Federal Register / Vol. 88, No. 173 / Friday, September 8, 2023 / Proposed Rules 62023 

1Petition of the United States Postal Service for 

the Initiation of a Proceeding to Consider Proposed 

Changes in Analytical Principles (Proposal Two), 

May 26, 2023 (Petition). 

2 Docket No. RM2023–7, Order on Analytical 

Principles Used in Periodic Reporting (Proposal 

Two), Directing the Postal Service’s Participation in 

Further Proceedings, and Providing Notice of Filing 

Attachment Under Seal, August 31, 2023 (Order No. 

6659). 

3Postal Service Reform Act of 2022 (PSRA), 

Public Law. 117–108, 136 Stat. 1127 (2022). 

4Prior to the enactment of the PSRA, the Postal 

Service’s authority for these agreements was 

governed by 39 U.S.C. 411, which authorizes the 

Postal Service to ‘‘furnish property and services’’ to 

‘‘Executive agencies within the meaning of [5 U.S.C. 

105] and the Government Publishing Office. . . .’’ 

39 U.S.C. 411. Section 105 of Title 5 of the United 

States Code specifies that an ‘‘ ‘Executive agency’ 

means an Executive department, a Government 

corporation, and an independent establishment’’ of 

the U.S. Government, as those terms are defined in 

5 U.S.C. chapter 1. 5 U.S.C. 105. 

5 Docket No. ACR2022, Annual Compliance 

Determination Report, FY 2022, March 29, 2023. 

firearm to another licensee, the licensee 

shall comply with the verification and 

recordkeeping requirements in § 478.94 

and subpart H of part 478. 

* * * * * 

■ 6. In § 478.125a, in paragraphs (a)(2) 

and (3), remove the citation 

‘‘§ 478.125(e)’’ and add in its place 

‘‘§§ 478.122(a), 478.123(a), or 

478.125(e)’’. 

Dated: August 30, 2023. 

Merrick B. Garland, 

Attorney General. 

[FR Doc. 2023–19177 Filed 9–7–23; 8:45 am] 

BILLING CODE 4410–FY–P 

POSTAL REGULATORY COMMISSION 

39 CFR Part 3050 

[Docket No. RM2023–7; Order No. 6659] 

Periodic Reporting 

AGENCY: Postal Regulatory Commission. 

ACTION: Notice of proposed rulemaking. 

SUMMARY: The Commission is 

conducting further proceedings and will 

be accepting further comments with 

respect to a rulemaking proceeding to 

consider changes to analytical 

principles relating to periodic reports 

(Proposal Two). This document invites 

further public comment and takes other 

administrative steps. 

DATES: Comments are due: October 16, 

2023. 

ADDRESSES: Submit comments 

electronically via the Commission’s 

Filing Online system at http://

www.prc.gov. Those who cannot submit 

comments electronically should contact 

the person identified in the FOR FURTHER

INFORMATION CONTACT section by 

telephone for advice on filing 

alternatives. 

FOR FURTHER INFORMATION CONTACT: 

David A. Trissell, General Counsel, at 

202–789–6820. 

SUPPLEMENTARY INFORMATION: 

Table of Contents 

I. Introduction 

II. Proposal Two, Order No. 6659, and 

Direction for Further Proceedings 

III. Notice and Comment 

IV. Ordering Paragraphs 

I. Introduction 

On May 26, 2023, the Postal Service 

filed a petition pursuant to 39 CFR 

3050.11 requesting that the Commission 

initiate a rulemaking proceeding to 

consider changes to analytical 

principles relating to periodic reports.1

The Petition identified the proposed 

analytical changes as Proposal Two. In 

Order No. 6659 the Commission 

conditionally approved Proposal Two 

but directed the Postal Service to 

propose further changes to analytical 

principles relating to periodic reports to 

address what the Commission found to 

be outstanding issues with respect to 

cost identification and attribution for 

interagency agreements (IAAs).2

II. Proposal Two, Order No. 6659, and 

Direction for Further Proceedings 

Background. The Postal Service 

Reform Act of 2022 3 modified and 

expanded the Postal Service’s ability to 

enter into IAAs to provide property and 

services to, or on behalf of, other 

government agencies. Specifically, 39 

U.S.C. 3703 for the first time authorizes 

the Postal Service to enter into 

agreements with agencies of any state 

government, local government, or tribal 

government to provide property or 

nonpostal services to the public on 

behalf of such agencies for noncommercial purposes. At the same time, 

with respect to the Postal Service’s preexisting authority under 39 U.S.C. 411 

to provide property and services to 

other Federal agencies, the PSRA 

specifies that ‘‘[t]he Postal Service may 

establish a program to provide property 

and nonpostal services to other 

Government [i.e., federal] agencies 

within the meaning of section 411 4, but 

only if such program provides a net 

contribution to the Postal Service, 

defined as reimbursement that covers at 

least 100 percent of the costs 

attributable . . ..’’ 39 U.S.C. 3704. 

Under the PSRA, the Postal Service 

must submit a report to the Commission 

after the close of each fiscal year that 

‘‘analyzes costs, revenues, rates, and 

quality of service for each agreement or 

substantially similar set of agreements 

for the provision of property or 

nonpostal services under section 3703 

or the program as a whole under section 

3704, . . . using such methodologies as 

the Commission may prescribe, and in 

sufficient detail to demonstrate 

compliance with the requirements of 

[Chapter 37 of Title 39 of the United 

States Code].’’ 39 U.S.C. 3705(a). Upon 

receiving the Postal Service’s report and 

providing an opportunity for public 

comment, the Commission must make a 

written determination of compliance. 39 

U.S.C. 3705(e). 

In the Commission’s FY 2022 Annual 

Compliance Determination,5 the 

Commission directed the Postal Service 

to develop a proposed methodology (or 

methodologies) for calculating and 

attributing costs and revenue to IAAs 

authorized under 39 U.S.C. 3703 and 

3704, and to initiate a rulemaking 

proceeding to establish such 

methodology (or methodologies) in 

accordance with 39 CFR 3050.11 by no 

later than May 31, 2023. Id. at 102. As 

directed, the Postal Service initiated the 

instant proceeding to propose a 

categorical approach to identifying costs 

and revenue for similar types, or 

groupings, of IAAs. Petition, Proposal 

Two at 2–3. 

Order No. 6659 and direction for 

further proceedings. In Order No. 6659 

the Commission conditionally approved 

Proposal Two, but directed the Postal 

Service to propose further changes to 

analytical principles relating to periodic 

reports to address specific issues that 

the Commission found remained 

unaddressed. First, the Commission 

directed the Postal Service to develop a 

proposed change in accepted analytical 

principles to develop a separate line 

item (or line items) in the Cost and 

Revenue Analysis (CRA) and related 

workbooks to enable the attribution of 

costs and related revenue to IAAs. Order 

No. 6659 at 16. Second, for agreements 

with government agencies that involve 

the provision of both postal services and 

property or nonpostal services, the 

Commission directed the Postal Service 

to develop a proposed change in 

analytical principles to separately 

account for the costs and revenue for 

those respective portions. Id. The 

Commission directed the Postal Service 

to file proposals related to these issues 

by September 29, 2023. Id. The 

Commission will then accept comments 

on the Postal Service’s proposals until 

October 16, 2023. Id. at 18. 


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62024 Federal Register / Vol. 88, No. 173 / Friday, September 8, 2023 / Proposed Rules 

1Petition of the United States Postal Service for 

the Initiation of a Proceeding to Consider Proposed 

Changes in Analytical Principles (Proposal Four), 

August 28, 2023 (Petition). Proposal Four is 

attached to the Petition. The Postal Service also 

filed a notice of filing of non-public material 

relating to Proposal Four. Notice of Filing of USPS– 

RM2023–9–NP1 and Application for Nonpublic 

Treatment, August 28, 2023. 

2 Id. (citing Docket No. ACR2022, Library 

Reference USPS–FY22–NP27, December 29, 2022). 

III. Notice and Comment 

Docket No. RM2023–7 will remain 

open for consideration of matters raised 

in Order No. 6659. More information on 

this docket may be accessed via the 

Commission’s website at http://

www.prc.gov. Interested persons may 

submit comments on the Postal 

Service’s proposals no later than 

October 16, 2023. Pursuant to 39 U.S.C. 

505, Manon A. Boudreault shall 

continue to serve as an officer of the 

Commission (Public Representative) to 

represent the interests of the general 

public in this proceeding. 

IV. Ordering Paragraphs 

It is ordered: 

1. For purposes of periodic reporting 

to the Commission, the Commission 

conditionally approves the changes in 

analytical principles proposed by the 

Postal Service in Proposal Two. 

2. Docket No. RM2023–7 will remain 

open for consideration of the matters 

raised in Order No. 6659. 

3. The Postal Service shall file 

information addressing the issues 

identified in the body of this Order by 

September 29, 2023. 

4. Comments by interested persons on 

the Postal Service’s proposals are due 

no later than October 16, 2023. 

5. Pursuant to 39 U.S.C. 505, Manon 

A. Boudreault shall continue to serve as 

an officer of the Commission (Public 

Representative) to represent the 

interests of the general public in this 

docket. 

6. The Secretary shall arrange for 

publication of this order in the Federal 

Register. 

By the Commission. 

Erica A. Barker, 

Secretary. 

[FR Doc. 2023–19363 Filed 9–7–23; 8:45 am] 

BILLING CODE 7710–FW–P 

POSTAL REGULATORY COMMISSION 

39 CFR Part 3050 

[Docket No. RM2023–9; Order No. 6652] 

Periodic Reporting 

AGENCY: Postal Regulatory Commission. 

ACTION: Notice of proposed rulemaking. 

SUMMARY: The Commission is 

acknowledging a recent filing requesting 

the Commission initiate a rulemaking 

proceeding to consider changes to 

analytical principles relating to periodic 

reports (Proposal Four). This document 

informs the public of the filing, invites 

public comment, and takes other 

administrative steps. 

DATES: Comments are due: September 

29, 2023. 

ADDRESSES: Submit comments 

electronically via the Commission’s 

Filing Online system at http://

www.prc.gov. Those who cannot submit 

comments electronically should contact 

the person identified in the FOR FURTHER

INFORMATION CONTACT section by 

telephone for advice on filing 

alternatives. 

FOR FURTHER INFORMATION CONTACT: 

David A. Trissell, General Counsel, at 

202–789–6820. 

SUPPLEMENTARY INFORMATION: 

Table of Contents 

I. Introduction 

II. Proposal Four 

III. Notice and Comment 

IV. Ordering Paragraphs 

I. Introduction 

On August 28, 2023, the Postal 

Service filed a petition pursuant to 39 

CFR 3050.11 requesting that the 

Commission initiate a rulemaking 

proceeding to consider changes to 

analytical principles relating to periodic 

reports.1 The Petition identifies the 

proposed analytical changes filed in this 

docket as Proposal Four. 

II. Proposal Four 

Background. The Priority Mail 

Transportation Cost Model is used in 

financial projections of the expected 

cost coverage for negotiated service 

agreements (NSAs). Petition, Proposal 

Four at 1. The current model was 

introduced in Docket No. R2006–1 and 

is updated annually in the Annual 

Compliance Review (ACR), most 

recently in Docket No. ACR2022.2 The 

Postal Service states that the model 

disaggregates the product-level 

transportation costs by zone and the 

resulting cost per cube and cost per 

pound by zone are applied to a 

customer’s weight and zone profile in 

order to generate forward-looking cost 

projections for Priority Mail included in 

any NSA. Petition, Proposal Four at 1. 

These projections rely on prior fiscal 

year’s costs with inflation factors 

applied to reflect the expected changes 

in costs due to broader economic 

conditions during the first full year of 

the NSA. Id. The Postal Service states 

that, however, these projections do not 

reflect expected changes in costs due to 

Postal Service’s changing operational 

conditions during the first full year of 

the NSA. Id. Thus, the Postal Service 

proposes several changes to the Priority 

Mail Transportation Cost Model in 

Proposal Four to reflect these types of 

changes more accurately in Priority Mail 

transportation costs. 

Proposal. The Postal Service proposes 

several changes to the Priority Mail 

Transportation Cost Model. 

First, the Postal Service proposes a 

correction to the base year model to 

reflect that a portion of zone 6 pieces 

utilized distance-related surface 

transportation during fiscal year (FY) 

2022. Id. at 2. The Postal Service states 

that the current model assumes that 

zone 6 pieces are transported entirely by 

air. Id. The Postal Service states that the 

correction is made by extending the 

existing methodology used for zones 1– 

5 up to zone 6. Id. 

Second, once the correction to the 

base year model has been made, the 

Postal Service proposes the following 

sequence of actions to adjust the 

transportation costs by zone to reflect 

changes in the split between air and 

surface transportation occurring in the 

subsequent year due to Postal Service’s 

network change. Id. 

A. Collect the proportions of priority 

mail on air and surface transportation 

by zone from the Product Tracking and 

Reporting (PTR) system, for both the 

base year and the month most recently 

ended. Id. 

B. Compare the base year’s data with 

the most recent month’s data and 

calculate the change in the percentage of 

Priority Mail transported on air vis-a`-vis 

surface for each zone. Id. at 3. 

1. If the absolute change from the base 

year percentage is less than five 

percentage points for a zone, then no 

adjustment to the base year costs is 

made. Id. 

2. If the absolute change from the base 

year percentage is more than five 

percentage points for a zone, then the 

air and surface costs for that zone are 

adjusted by the following method: 

a. The cube-related costs are divided 

into air-related, distance-related surface, 

and non-distance-related surface. Id. 

The Postal Service states that air-related 

costs include both the air costs and the 

surface costs associated with a 

connection to air. Id. 

b. The weight-related costs are fully 

air-related. Id. 

c. The non-distance-related surface 

costs are excluded from the adjustment 

and remain unchanged. Id. The Postal 

Service states that these are generally 


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