81124 Federal Register / Vol. 85, No. 241 / Tuesday, December 15, 2020 / Rules and Regulations 

1Public Law 109–435, 120 Stat. 3198 (2006). 

2Order on the Findings and Determination of the 

39 U.S.C. 3622 Review, December 1, 2017 (Order 

No. 4257). 

3Notice of Proposed Rulemaking for the System 

for Regulating Rates and Classes for Market 

Dominant Products, December 1, 2017 (Order No. 

4258), 82 FR 58280 (December 11, 2017). 

4Revised Notice of Proposed Rulemaking, 

December 5, 2019 (Order No. 5337), 84 FR 67685 

(December 11, 2019). 

effective date of § 2.6(a)(1)(ii) is in the 

public interest because it will allow the 

USPTO to meet its obligation under the 

Madrid Protocol to provide three 

months advance notice to WIPO and to 

international applicants of any changes 

to international application/subsequent 

designation fees. A delay of this final 

rule to provide prior notice and 

comment procedures and a delay in 

effectiveness are impracticable because 

they would allow the change to 

§ 2.6(a)(1)(ii) to go into effect before the 

agency has provided WIPO with the 

required three-month advance notice, 

thereby defeating the purpose of this 

rulemaking. Therefore, the Director 

finds there is good cause to waive notice 

and comment procedures and the 30- 

day delay in effectiveness for this rule. 

B. Regulatory Flexibility Act: As prior 

notice and an opportunity for public 

comment are not required pursuant to 5 

U.S.C. 553 (or any other law), neither a 

Regulatory Flexibility Act analysis nor a 

certification under the Regulatory 

Flexibility Act (5 U.S.C. 601 et seq.) is 

required and none have been prepared. 

See 5 U.S.C. 605(b). 

C. Executive Order 12866 (Regulatory 

Planning and Review): This rulemaking 

has been determined to be not 

significant for purposes of Executive 

Order 12866 (Sept. 30, 1993). 

D. Executive Order 13771 (Reducing 

Regulation and Controlling Regulatory 

Costs): This rule is not an Executive 

Order 13771 regulatory action because 

this rule is not significant under 

Executive Order 12866 (Jan. 30, 2017). 

Andrei Iancu, 

Under Secretary of Commerce for Intellectual 

Property and Director of the United States 

Patent and Trademark Office. 

[FR Doc. 2020–27564 Filed 12–14–20; 8:45 am] 

BILLING CODE 3510–16–P 

POSTAL REGULATORY COMMISSION 

39 CFR Parts 3030, 3040, 3045, 3050, 

and 3055 

[Docket No. RM2017–3; Order No. 5763] 

System for Regulating Market 

Dominant Rates and Classifications 

AGENCY: Postal Regulatory Commission. 

ACTION: Final rule. 

SUMMARY: The Commission is adopting 

final rules modifying the system for 

regulating rates and classifications for 

Market Dominant products. The revised 

rules incorporate feedback from 

comments received from the 

Commission’s prior proposed 

rulemaking. The rules as adopted are 

intended to enable the Market Dominant 

rate making system to achieve certain 

statutory objectives. 

DATES: Effective: January 14, 2021. 

ADDRESSES: For additional information, 

Order No. 5763 can be accessed 

electronically through the Commission’s 

website at https://www.prc.gov. 

FOR FURTHER INFORMATION CONTACT: 

David A. Trissell, General Counsel, at 

202–789–6820. 

SUPPLEMENTARY INFORMATION: 

Table of Contents 

I. Relevant Statutory Requirements 

II. Background 

III. Basis and Purpose of Final Rules 

I. Relevant Statutory Requirements 

The Postal Accountability and 

Enhancement Act (PAEA),1 directed the 

Commission to promulgate rules 

establishing a ratemaking system for 

Market Dominant products within 18 

months after the law’s enactment, which 

the Commission did in 2007. See 39 

U.S.C. 3622(a); Docket No. RM2007–1. 

Section 3622(d)(3) of title 39 of the 

United States Code requires the 

Commission to review the ratemaking 

system 10 years after the PAEA’s 

enactment to determine if the system 

has achieved the 9 statutory objectives 

as specified by the PAEA, taking into 

account the 14 statutory factors. 39 

U.S.C. 3622(b), (c), and (d)(3). After 

making its determination that the 

ratemaking system did not achieve the 

statutory objectives, taking into account 

the statutory factors, the Commission 

began a public rulemaking process to 

make modifications to the ratemaking 

system for Market Dominant products as 

necessary to achieve the objectives 

pursuant to 39 U.S.C. 3622(d)(3). 

II. Background 

Pursuant to section 3622(d)(3), the 

Commission initiated Docket No. 

RM2017–3 for the purpose of 

conducting its 10-year review of the 

Market Dominant ratemaking system. In 

Order No. 4257,2 the Commission found 

that in the decade following the PAEA’s 

enactment, the ratemaking system had 

not achieved the statutory objectives, 

taking into account the statutory factors. 

Order No. 4257 at 275. On the same day 

that it released its findings, the 

Commission issued a notice of proposed 

rulemaking (NPR), setting forth a 

number of proposed regulatory 

modifications intended to enable the 

ratemaking system to achieve the 

statutory objectives and seeking public 

input.3 In response to comments 

received, the Commission issued a 

revised notice of proposed rulemaking 

(Revised NPR) again seeking public 

comment on the Commission’s revised 

proposals.4 The Commission’s further 

modifications and responses to public 

comments received from the Revised 

NPR are addressed in its final rules. 

III. Basis and Purpose of Final Rules 

Order No. 4257 concluded that while 

the ratemaking system had fulfilled 

some of the PAEA’s goals, the overall 

system had not achieved the statutory 

objectives, taking into account the 

statutory factors. Order No. 4257 at 

3–4. For ease of organization, the 

Commission’s analysis grouped the 

PAEA’s nine statutory objectives into 

three principal areas: (1) The structure 

of the ratemaking system; (2) the 

financial health of the Postal Service; 

and (3) service. 

For the first principal area, the 

Commission found that the ratemaking 

system had resulted in predictable and 

stable rates, in terms of timing and 

magnitude (Objective 2); that it had 

reduced administrative burden and 

increased transparency (Objective 6); 

that it had provided the Postal Service 

with pricing flexibility (Objective 4); 

and that it had, on balance, maintained 

just prices (Objective 8). Id. at 142–145. 

However, the Commission found that 

the ratemaking system had not 

increased pricing efficiency (Objective 

1). Id. at 146. For the second principal 

area—the financial health of the Postal 

Service—the Commission found that 

while the ratemaking system had been 

sufficient to provide for mail security 

and terrorism deterrence (Objective 7); 

had provided a sufficient mechanism to 

allocate institutional costs between 

Market Dominant products and 

Competitive products (Objective 9); and 

had generally enabled the Postal Service 

to achieve short-term financial stability, 

medium- and long-term financial 

stability had not been achieved 

(Objective 5). Id. at 247–249. The 

Commission also found that cost 

reductions and operational efficiency 

improvements were not sufficient to 

achieve overall financial stability and 

therefore not maximized (Objective 1). 

Id. at 184–194, 221–226. Likewise due 

to loss-making products and classes, the 

Commission found the system did not 

Federal Register / Vol. 85, No. 241 / Tuesday, December 15, 2020 / Rules and Regulations 81125 

5The retirement-based rate authority is not 

intended to provide full compensation. Instead, the 

formula calculates the revenue increase that would 

be required from all products (both Market 

Dominant and Competitive) and authorizes only the 

Market Dominant portion in this authority. The 

Postal Service, at its discretion, may implement an 

equivalent rate increase on Competitive products. 

6Non-compensatory classes are those classes 

whose attributable cost exceeds revenue; likewise 

non-compensatory products are those products 

whose attributable cost exceeds revenue. 

have an adequate mechanism to 

maintain reasonable rates (Objective 8). 

Id. at 226–236. 

Finally, for the third principal area— 

service (Objective 3)—the Commission 

found that service standards declined 

during the PAEA era because the Postal 

Service had reduced the high-quality 

service standards that were initially 

promulgated in 2007. Id. at 273. 

In light of the deficiencies described 

above and in response to the comments 

received from the NPR and Revised 

NPR, Order No. 5763 sets forth 

regulatory changes targeted to address 

the identified areas where the 

ratemaking system failed to achieve the 

objectives set forth in section 3622(b). 

To address obstacles to the Postal 

Service’s ability to maintain financial 

health and target primary drivers of net 

losses, the Commission implements two 

mechanisms designed to provide 

additional revenue for costs outside the 

Postal Service’s control. The first 

mechanism, designed to address 

consequences of mail density declines, 

modifies the price cap to provide 

additional rate adjustment authority 

equal to the density-driven portion of 

increases in average cost-per-piece, as 

calculated under the Commission’s 

formula. Order No. 5337 at 70–71. The 

second mechanism, designed to address 

the Postal Service’s retirement 

amortization payments, modifies the 

price cap to provide additional Market 

Dominant rate adjustment authority 

equal to the percentage by which total 

revenue 5 would need to increase to 

provide sufficient revenue for the Postal 

Service to meet its required retirement 

obligation payments, as calculated 

under the Commission’s formula. Id. at 

96–97. 

In the Revised NPR, the Commission 

proposed to provide an additional 1 

percentage point of performance-based 

rate authority per mail class annually 

contingent on Postal Service 

achievement of distinct performancebased requirements for operational 

efficiency and service standard quality. 

Id. at 14. In the final rules, the 

Commission has elected to withdraw 

that proposed authority in response to 

commenter concerns. The Commission 

will open a separate rulemaking to 

further study potential modifications to 

the ratemaking system that link 

financial incentives and/or 

consequences to efficiency gains, cost 

reductions, and the maintenance of 

service standards. Order No. 5763 at 21. 

For the purposes of transparency, the 

Commission adopts the following 

reporting requirements: The Postal 

Service, when it files its Annual 

Compliance Report (ACR), must provide 

the input data and calculations used to 

produce the annual total factor 

productivity estimates, and provide a 

description of and reason for any 

changes to the service standards 

(including relevant business rules), or 

certify that no changes have occurred. 

Id. 

The Commission also adopts rules 

relating to non-compensatory classes 

and products to address the system’s 

failure to maintain reasonable rates and 

promote pricing efficiency.6 For noncompensatory classes of mail, the 

Commission provides an additional rate 

authority of 2 percentage points per 

class and per fiscal year the Postal 

Service may use, with an aim to narrow 

the cost coverage gap of those classes 

over time. Id. at 159. For noncompensatory products, the Postal 

Service is restricted from reducing rates 

for those products and will be required 

to enact minimum product-level price 

increases for each non-compensatory 

product. Id. at 182. These restrictions 

are designed to stop the trend of 

declining cost coverage for these 

products and move cost coverage 

toward 100 percent. Id. at 186. 

Also to improve pricing efficiency, 

the Commission adopts rules intended 

to phase out two practices impeding 

pricing efficiency: Workshare discounts 

that are either set substantially below 

avoided costs or substantially above 

avoided costs. Id. at 197. With its ‘‘do 

no harm principle,’’ the Postal Service 

is restricted from changing workshare 

discounts set equal to avoided costs, 

from reducing workshare discounts set 

below avoided costs, and from 

increasing workshare discounts set 

above avoided costs. Id. at 19. A low 

workshare discount or an excessive 

workshare discount would be permitted 

if it were new, if it would represent an 

improvement of 20 percent over the 

existing workshare discount 

passthrough, or if it were set in 

accordance with a prior Commission 

order (via the proposed waiver process). 

Id. at 199. A low workshare discount 

would also be permitted if the proposed 

workshare discount would produce a 

passthrough of at least 85 percent. Id. 

Additionally, an excessive workshare 

discount would be permitted if it would 

be provided in connection with a 

subclass of mail (product), consisting 

exclusively of mail matter of 

educational, cultural, scientific, or 

informational (ECSI) value (39 U.S.C. 

3622(e)(2)(C)) and accompanied by 

certain information to ensure 

transparency. Id. 

The final rules also include new 

annual reporting requirements intended 

to facilitate the tracking of costs and 

monitoring of the Postal Service’s efforts 

to reduce costs. Id. at 228. The final 

rules require the Postal Service to 

provide information consisting of three 

separate components: (1) A consolidated 

cost analysis; (2) detailed information 

regarding planned and active large-scale 

cost-reduction initiatives; and (3) 

summary information pertaining to 

approved Decision Analysis Reports, 

which are internal Postal Service 

documents used to justify and obtain 

approval for certain proposed capital 

spending projects. Id. 

The Commission also modifies the 

schedule for regular and predictable rate 

adjustments by requiring the Postal 

Service to update it annually and 

provide certain information designed to 

increase transparency for mailers with 

regard to the Postal Service’s planned 

price changes. Id. at 242. It will also 

extend the minimum notice period 

between the date the Postal Service filed 

a notice of proposed rate adjustment 

and the date the proposed rates could go 

into effect from 45 days to 90 days. Id. 

at 243. The final rules discontinue the 

practice that the Commission addresses 

the objectives and factors of 39 U.S.C. 

3622(b) and (c) in individual rate 

adjustment proceedings. Id. at 243–244. 

Finally, the rules provide for a 5-year 

review period for a holistic review of 

the effects of the Commission’s rule 

changes. Id. at 266. The Commission 

retains flexibility to adjust certain 

components of the system sooner than 

that if serious ill effects are evident. Id. 

List of Subjects 

39 CFR Part 3030 

Administrative practice and 

procedure, Fees, Postal Service. 

39 CFR Part 3040 

Administrative practice and 

procedure, Foreign relations, Postal 

Service. 

39 CFR Part 3045 

Administrative practice and 

procedure, Postal Service. 

81126 Federal Register / Vol. 85, No. 241 / Tuesday, December 15, 2020 / Rules and Regulations 

39 CFR Part 3050 

Administrative practice and 

procedure, Postal Service, Reporting 

and recordkeeping requirements. 

39 CFR Part 3055 

Administrative practice and 

procedure, Reporting and recordkeeping 

requirements. 

By the Commission. 

Erica A. Barker, 

Secretary. 

For the reasons discussed in the 

preamble, the Commission amends 

chapter III of title 39 of the Code of 

Federal Regulations as follows: 

■ 1. Revise part 3030 to read as follows: 

PART 3030—REGULATION OF RATES 

FOR MARKET DOMINANT PRODUCTS 

Subpart A—General Provisions 

Sec. 

3030.100 Applicability. 

3030.101 Definitions. 

3030.102 Schedule for regular and 

predictable rate adjustments. 

Subpart B—Rate Adjustments 

3030.120 General. 

3030.121 Postal Service rate adjustment 

filing. 

3030.122 Contents of a rate adjustment 

filing. 

3030.123 Supporting technical 

documentation. 

3030.124 Docket and notice. 

3030.125 Opportunity for comments. 

3030.126 Proceedings. 

3030.127 Maximum rate adjustment 

authority. 

3030.128 Calculation of percentage change 

in rates. 

3030.129 Exceptions for de minimis rate 

increases. 

Subpart C—Consumer Price Index Rate 

Authority 

3030.140 Applicability. 

3030.141 CPI–U data source. 

3030.142 CPI–U rate authority when rate 

adjustment filings are 12 or more months 

apart. 

3030.143 CPI–U rate authority when rate 

adjustment filings are less than 12 

months apart. 

Subpart D—Density Rate Authority 

3030.160 Applicability. 

3030.161 Density calculation data sources. 

3030.162 Calculation of density rate 

authority. 

Subpart E—Retirement Obligation Rate 

Authority 

3030.180 Definitions. 

3030.181 Applicability. 

3030.182 Retirement obligation data 

sources. 

3030.183 Calculation of retirement 

obligation rate authority. 

3030.184 Required minimum remittances. 

3030.185 Forfeiture. 

Subpart F—[Reserved] 

Subpart G—Non-Compensatory Classes or 

Products 

3030.220 Applicability. 

3030.221 Individual product requirement. 

3030.222 Class requirement and additional 

class rate authority. 

Subpart H—Accumulation of Unused and 

Disbursement of Banked Rate Adjustment 

Authority 

3030.240 General. 

3030.241 Schedule of banked rate 

adjustment authority. 

3030.242 Calculation of unused rate 

adjustment authority for rate adjustments 

that involve a rate increase which are 

filed 12 months apart or less. 

3030.243 Calculation of unused rate 

adjustment authority for rate adjustments 

that involve a rate increase which are 

filed more than 12 months apart. 

3030.244 Calculation of unused rate 

adjustment authority for rate adjustments 

that only include rate decreases. 

3030.245 Application of banked rate 

authority. 

Subpart I—Rate Adjustments Due to 

Extraordinary and Exceptional 

Circumstances 

3030.260 General. 

3030.261 Contents of a rate adjustment 

filing. 

3030.262 Supplemental information. 

3030.263 Docket and notice. 

3030.264 Public hearing. 

3030.265 Opportunity for comments. 

3030.266 Deadline for Commission 

decision. 

3030.267 Treatment of banked rate 

adjustment authority. 

Subpart J—Workshare Discounts 

3030.280 Applicability. 

3030.281 Calculation of passthroughs for 

workshare discounts. 

3030.282 Increased pricing efficiency. 

3030.283 Limitations on excessive 

discounts. 

3030.284 Limitations on discounts below 

avoided cost. 

3030.285 Proposal to adjust a rate 

associated with a workshare discount. 

3030.286 Application for waiver. 

Authority: 39 U.S.C. 503; 3622. 

Subpart A—General Provisions 

§ 3030.100 Applicability. 

(a) The rules in this part implement 

provisions in 39 U.S.C. chapter 36, 

subchapter I, establishing the modern 

system of ratemaking for regulating rates 

and classes for market dominant 

products. The rules in this part are 

applicable whenever the Postal Service 

proposes to adjust a rate of general 

applicability for any market dominant 

product, which includes the addition of 

a new rate, the removal of an existing 

rate, or a change to an existing rate. 

Current rates may be found in the Mail 

Classification Schedule appearing on 

the Commission’s website at 

www.prc.gov. 

(b) Rates may be adjusted either 

subject to the rules appearing in subpart 

B of this part, which includes a 

limitation on rate increases, or subject to 

the rules appearing in subpart I of this 

part, which does not include a 

limitation on rate increases but requires 

either extraordinary or exceptional 

circumstances. The rules applicable to 

the calculation of the limitations on rate 

increases appear in subparts C through 

H of this part. The rules for workshare 

discounts, which are applicable 

whenever market dominant rates are 

adjusted, appear in subpart J of this part. 

§ 3030.101 Definitions. 

(a) The definitions in paragraphs (b) 

through (l) of this section apply to this 

part. 

(b) Annual limitation means the 

annual limitation on the percentage 

change in rates equal to the change in 

the Consumer Price Index for all Urban 

Consumers (CPI–U) unadjusted for 

seasonal variation over the most 

recently available 12-month period 

preceding the date the Postal Service 

files a request to review its notice of rate 

adjustment, as determined by the 

Commission. 

(c) Banked rate authority means 

unused rate adjustment authority 

accumulated for future use pursuant to 

the rules in this part. 

(d) A class of mail means the FirstClass Mail, USPS Marketing Mail, 

Periodicals, Package Services, or Special 

Services groupings of market dominant 

Postal Service products or services. 

Generally, the regulations in this part 

are applicable to individual classes of 

mail. 

(e) Density rate authority means rate 

authority that is available to all classes 

to address the effects of decreases in 

density of mail. 

(f) Maximum rate adjustment 

authority means the maximum 

percentage change in rates available to 

a class for any planned increase in rates. 

It is the sum of: The consumer price 

index rate authority, and any available 

density rate authority, retirement 

obligation rate authority, banked rate 

authority, and rate authority applicable 

to non-compensatory classes. 

(g) Rate authority applicable to noncompensatory classes means rate 

authority available to classes where 

revenue for each product within the 

class was insufficient to cover that 

product’s attributable costs as 

determined by the Commission. 

(h) Rate cell means each and every 

separate rate identified as a rate of 

general applicability. 

Federal Register / Vol. 85, No. 241 / Tuesday, December 15, 2020 / Rules and Regulations 81127 

(i) Rate incentive means a discount 

that is not a workshare discount and 

that is designed to increase or retain 

volume, improve the value of mail for 

mailers, or improve the operations of 

the Postal Service. 

(j) Rate of general applicability means 

a rate applicable to all mail meeting 

standards established by the Mail 

Classification Schedule, the Domestic 

Mail Manual, and the International Mail 

Manual. A rate is not a rate of general 

applicability if eligibility for the rate is 

dependent on factors other than the 

characteristics of the mail to which the 

rate applies, including the volume of 

mail sent by a mailer in a past year or 

years. A rate is not a rate of general 

applicability if it benefits a single 

mailer. A rate that is only available 

upon the written agreement of both the 

Postal Service and a mailer, a group of 

mailers, or a foreign postal operator is 

not a rate of general applicability. 

(k) Retirement obligation rate 

authority means rate authority that is 

available to all classes to provide 

revenue for remittance towards the 

statutorily mandated amortization 

payments for unfunded liabilities. 

(l) A seasonal or temporary rate is a 

rate that is in effect for a limited and 

defined period of time. 

§ 3030.102 Schedule for regular and 

predictable rate adjustments. 

(a) The Postal Service shall develop a 

Schedule for Regular and Predictable 

Rate Adjustments applicable to rate 

adjustments subject to this part. The 

Schedule for Regular and Predictable 

Rate Adjustments shall: 

(1) Schedule rate adjustments at 

specific regular intervals of time; 

(2) Provide estimated filing and 

implementation dates (month and year) 

for future rate adjustments for each class 

of mail expected over a minimum of the 

next 3 years; and 

(3) Provide an explanation that will 

allow mailers to predict with reasonable 

accuracy, by class, the amounts of future 

scheduled rate adjustments. 

(b) The Postal Service shall file a 

current Schedule for Regular and 

Predictable Rate Adjustments annually 

with the Commission at the time of 

filing the Postal Service’s section 3652 

report (see § 3050.1(g) of this chapter). 

The Commission shall post the current 

schedule on the Commission’s website 

at www.prc.gov. 

(c) Whenever the Postal Service 

deems it appropriate to change the 

Schedule for Regular and Predictable 

Rate Adjustments, it shall file a revised 

schedule. 

(d) The Postal Service may vary the 

magnitude of rate adjustments from 

those estimated by the Schedule for 

Regular and Predictable Rate 

Adjustments. In such case, the Postal 

Service shall provide an explanation for 

such variation with its rate adjustment 

filing. 

Subpart B—Rate Adjustments 

§ 3030.120 General. 

This subpart describes the process for 

the periodic adjustment of rates subject 

to the percentage limitations specified 

in § 3030.127 that are applicable to each 

class of mail. 

§ 3030.121 Postal Service rate adjustment 

filing. 

(a) In every instance in which the 

Postal Service determines to exercise its 

statutory authority to adjust rates for a 

class of mail, the Postal Service shall 

comply with the requirements specified 

in paragraphs (b) through (d) of this 

section. 

(b) The Postal Service shall take into 

consideration how the planned rate 

adjustments are in accordance with the 

provisions of 39 U.S.C. chapter 36. 

(c) The Postal Service shall provide 

public notice of its planned rate 

adjustments in a manner reasonably 

designed to inform the mailing 

community and the general public that 

it intends to adjust rates no later than 90 

days prior to the planned 

implementation date of the rate 

adjustments. 

(d) The Postal Service shall file a 

request to review its notice of rate 

adjustment with the Commission no 

later than 90 days prior to the planned 

implementation date of the rate 

adjustment. 

§ 3030.122 Contents of a rate adjustment 

filing. 

(a) A rate adjustment filing under 

§ 3030.121 shall include the items 

specified in paragraphs (b) through (j) of 

this section. 

(b) A representation or evidence that 

public notice of the planned changes 

has been issued or will be issued at least 

90 days before the effective date(s) for 

the planned rate adjustments. 

(c) The intended effective date(s) of 

the planned rate adjustments. 

(d) A schedule of the planned rate 

adjustments, including a schedule 

identifying every change to the Mail 

Classification Schedule that will be 

necessary to implement the planned rate 

adjustments. 

(e) The identity of a responsible Postal 

Service official who will be available to 

provide prompt responses to requests 

for clarification from the Commission. 

(f) The supporting technical 

documentation as described in 

§ 3030.123. 

(g) A demonstration that the planned 

rate adjustments are consistent with 39 

U.S.C. 3626, 3627, and 3629. 

(h) A certification that all cost, 

avoided cost, volume, and revenue 

figures submitted with the rate 

adjustment filing are developed from 

the most recent applicable Commission 

accepted analytical principles. 

(i) For a rate adjustment that only 

includes a decrease in rates, a statement 

of whether the Postal Service elects to 

generate unused rate adjustment 

authority. 

(j) Such other information as the 

Postal Service believes will assist the 

Commission in issuing a timely 

determination of whether the planned 

rate adjustments are consistent with 

applicable statutory policies. 

§ 3030.123 Supporting technical 

documentation. 

(a) Supporting technical 

documentation shall include the items 

specified in paragraphs (b) through (k) 

of this section, as applicable to the 

specific rate adjustment filing. This 

information must be supported by 

workpapers in which all calculations 

are shown and all relevant values (e.g., 

rates, CPI–U values, billing 

determinants) are identified with 

citations to original sources. The 

information must be submitted in 

machine-readable, electronic format. 

Spreadsheet cells must be linked to 

underlying data sources or calculations 

(not hard-coded), as appropriate. 

(b) The maximum rate adjustment 

authority, by class, as summarized by 

§ 3030.127 and calculated separately for 

each of subparts C through H of this 

part, as appropriate. 

(c) A schedule showing the banked 

rate adjustment authority available, by 

class, and the available amount for each 

of the preceding 5 years calculated as 

required by subpart H of this part. 

(d) The calculation of the percentage 

change in rates, by class, calculated as 

required by § 3030.128. 

(e) The planned usage of rate 

adjustment authority, by class, and 

calculated separately for each of 

subparts C through H of this part, as 

appropriate. 

(f) The amount of new unused rate 

adjustment authority, by class, if any, 

that will be generated by the rate 

adjustment calculated as required by 

subpart H of this part, as applicable. 

(g) A schedule of the workshare 

discounts included with the planned 

rate adjustments, and a companion 

81128 Federal Register / Vol. 85, No. 241 / Tuesday, December 15, 2020 / Rules and Regulations 

schedule listing the avoided costs that 

underlie each such discount. 

(h) Whenever the Postal Service 

establishes a new workshare discount 

rate, it must include with its filing: 

(1) A statement explaining its reasons 

for establishing the workshare discount; 

(2) All data, economic analyses, and 

other information relied on to justify the 

workshare discount; and 

(3) A certification based on 

comprehensive, competent analyses that 

the discount will not adversely affect 

either the rates or the service levels of 

users of postal services who do not take 

advantage of the workshare discount. 

(i) Whenever the Postal Service 

establishes a new discount or surcharge 

rate it does not view as creating a 

workshare discount, it must include 

with its filing: 

(1) An explanation of the basis for its 

view that the discount or surcharge rate 

is not a workshare discount; and 

(2) A certification that the Postal 

Service applied accepted analytical 

principles to the discount or surcharge 

rate. 

(j) Whenever the Postal Service 

includes a rate incentive with its 

planned rate adjustment, it must 

include with its filing: 

(1) Whether the rate incentive is being 

treated under § 3030.128(f)(2) or under 

§ 3030.128(f)(1) and (g); 

(2) If the Postal Service seeks to 

include the rate incentive in the 

calculation of the percentage change in 

rates under § 3030.128(f)(2), whether the 

rate incentive is available to all mailers 

equally on the same terms and 

conditions; and 

(3) If the Postal Service seeks to 

include the rate incentive in the 

calculation of the percentage change in 

rates under § 3030.128(f)(2), sufficient 

information to demonstrate that the rate 

incentive is a rate of general 

applicability, which at a minimum 

includes: The terms and conditions of 

the rate incentive; the factors that 

determine eligibility for the rate 

incentive; a statement that affirms that 

the rate incentive will not benefit a 

single mailer; and a statement that 

affirms that the rate incentive is not 

only available upon the written 

agreement of both the Postal Service and 

a mailer, or group of mailers, or a 

foreign postal operator. 

(k) For each class or product where 

the attributable cost for that class or 

product exceeded the revenue from that 

class or product as determined by the 

Commission, a demonstration that the 

planned rate adjustments comply with 

the requirements in subpart G of this 

part. 

§ 3030.124 Docket and notice. 

(a) The Commission will establish a 

docket for each rate adjustment filed by 

the Postal Service under § 3030.121, 

promptly publish notice of the filing in 

the Federal Register, and post the filing 

on its website. The notice shall include 

the items specified in paragraphs (b) 

through (g) of this section. 

(b) The general nature of the 

proceeding. 

(c) A reference to legal authority 

under which the proceeding is to be 

conducted. 

(d) A concise description of the 

planned changes in rates, fees, and the 

Mail Classification Schedule. 

(e) The identification of an officer of 

the Commission to represent the 

interests of the general public in the 

docket. 

(f) A period of 30 days from the date 

of the filing for public comment. 

(g) Such other information as the 

Commission deems appropriate. 

§ 3030.125 Opportunity for comments. 

Public comments should focus on 

whether planned rate adjustments 

comport with applicable statutory and 

regulatory requirements. 

§ 3030.126 Proceedings. 

(a) If the Commission determines that 

the rate adjustment filing does not 

substantially comply with the 

requirements of §§ 3030.122 and 

3030.123, the Commission may: 

(1) Inform the Postal Service of the 

deficiencies and provide an opportunity 

for the Postal Service to take corrective 

action; 

(2) Toll or otherwise modify the 

procedural schedule until such time the 

Postal Service takes corrective action; 

(3) Dismiss the rate adjustment filing 

without prejudice; or 

(4) Take other action as deemed 

appropriate by the Commission. 

(b) Within 21 days of the conclusion 

of the public comment period the 

Commission will determine whether the 

planned rate adjustments are consistent 

with applicable law and issue an order 

announcing its findings. Applicable law 

means only the applicable requirements 

of this part, Commission directives and 

orders, and 39 U.S.C. 3626, 3627, and 

3629. 

(c) If the planned rate adjustments are 

found consistent with applicable law, 

they may take effect. 

(d) If the planned rate adjustments are 

found inconsistent with applicable law, 

the Commission will notify and require 

the Postal Service to respond to any 

issues of noncompliance. 

(e) Following the Commission’s notice 

of noncompliance, the Postal Service 

may submit an amended rate adjustment 

filing that describes the modifications to 

its planned rate adjustments that will 

bring its rate adjustments into 

compliance. An amended rate 

adjustment filing shall be accompanied 

by sufficient explanatory information to 

show that all deficiencies identified by 

the Commission have been corrected. 

(f) The Commission will allow a 

period of 10 days from the date of the 

amended rate adjustment filing for 

public comment. 

(g) The Commission will review the 

amended rate adjustment filing together 

with any comments filed for compliance 

and issue an order announcing its 

findings within 21 days after the 

comment period ends. 

(h) If the planned rate adjustments as 

amended are found to be consistent 

with applicable law, they may take 

effect. However, no amended rate shall 

take effect until 45 days after the Postal 

Service transmits its rate adjustment 

filing specifying that rate. 

(i) If the planned rate adjustments in 

an amended rate adjustment filing are 

found to be inconsistent with applicable 

law, the Commission shall explain the 

basis for its determination and suggest 

an appropriate remedy. Noncompliant 

rates may not go into effect. 

(j) A Commission finding that a 

planned rate adjustment is in 

compliance with the applicable 

requirements of this part, Commission 

directives and orders, and 39 U.S.C. 

3626, 3627, and 3629 is decided on the 

merits. A Commission finding that a 

planned rate adjustment does not 

contravene other policies of 39 U.S.C. 

chapter 36, subchapter I, is provisional 

and subject to subsequent review. 

§ 3030.127 Maximum rate adjustment 

authority. 

(a) The maximum rate adjustment 

authority available to the Postal Service 

for each class of market dominant mail 

is limited to the sum of the percentage 

points developed in subparts C through 

E and G through H of this part. 

(b) For any product where the 

attributable cost for that product 

exceeded the revenue from that product 

as determined by the Commission, rates 

may not be reduced. 

§ 3030.128 Calculation of percentage 

change in rates. 

(a) For the purpose of calculating the 

percentage change in rates, the current 

rate is the rate in effect at the time of 

the rate adjustment filing under 

§ 3030.121 with the following 

exceptions: 

(1) A seasonal or temporary rate shall 

be identified and treated as a rate cell 

Federal Register / Vol. 85, No. 241 / Tuesday, December 15, 2020 / Rules and Regulations 81129 

separate and distinct from the 

corresponding non-seasonal or 

permanent rate. When used with respect 

to a seasonal or temporary rate, the 

current rate is the most recent rate in 

effect for the rate cell, regardless of 

whether the seasonal or temporary rate 

is available at the time of the rate 

adjustment filing. 

(2) When used with respect to a rate 

cell that corresponds to a rate incentive 

that was previously excluded from the 

calculation of the percentage change in 

rates, the current rate is the full 

undiscounted rate in effect for the rate 

cell at the time of the rate adjustment 

filing, not the discounted rate in effect 

for the rate cell at such time. 

(b) For the purpose of calculating the 

percentage change in rates, the volume 

for each rate cell shall be obtained from 

the most recently available 12 months of 

Postal Service billing determinants with 

the following permissible adjustments: 

(1) The Postal Service shall make 

reasonable adjustments to the billing 

determinants to account for the effects 

of classification changes such as the 

introduction, deletion, or redefinition of 

rate cells. The Postal Service shall 

identify and explain all adjustments. All 

information and calculations relied 

upon to develop the adjustments shall 

be provided together with an 

explanation of why the adjustments are 

appropriate. 

(2) Whenever possible, adjustments 

shall be based on known mail 

characteristics or historical volume data, 

as opposed to forecasts of mailer 

behavior. 

(3) For an adjustment accounting for 

the effects of the deletion of a rate cell 

when an alternate rate cell is not 

available, the Postal Service should 

adjust the billing determinants 

associated with the rate cell to 0. If the 

Postal Service does not adjust the billing 

determinants for the rate cell to 0, the 

Postal Service shall include a rationale 

for its treatment of the rate cell with the 

information required under paragraph 

(b)(1) of this section. 

(c) For a rate adjustment that involves 

a rate increase, for each class of mail 

and product within the class, the 

percentage change in rates is calculated 

in three steps. First, the volume of each 

rate cell in the class is multiplied by the 

planned rate for the respective cell and 

the resulting products are summed. 

Second, the same set of rate cell 

volumes is multiplied by the 

corresponding current rate for each cell 

and the resulting products are summed. 

Third, the percentage change in rates is 

calculated by dividing the results of the 

first step by the results of the second 

step and subtracting 1 from the quotient. 

The result is expressed as a percentage. 

(d) For rate adjustments that only 

involve a rate decrease, for each class of 

mail and product within the class, the 

percentage change in rates is calculated 

by amending the workpapers attached to 

the Commission’s order relating to the 

most recent rate adjustment filing that 

involved a rate increase to replace the 

planned rates under the most recent rate 

adjustment filing that involves a rate 

increase with the corresponding 

planned rates applicable to the class 

from the rate adjustment filing involving 

only a rate decrease. 

(e) The formula for calculating the 

percentage change in rates for a class, 

described in paragraphs (c) and (d) of 

this section, is as follows: 

Where: 

N = number of rate cells in the class. 

i = denotes a rate cell (i = 1, 2, . . ., N). 

Ri,n = planned rate of rate cell i. 

Ri,c = current rate of rate cell i (for rate 

adjustment involving a rate increase) or 

rate from most recent rate adjustment 

involving a rate increase for rate cell i 

(for a rate adjustment only involving a 

rate decrease). 

Vi = volume of rate cell i. 

(f)(1) Rate incentives may be excluded 

from a percentage change in rates 

calculation. If the Postal Service elects 

to exclude a rate incentive from a 

percentage change in rates calculation, 

the rate incentive shall be treated in the 

same manner as a rate under a 

negotiated service agreement (as 

described in paragraph (g) of this 

section). 

(2) A rate incentive may be included 

in a percentage change in rates 

calculation if it meets the following 

criteria: 

(i) The rate incentive is in the form of 

a discount or can be easily translated 

into a discount; 

(ii) Sufficient billing determinants are 

available for the rate incentive to be 

included in the percentage change in 

rate calculation for the class, which may 

be adjusted based on known mail 

characteristics or historical volume data 

(as opposed to forecasts of mailer 

behavior); 

(iii) The rate incentive is a rate of 

general applicability; and 

(iv) The rate incentive is made 

available to all mailers equally on the 

same terms and conditions. 

(g)(1) Mail volumes sent at rates under 

a negotiated service agreement or a rate 

incentive that is not a rate of general 

applicability are to be included in the 

calculation of the percentage change in 

rates under this section as though they 

paid the appropriate rates of general 

applicability. Where it is impractical to 

identify the rates of general applicability 

(e.g., because unique rate categories are 

created for a mailer), the volumes 

associated with the mail sent under the 

terms of the negotiated service 

agreement or the rate incentive that is 

not a rate of general applicability shall 

be excluded from the calculation of the 

percentage change in rates. 

(2) The Postal Service shall identify 

and explain all assumptions it makes 

with respect to the treatment of 

negotiated service agreements and rate 

incentives that are not rates of general 

applicability in the calculation of the 

percentage change in rates and provide 

the rationale for its assumptions. 

§ 3030.129 Exceptions for de minimis rate 

increases. 

(a) The Postal Service may request 

that the Commission review a de 

minimis rate increase without 

immediately calculating the maximum 

rate adjustment authority or banking 

unused rate adjustment authority. For 

the exception in this paragraph (a) to 

apply, requests to review de minimis 

rate adjustments must be filed 

separately from any other request to 

review a rate adjustment filing. 

(b) Rate adjustments resulting in rate 

increases are de minimis if: 

(1) For each affected class, the rate 

increases do not result in the percentage 

change in rates for the class equaling or 

exceeding 0.001 percent; and 

(2) For each affected class, the sum of 

all rate increases included in de 

minimis rate increases since the most 

recent rate adjustment resulting in a rate 

increase, or the most recent rate 

adjustment due to extraordinary and 

exceptional circumstances, that was not 

a de minimis rate increase does not 

result in the percentage change in rates 


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81130 Federal Register / Vol. 85, No. 241 / Tuesday, December 15, 2020 / Rules and Regulations 

for the class equaling or exceeding 0.001 

percent. 

(c) If the rate adjustments are de 

minimis, no unused rate adjustment 

authority will be added to the schedule 

of banked rate adjustment authority 

maintained under subpart G of this part 

as a result of the de minimis rate 

increase. 

(d) If the rate adjustments are de 

minimis, no rate decreases may be taken 

into account when determining whether 

rate increases comply with paragraphs 

(b)(1) and (2) of this section. 

(e) In the next rate adjustment filing 

proposing to increase rates for a class 

that is not a de minimis rate increase: 

(1) The maximum rate adjustment 

authority shall be calculated as if the de 

minimis rate increase had not been 

filed; and 

(2) For purposes of calculating the 

percentage change in rates, the current 

rate shall be the current rate from the de 

minimis rate increase. 

(f) The Postal Service shall file 

supporting workpapers with each 

request to review a de minimis rate 

increase that demonstrate that the sum 

of all rate increases included in de 

minimis rate increases since the most 

recent rate adjustment resulting in a rate 

increase that was not de minimis, or the 

most recent rate adjustment due to 

extraordinary and exceptional 

circumstances, does not result in a 

percentage change in rates for the class 

equaling or exceeding 0.001 percent. 

(g) For any product where the 

attributable cost for that product 

exceeded the revenue from that product 

as determined by the Commission, rates 

may not be reduced. 

Subpart C—Consumer Price Index 

Rate Authority 

§ 3030.140 Applicability. 

The Postal Service may adjust rates 

based upon changes in the Consumer 

Price Index for all Urban Consumers 

(CPI–U) identified in § 3030.141. If rate 

adjustment filings involving rate 

increases are filed 12 or more months 

apart, rate adjustments are subject to a 

full year limitation calculated pursuant 

to § 3030.142. If rate adjustment filings 

involving rate increases are filed less 

than 12 months apart, rate adjustments 

are subject to a partial year limitation 

calculated pursuant to § 3030.143. 

§ 3030.141 CPI–U data source. 

The monthly CPI–U values needed for 

the calculation of rate adjustment 

limitations under this subpart shall be 

obtained from the Bureau of Labor 

Statistics (BLS) Consumer Price Index— 

All Urban Consumers, U.S. All Items, 

Not Seasonally Adjusted, Base Period 

1982–84 = 100. The current Series ID for 

the index is ‘‘CUUR0000SA0.’’ 

§ 3030.142 CPI–U rate authority when rate 

adjustment filings are 12 or more months 

apart. 

(a) If a rate adjustment filing involving 

a rate increase is filed 12 or more 

months after the most recent rate 

adjustment filing involving a rate 

increase, then the calculation of an 

annual limitation for the class (full year 

limitation) involves three steps. First, a 

simple average CPI–U index is 

calculated by summing the most 

recently available 12 monthly CPI–U 

values from the date of the rate 

adjustment filing and dividing the sum 

by 12 (Recent Average). Second, a 

second simple average CPI–U index is 

similarly calculated by summing the 12 

monthly CPI–U values immediately 

preceding the Recent Average and 

dividing the sum by 12 (Base Average). 

Third, the full year limitation is 

calculated by dividing the Recent 

Average by the Base Average and 

subtracting 1 from the quotient. The 

result is expressed as a percentage, 

rounded to three decimal places. 

(b) The formula for calculating a full 

year limitation for a rate adjustment 

filing filed 12 or more months after the 

last rate adjustment filing is as follows: 

Full Year Limitation = (Recent Average/ 

Base Average)¥1. 

§ 3030.143 CPI–U rate authority when rate 

adjustment filings are less than 12 months 

apart. 

(a) If a rate adjustment filing involving 

a rate increase is filed less than 12 

months after the most recent rate 

adjustment filing involving a rate 

increase, then the annual limitation for 

the class (partial year limitation) will 

recognize the rate increases that have 

occurred during the preceding 12 

months. When the effects of those 

increases are removed, the remaining 

partial year limitation is the applicable 

restriction on rate increases. 

(b) The applicable partial year 

limitation is calculated in two steps. 

First, a simple average CPI–U index is 

calculated by summing the 12 most 

recently available monthly CPI–U 

values from the date of the rate 

adjustment filing and dividing the sum 

by 12 (Recent Average). Second, the 

partial year limitation is then calculated 

by dividing the Recent Average by the 

Recent Average from the most recent 

previous rate adjustment filing 

(Previous Recent Average) applicable to 

each affected class of mail and 

subtracting 1 from the quotient. The 

result is expressed as a percentage, 

rounded to three decimal places. 

(c) The formula for calculating the 

partial year limitation for a rate 

adjustment filing filed less than 12 

months after the last rate adjustment 

filing is as follows: Partial Year 

Limitation = (Recent Average/Previous 

Recent Average)¥1. 

Subpart D—Density Rate Authority 

§ 3030.160 Applicability. 

(a) This subpart allocates rate 

authority to address the effects of 

decreases in the density of mail as 

measured by the sources identified in 

§ 3030.161. The calculation of the 

additional rate authority corresponding 

to the change in density is described in 

§ 3030.162. 

(b) The Postal Service shall file a 

notice with the Commission by 

December 31 of each year that calculates 

the amount of density rate authority that 

is eligible to be authorized under this 

subpart. 

(c) The Commission shall review the 

Postal Service’s notice and determine 

how much, if any, rate authority will be 

authorized under this subpart. Any rate 

authority allocated under this subpart: 

(1) Shall be made available to the 

Postal Service as of the date of the 

Commission’s determination; 

(2) Must be included in the 

calculation of the maximum rate 

adjustment authority in the first 

generally applicable rate adjustment 

filed after the Commission’s 

determination; and 

(3) May be used to generate unused 

rate authority, if unused, within 12 

months of the Commission’s 

announcement. 

§ 3030.161 Density calculation data 

sources. 

(a) The data needed for the 

calculation of the density rate authority 

in § 3030.162 shall be obtained from the 

values reported by the Postal Service as 

specified in paragraphs (b) through (d) 

of this section. When both originally 

filed and annually revised data are 

available, the originally filed data shall 

be used. When the originally filed data 

are corrected through a refiling or in the 

Commission’s Annual Compliance 

Determination report, the corrected 

version of the originally filed data shall 

be used. 

(b) Market dominant volume and total 

volume from the Revenue, Pieces, and 

Weight report, filed by the Postal 

Service under § 3050.25 of this chapter; 

(c) Institutional costs and total costs 

from the Cost and Revenue Analysis 

report, filed with the Postal Service’s 

Federal Register / Vol. 85, No. 241 / Tuesday, December 15, 2020 / Rules and Regulations 81131 

section 3652 report (see § 3050.1(g) of 

this chapter); and 

(d) The number of delivery points, 

from the input data used to produce the 

Total Factor Productivity estimates, 

filed with the Postal Service’s section 

3652 report. 

§ 3030.162 Calculation of density rate 

authority. 

(a) Formulas. (1) The formula for 

calculating the amount of density rate 

authority, in conformance with 

paragraph (b)(1) of this section, is as 

follows: 

Where: 

T = most recently completed fiscal year. 

T–1 = fiscal year prior to fiscal year T. 

ICT = institutional cost in fiscal year T. 

TCT = total cost in fiscal year T. 

%DD[T–1,T] = Percentage change in density 

from fiscal year T–1 to fiscal year T. 

(2) The formula for calculating the 

percentage change in density, in 

conformance with paragraph (b)(2) of 

this section, is as follows: 

Where: 

T = most recently completed fiscal year. 

T–1 = fiscal year prior to fiscal year T. 

VT = volume in fiscal year T (either market 

dominant volume or total volume as 

discussed in paragraph (b)(2) of this 

section). 

DPT = delivery points in fiscal year T. 

(b) Calculation. (1) The amount of 

density rate authority available under 

this section shall be calculated in three 

steps. First, the percentage change in 

density during the most recently 

completed fiscal year shall be calculated 

using the formula in paragraph (a)(2) of 

this section as described in paragraph 

(b)(2) of this section. Second, this 

percentage change shall be multiplied 

by the institutional cost ratio, which is 

calculated as institutional costs for the 

most recently completed fiscal year 

divided by total costs for that fiscal year. 

Finally, this product shall be multiplied 

by negative 1 so that declines in density 

correspond to a positive increase in 

rates. If the result of this calculation is 

less than 0, the amount of additional 

rate authority shall be 0. 

(2) The percentage change in density 

from the prior fiscal year shall be 

calculated as the ratio of volume to 

delivery points for the most recently 

completed fiscal year, divided by the 

same ratio for the prior fiscal year, and 

subtracting 1 from the quotient. The 

result is expressed as a percentage, 

rounded to three decimal places. To 

ensure that decreases in competitive 

product volume will not result in the 

Postal Service receiving greater 

additional rate adjustment authority 

under this subpart, the percentage 

change in density shall be calculated 

two ways: Using market dominant 

volume and using total volume. The 

greater of the two results (not using 

absolute value) shall be used as the 

percentage change in density from the 

prior fiscal year. 

Subpart E—Retirement Obligation Rate 

Authority 

§ 3030.180 Definitions. 

(a) The definitions in paragraphs (b) 

through (e) of this section apply to this 

subpart. 

(b) Amortization payments mean the 

amounts that the Postal Service is 

invoiced by the U.S. Office of Personnel 

Management to provide for the 

liquidation of the specific and 

supplemental unfunded liabilities by 

statutorily predetermined dates, as 

described in § 3030.182(a). 

(c) Phase-in period means the period 

of time spanning the fiscal years of 

issuance of the first five determinations 

following January 14, 2021, as specified 

by the timing provisions in § 3030.181. 

(d) Required minimum remittance 

means the minimum amount the Postal 

Service is required to remit during a 

particular fiscal year, as calculated 

under § 3030.184. 

(e) Revenue collected under this 

subpart means the amount of revenue 

collected during a fiscal year as a result 

of all previous rate increases authorized 

under this subpart, as calculated under 

§ 3030.184. 

§ 3030.181 Applicability. 

(a) This subpart allocates additional 

rate authority to provide the Postal 

Service with revenue for remittance 

towards the statutorily mandated 

amortization payments for supplemental 

and unfunded liabilities identified in 

§ 3030.182. As described in § 3030.184, 

for retirement obligation rate authority 

to be made available, the Postal Service 

must annually remit towards these 

amortization payments all revenue 

collected under this subpart previously. 

The full retirement obligation rate 

authority, calculated as described in 

§ 3030.183, shall be phased in over 5 

fiscal years, taking into account changes 

in volume during the phase-in period. If 

combined with an equal rate increase on 

Competitive products, the compounded 

rate increase resulting from retirement 

obligation rate authority is calculated to 

generate sufficient additional revenue at 

the end of the phase-in period to permit 

the Postal Service to remit the entire 

invoiced amount of its amortization 

payments. 

(b) Until the conclusion of the phasein period, the Postal Service shall file a 

notice with the Commission by 

December 31 of each year that calculates 

the amount of retirement obligation rate 

authority that is eligible to be 

authorized under this subpart. 

(c) The Commission shall review the 

Postal Service’s notice and determine 

how much, if any, rate authority will be 

authorized under this subpart. Any rate 

authority allocated under this subpart: 

(1) Shall be made available to the 

Postal Service as of the date of the 

Commission’s determination; 

(2) Must be included in the 

calculation of the maximum rate 

adjustment authority in the first 

generally applicable rate adjustment 


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81132 Federal Register / Vol. 85, No. 241 / Tuesday, December 15, 2020 / Rules and Regulations 

filed after the Commission’s 

determination; 

(3) Shall lapse if not used in the first 

generally applicable rate adjustment 

filed after the Commission’s 

determination; 

(4) Shall lapse if unused, within 12 

months of the Commission’s 

determination, however this paragraph 

(c)(4) shall not prohibit the Postal 

Service from making a stand-alone 

adjustment to one or two generally 

applicable rate cells, if such a case were 

to be followed by a broader rate 

adjustment in the class later in the same 

fiscal year; and 

(5) May not be used to generate 

unused rate authority, nor shall it affect 

existing banked rate authority. 

§ 3030.182 Retirement obligation data 

sources. 

(a) The amounts of the amortization 

payments needed for the calculation of 

retirement obligation rate adjustment 

authority in § 3030.183 shall be 

obtained from notifications to the Postal 

Service by the Office of Personnel 

Management of annual determinations 

of the funding amounts specific to 

payments at the end of each fiscal year 

for Retiree Health Benefits as computed 

under 5 U.S.C. 8909a(d)(2)(B) and 

(d)(3)(B)(ii); the Civil Service Retirement 

System as computed under 5 U.S.C. 

8348(h)(2)(B); and the Federal 

Employees Retirement System as 

computed under 5 U.S.C. 8423(b)(1)(B), 

(b)(2), and (b)(3)(B), filed with the Postal 

Service’s section 3652 report. 

(b) The values for market dominant 

revenue, total revenue and market 

dominant volumes needed for the 

calculation of retirement obligation rate 

authority in § 3030.183 shall be 

obtained from values reported in the 

Revenue, Pieces, and Weight report, 

filed by the Postal Service under 

§ 3050.25 of this chapter. 

(c) The values for additional rate 

authority previously provided under 

this subpart, if any, needed for the 

calculation of retirement obligation rate 

authority in § 3030.183 and the 

calculation of required minimum 

remittances under § 3030.184 shall be 

obtained from the Commission’s prior 

determinations. 

§ 3030.183 Calculation of retirement 

obligation rate authority. 

(a) Formulas. (1) The formula for 

calculating the amount of retirement 

obligation rate authority available under 

this subpart, described in paragraph 

(b)(1) of this section, is as follows: 

Where: 

T = most recently completed fiscal year. 

APT = total amortization payment for fiscal 

year T. 

TRT = total revenue in fiscal year T. 

PARAT = previously authorized retirement 

obligation rate authority, compounded 

through fiscal year T, expressed as a 

proportion of the market dominant rate 

base and calculated using the formula in 

paragraph (a)(2) of this section as 

described in paragraph (b)(2) of this 

section. 

N = number of previously issued 

determinations in which retirement 

obligation rate authority was made 

available under this subpart. 

(2) The formula for calculating the 

amount of previously authorized 

retirement obligation rate authority 

through fiscal year T, described in 

paragraph (b)(2) of this section, is as 

follows: 

Where: 

T = most recently completed fiscal year. 

rt = retirement obligation rate authority 

authorized in fiscal year T. 

N = number of previously issued 

determinations in which retirement 

obligation rate authority was made 

available under this subpart. 

(b) Calculations. (1) The amount of 

retirement obligation rate authority 

available for a fiscal year shall be 

calculated in four steps. First, the ratio 

of the total amortization payment for the 

fiscal year under review to the total 

revenue in the fiscal year under review 

shall be added to 1. This sum represents 

the factor by which an equal increase in 

market dominant and competitive rates 

in the fiscal year under review would 

generate sufficient additional revenue to 

make the full amortization payment. It 

does not account, however, for any 

previous rate authority authorized 

under this subpart. The second step is 

therefore to subtract the proportion of 

the market dominant rate base resulting 

from previously authorized retirement 

obligation rate authority. That 

proportion is calculated using the 

formula in paragraph (a)(2) of this 

section as described in paragraph (b)(2) 

of this section. Third, to amortize the 

resulting amount of retirement 

obligation rate authority over the 

remainder of the phase-in period, the 

difference shall be raised to the power 

of the inverse of the number of 

determinations remaining in the phasein period, including the current 

determination. Finally, 1 shall be 

subtracted from the result to convert 

from a proportional change in rates to a 

percentage of rate adjustment authority. 

(2) The amount of previously 

authorized retirement obligation rate 

authority shall be calculated in two 

steps. First, the sums of 1 and the 

amount of retirement obligation rate 

authority authorized in each of the 

previous fiscal years shall be multiplied 

together. This product represents the 

compounded amount of such rate 

authority, expressed as a net rate 

increase. To express this product as a 

proportion of the market dominant rate 

base, the second step is to subtract the 

inverse of this product from 1. 


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Federal Register / Vol. 85, No. 241 / Tuesday, December 15, 2020 / Rules and Regulations 81133 

§ 3030.184 Required minimum 

remittances. 

(a) Minimum remittances. During 

each fiscal year subsequent to January 

14, 2021, the Postal Service shall remit 

towards the liabilities identified in 

§ 3030.182 an amount equal to or greater 

than the amount of revenue collected as 

a result of all previous rate increases 

under this subpart during the previous 

fiscal year, as calculated using the 

formulas in paragraph (b) of this section, 

as described in paragraph (c) of this 

section. 

(b) Formulas. (1) The formula for 

calculating the amount of revenue 

collected under this subpart during a 

fiscal year, described in paragraph (c)(1) 

of this section, is as follows: 

Where: 

T = most recently completed fiscal year. 

MDRT = market dominant revenue in fiscal 

year T. 

N = number of previously issued 

determinations in which retirement 

obligation rate authority was made 

available under this subpart. 

rt = retirement obligation rate authority 

authorized in fiscal year t. 

pt = prorated fraction of rt that was in effect 

during fiscal year T, calculated using the 

formula in paragraph (b)(2) of this 

section, as described in paragraph (c)(2) 

of this section. 

(2) The formula for calculating the 

prorated fraction of retirement 

obligation rate authority authorized in a 

particular fiscal year t that was in effect 

during the most recently completed 

fiscal year, described in paragraph (c)(2) 

of this section, is as follows: 

Where: 

T = most recently completed fiscal year. 

rt = retirement obligation rate authority 

authorized under this subpart in fiscal 

year t. 

Q = the number of the quarter during the 

fiscal year of the effective date of the 

price increase including retirement 

obligation rate authority made available 

under this subpart. 

EQ = number of days in quarter Q subsequent 

to and including the effective date of the 

price increase. 

DQ = total number of days in quarter Q. 

QMDVQ = market dominant volume in 

quarter Q. 

MDVT = market dominant volume in fiscal 

year T. 

(c) Calculations. (1) The amount of 

revenue collected under this subpart 

during a fiscal year, as calculated by the 

formula in paragraph (b)(1) of this 

section, shall be calculated in three 

steps. First, the sums of 1 and the 

amount of retirement obligation rate 

authority made available under this 

subpart during each previous fiscal 

year—prorated to account for mid-year 

price increases as described in 

paragraph (b)(2) of this section—shall be 

multiplied together. This product 

represents the proportion by which 

prices were higher during the most 

recently completed fiscal year as a result 

of retirement obligation rate authority. 

Second, to express this net price 

increase as a proportion of market 

dominant revenue, the inverse of this 

product shall be subtracted from 1. 

Finally, the result shall be multiplied by 

market dominant revenue for the fiscal 

year to change the proportion into a 

dollar amount. 

(2)(i) The prorated fraction of 

retirement obligation rate authority 

authorized in a particular fiscal year 

that was in effect during the most 

recently completed fiscal year, as 

calculated by the formula in paragraph 

(b)(2) of this section, shall be a 

piecewise function of three parts. First, 

if the retirement obligation rate 

authority authorized in a particular year 

was not in effect during the most 

recently completed fiscal year, the 

prorated fraction shall be 0. Second, if 

the retirement obligation rate authority 

authorized in a particular year was in 

effect during the entirety of the most 

recently completed fiscal year, the 

prorated fraction shall be 1. Finally, if 

the retirement obligation rate authority 

authorized in a particular fiscal year 

was used to raise prices during the most 

recently completed fiscal year, the 

prorated fraction shall be the proportion 

of volume sent during the fiscal year 

after that rate increase went into effect. 

(ii) The proportion in paragraph 

(c)(2)(i) of this section shall be 

calculated in four steps. First, the 

number of days of the fiscal quarter after 

and including the effective date of the 

price adjustment including the 

retirement obligation rate authority shall 

be divided by the total number of days 

in that fiscal quarter. This quotient 

determines the proportion of days in 

that quarter in which the higher rates 

were in effect. Second, that quotient 

shall be multiplied by the market 

dominant volume from that fiscal 

quarter to determine the amount of 

volume during the quarter receiving the 

higher rates. Third, that product shall be 

added to the market dominant volume 

from any subsequent quarters of the 

fiscal year because the volume in those 

quarters was also sent under the higher 

rates. Finally, this sum shall be divided 

by the total market dominant volume 

from the fiscal year to determine the 

proportion of annual volume sent after 

the rate increase went into effect. 

§ 3030.185 Forfeiture. 

(a) If any of the circumstances 

described in paragraphs (b) through (d) 


ER15DE20.005</GPH> ER15DE20.006</GPH>
81134 Federal Register / Vol. 85, No. 241 / Tuesday, December 15, 2020 / Rules and Regulations 

of this section occur, the Postal Service 

shall not be eligible for future retirement 

obligation rate authority under this 

subpart, and the Commission may 

commence additional proceedings as 

appropriate. 

(b) If, subsequent to March 1, 2021, 

and prior to the end of the phase-in 

period, the Postal Service fails to timely 

file the notice required under 

§ 3030.181(b); 

(c) In any fiscal year in which 

retirement obligation rate authority was 

determined to be available under this 

subpart, the Postal Service fails to 

timely file under § 3030.122 for a rate 

increase including the full amount of 

retirement obligation rate authority 

authorized under this subpart during 

that fiscal year, to take effect prior to the 

end of that fiscal year; or 

(d) In any fiscal year including or 

subsequent to the first fiscal year in 

which rate authority under this subpart 

was used to adjust market dominant 

rates, the Postal Service’s total payments 

towards the supplemental and 

unfunded liabilities identified in 

§ 3030.182 are not equal to or greater 

than the minimum remittance required 

for that fiscal year under § 3030.184(a). 

Subpart F—[Reserved] 

Subpart G—Non-compensatory 

Classes or Products 

§ 3030.220 Applicability. 

This subpart is applicable to a class or 

product where the attributable cost for 

that class or product exceeded the 

revenue from that class or product as 

determined by the Commission. Section 

3030.221 is applicable where the 

attributable cost for a product within a 

class exceeded the revenue from that 

particular product where the product is 

classified within a class where the 

overall class revenue exceeded the 

attributable cost for that class. Section 

3030.222 is applicable where the 

attributable cost for an entire class 

exceeded the revenue from that class. 

§ 3030.221 Individual product requirement. 

Whenever the Postal Service files a 

rate adjustment filing affecting a class of 

mail which includes a product where 

the attributable cost for that product 

exceeded the revenue from that product, 

as determined by the Commission, the 

Postal Service shall increase the rates 

for each non-compensatory product by a 

minimum of 2 percentage points above 

the percentage increase for that class. 

This section does not create additional 

rate authority applicable to any class of 

mail. This section only applies to 

products classified within classes for 

which the overall class revenue 

exceeded the attributable cost for that 

class. This section does not apply to a 

non-compensatory product for which 

the Commission has determined that the 

Postal Service lacks independent 

authority to set rates (such as rates set 

by treaty obligation). 

§ 3030.222 Class requirement and 

additional class rate authority. 

(a) This section provides 2 percentage 

points of additional rate authority for 

any class of mail where the attributable 

cost for that class exceeded the revenue 

from that class as determined by the 

Commission. This additional rate 

authority is optional and may be used 

at the Postal Service’s discretion. 

(b) The Commission shall announce 

how much, if any, rate authority will be 

authorized under this subpart. Any rate 

authority allocated under this subpart: 

(1) Shall be made available to the 

Postal Service as of the date of the 

Commission’s announcement; 

(2) Must be included in the 

calculation of the maximum rate 

adjustment authority change in rates in 

the first generally applicable rate 

adjustment filed after the Commission’s 

announcement; and 

(3) May be used to generate unused 

rate authority, if unused, within 12 

months of the Commission’s 

announcement. 

Subpart H—Accumulation of Unused 

and Disbursement of Banked Rate 

Adjustment Authority 

§ 3030.240 General. 

Unless a specific exception applies, 

unused rate adjustment authority, on a 

class-by-class basis, shall be calculated 

for each rate adjustment filing. Unused 

rate adjustment authority shall be added 

to the schedule of banked rate authority 

in each instance, and be available for 

application to rate adjustments pursuant 

to the requirements of this subpart. 

§ 3030.241 Schedule of banked rate 

adjustment authority. 

Upon the establishment of unused 

rate adjustment authority, the Postal 

Service shall devise and maintain a 

schedule that tracks the establishment 

and subsequent use of banked rate 

authority on a class-by-class basis. At a 

minimum, the schedule must track the 

amount of banked rate authority 

available immediately prior to the rate 

adjustment filing and the amount of 

banked rate authority available upon 

acceptance of the rates included in the 

rate adjustment filing. It shall also track 

all changes to the schedule, including 

the docket numbers of Commission 

decisions affecting the schedule, the 

dates and amounts that any rate 

authority was generated or subsequently 

expended, and the expiration dates of 

all rate adjustment authority. The 

schedule shall be included with any rate 

adjustment filing purporting to modify 

the amount of banked rate adjustment 

authority. 

§ 3030.242 Calculation of unused rate 

adjustment authority for rate adjustments 

that involve a rate increase which are filed 

12 months apart or less. 

(a) When rate adjustment filings that 

involve a rate increase are filed 12 

months apart or less, unused rate 

adjustment authority for a class is equal 

to the difference between the maximum 

rate adjustment authority as 

summarized by § 3030.127 and 

calculated pursuant to subparts C 

through G of this part and this subpart, 

as appropriate, and the percentage 

change in rates for the class calculated 

pursuant to § 3030.128, subject to the 

limitations described in paragraph (b) of 

this section. 

(b) For rate adjustment filings that 

involve a rate increase, unused rate 

adjustment authority cannot exceed the 

unused portion of rate authority 

calculated pursuant to subparts C and D 

of this part and § 3030.222. 

§ 3030.243 Calculation of unused rate 

adjustment authority for rate adjustments 

that involve a rate increase which are filed 

more than 12 months apart. 

(a) When rate adjustment filings that 

involve a rate increase are filed more 

than 12 months apart, any interim rate 

adjustment authority must first be 

added to the schedule of banked rate 

authority before the unused rate 

adjustment authority is calculated. 

(b) Interim rate adjustment authority 

for a class is equal to the Base Average 

applicable to the second rate adjustment 

filing (as developed pursuant to 

§ 3030.142) divided by the Recent 

Average utilized in the first rate 

adjustment filing (as developed 

pursuant to § 3030.142) and subtracting 

1 from the quotient. The result is 

expressed as a percentage and 

immediately added to the schedule of 

banked rate authority as of the date the 

rate adjustment filing is filed. If the 

Commission announces that rate 

authority calculated pursuant to subpart 

D of this part or § 3030.222 are available 

and no rate adjustment is filed before 

the Commission subsequently 

announces that further rate authority 

calculated pursuant to subpart D of this 

part or § 3030.222 are available, then the 

amount of rate authority calculated 

pursuant to subpart D of this part and 

§ 3030.222 in the first Commission 

Federal Register / Vol. 85, No. 241 / Tuesday, December 15, 2020 / Rules and Regulations 81135 

announcement shall be added to the 

interim rate adjustment authority. 

(c) Unused rate adjustment authority 

for a class is equal to the difference 

between the maximum rate adjustment 

authority as summarized by § 3030.127 

and calculated pursuant to subparts C 

through G of this part and this subpart, 

as appropriate, and the percentage 

change in rates for the class calculated 

pursuant to § 3030.128, subject to the 

limitations described in paragraph (d) of 

this section. 

(d) For rate adjustment filings that 

involve a rate increase, unused rate 

adjustment authority cannot exceed the 

unused portion of rate authority 

calculated pursuant to subparts C and D 

of this part and § 3030.222. 

§ 3030.244 Calculation of unused rate 

adjustment authority for rate adjustments 

that only include rate decreases. 

(a) For rate adjustment filings that 

only include rate decreases, unused rate 

adjustment authority for a class is 

calculated in two steps. First, the 

difference between the maximum rate 

adjustment authority as summarized by 

§ 3030.127 and calculated pursuant to 

subparts C through G of this part and 

this subpart, as appropriate, for the most 

recent rate adjustment that involves a 

rate increase and the percentage change 

in rates for the class calculated pursuant 

to § 3030.128(d) is calculated. Second, 

the unused rate adjustment authority 

generated in the most recent rate 

adjustment that involves a rate increase 

is subtracted from that result. 

(b) Unused rate adjustment authority 

generated under paragraph (a) of this 

section for a class shall be added to the 

unused rate adjustment authority 

generated in the most recent rate 

adjustment that involves a rate increase 

on the schedule maintained under 

§ 3030.241. For purposes of this section, 

the unused rate adjustment authority 

generated under paragraph (a) of this 

section for a class shall be deemed to 

have been added to the schedule 

maintained under § 3030.241 on the 

same date as the most recent rate 

adjustment filing that involves a rate 

increase. 

(c) For rate adjustment filings that 

only include rate decreases, the sum of 

unused rate adjustment authority 

generated under paragraph (a) of this 

section and the unused rate adjustment 

authority generated in the most recent 

rate adjustment that involves a rate 

increase cannot exceed the unused 

portion of rate adjustment authority 

calculated pursuant to subparts C and D 

of this part and § 3030.222 in the most 

recent rate adjustment that involves a 

rate increase. 

(d) Unused rate adjustment authority 

generated under paragraph (a) of this 

section shall be subject to the limitation 

under § 3030.245, regardless of whether 

it is used alone or in combination with 

other existing unused rate adjustment 

authority. 

(e) For rate adjustment filings that 

only include rate decreases, unused rate 

adjustment authority generated under 

this section lapses 5 years from the date 

of filing of the most recent rate 

adjustment filing that involves a rate 

increase. 

(f) A rate adjustment filing that only 

includes rate decreases that is filed 

immediately after a rate adjustment due 

to extraordinary or exceptional 

circumstances (i.e., without an 

intervening rate adjustment involving a 

rate increase) may not generate unused 

rate adjustment authority. 

§ 3030.245 Application of banked rate 

authority. 

(a) Banked rate authority may be 

applied to any planned rate adjustment 

subject to the limitations appearing in 

paragraphs (b) through (f) of this 

section. 

(b) Banked rate authority may only be 

applied to a proposal to adjust rates 

after applying rate authority as 

described in subparts C through F of 

this part and in § 3030.222. 

(c) A maximum of 2 percentage points 

of banked rate authority may be applied 

to a rate adjustment for any class in any 

12-month period. If banked rate 

authority is used, it shall be subtracted 

from the schedule of banked rate 

adjustment authority as of the date of 

the final order accepting the rates. 

(d) Subject to paragraphs (b) and (c) 

of this section, interim rate adjustment 

authority may be used to make a rate 

adjustment pursuant to the rate 

adjustment filing that led to its 

calculation. If interim rate adjustment 

authority is used to make such a rate 

adjustment, the interim rate adjustment 

authority generated pursuant to the rate 

adjustment filing shall first be added to 

the schedule of banked rate adjustment 

authority pursuant to § 3030.241 as the 

most recent entry. Then, any interim 

rate adjustment authority used in 

accordance with this paragraph (d) shall 

be subtracted from the existing banked 

rate adjustment authority using a firstin, first-out (FIFO) method, beginning 5 

years before the instant rate adjustment 

filing. 

(e) Banked rate authority for a class 

must be applied, using a first-in, firstout (FIFO) method, beginning 5 years 

before the instant rate adjustment filing. 

(f) Banked rate adjustment authority 

calculated under this section shall lapse 

5 years from the date of the rate 

adjustment filing leading to its 

calculation. 

Subpart I—Rate Adjustments Due to 

Extraordinary and Exceptional 

Circumstances 

§ 3030.260 General. 

The Postal Service may request to 

adjust rates for market dominant 

products due to extraordinary or 

exceptional circumstances pursuant to 

39 U.S.C. 3622(d)(1)(E). The rate 

adjustments are not subject to rate 

adjustment limitations or the 

restrictions on the use of unused rate 

adjustment authority. The rate 

adjustment request may not include 

material classification changes. The 

request is subject to public participation 

and Commission review within 90 days. 

§ 3030.261 Contents of a rate adjustment 

filing. 

(a) Each exigent request shall include 

the items specified in paragraphs (b) 

through (i) of this section. 

(b) A schedule of the planned rates. 

(c) Calculations quantifying the 

increase for each affected product and 

class. 

(d) A full discussion of the 

extraordinary or exceptional 

circumstances giving rise to the request, 

and a complete explanation of how both 

the requested overall increase and the 

specific rate adjustments requested 

relate to those circumstances. 

(e) A full discussion of why the 

requested rate adjustments are necessary 

to enable the Postal Service, under best 

practices of honest, efficient, and 

economical management, to maintain 

and continue the development of postal 

services of the kind and quality adapted 

to the needs of the United States. 

(f) A full discussion of why the 

requested rate adjustments are 

reasonable and equitable as among types 

of users of market dominant products. 

(g) An explanation of when, or under 

what circumstances, the Postal Service 

expects to be able to rescind the exigent 

rate adjustments in whole or in part. 

(h) An analysis of the circumstances 

giving rise to the exigent request, which 

should, if applicable, include a 

discussion of whether the circumstances 

were foreseeable or could have been 

avoided by reasonable prior action. 

(i) Such other information as the 

Postal Service believes will assist the 

Commission in issuing a timely 

determination of whether the requested 

rate adjustments are consistent with 

applicable statutory policies. 

81136 Federal Register / Vol. 85, No. 241 / Tuesday, December 15, 2020 / Rules and Regulations 

§ 3030.262 Supplemental information. 

The Commission may require the 

Postal Service to provide clarification of 

its request or to provide additional 

information in order to gain a better 

understanding of the circumstances 

leading to the request or the justification 

for the specific rate adjustments 

requested. The Postal Service shall 

include within its request the 

identification of one or more 

knowledgeable Postal Service official(s) 

who will be available to provide prompt 

responses to Commission requests for 

clarification or additional information. 

§ 3030.263 Docket and notice. 

(a) The Commission will establish a 

docket for each request to adjust rates 

due to extraordinary or exceptional 

circumstances, publish notice of the 

request in the Federal Register, and post 

the filing on its website. The notice 

shall include the items specified in 

paragraphs (b) through (g) of this 

section. 

(b) The general nature of the 

proceeding. 

(c) A reference to legal authority 

under which the proceeding is to be 

conducted. 

(d) A concise description of the 

proposals for changes in rates, fees, and 

the Mail Classification Schedule. 

(e) The identification of an officer of 

the Commission to represent the 

interests of the general public in the 

docket. 

(f) A specified period for public 

comment. 

(g) Such other information as the 

Commission deems appropriate. 

§ 3030.264 Public hearing. 

(a) The Commission will hold a 

public hearing on the Postal Service’s 

request. During the public hearing, 

responsible Postal Service officials will 

appear and respond under oath to 

questions from the Commissioners or 

their designees addressing previously 

identified aspects of the Postal Service’s 

request and supporting information. 

(b) Interested persons will be given an 

opportunity to submit to the 

Commission suggested relevant 

questions that might be posed during 

the public hearing. Such questions, and 

any explanatory materials submitted to 

clarify the purpose of the questions, 

should be filed in accordance with 

§ 3010.120 of this chapter, and will 

become part of the administrative record 

of the proceeding. 

(c) The timing and length of the 

public hearing will depend on the 

nature of the circumstances giving rise 

to the request and the clarity and 

completeness of the supporting 

materials provided with the request. 

(d) If the Postal Service is unable to 

provide adequate explanations during 

the public hearing, supplementary 

written or oral responses may be 

required. 

§ 3030.265 Opportunity for comments. 

(a) Following the conclusion of the 

public hearings and submission of any 

supplementary materials, interested 

persons will be given the opportunity to 

submit written comments on: 

(1) The sufficiency of the justification 

for an exigent rate adjustment; 

(2) The adequacy of the justification 

for adjustments in the amounts 

requested by the Postal Service; and 

(3) Whether the specific rate 

adjustments requested are reasonable 

and equitable. 

(b) An opportunity to submit written 

reply comments will be given to the 

Postal Service and other interested 

persons. 

§ 3030.266 Deadline for Commission 

decision. 

Requests under this subpart seek rate 

relief required by extraordinary or 

exceptional circumstances and will be 

treated with expedition at every stage. It 

is Commission policy to provide 

appropriate relief as quickly as possible 

consistent with statutory requirements 

and procedural fairness. The 

Commission will act expeditiously on 

the Postal Service’s request, taking into 

account all written comments. In every 

instance, a Commission decision will be 

issued within 90 days of the filing of an 

exigent request. 

§ 3030.267 Treatment of banked rate 

adjustment authority. 

(a) Each request will identify the 

banked rate adjustment authority 

available as of the date of the request for 

each class of mail and the available 

amount for each of the preceding 5 

years. 

(b) Rate adjustments may use existing 

banked rate adjustment authority in 

amounts greater than the limitations 

described in § 3030.245. 

(c) Increases will exhaust all banked 

rate adjustment authority for each class 

of mail before imposing additional rate 

adjustments in excess of the maximum 

rate adjustment for any class of mail. 

Subpart J—Workshare Discounts 

§ 3030.280 Applicability. 

This subpart is applicable whenever 

the Postal Service proposes to adjust a 

rate associated with a workshare 

discount. For the purpose of this 

subpart, the cost avoided by the Postal 

Service for not providing the applicable 

service refers to the amount identified 

in the most recently applicable Annual 

Compliance Determination, unless the 

Commission otherwise provides. 

§ 3030.281 Calculation of passthroughs for 

workshare discounts. 

For the purpose of this subpart, the 

percentage passthrough for any 

workshare discount shall be calculated 

by dividing the workshare discount by 

the cost avoided by the Postal Service 

for not providing the applicable service 

and expressing the result as a 

percentage. 

§ 3030.282 Increased pricing efficiency. 

(a) For a workshare discount that is 

equal to the cost avoided by the Postal 

Service for not providing the applicable 

service, no proposal to adjust a rate 

associated with that workshare discount 

may change the size of the discount. 

(b) For a workshare discount that 

exceeds the cost avoided by the Postal 

Service for not providing the applicable 

service, no proposal to adjust a rate 

associated with that workshare discount 

may increase the size of the discount. 

(c) For a workshare discount that is 

less than the cost avoided by the Postal 

Service for not providing the applicable 

service, no proposal to adjust a rate 

associated with that workshare discount 

may decrease the size of the discount. 

§ 3030.283 Limitations on excessive 

discounts. 

(a) No proposal to adjust a rate may 

set a workshare discount that would 

exceed the cost avoided by the Postal 

Service for not providing the applicable 

service, unless at least one of the 

following reasons provided in 

paragraphs (b) through (e) of this section 

applies. 

(b) The proposed workshare discount 

is associated with a new postal service, 

a change to an existing postal service, or 

a new workshare initiative. 

(c) The proposed workshare discount 

is a minimum of 20 percent less than 

the existing workshare discount. 

(d) The proposed workshare discount 

is set in accordance with a Commission 

order issued pursuant to § 3030.286. 

(e) The proposed workshare discount 

is provided in connection with a 

subclass of mail, consisting exclusively 

of mail matter of educational, cultural, 

scientific, or informational value (39 

U.S.C. 3622(e)(2)(C)) and is in 

compliance with § 3030.285(c). 

§ 3030.284 Limitations on discounts below 

avoided cost. 

(a) No proposal to adjust a rate may 

set a workshare discount that would be 

below the cost avoided by the Postal 

Federal Register / Vol. 85, No. 241 / Tuesday, December 15, 2020 / Rules and Regulations 81137 

Service for not providing the applicable 

service, unless at least one of the 

following reasons provided in 

paragraphs (b) through (e) of this section 

applies. 

(b) The proposed workshare discount 

is associated with a new postal service, 

a change to an existing postal service, or 

a new workshare initiative. 

(c) The proposed workshare discount 

is a minimum of 20 percent more than 

the existing workshare discount. 

(d) The proposed workshare discount 

is set in accordance with a Commission 

order issued pursuant to § 3030.286. 

(e) The percentage passthrough for the 

proposed workshare discount is at least 

85 percent. 

§ 3030.285 Proposal to adjust a rate 

associated with a workshare discount. 

(a) Each proposal to adjust a rate 

associated with a workshare discount 

shall be supported by substantial 

evidence and demonstrate that each 

proposed workshare discount has been 

set in compliance with 39 U.S.C. 

3622(e) and this subpart. Substantial 

evidence means such relevant evidence 

as a reasonable mind might accept as 

adequate to support a conclusion. 

(b) For each proposed workshare 

discount that would exceed the cost 

avoided by the Postal Service for not 

providing the applicable service, the 

rate adjustment filing shall indicate the 

applicable paragraph of § 3030.283 

under which the Postal Service is 

justifying the excessive discount and 

include any relevant analysis 

supporting the claim. 

(c) For each proposed workshare 

discount that is provided in connection 

with a subclass of mail, consisting 

exclusively of mail matter of 

educational, cultural, scientific, or 

informational value (39 U.S.C. 

3622(e)(2)(C)), would exceed the cost 

avoided by the Postal Service for not 

providing the applicable service, and 

would not be set in accordance with at 

least one specific provision appearing in 

§ 3030.283(b) through (d), the rate 

adjustment filing shall provide the 

information specified in paragraphs 

(c)(1) through (3) of this section: 

(1) The number of mail owners 

receiving the workshare discount during 

the most recent full fiscal year and for 

the current fiscal year to date; 

(2) The number of mail owners for the 

applicable product or products in the 

most recent full fiscal year and for the 

current fiscal year to date; and 

(3) An explanation of how the 

proposed workshare discount would 

promote the public interest, even 

though the proposed workshare 

discount would substantially exceed the 

cost avoided by the Postal Service. 

(d) For each proposed workshare 

discount that would be below the cost 

avoided by the Postal Service for not 

providing the applicable service, the 

rate adjustment filing shall indicate the 

applicable paragraph of § 3030.284 

under which the Postal Service is 

justifying the discount that is below the 

cost avoided and include any relevant 

analysis supporting the claim. 

§ 3030.286 Application for waiver. 

(a) In every instance in which the 

Postal Service determines to adjust a 

rate associated with a workshare 

discount in a manner that does not 

comply with the limitations imposed by 

§§ 3030.283 through 3030.284, the 

Postal Service shall file an application 

for waiver. The Postal Service must file 

any application for waiver at least 60 

days prior to filing the proposal to 

adjust a rate associated with the 

applicable workshare discount. In its 

application for waiver, the Postal 

Service shall indicate the approximate 

filing date for its next rate adjustment 

filing. 

(b) The application for waiver shall be 

supported by a preponderance of the 

evidence and demonstrate that a waiver 

from the limitations imposed by 

§§ 3030.283 through 3030.284 should be 

granted. Preponderance of the evidence 

means proof by information that, 

compared with that opposing it, leads to 

the conclusion that the fact at issue is 

more probably true than not. 

(c) The application for waiver shall 

include a specific and detailed 

statement signed by one or more 

knowledgeable Postal Service official(s) 

who sponsors the application and 

attests to the accuracy of the 

information contained within the 

statement. The statement shall set forth 

the information specified in paragraphs 

(c)(1) through (8) of this section, as 

applicable to the specific workshare 

discount for which a waiver is sought: 

(1) The reason(s) why a waiver is 

alleged to be necessary (with 

justification thereof), including all 

relevant supporting analysis and all 

assumptions relied upon. 

(2) The length of time for which a 

waiver is alleged to be necessary (with 

justification thereof). 

(3) For each subsequent rate 

adjustment filing planned to occur 

during the length of time for which a 

waiver is sought, a representation of the 

proposed minimum amount of the 

change to the workshare discount. 

(4) For a claim that the amount of the 

workshare discount exceeding the cost 

avoided by the Postal Service for not 

providing the applicable service is 

necessary in order to mitigate rate shock 

(39 U.S.C. 3622(e)(2)(B)), the Postal 

Service shall provide an explanation 

addressing all of the items specified in 

paragraphs (c)(4)(i) through (iii) of this 

section: 

(i) A description of the customers that 

the Postal Service claims would be 

adversely affected. 

(ii) Prices and volumes for the 

workshare discount at issue (the 

benchmark and workshared mail 

category) for the last 10 years. 

(iii) Quantitative analysis or, if not 

available, qualitative analysis indicating 

the nature and extent of the likely harm 

to the customers that would result from 

setting the workshare discount in 

compliance with § 3030.283(c). 

(5) For a claim that setting an 

excessive or low workshare discount 

closer or equal to the cost avoided by 

the Postal Service for not providing the 

applicable service would impede the 

efficient operation of the Postal Service, 

the Postal Service shall provide an 

explanation addressing all of the items 

specified in paragraphs (c)(5)(i) through 

(iii) of this section: 

(i) A description of the operational 

strategy at issue. 

(ii) Quantitative analysis or, if not 

available, qualitative analysis indicating 

how the workshare discount at issue is 

related to that operational strategy. 

(iii) How setting the workshare 

discount in compliance with 

§ 3030.283(c) or § 3030.284(c), 

whichever is applicable, would impede 

that operational strategy. 

(6) For a claim that reducing or 

eliminating the excessive workshare 

discount would lead to a loss of volume 

in the affected category of mail and 

reduce the aggregate contribution to the 

Postal Service’s institutional costs from 

the mail that is subject to the discount 

(39 U.S.C. 3622(e)(3)(A)), the Postal 

Service shall provide an explanation 

addressing all of the items specified in 

paragraphs (c)(6)(i) through (iii) of this 

section: 

(i) A description of the affected 

category of mail. 

(ii) Quantitative analysis or, if not 

available, qualitative analysis indicating 

the expected loss of volume and 

reduced contribution that is claimed 

would result from reducing or 

eliminating the excessive workshare 

discount. 

(iii) How setting the excessive 

workshare discount in compliance with 

§ 3030.283(c) would lead to the 

expected loss of volume and reduced 

contribution. 

(7) For a claim that reducing or 

eliminating the excessive workshare 

81138 Federal Register / Vol. 85, No. 241 / Tuesday, December 15, 2020 / Rules and Regulations 

discount would result in a further 

increase in the rates paid by mailers not 

able to take advantage of the workshare 

discount (39 U.S.C. 3622(e)(3)(B)), or a 

claim that increasing or eliminating a 

low workshare discount for a noncompensatory product would result in a 

further increase in the rates paid by 

mailers not able to take advantage of the 

workshare discount, the Postal Service 

shall provide an explanation addressing 

all of the items specified in paragraphs 

(c)(7)(i) through (iii) of this section: 

(i) A description of the mailers not 

able to take advantage of the discount. 

(ii) Quantitative analysis or, if not 

available, qualitative analysis indicating 

the expected size of the rate increase 

that is claimed would result in the rates 

paid by mailers not able to take 

advantage of the discount. 

(iii) How setting the excessive 

workshare discount in compliance with 

§ 3030.283(c) or the low workshare 

discount for a non-compensatory 

product in compliance with 

§ 3030.284(c) or (e), whichever is 

applicable, would result in a further 

increase in the rates paid by mailers not 

able to take advantage of the discount. 

(8) Any other relevant factors or 

reasons to support the application for 

waiver. 

(d) Unless the Commission otherwise 

provides, commenters will be given at 

least 7 calendar days to respond to the 

application for waiver after it has been 

filed by the Postal Service. 

(e) To better evaluate the waiver 

application, the Commission may, on its 

own behalf or by request of any 

interested person, order the Postal 

Service to provide experts on the subject 

matter of the waiver application to 

participate in technical conferences, 

prepare statements clarifying or 

supplementing their views, or answer 

questions posed by the Commission or 

its representatives. 

(f) For a proposed workshare discount 

that would exceed the cost avoided by 

the Postal Service for not providing the 

applicable service, the application for 

waiver shall be granted only if at least 

one provision appearing in 39 U.S.C. 

3622(e)(2)(A) through (e)(2)(D) or 39 

U.S.C. 3622(e)(3)(A) through (e)(3)(B) is 

determined to apply. 

(g) For a proposed workshare discount 

that would be set below the cost 

avoided by the Postal Service for not 

providing the applicable service, the 

application for waiver shall be granted 

only if setting the workshare discount 

closer or equal to the cost avoided by 

the Postal Service for not providing the 

applicable service would impede the 

efficient operation of the Postal Service 

or if increasing or eliminating a low 

workshare discount for a noncompensatory product would result in a 

further increase in the rates paid by 

mailers not able to take advantage of the 

workshare discount. 

(h) The Commission will issue an 

order announcing, at a minimum, 

whether the requested waiver will be 

granted or denied no later than 21 days 

following the close of any comment 

period(s). An order granting the 

application for waiver shall specify all 

conditions upon which the waiver is 

granted, including the date upon which 

the waiver shall expire. 

PART 3040—PRODUCT LISTS AND 

THE MAIL CLASSIFICATION 

SCHEDULE 

■ 2. The authority citation for part 3040 

continues to read as follows: 

Authority: 39 U.S.C. 503; 3622; 3631; 3642; 

3682. 

■ 3. Amend § 3040.132 by revising 

paragraphs (a) and (b) to read as follows: 

§ 3040.132 Supporting justification. 

* * * * * 

(a) Explain the reason for initiating 

the docket and explain why the change 

is not inconsistent with the applicable 

requirements of this part and any 

applicable Commission directives and 

orders; 

(b) Explain why, as to market 

dominant products, the change is not 

inconsistent with the policies and the 

applicable criteria of chapter 36 of title 

39 of the United States Code; 

* * * * * 

■ 4. Amend § 3040.152 by revising 

paragraphs (a) and (b) to read as follows: 

§ 3040.152 Supporting justification. 

* * * * * 

(a) Explain the reason for initiating 

the docket and explain why the change 

is not inconsistent with the applicable 

requirements of this part and any 

applicable Commission directives and 

orders; 

(b) Explain why, as to market 

dominant products, the change is not 

inconsistent with the policies and the 

applicable criteria of chapter 36 of title 

39 of the United States Code; 

* * * * * 

■ 5. Amend § 3040.172 by revising 

paragraphs (a) and (b) to read as follows: 

§ 3040.172 Supporting justification. 

* * * * * 

(a) Explain the reason for initiating 

the docket and explain why the change 

is not inconsistent with the applicable 

requirements of this part and any 

applicable Commission directives and 

orders; 

(b) Explain why, as to market 

dominant products, the change is not 

inconsistent with the policies and the 

applicable criteria of chapter 36 of title 

39 of the United States Code; 

* * * * * 

■ 6. Amend § 3040.181 by revising 

paragraph (b)(1) to read as follows: 

§ 3040.181 Supporting justification for 

material changes to product descriptions. 

* * * * * 

(b)(1) As to market dominant 

products, explain why the changes are 

not inconsistent with the policies and 

the applicable criteria of chapter 36 of 

title 39 of the United States Code, the 

applicable requirements of this part, and 

any applicable Commission directives 

and orders; or 

* * * * * 

■ 7. Amend § 3040.182 by revising 

paragraph (e) to read as follows: 

§ 3040.182 Docket and notice of material 

changes to product descriptions. 

* * * * * 

(e) Provide interested persons with an 

opportunity to comment on whether the 

proposed changes are consistent with 

the policies and the applicable criteria 

of chapter 36 of title 39 of the United 

States Code, the applicable 

requirements of this part, and any 

applicable Commission directives and 

orders. 

■ 8. Amend § 3040.190 by revising 

paragraph (c)(2) to read as follows: 

§ 3040.190 Minor corrections to product 

descriptions. 

* * * * * 

(c) * * * 

(2) Explain why the proposed 

corrections are consistent with the 

policies and the applicable criteria of 

chapter 36 of title 39 of the United 

States Code, the applicable 

requirements of this part, and any 

applicable Commission directives and 

orders; and 

* * * * * 

■ 9. Amend § 3040.191 by revising 

paragraph (e) to read as follows: 

§ 3040.191 Docket and notice of minor 

corrections to product descriptions. 

* * * * * 

(e) Provide interested persons with an 

opportunity to comment on whether the 

proposed corrections are consistent with 

the policies and the applicable criteria 

of chapter 36 of title 39 of the United 

States Code, the applicable 

requirements of this part, and any 

applicable Commission directives and 

orders. 

■ 10. Add subpart G to read as follows: 

Federal Register / Vol. 85, No. 241 / Tuesday, December 15, 2020 / Rules and Regulations 81139 

Subpart G—Requests for Market 

Dominant Negotiated Service 

Agreements 

Sec. 

3040.220 General. 

3040.221 Additional supporting 

justification for negotiated service 

agreements. 

3040.222 Data collection plan and report for 

negotiated service agreements. 

§ 3040.220 General. 

This subpart imposes additional 

requirements whenever there is a 

request to add a negotiated service 

agreement to the market dominant 

product list. The additional supporting 

justification appearing in § 3040.221 

also should be provided whenever the 

Postal Service proposes to modify the 

terms of an existing market dominant 

negotiated service agreement. 

Commission findings that the addition 

of a special classification is not 

inconsistent with 39 U.S.C. 3622 are 

provisional and subject to subsequent 

review. No rate(s) shall take effect until 

45 days after the Postal Service files a 

request for review of a notice of a new 

rate or rate(s) adjustment specifying the 

rate(s) and the effective date. 

§ 3040.221 Additional supporting 

justification for negotiated service 

agreements. 

(a) Each request shall also include the 

items specified in paragraphs (b) 

through (j) of this section. 

(b) A copy of the negotiated service 

agreement. 

(c) The planned effective date(s) of the 

planned rates. 

(d) The identity of a responsible 

Postal Service official who will be 

available to provide prompt responses 

to requests for clarification from the 

Commission. 

(e) A statement identifying all parties 

to the agreement and a description 

clearly explaining the operative 

components of the agreement. 

(f) Details regarding the expected 

improvements in the net financial 

position or operations of the Postal 

Service (39 U.S.C. 3622(c)(10)(A)(i) and 

(ii)). The projection of the change in net 

financial position as a result of the 

agreement shall be based on accepted 

analytical principles. The projection of 

the change in net financial position as 

a result of the agreement shall include 

for each year of the agreement: 

(1) The estimated mailer-specific 

costs, volumes, and revenues of the 

Postal Service absent the 

implementation of the negotiated 

service agreement; 

(2) The estimated mailer-specific 

costs, volumes, and revenues of the 

Postal Service which result from 

implementation of the negotiated 

service agreement; 

(3) An analysis of the effects of the 

negotiated service agreement on the 

contribution to institutional costs from 

mailers not party to the agreement; 

(4) If mailer-specific costs are not 

available, the source and derivation of 

the costs that are used shall be 

provided, together with a discussion of 

the currency and reliability of those 

costs and their suitability as a proxy for 

the mailer-specific costs; and 

(5) If the Postal Service believes the 

Commission’s accepted analytical 

principles are not the most accurate and 

reliable methodology available: 

(i) An explanation of the basis for that 

belief; and 

(ii) A projection of the change in net 

financial position resulting from the 

agreement made using the Postal 

Service’s alternative methodology. 

(g) An identification of each 

component of the agreement expected to 

enhance the performance of mail 

preparation, processing, transportation, 

or other functions in each year of the 

agreement, and a discussion of the 

nature and expected impact of each 

such enhancement. 

(h) Details regarding any and all 

actions (performed or to be performed) 

to assure that the agreement will not 

result in unreasonable harm to the 

marketplace (39 U.S.C. 3622(c)(10)(B)). 

(i) A discussion in regard to how 

functionally similar negotiated service 

agreements will be made available on 

public and reasonable terms to similarly 

situated mailers. 

(j) Such other information as the 

Postal Service believes will assist the 

Commission in issuing a timely 

determination of whether the requested 

changes are consistent with applicable 

statutory policies. 

§ 3040.222 Data collection plan and report 

for negotiated service agreements. 

(a) The Postal Service shall include 

with any request concerning a 

negotiated service agreement a detailed 

plan for providing data or information 

on actual experience under the 

agreement sufficient to allow evaluation 

of whether the negotiated service 

agreement operates in compliance with 

39 U.S.C. 3622(c)(10). 

(b) A data report under the plan is due 

60 days after each anniversary date of 

implementation and shall include, at a 

minimum, the following information for 

each 12-month period the agreement has 

been in effect: 

(1) The change in net financial 

position of the Postal Service as a result 

of the agreement. This calculation shall 

include for each year of the agreement: 

(i) The actual mailer-specific costs, 

volumes, and revenues of the Postal 

Service; 

(ii) An analysis of the effects of the 

negotiated service agreement on the net 

overall contribution to the institutional 

costs of the Postal Service; and 

(iii) If mailer-specific costs are not 

available, the source and derivation of 

the costs that are used shall be 

provided, including a discussion of the 

currency and reliability of those costs 

and their suitability as a proxy for the 

mailer-specific costs. 

(2) A discussion of the changes in 

operations of the Postal Service that 

have resulted from the agreement. This 

shall include, for each year of the 

agreement, identification of each 

component of the agreement known to 

enhance the performance of mail 

preparation, processing, transportation, 

or other functions in each year of the 

agreement. 

(3) An analysis of the impact of the 

negotiated service agreement on the 

marketplace, including a discussion of 

any and all actions taken to protect the 

marketplace from unreasonable harm. 

PART 3045—RULES FOR MARKET 

TESTS OF EXPERIMENTAL 

PRODUCTS 

■ 11. The authority citation for part 

3045 continues to read as follows: 

Authority: 39 U.S.C. 503; 3641. 

■ 12. Amend § 3045.15 by revising 

paragraph (a) to read as follows: 

§ 3045.15 Dollar amount limitation. 

(a) The Consumer Price Index used for 

calculations under this part is the CPI– 

U index, as specified in § 3030.141(a) of 

this chapter. 

* * * * * 

PART 3050—PERIODIC REPORTING 

■ 13. The authority citation for part 

3050 continues to read as follows: 

Authority: 39 U.S.C. 503, 3651, 3652, 3653. 

■ 14. Amend § 3050.20 by revising 

paragraph (c) to read as follows: 

§ 3050.20 Compliance and other analyses 

in the Postal Service’s section 3652 report. 

* * * * * 

(c) It shall address such matters as 

non-compensatory rates and failures to 

achieve stated goals for on-time delivery 

standards. A more detailed analysis is 

required when the Commission 

observed and commented upon the 

same matter in its Annual Compliance 

Determination for the previous fiscal 

year. 

■ 15. Amend § 3050.21 by: 

81140 Federal Register / Vol. 85, No. 241 / Tuesday, December 15, 2020 / Rules and Regulations 

■ a. Revising paragraphs (a), (e), (l), and 

(m); and 

■ b. Adding paragraphs (n) and (o). 

The revisions and additions read as 

follows: 

§ 3050.21 Content of the Postal Service’s 

section 3652 report. 

(a) No later than 90 days after the 

close of each fiscal year, the Postal 

Service shall submit a report to the 

Commission analyzing its cost, volume, 

revenue, rate, and service information in 

sufficient detail to demonstrate that all 

products during such year comply with 

all applicable provisions of title 39 of 

the United States Code. The report shall 

provide the items in paragraphs (b) 

through (o) of this section. 

* * * * * 

(e) For each market dominant 

workshare discount offered during the 

reporting year: 

(1) The per-item cost avoided by the 

Postal Service by virtue of such 

discount; 

(2) The percentage of such per-item 

cost avoided that the per-item 

workshare discount represents; 

(3) The per-item contribution made to 

institutional costs; 

(4) The factual and analytical bases 

for any claim that one or more of the 

exception provisions of 39 U.S.C. 

3622(e)(2)(A) through (e)(2)(D) or 39 

U.S.C. 3622(e)(3)(A) through (e)(3)(B) 

apply; and 

(5) For each workshare discount that 

is provided in connection with a 

subclass of mail, consisting exclusively 

of mail matter of educational, cultural, 

scientific, or informational value (39 

U.S.C. 3622(e)(2)(C)), exceeded the cost 

avoided by the Postal Service for not 

providing the applicable service, and 

was not set in accordance with at least 

one specific provision appearing in 

§ 3030.262(b) through (d) of this 

chapter, the information specified in 

paragraphs (e)(5)(i) through (iii) of this 

section: 

(i) The number of mail owners 

receiving the workshare discount; 

(ii) The number of mail owners for the 

applicable product or products; and 

(iii) An explanation of how the 

workshare discount promotes the public 

interest, even though the workshare 

discount substantially exceeds the cost 

avoided by the Postal Service; 

* * * * * 

(l) For the Inbound Letter Post 

product, provide revenue, volume, 

attributable cost, and contribution data 

by Universal Postal Union country 

group and by shape for the fiscal year 

subject to review and each of the 

preceding 4 fiscal years; 

(m) Input data and calculations used 

to produce the annual Total Factor 

Productivity estimates; 

(n) Copies of notifications to the 

Postal Service by the Office of Personnel 

Management (OPM) of annual 

determinations of the funding amounts 

specific to payments at the end of each 

fiscal year computed under 5 U.S.C. 

8909a(d)(2)(B) and 5 U.S.C. 

8909a(d)(3)(B)(ii); 5 U.S.C. 8348(h)(2)(B) 

and 5 U.S.C. 8423(b)(3)(B); 5 U.S.C. 

8423(b)(1)(B) and 5 U.S.C. 8423(b)(2); 

and 

(o) Provide any other information that 

the Postal Service believes will help the 

Commission evaluate the Postal 

Service’s compliance with the 

applicable provisions of title 39 of the 

United States Code. 

■ 16. Add § 3050.55 to read as follows: 

§ 3050.55 Information pertaining to cost 

reduction initiatives. 

(a) The reports in paragraphs (b) 

through (f) of this section shall be filed 

with the Commission at the times 

indicated in paragraphs (b) through (f). 

(b) Within 95 days after the end of 

each fiscal year, the Postal Service shall 

file a financial report that analyzes cost 

data from the fiscal year. For purposes 

of this paragraph (b), the percentage 

change shall compare the fiscal year 

under review to the previous fiscal year. 

At a minimum, the report shall include: 

(1) For all market dominant mail, the 

percentage change in total unit 

attributable cost; 

(2) For each market dominant mail 

product, the percentage change in unit 

attributable cost; 

(3) For the system as a whole, total 

average cost per piece, which includes 

all Postal Service competitive and 

market dominant attributable costs and 

institutional costs; 

(4) The percentage change in total 

average cost per piece; 

(5) Market dominant unit attributable 

cost by product; 

(6) If the percentage change in unit 

attributable cost for a market dominant 

mail product is more than 0.0 percent 

and exceeds the percentage change in 

total market dominant mail unit 

attributable cost, then the following 

information shall be provided: 

(i) Unit attributable cost workpapers 

for the product disaggregated into the 

following cost categories: mail 

processing unit cost, delivery unit cost, 

vehicle service driver unit cost, 

purchased transportation unit cost, 

window service unit cost, and other unit 

cost; 

(ii) A narrative that identifies cost 

categories that are driving above average 

increases in unit attributable cost for the 

product and explains the reason for the 

above-average increase; and 

(iii) A specific plan to reduce unit 

attributable cost for the product; and 

(7) An analysis of volume trends and 

mail mix changes for each market 

dominant mail product from fiscal year 

2017 through the end of the fiscal year 

under review, which shall include at a 

minimum: 

(i) A comparison of actual unit 

attributable costs and estimated unit 

attributable costs for each market 

dominant mail product, using the 

volume distribution from fiscal year 

2017; 

(ii) A narrative that identifies the 

drivers of change in volume trends and 

the mail mix; and 

(iii) A narrative that explains the 

methodology used to calculate the 

estimated unit attributable costs as 

required by paragraph (b)(7)(i) of this 

section. 

(c) Within 95 days after the end of 

each fiscal year, the Postal Service shall 

file a report with analysis of each 

planned cost reduction initiative that is 

expected to require Postal Service total 

expenditures of $5 million or more over 

the duration of the initiative. At a 

minimum, the report shall include: 

(1) A narrative that describes each 

cost reduction initiative planned for 

future fiscal years, including the status, 

the expected total expenditure, start 

date, end date, and any intermediate 

deadlines; 

(2) Identification of a metric to 

measure the impact of each planned 

cost reduction initiative identified in 

paragraph (c)(1) of this section, a 

narrative describing the selected metric, 

a narrative explaining the reason for 

selecting that metric, and a schedule 

approximating the months and fiscal 

years in which the cost reduction 

impact is expected to be measureable; 

and 

(3) Estimates of the expected impact 

of each planned cost reduction 

initiative, with supporting workpapers, 

using the metric identified in paragraph 

(c)(2) of this section, total market 

dominant mail attributable unit cost, 

and total unit cost as calculated 

pursuant to paragraph (b)(3) of this 

section. 

(d) Within 95 days after the end of 

each fiscal year, the Postal Service shall 

file a report that describes each active 

cost reduction initiative during the 

fiscal year which incurred or is 

expected to incur Postal Service 

expenditures of $5 million or more over 

the duration of the initiative. At a 

minimum, the report shall include: 

(1) The information described in 

paragraphs (c)(1) through (3) of this 

Federal Register / Vol. 85, No. 241 / Tuesday, December 15, 2020 / Rules and Regulations 81141 

section, based on actual data for the 

fiscal year, and a specific statement as 

to whether the initiative actually 

achieved the expected impact as 

measured by the selected metric; 

(2) An explanation of the trends, 

changes, or other reasons that caused 

any variance between the actual 

information provided under paragraph 

(d)(1) of this section and the estimated 

information previously provided under 

paragraphs (c)(1) through (3) of this 

section, if applicable; 

(3) A description of any midimplementation adjustments the Postal 

Service has taken or will take to align 

the impacts with the schedule; and 

(4) Any revisions to the schedule of 

cost reduction impacts for future fiscal 

years. 

(e) Within 95 days after the end of 

each fiscal year, the Postal Service shall 

file a report that summarizes all projects 

associated with a Decision Analysis 

Report for the fiscal year. At a 

minimum, the report shall include: 

(1) A description of each project; 

(2) The status of each project; 

(3) An estimate of cost savings or 

additional revenues from each project; 

and 

(4) The return on investment expected 

from each project. 

(f) Within 95 days after the end of 

each fiscal year, the Postal Service shall 

file a report that summarizes all planned 

projects that have an approved Decision 

Analysis Report for the next fiscal year. 

At a minimum, the report shall include: 

(1) A description of each planned 

project; 

(2) The status of each project; 

(3) An estimate of the cost savings or 

additional revenues expected from each 

project; and 

(4) The return on investment expected 

from each project. 

■ 17. Amend § 3050.60 by: 

■ a. Revising paragraph (a); 

■ b. Removing paragraph (e); 

■ c. Redesignating paragraphs (f) and (g) 

as paragraphs (e) and (f). 

The revision reads as follows: 

§ 3050.60 Miscellaneous reports and 

documents. 

(a) The reports in paragraphs (b) 

through (f) of this section shall be 

provided at the times indicated in 

paragraphs (b) through (f). 

* * * * * 

PART 3055—SERVICE 

PERFORMANCE AND CUSTOMER 

SATISFACTION REPORTING 

■ 18. The authority citation for part 

3055 continues to read as follows: 

Authority: 39 U.S.C. 503, 3622(a), 3652(d) 

and (e); 3657(c). 

■ 19. Amend § 3055.2 by revising 

paragraph (c) to read as follows: 

§ 3055.2 Contents of the annual report of 

service performance achievements. 

* * * * * 

(c) The applicable service standard(s) 

for each product. If there has been a 

change to a service standard(s) since the 

previous report, a description of and 

reason for the change shall be provided. 

If there have been no changes to service 

standard(s) since the previous report, a 

certification stating this fact shall be 

provided. 

* * * * * 

[FR Doc. 2020–26645 Filed 12–14–20; 8:45 am] 

BILLING CODE 7710–FW–P 

DEPARTMENT OF THE INTERIOR 

Bureau of Land Management 

43 CFR Part 1820 

[LLES9120000 L14400000.PN0000] 

RIN 1004–AE76 

Application Procedures, Execution and 

Filing of Forms: Correction of State 

Office Address for Filings and 

Recordings, Including Proper Offices 

for Recording of Mining Claims; 

Eastern States 

AGENCY: Bureau of Land Management, 

Interior. 

ACTION: Final rule. 

SUMMARY: This final rule amends the 

regulations pertaining to execution and 

filing of forms in order to reflect the 

new address of the BLM-Eastern States 

Office of the Bureau of Land 

Management (BLM). All filings and 

other documents relating to public lands 

in the 31 States east of and bordering 

the Mississippi River must be filed at 

the new address of the BLM-Eastern 

States Office beginning on January 14, 

2021. 

DATES: This rule is effective on January 

14, 2021. 

ADDRESSES: You may send inquiries or 

suggestions to the Deputy State Director 

for Communications, BLM-Eastern 

States Office, 5275 Leesburg Pike, Falls 

Church, VA 22041. 

FOR FURTHER INFORMATION CONTACT: 

Francis Piccoli, (202) 912–7700. Persons 

who use a telecommunications device 

for the deaf (TDD) may call the Federal 

Information Relay Service (FIRS) at 

1–800–877–8339, 24 hours a day, 7 days 

a week. 

SUPPLEMENTARY INFORMATION: 

I. Background 

II. Procedural Matters 

I. Background 

This final rule reflects the 

administrative action of changing the 

street address of the Eastern States 

Office of the BLM. This rule changes the 

postal and street address for the 

personal filing of documents relating to 

public lands in the Eastern States but 

makes no other changes in filing 

requirements. The BLM has determined 

that the rule has no substantive impact 

on the public, imposes no costs, and 

merely updates a list of addresses 

included in the Code of Federal 

Regulations for the convenience of the 

public. The Department of the Interior, 

therefore, for good cause finds that 

under 5 U.S.C. 553(b)(B), notice and 

public comment procedures are 

unnecessary. 

II. Procedural Matters 

Regulatory Planning and Review 

(Executive Order 12866) 

This final rule is an administrative 

action to change the address for one 

BLM State Office. This rule was not 

subject to review by the Office of 

Management and Budget under 

Executive Order 12866. The rule 

imposes no costs, and merely updates a 

list of addresses included in the Code of 

Federal Regulations for the convenience 

of the public. 

National Environmental Policy Act 

The BLM has found that the final rule 

is of a procedural nature and thus is 

categorically excluded from 

environmental review under section 

102(2)(C) of the National Environmental 

Policy Act of 1969 (NEPA), 42 U.S.C. 

4332(2)(C), pursuant to 43 CFR 

46.210(i). In addition, the final rule does 

not present any of the 12 extraordinary 

circumstances listed at 43 CFR 46.215. 

Pursuant to the Council on 

Environmental Quality regulations (40 

CFR 1508.4) and the environmental 

regulations, policies, and procedures of 

the Department of the Interior, the term 

‘‘categorical exclusions’’ means a 

category of actions which do not 

individually or cumulatively have a 

significant effect on the human 

environment, have been found to have 

no such effect in procedures adopted by 

a Federal agency, and for which neither 

an environmental assessment nor an 

environmental impact statement is 

required. 

Regulatory Flexibility Act 

Congress enacted the Regulatory 

Flexibility Act of 1980 (5 U.S.C. 601, et 

seq.) to ensure that Government 

regulations do not unnecessarily or