description. A remote resetting nor arranged for by a product service any serious operational deficiency that system permits registered users to reset provider or its affiliate. The funds must may result in the loss of funds to the their PSDs at places of business and/or be transferred directly into an account at Postal Service. homes via modem or network interface. a financial institution designated by the (e) Financial operation. The Postal The Electronic Funds Resetting System Postal Service. Service shall establish a separate (EFRS) is the Postal Service system that (2) A registered user is required to account at its designated financial processes system resetting data for initiate payment to the Postal Service institution to handle the funds for postage value downloads submitted by sufficient to cover the desired postage payment for postage received from providers of postage evidencing systems value download contemporaneously registered users. The provider may not that generate IBI. The Postal Service with a download being made. The establish an account to handle the funds processes the data separately from data details of this payment requirement are of registered users intended for the processed under the Computerized covered in the Postage Payment purchase of postage. Payment Meter Resetting System (CMRS), which Agreement. Technologies, Office of the Treasurer, is used for traditional postage meters. (3) Each provider is required to USPS, will coordinate the (b) Resetting a PSD. To reset a PSD, incorporate the Postage Payment implementation of the ACH debit the registered user connects to the Agreement into its postage evidencing process with the provider. (f) Reports. The provider must submit provider and provides specified system lease agreement with each a daily financial transaction for each identifying data and PSD audit data for registered user, as follows: postage value download or postage refill the postage value download. Before POSTAGE PAYMENT AGREEMENT according to established EFRS proceeding with the transaction, the By signing this postage evidencing system procedures. The provider must provide provider must verify all the data, lease agreement you agree to initiate payment other reports as required by the Postal conduct the system audit, and ascertain for postage using either a USPS-approved Service. whether payment to the Postal Service credit card or ACH debit. If you use ACH (g) Inspection of records and facilities. sufficient to cover the desired postage debit, you agree to transfer funds directly to The provider must make its facilities value download was initiated by the the Postal Service through a financial that handle the operation of the EFRS institution, as specified by the Postal Service, registered user. If payment was initiated and all records about the operation of and the system audit was successful, the for the purpose of prepayment of postage. If you use a credit card, you agree to use only the system available for inspection by provider may complete the postage representatives of the Postal Service at value download. those credit cards approved for use for payment for postage by the Postal Service. all reasonable times. (c) Payment to the Postal Service. You understand that the provider and its (1) The only acceptable methods used affiliates shall not hold, or contract with or § 502.28 Indicia quality assurance. for postage payments for postage otherwise arrange for any third party to hold, The provider shall implement a evidencing systems that generate IBI are your funds intended for the purchase of mailpiece quality assurance program to credit cards and Automated postage. You will be bound by all terms and ensure the quality and readability of the Clearinghouse (ACH) debit. The conditions of this Postage Payment indicia and shall instruct the registered providers must publicize these payment Agreement as it may be amended user on the submission of the required options to all registered IBI users. When periodically by the Postal Service. mailpieces. The registered user is publicizing these options, the provider (4) The provider must require each required to forward a mailpiece to the must provide a clear and concise registered user who requests a postage provider for evaluation when the system description of each. value download to provide the PSD is installed and at least once every 6

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The provider must analyze Service Form 3533–PCP–X, Refund Postal Service audit following the these mailpieces for quality and Request for Unused IBI Postage, and withdrawal of the PSD from service. readability and is required to provide notify both the registered user and the (b) Refund for postage balance guidance to the registered user to correct manager of Postage Technology remaining on a PSD that is withdrawn any deficiencies that are discovered. Management, USPS Headquarters, of from service and is in the possession of The provider must notify the Postal any instances where the refund request the provider. Service of all noncompliant registered for a given, unused indicium will be (1) The registered user informs the users, so that the Postal Service can denied. provider of the intention to withdraw initiate revocation of the user’s (6) Upon successful signature the PSD from service and has the registration. verification and completion of all other postage evidencing system generate a required checks listed above, the refund request indicium for transmittal § 502.29 Refunds for postage evidencing provider shall either: to the provider. The means by which systems that generate information-based this is accomplished is at the provider’s indicia (IBI). (i) Issue an immediate refund to the registered user from the provider’s own discretion. The transmittal of the refund The Postal Service provides refunds funds, or request indicium is the last activity that for readable, valid, unused postage on (ii) Issue the refund to the registered is permitted for the PSD. If the an unmailed envelope or label, and for user within 5 business days of receiving registered user has physical possession any balance remaining on a PSD reimbursement from the Postal Service. of the PSD, the registered user returns withdrawn from service and in the (7) No more frequently than once per the withdrawn PSD to the provider, in possession of the provider, in week, the provider shall submit to the accordance with regulations for accordance with established refund Postal Service a refund request for returning PSDs. procedures. Postage losses to the unused postage, using the format in (2) Upon receipt of the refund request registered user due to system Postal Service Form PCP–X, Provider indicium and the PSD (where malfunctions and the refund of any non- Refund Request for Information-Based applicable), the provider shall scan the postal fees are the responsibility of the Indicia. two-dimensional barcode in the provider. Registered users submit (8) The Postal Service shall remit a submitted indicium, analyze the data to refund requests to the provider in ensure the indicium is valid, and verify accordance with Domestic Mail Manual check made payable to the provider for the total amount of the refund request the following: (DMM) P014. The following procedures (i) The descending register value in apply, depending on the type of refund for unused postage. (9) The Postal Service reserves the the refund request indicium is $0.00. requested: (ii) The PSD used in producing the right to audit the provider’s refund (a) Refund for unused postage indicia is the expected PSD. (1) The provider shall acknowledge processing and the unused mailpieces (iii) The refund request indicium is the refund request and confirm that the submitted for refund. Providers are presented by the registered user of the appropriate supporting materials have required to maintain the following PSD. been received, including Postal Service records: (iv) The PSD certificate has not been Form 3533–PCP–X, Refund Request for (i) The unused envelopes and labels revoked. Unused IBI Postage, in accordance with submitted for refund, and any other (v) There is no evidence of tampering the requirements in DMM P014. correspondence related to the refund with the PSD. (2) The provider shall scan the two- request, attached to a copy of the (3) The provider shall submit the dimensional barcode in the submitted associated Form 3533 PCP–X, Refund refund request indicium data indicium, analyze the data to ensure the Request for Unused IBI Postage, and electronically to the Certificate indicium is valid, and verify the organized by the date of the provider’s Authority for digital signature following: refund request. The Postal Service will verification. (i) The PSD used in producing the destroy the unused mailpieces after the (4) Under no circumstances may a indicium is the expected PSD. completion of the audit. provider issue a refund for a withdrawn (ii) The unused postage is presented (ii) Electronic copies of the scanned PSD unless the PSD is in the provider’s by the user to whom the PSD that indicia organized by date submitted for possession. produced the indicium is registered. refund. These are maintained until the (5) The provider shall not issue a (iii) The date of mailing shown in the Postal Service completes its audit. refund if there is any question as to the indicium is not more than 10 days (iii) Postal Service Form 3533–PCP–X remaining postage value on the PSD before the date on which the registered (printed copy) submitted by the without first consulting with the user mailed the indicium for refund. registered user to the provider. The manager of Postage Technology The date is checked by postmark. printed copy shall be kept for 1 year. An Management, USPS Headquarters. The (iv) The human-readable data matches electronic, scanned version with the provider shall notify both the registered the corresponding data in the two- registered user’s signature shall be kept user and the manager of Postage dimensional barcode. for 3 years after the destruction of the Technology Management of any (v) The PSD certificate has not been printed copy. instances where the refund request will revoked. (iv) A copy of each Postal Service be denied. (vi) The indicium has not been Form PCP–X, Provider Refund Request (6) The provider shall generate a form submitted before. for Information-Based Indicia, equivalent to Postal Service Form 3601– (3) The provider shall submit the submitted by the provider to the Postal C, Postage Evidencing System Activity indicium data electronically to the Service. This form shall be maintained Report, for withdrawal of the PSD. The Certificate Authority for verification of by the provider until completion of the form will include the refund request the digital signature. Postal Service audit. indicium.

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(7) Upon successful signature (1) A provider that retains personal (5) To advertise Postal Service verification and completion of all other information regarding a registered user services relating to the acceptance, required checks listed above, the must issue a privacy policy that informs processing and delivery of or postage provider shall initiate a PSD withdrawal the registered user of the information to payment for mail using information- as specified by Postal Service be retained and its intended uses. based indicia. procedures and shall revoke the PSD (2) The provider is strictly prohibited (6) To allow the Postal Service to certificate. Then the provider shall from disclosing any list of applicants or communicate with USPS customers on either: registered users, or any identifying products, services, and other (i) Issue an immediate refund to the information about any given applicant information otherwise available to USPS registered user from the provider’s own or registered user, to any other entity, customers through traditional retail funds; or for any purpose, without prior outlets. (ii) Issue the refund to the registered notification to the customer. (7) To support any internal use by user within 5 business days of receiving (3) The provider must offer the Postal Service personnel, including reimbursement from the Postal Service. applicant or registered user the option identification and monitoring activities (8) No more frequently than once per to not have their personal information relating to postage evidencing systems, week, the provider shall submit to the disclosed to any other entity. provided that such use by the Postal (b) As stated in § 502.21, providers are Service does not result in the disclosure Postal Service a refund request for required to electronically transmit of applicant information to any third withdrawn PSDs, including a listing of information required to apply for a user party and will not enable any third the refund requested by each registered registration to the designated Postal party to use applicant information for its user, using the format in Postal Service Service central registration processing own purposes; except that the applicant Form PCP–X, Provider Refund Request facility, on behalf of applicants. information may be disclosed to other for Information-Based Indicia. (c) The Postal Service shall use the governmental agencies for law (9) The Postal Service shall remit a registered user information in enforcement purposes as provided by check made payable to the provider for accordance with the purposes and law. the total amount of the refund request routine uses published in the Privacy (8) To identify authorized product for postage value remaining on Act system of records USPS 140.020, service providers or announce de- withdrawn PSDs. Postage-Postage Evidencing System authorization of an authorized product (10) The Postal Service reserves the Records. The Postal Service may use service provider, or provide currently right to audit the provider’s refund applicant information in the available public information, where an processing and the refund request administration of postage evidencing authorized provider is identified. indicia. Providers are required to systems and mailing activities, and to (9) To promote and encourage the use maintain the following records: communicate with customers who may of information-based indicia as a form of (i) An electronic copy of a form no longer be visiting a traditional USPS postage evidencing, provided that the equivalent to Postal Service Form 3601– retail outlet. The Postal Service will also same information is provided to all C, Postage Evidencing System Activity use applicant information to registered users, and no particular Report, which includes the refund communicate with USPS customers provider will be recommended by the request indicia, organized by the date of through any new retail channels, and for Postal Service. the provider’s refund request, shall be the following purposes: (10) To contact registered users in kept for 2 years, or until the completion (1) To issue (including reregistration, cases of revenue fraud or revenue of the Postal Service audit, whichever is renewal, transfer, revocation, or refusal, security, except that any registered user longer. as applicable) a user registration to a suspected of fraud shall not be (ii) Any other correspondence that is customer and to communicate with identified to other users. related to the refund request must be respect to the status of such registration. (11) To disclose to a provider retained by the provider until the Postal (2) To disclose to a provider the applicant information pertaining to that Service completes its audit. identity of any PSD and any related user provider’s customers that the Postal (iii) A copy of each Postal Service registration data for any PSDs required Service views as necessary to enable the Form PCP–X, Provider Refund Request to be removed from service by that Postal Service to carry out its duties and for Information-Based Indicia, provider as the result of revocation of a purposes. submitted by the provider to the Postal user registration, questioned accurate (12) To transmit to a provider all Service shall be maintained by the registration or other failure of the PSD applicant and system information provider until completion of the Postal to record its operations correctly and pertaining to that provider’s customers Service audit. accurately, or decertification by the and systems that may be necessary to Postal Service of any particular postage permit such provider to synchronize its § 502.30 Registered user information. evidencing system that generates IBI or registered user and PSD database with (a) Providers are required to collect family of such models. information contained in the computer registration information and transaction (3) To track the movement of postage files of the Postal Service, including but records from registered users on behalf evidencing systems between a provider not limited to computerized data that of the Postal Service and to transmit the and registered users and to reside in Postal Service postage data to the Postal Service as part of the communicate to a provider (but not to evidencing system management registration process, the postage any third party other than the applicant/ databases. payment process; and, for IBI open registered user) concerning such (13) Subject to the conditions stated systems, the mailpiece generation movement. The term ‘‘provider’’ herein, to communicate in oral or process. Although the Postal Service includes a provider’s dealers and agents. written form with any or all applicants does not require the provider to retain (4) To transmit general information to and registered users any information registered user information, the provider all registered users concerning rate and that the Postal Service views as may choose to do so for its own rate category changes implemented or necessary or desirable to enable the purposes, subject to the following proposed for implementation by the Postal Service to carry out its duties and limitations: Postal Service. purposes under this part 502.

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§ 502.31 Intellectual Property (1) Such judicial determination is ENVIRONMENTAL PROTECTION (a) None of the following shall vacated or reversed; or AGENCY constitute a grant of authorization or (2) The provider duly licenses or 40 CFR Part 52 consent by the Postal Service or the otherwise procures and maintains in United States to a provider or any other effect (for the benefit of itself, users and [Region II Docket No. NY39±208, person to manufacture or use any the Postal Service as may be necessary) FRL±6879±8] patented invention or to infringe any the right to conduct, with respect to Approval and Promulgation of copyright, under 28 U.S.C. 1498 or provider’s postage evidencing device otherwise: Implementation Plans; New York; and the indicia created thereby, the (1) The publication of performance Motor Vehicle Inspection and activities that the court has determined criteria, or Maintenance Program to be infringing. (2) The granting of authorization to a AGENCY: Environmental Protection (d) A determination that the provider under part 501 or this part 502, Agency (EPA). or validating of an indicia by the Postal ACTION: Proposed rule. (3) The granting of approval to a Service infringes a patent or copyright provider to market or distribute a shall not be a basis for suspending SUMMARY: EPA is proposing to approve postage evidencing system. provider’s approval if the provider can a State Implementation Plan (SIP) (b) A provider must reimburse the establish that alternative, non-infringing revision submitted by New York. This Postal Service for any compensation or means of performing such validation are revision consists of a demonstration of other costs or damages (other than the available to the Postal Service with the effectiveness of New York’s Postal Services’ own attorneys’ fees and respect to the indicia created by enhanced motor vehicle inspection and other costs of defense) that the Postal provider’s postage evidencing device so maintenance (I/M) program Service or the U.S. Government is long as such means fully comply with decentralized testing network, to satisfy required, by final order of a court of the performance criteria under which the requirements of section 348 of the competent jurisdiction which is either the postage evidencing device and National Highway Systems Designation not subject to appeal or as to which the indicia have been approved. Act (NHSDA). This revision also time to appeal has already passed, to consists of the corrections to six de pay on a claim of infringement or (e) The Postal Service may provide minimus deficiencies related to the unauthorized use of a U.S. patent or additional requirements relating to Clean Air Act (CAA) requirements for U.S. copyright, under any legal theory, intellectual property in the product enhanced I/M. Therefore, EPA is also based on either: submission procedure, performance proposing to remove all of the de (1) The manufacture, use, sale or criteria or both (‘‘IP Requirements’’) and minimus conditions related to EPA’s importation of provider’s postage may condition the granting or approval of New York’s I/M program evidencing system, whether or not such maintenance of approval of a postage under the NHSDA. In addition, EPA is manufacture, use, sale or importation is evidencing system on provider’s proposing to approve New York’s test alleged to be pursuant to authorization compliance with those IP Requirements. method, NYTEST, as being 95 percent or consent provided under 28 U.S.C. When IP Requirements are imposed on as effective as IM240 in reducing 1498; a provider, they shall control over any hydrocarbon emissions, 99 percent as (2) The use of provider’s postage conflicting provision in this § 502.31. effective as IM240 in reducing carbon monoxide emissions and 99 percent as evidencing system by mailers in a (f) The requirements of this § 502.31 manner specified or intended by effective as IM240 in reducing nitrogen shall apply to all aspects of a provider’s Provider to create postage indicia, apply oxide emissions. The effect is to propose postage evidencing device and the such indicia to mail, and/or deposit full approval of New York’s enhanced I/ indicia created thereby, including those such mail with the USPS; or M program. (3) The granting by the Postal Service aspects required or specified under DATES: Comments must be received on to provider of government authorization applicable performance criteria. or before November 1, 2000. Public or consent, under 28 U.S.C. 1498 or (g) Notwithstanding § 502.1 to the comments on this action are requested otherwise, to make or use a patented contrary, this § 502.31 shall apply to any and will be considered before taking invention or infringe a copyright in postage evidencing system approved by final action. connection with the manufacture, use or the Postal Service under part 501, part ADDRESSES: All comments should be sale of provider’s postage evidencing 502 or otherwise and to any addressed to Raymond Werner, Branch system, or the activities of provider performance criteria whether directed to Chief, Air Programs Branch, pursuant to such grant of authorization IBI or other forms of postage evidence. Environmental Protection Agency, 290 and consent. Broadway, 25th Floor, New York, New Appropriate amendments to 39 CFR (c) The Postal Service may suspend York 10007–1866. parts 111 and 502 to reflect these approval of a postage evidencing system Copies of the documents relevant to on 60 days’ notice to provider if a court changes will be published if the this action are available for public of competent jurisdiction determines proposal is adopted. inspection during normal business that the manufacture or use of the Stanley F. Mires, hours at the following locations: Environmental Protection Agency, postage evidencing system, or the Chief Counsel, Legislative. creation or validation of the indicia Region II Office, Air Programs Branch, [FR Doc. 00–25090 Filed 9–29–00; 8:45 am] produced thereby, infringes, induces or 290 Broadway, 25th Floor, New York, contributes to the infringement of, or BILLING CODE 7710±12±U New York 10007–1866 and New York otherwise violates any person’s or State Department of Environmental entity’s rights under a U.S. patent or Conservation, 50 Wolf Road, Albany, U.S. copyright. The Postal Service shall New York 12233. reinstate approval of such postage FOR FURTHER INFORMATION CONTACT: evidencing system if and so long as: Judy-Ann Mitchell, Air Programs

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