31822 Federal Register / Vol. 66, No. 113 / Tuesday, June 12, 2001 / Rules and Regulations

POSTAL SERVICE

39 CFR Part 551

Semipostal Stamp Program

AGENCY: Postal Service.

ACTION: Final rule.

SUMMARY: This final rule creates

implementation regulations for the

Semipostal Authorization Act, which

authorizes the Postal Service to issue

and sell semipostal postage stamps.

Semipostal stamps are intended to raise

funds for causes determined by the

Postal Service to be in the public

interest and appropriate. The final

regulations relate to the selection

procedures for causes and recipient

executive agencies, the offices and

authorities responsible for making

decisions related to causes and recipient

executive agencies, the criteria to be

applied in evaluating proposals for

causes and recipient executive agencies,

sales limitations, the calculation of

amounts to be transferred to executive

agencies, and the determination of costs

to be offset from differential revenue.

EFFECTIVE DATE: June 12, 2001.

FOR FURTHER INFORMATION CONTACT:

Cindy Tackett, (202) 268–6555.

SUPPLEMENTARY INFORMATION: 

I. Introduction

The Semipostal Authorization Act,

Public Law 106–253, 114 Stat. 634

(2000) (hereinafter ‘‘Act’’), authorizes

the Postal Service to establish a 10-year

program to sell semipostal stamps. The

differential between the price of a

semipostal stamp and the First-Class

Mail service rate, less an offset for the

reasonable costs of the Postal Service,

consists of an amount to fund causes

that the ‘‘Postal Service determines to be

in the national public interest and

appropriate.’’ By law, revenue from

sales (net of postage and the reasonable

costs of the Postal Service) is to be

transferred to selected executive

agencies within the meaning of 5 U.S.C.

105.

The Governors of the Postal Service

are authorized to set prices for

semipostal stamps according to a

formula prescribed in the Act.

Specifically, the Act prescribes that the

price of a semipostal stamp is the ‘‘rate

of postage that would otherwise

regularly apply,’’ plus a differential, that

is, the difference between sales revenue

and postage, not to exceed 25 percent.

This is essentially the same formula

prescribed by the Stamp Out Breast

Cancer Act, Public L. 105–41, 111 Stat.

1119 (1997).

The Act provides that the Postal

Service is to promulgate certain

regulations via a notice and comment

rulemaking. Specifically, the Postal

Service must identify the ‘‘office or

other authority within the Postal

Service’’ to make decisions on the

‘‘appropriate causes and agencies’’

eligible to receive amounts becoming

available from differential revenue less

an offset for the reasonable costs of the

Postal Service. The Postal Service is also

directed to issue regulations on the

‘‘criteria and procedures’’ to be applied

in making decisions on recipient

executive agencies and causes. The Act

further requires the Postal Service to

identify ‘‘what limitations shall apply, if

any, relating to the issuance of

semipostals (such as whether more than

one semipostal may be offered for sale

at the same time).’’ Finally, the Postal

Service’s regulations must ‘‘specifically

address how the costs incurred by the

Postal Service * * * shall be computed,

recovered, and kept to a minimum.’’

II. Comments on the Proposed Rule

On February 15, 2001, the Postal

Service published a notice in the

Federal Register (66 FR 10408)

soliciting comments on a proposed rule

to implement the Act. The Postal

Service also published the notice on its

Internet Web site at www.usps.com. The

Postal Service received 73 comments

responding to the solicitation for

comments, many of which were

received electronically through the

Postal Service’s Web site. The

comments are grouped into similar

themes and are addressed below.

Selection Criteria

Two commenters expressed support

for the following general criteria for the

Semipostal Stamp Program: (a)

Semipostal stamps should benefit only

congressionally authorized programs

within U.S. Government executive

agencies; (b) semipostal stamps should

focus on programs that are characterized

by a significant disparity between

congressional authorizations and

appropriations; (c) semipostal stamps

should also look for programs for which

there is a broad supportive network of

private organizations that is willing and

capable of assisting in local and national

marketing; (d) semipostal stamps should

have broad appeal to the American

public and not be on programs and

issues of narrow interest; and (e) the

selection process should include

estimating the revenue potential of a

stamp through market surveys,

evaluating the retention rates of

commemorative and ‘‘awareness’’

stamps that have been issued on the

same subject, and evaluating the

experience of other countries to

determine the differences between

successful and unsuccessful semipostal

issues.

As a general matter, the Postal Service

agrees that the types of factors

mentioned above may be instructive and

may be among the factors that could be

used in the decision-making process;

however, the Postal Service believes

that those types of factors need not be

formally inscribed in the regulations.

The same commenters also

questioned the requirement in § 551.4

that causes must ‘‘further human

welfare.’’ The commenters stated that

this term should be carefully defined to

include causes or purposes that

contribute to human welfare, such as a

healthy environment or a sustainable

level of biodiversity; alternatively, the

requirement should be eliminated. The

commenters also recommend that the

requirement be removed from the list in

§ 551.4(d).

The Postal Service believes that the

criterion of advancement of human

welfare is quite broad, and can

encompass a wide variety of subjects.

Thus, the Postal Service does not

interpret the requirement that proposals

advance human welfare narrowly. To

the contrary, the Postal Service intends

to interpret this provision quite broadly.

Topics such as a healthy environment or

biodiversity appear on their face to be

linked to the advancement of human

welfare. This should assuage the

commenters’ concern. Consequently, the

Postal Service does not believe a change

in the regulation is necessary.

Cost Recovery

One commenter questioned whether

the Postal Service would be able to

recover its costs, and if not, whether

ratepayers would be subsidizing the

Semipostal Stamp Program. Another

commenter recommended that strict

auditing be used. The Postal Service

believes that the regulations will

provide the Postal Service with an

adequate and effective means of

preventing cross-subsidy. In particular,

the Postal Service will track costs and

revenues associated with the program,

and will use data from comparable

stamp issues to determine the additional

costs attributable to semipostals.

Furthermore, the Postal Service has

reserved the right to withdraw

semipostal stamps if sales or sales

projections are lower than expected. In

addition, the Act requires that the

General Accounting Office prepare

reports on the Semipostal Stamp

Program. These measures provide

Federal Register / Vol. 66, No. 113 / Tuesday, June 12, 2001 / Rules and Regulations 31823

multiple means to protect against the

risks cited by the commenters.

One commenter suggested that there

should be exclusions for off-site

meetings in resort areas and excessive

spending on planning. The Postal

Service is sensitive to these concerns,

and § 551.8(f) incorporates several

measures to minimize costs associated

with the program. The Postal Service

does not foresee deductions for the cost

of off-site meetings, since decisions on

semipostal stamps by the Citizens’

Stamp Advisory Committee (CSAC)

would be combined with that body’s

regular meetings. Thus, the costs of such

meetings would ordinarily not need to

be deducted against differential revenue

under the standard set forth in § 551.8.

Moreover, the Postal Service does not

foresee the need for excessive spending.

Indeed, in the case of the Breast Cancer

Research Stamp, the costs as a

proportion of total revenue transferred

to the Department of Defense and the

National Institutes of Health are very

small, amounting to a small percentage

of the funds transferred to date.

Two commenters expressed support

for the policy to recover from

differential revenue those costs that are

attributable to the semipostal stamp that

are not normally incurred for

comparable commemorative stamps;

however, these commenters oppose the

provision in § 551.8(f)(2) that costs be

minimized through issuance of one

semipostal stamp at a time. To the

extent this requirement prevents the

Postal Service from having to dedicate

additional resources to the Semipostal

Stamp Program, the Postal Service

believes that this provision serves as an

appropriate means of minimizing costs,

as required by the Act.

One commenter recommended that

the cost profile used in § 551.8(c) should

be identified before the sale of each

stamp. The commenter believes that

selection of a cost profile during or after

the sales period could lead to

inconsistencies in the amounts

identified as recoverable costs. While

the Postal Service agrees that it is

generally sensible to decide on a cost

profile before issuance of a stamp based

on expectations of sales, the Postal

Service believes it is reasonable to

preserve discretion to change the cost

profile if expectations of sales do not

match actual experience. In such

situations, it may be reasonable to draw

comparisons between other

commemorative issues exhibiting the

same pattern, that is, where sales

experience differs substantially from

prior expectations. Naturally, such

comparisons cannot be drawn until after

the issuance of the semipostal stamp;

hence, it is reasonable to preserve

discretion to select comparable stamps

after the sales period begins. Thus, the

Postal Service declines to adopt this

suggestion.

One commenter suggested that

advertising costs recoverable from

differential revenue in § 551.8(e)(4) be

clearly defined, so as to result in no

confusion with advertising costs in

§ 551.8(g)(8). The advertising costs

recoverable from differential revenue in

§ 551.8(e)(4) include those costs for

advertising where the semipostal stamp

is the only product featured in the

advertising and for which no additional

expenses are actually incurred. Section

551.8(g)(8) refers to advertising that is

geared toward the image of the Postal

Service as an entity. The Postal Service

believes that this explanation addresses

the commenter’s concern.

One commenter recommended that

§ 551.8(d)(1) should be revised to

include a threshold for costs considered

too ‘‘inconsequentially small.’’ The

Postal Service believes that a maximum

threshold is reasonable. Hence,

§ 551.8(d)(1) is amended so as to define

the term ‘‘inconsequentially small’’ to

include cost items not exceeding $3,000

per invoice.

Voluntary Purchase

Two commenters expressed that

customers should not be required to

purchase semipostal stamps. The Postal

Service agrees that the purchase of

semipostal stamps should be strictly

voluntary, and that postal retail units

should have ample regular First-Class

Mail postage stamps in stock at all

locations where semipostal stamps are

sold, so that no customers will feel

compelled to purchase semipostal

stamps. For emphasis, § 551.2 is

amended to include a passage from 39

U.S.C. 416(c), which clearly states that

the use of semipostal stamps is

voluntary on the part of postal patrons.

Historical Events

One commenter submitting two

comments objected to the exclusion of

historical events in 39 CFR 551.4(d).

The commenter expressed that the

categorical exclusion of historical events

was vague. The commenter further

stated that historic-related national

causes can further the national public

interest and human welfare by

educating the American people about

their collective past. In the commenter’s

view, excluding historical events denies

the opportunity to use semipostal

stamps to fund the preservation of

cultural resources and sites associated

with those events. The Postal Service

agrees that proposals as described by the

commenter could arguably fit within the

statutory criteria. Accordingly, the term

‘‘historical events’’ is removed from the

list of excluded causes in § 551.4(d).

Length of the Semipostal Stamp

Program

One commenter suggested that the

Postal Service operate the Semipostal

Stamp Program for 6 months and then

revisit the merits of the program after

review of actual performance. The

Postal Service notes that it has already

established a track record with

semipostal stamps through issuance of

the Breast Cancer Research Stamp,

which was issued in July 1998 and will

continue to be sold to the public until

July 29, 2002. The Postal Service’s

experience with the Breast Cancer

Research Stamp demonstrates that

semipostal stamps are accepted by the

public and constitute an effective means

of raising funds for selected causes.

Consequently, the Postal Service

declines to adopt the commenter’s

proposal.

Frequency

Two commenters expressed

opposition to the requirement in § 551.5

that semipostal stamps may be offered

for sale for less than 2 years to coincide

with changes in the First-Class Mail

single-piece first-ounce rate. The

commenters stated that this provision

should be eliminated on grounds of

inequity to the beneficiary. The Postal

Service is sensitive to these concerns,

and intends to avoid situations where

sales periods are shortened by

underlying rate changes. This is not to

suggest, however, that rate changes will

never be implemented during the sales

periods of future semipostal stamps.

Past experience with the Breast Cancer

Research Stamp suggests, however, that

such situations should be kept to a

minimum, because changing the

underlying First-Class rate during the

sales period of a semipostal generates

confusion. This is because the postage

value of semipostal stamps is based on

their date of sale, not on their date of

use, and there is no tracking system that

would enable the Postal Service to

measure differential revenue based on

the date of use. Scheduling sales periods

so as to coincide with changes in the

First-Class Mail single-piece rate would

accordingly enhance awareness among

customers of the association of the

underlying rate with the postage value

of semipostal stamps. Thus, the Postal

Service believes that § 551.5 is

reasonable.

31824 Federal Register / Vol. 66, No. 113 / Tuesday, June 12, 2001 / Rules and Regulations

Breast Cancer Research Stamp

Several commenters suggested that

the Postal Service continue to sell the

Breast Cancer Research Stamp,

presumably pursuant to its authority

under 39 U.S.C. 416. Two commenters

objected to the exclusion in § 551.4(d) of

‘‘any cause that has been previously

supported by a semipostal stamp,

including the stamp issued pursuant to

39 U.S.C. 414 [the authorizing statute

for the Breast Cancer Research Stamp.]’’

One commenter states that this

restriction extends beyond the Act.

The Postal Service notes that a

categorical rule limiting the issuance of

semipostals provides a means to

diversify the Semipostal Stamp Program

and ensures that no one cause receives

the benefits of the program to the

exclusion of others. However, the Postal

Service believes that the CSAC could

take account of this concern in selecting

causes and recipient executive agencies.

Therefore, the Postal Service will

remove the limitation in § 551.4(d)

providing that former causes funded by

prior semipostal stamps, including the

semipostal authorized by 39 U.S.C. 414,

are categorically excluded from

consideration.

Date of Commencement

Two commenters recommended that

the Postal Service specify definitively

that the 10-year sales period commences

on August 1, 2002, immediately after

the conclusion of the Breast Cancer

Research Stamp in July 2002. As a

general matter, the Postal Service

intends to begin issuing semipostal

stamps in mid-2002; however, the Postal

Service does not wish to commit itself

to issuing the first semipostal until it

has a better idea of whether any rate

changes are contemplated in that

period, and whether the program would

be better suited to begin after a rate

change, rather than immediately prior to

the date of implementation. Hence, the

Postal Service declines to adopt the

commenters’ suggestion.

Number of Semipostal Stampss

Five commenters suggested that the

Postal Service reconsider § 551.5(b),

which provides that only one

semipostal stamp will be offered for sale

at a time. The commenters suggested

that the Postal Service consider selling

several semipostal stamps

simultaneously. Two commenters

suggested that the standard for

discontinuing sales should be the

standard in § 551.5(d), which

establishes criteria for the

discontinuation of semipostal stamps.

Two other commenters suggested

issuing a new semipostal every year,

with each offered for sale for a 2-year

period.

The Postal Service appreciates these

concerns, but submits that these

interests are outweighed by other

factors. In particular, the Postal Service

believes that issuing more than one

semipostal stamp will increase the

complexity of the program from the

perspective of both the postal retail

employees and customers. This, in turn,

could diminish the overall effectiveness

of the program. Secondly, the Postal

Service has scarce resources to commit

to the Semipostal Stamp Program.

Increasing the number of semipostal

stamps would increase the

administrative burden on the Postal

Service and ultimately burden existing

staff and limited resources. This, in

turn, could require more dedicated

resources to be committed to the task,

and ultimately raises the proportion of

costs to be offset against differential

revenue. Finally, issuing multiple

semipostals at the same time could lead

to competition among semipostal

stamps, and ultimately defeat the

success of certain semipostal causes.

Therefore, the Postal Service declines to

adopt the commenters’ suggestion.

Fixed Percentages for Recipient

Executive Agencies

One commenter suggested that the

proposed rule be amended so that

agencies receive a specified percentage

of the gross receipts from sales. The Act

requires the Postal Service to deduct its

reasonable costs incurred in connection

with the program. Guaranteeing specific

amounts could result in situations in

which the Postal Service subsidizes

amounts transferred to other agencies

through ratepayer revenue. This, in the

Postal Service’s view, does not appear to

be consistent with the spirit of the Act.

Hence, the recommended change is not

adopted.

Interested Persons

One commenter stated that the

relationship between interested persons

and recipient executive agencies in

§ 551.3(a) is unclear. The commenter

notes that ‘‘descriptions of possible

collaborations in the actual request for

proposals could significantly increase

the involvement across federal agencies

and partnering organizations.’’ Section

551.4 provides that interested persons

include, but are not limited to,

‘‘individuals, corporations, associations,

and executive agencies under 5 U.S.C.

105.’’ The same meaning naturally

extends to the term ‘‘interested persons’’

as that term is used in § 551.3.

Furthermore, the regulations contain no

limitation against collaboration. Thus,

the Postal Service believes that this

explanation clarifies the rule.

CSAC

One commenter observed that there is

no description of the CSAC in § 551.3,

and suggested that a description of the

composition and function of that body

would be helpful. Information about the

CSAC is available on the Postal

Service’s Web site, www.usps.com, and

regulations pertaining to the CSAC are

published in § 644.5 of the

Administrative Support Manual. To

avoid unnecessary duplication, the

Postal Service believes that the

regulations describing the CSAC should

not be printed in the rule pertaining to

semipostal stamps; however, the Postal

Service has amended § 551.3 to include

a reference to the regulations describing

the CSAC. The Postal Service further

notes that a description of the CSAC

was included in footnote 1 of the

supplementary information section of

the proposed rule.

Two commenters stated that the

CSAC is not the appropriate body to

make recommendations on causes and

recipient executive agencies to the

postmaster general. The commenters

instead recommended that the

responsibility be assigned to a separate

body consisting of fundraising and

marketing experts. As an alternative, the

commenters suggested that two

additional appointments be made to the

CSAC to represent fundraising

expertise.

The Postal Service submits that the

CSAC is well equipped to assume

responsibility for the recommendation

of causes and recipient executive

agencies. CSAC membership represents

a diverse and broad spectrum of

American society, and CSAC members

can be entrusted to use their judgment,

experience, and talents to achieve the

statutory objectives of the Act. The

CSAC has had ample experience in

selecting themes for commemorative

stamps, many of which have been aimed

at raising public awareness of important

national interests. Thus, the CSAC

already assumes related responsibilities

through the selection of designs for

commemorative stamps, and the Postal

Service is confident that CSAC members

can apply the same talents in the

context of semipostal decision-making.

Furthermore, establishing a separate

panel of experts in marketing and

fundraising would add substantially to

the costs of administering the program,

and would ultimately reduce the funds

available for causes. A new committee

would entail substantial planning and

coordination and involve travel and

Federal Register / Vol. 66, No. 113 / Tuesday, June 12, 2001 / Rules and Regulations 31825

related expenses, which also would

consume additional Postal Service

administrative staff and resources. The

Postal Service also declines to adopt the

suggestion to increase the size of the

CSAC. The addition of two persons

would add to the expenses to be

deducted from differential revenue.

Moreover, existing CSAC members

should be well equipped to make

judgments on the feasibility of

proposals, particularly given that

interested persons submitting proposals

are encouraged to provide supporting

information demonstrating that the

proposal would benefit the public

interest.

CSAC Recommendations

Two commenters stated that the

CSAC should be required to recommend

more than one cause to the postmaster

general § 551.3(d). The Postal Service

does not believe that such a requirement

is necessary or appropriate. The CSAC

can make recommendations and

prioritize them as it determines in its

discretion. A rule requiring a specific

number of recommendations could

result in a situation where the CSAC is

forced to make a recommendation

notwithstanding its belief that none of

the eligible proposals meet the statutory

objectives. The Postal Service submits

that this result is not intended by the

Act, which confers discretionary

authority, and not a compulsory

obligation, on the Postal Service to issue

semipostal stamps.

Two commenters suggested that the

recommendation of causes and designs

be handled as two separate actions, in

order to facilitate consultations with the

proposal beneficiary on the design to be

developed. The Postal Service declines

to adopt this proposal as part of its

regulations. Such a requirement could

contribute to delay. The CSAC meets

four times per year, and in some cases

consultations could cause delays in

production and distribution schedules.

Moreover, the Postal Service does not

wish to commit itself or the CSAC to

engaging in consultations with proposal

submitters on stamp designs.

Pricing

Two commenters stated that § 551.6

should specify that the differential is

not to exceed 25 percent of the

underlying rate of postage. The Postal

Service agrees that this change comports

with the statutory language, and has

made corresponding changes to § 551.6.

III. Comments Outside the Scope of the

Rulemaking

A number of commenters also

addressed issues beyond the scope of

the proposed rule. These are

summarized below.

Nine commenters expressed favorable

views about semipostal stamps

generally. The Postal Service

appreciates these views and encourages

interested persons to consider

responding to future requests for

proposals.

Twenty-one commenters expressed

that the Postal Service should not offer

semipostal stamps. Those opposed to

semipostal stamps cited a number of

concerns. Some commenters suggested

that it would be inappropriate for the

Postal Service to select causes, since, in

their view, it would show favoritism of

certain causes or groups over others.

Some commenters expressed concern

that the Postal Service would have to

defend decisions on semipostals. Some

commenters were also concerned that

controversial causes would be featured

on semipostal stamps, and this would

lead to litigation and public

disapproval. Some commenters

suggested that Congress should make

decisions on causes. Other commenters

suggested that the Postal Service should

instead focus on other priorities, such as

improving mail delivery service. Some

commenters were concerned about the

cost of the program. One commenter

noted that semipostal stamps are unfair

to stamp collectors.

The Postal Service is aware of the

sentiments expressed in the comments,

but notes that the regulations are based

on legislation that Congress enacted,

and thus comments disfavoring the

concept of semipostal stamps are not

within the scope of the rulemaking. The

Postal Service further notes, however,

that the regulations are intended to

promote sound decision-making with

regard to the selection of causes and

recipient executive agencies, which

should provide ample protection against

many of the concerns raised by the

commenters.

One commenter suggested that

semipostal stamps raise funds that go

towards political parties. Another

commenter raised a related issue by

suggesting that funds be transferred to

‘‘legitimate 501(c)(3) organizations.’’

These proposals are not consistent with

the Act, since the Act requires that

funds must be transmitted to executive

agencies, as defined by 5 U.S.C. 105.

Political parties and tax-exempt

501(c)(3) nonprofit organizations are not

executive agencies under 5 U.S.C. 105;

hence they are not eligible to receive

funds directly through the Semipostal

Stamp Program.

One commenter recommended that

vending packet machines include a brief

explanation of the semipostal nature of

the stamps. The Postal Service already

has implemented, and will continue to

implement, measures to promote

awareness of the postage value of

semipostal stamps. Currently, the Postal

Service promotes awareness of the

postage value of stamps by printing a

notice on the selvage of semipostal

sheets that clearly states that each stamp

is valid for postage. The Postal Service

will continue these means of raising

awareness of the dual purpose of

semipostal stamps.

Several commenters suggested ideas

for semipostal stamps, including the

following:

• One commenter suggested a

NASCAR semipostal stamp to honor the

drivers who have passed away.

• Two commenters suggested a

semipostal stamp for hunger.

• One commenter suggested a gay

women’s Irish Catholic/German

American Voting Rights fund.

• One commenter suggested a

prostate research stamp.

• One commenter suggested an

Alzheimer’s disease semipostal stamp.

• Two commenters suggested a Dale

Earnhardt commemorative stamp to

benefit the Carolinas Foundation.

• Five commenters suggested a

semipostal stamp to fund a companion

animal spay-neuter initiative.

• One commenter suggested a generic

childhood cancer semipostal stamp.

The Postal Service appreciates the

public’s interest in ideas for future

semipostal stamps, but notes that these

comments are premature at this time, as

the proposed rule merely sought

suggestions on, inter alia, the

procedures for selection of causes and

agencies for future semipostals. The

selection process for a new semipostal

stamp will be announced in a separate

notice published in the Federal

Register, at which time interested

persons may submit proposals for new

semipostals in accordance with 39 CFR

Part 551. The Postal Service will

welcome conforming proposals on

causes at that time.

A number of commenters also raised

miscellaneous issues unrelated to

semipostal stamps. One commenter

raised questions with regard to stamps

featuring the image of Martin Luther

King, Jr. Another commenter asked for

information on the requirements for

designing stamps. One commenter

asked about mailing self-stamped

envelopes to Ontario. One commenter

asked for a hardcopy of the proposed

regulations. Three commenters

expressed opposition to stamps

featuring designs honoring trappers and

trapping. One commenter suggested that

the First-Class Mail rate be changed in

31826 Federal Register / Vol. 66, No. 113 / Tuesday, June 12, 2001 / Rules and Regulations

greater than 1-cent increments. One

commenter suggested printing stamps

featuring the faces of missing children.

One commenter suggested that the

Postal Service suspend Saturday

delivery in lieu of raising postage rates.

One commenter requested information

on purchasing stamps through the

Postal Service’s Web site. One

commenter raised concerns about the

privacy of her correspondence. One

commenter raised concerns about postal

rates and operating efficiency. One

commenter expressed concern about

delivery of mail to households. One

commenter sent a published article

related to the variable pay program for

postal management.

The Postal Service values public

comment on its affairs and appreciates

receiving information from those doing

business with the Postal Service, but

notes that these comments are beyond

the scope of the rulemaking.

IV. Conclusion

In accordance with 39 U.S.C. 416, the

Postal Service hereby adopts the

following amendments to the Code of

Federal Regulations.

List of Subjects in 39 CFR Part 551

Administrative practice and

procedure, Postal Service.

For the reasons set out in this

document, the Postal Service amends 39

CFR chapter I by revising the heading

for subchapter G and adding part 551 to

subchapter G to read as follows:

Subchapter G—Postage Programs

PART 551—SEMIPOSTAL STAMP

PROGRAM

Sec.

551.1 Semipostal Stamp Program.

551.2 Semipostal stamps.

551.3 Procedure for selection of causes and

recipient executive agencies.

551.4 Submission requirements and

selection criteria.

551.5 Frequency and other limitations.

551.6 Pricing.

551.7 Calculation of funds for recipient

executive agencies.

551.8 Cost offset policy.

Authority: 39 U.S.C. 101, 201, 203, 401,

403, 404, 410, 414, and 416.

§ 551.1 Semipostal Stamp Program.

The Semipostal Stamp Program is

established under the Semipostal

Authorization Act, Public Law No. 106–

253, 114 Stat. 634 (2000). The office of

Stamp Services has primary

responsibility for administering the

Semipostal Stamp Program. The office

of the vice president, Finance,

Controller, has primary responsibility

for financial aspects of the Semipostal

Stamp Program.

§ 551.2 Semipostal stamps.

Semipostal stamps are stamps that are

sold for a price that exceeds the postage

value of the stamp. The difference

between the price and postage value of

semipostal stamps, also known as the

differential, less an offset for reasonable

costs, as determined by the Postal

Service, consists of a contribution to

fund causes determined by the Postal

Service to be in the national public

interest and appropriate. Funds are to be

transferred to selected recipient

executive agencies, as defined under 5

U.S.C. 105. The office of Stamp Services

determines the print quantities of

semipostal stamps. The use of

semipostal stamps shall be voluntary on

the part of postal patrons.

§ 551.3 Procedure for selection of causes

and recipient executive agencies.

The Postal Service is authorized to

select causes and recipient executive

agencies to receive funds raised through

the sale of semipostal stamps. The

procedure for selection of causes and

recipient executive agencies is as

follows:

(a) In advance of the issuance of a

semipostal stamp, the office of Stamp

Services will publish a request for

proposals in the Federal Register

inviting interested persons to submit

proposals for a cause and recipient

executive agencies for a future

semipostal stamp. The notice will

specify the beginning and ending dates

of the period during which proposals

may be submitted. The notice will also

specify the approximate period in

which the semipostal stamp for which

proposals are solicited is to be sold. The

office of Stamp Services may publicize

the request for proposals through other

means, as it determines in its discretion.

(b) Proposals will be received by the

office of Stamp Services, which will

review each proposal under § 551.4.

(c) Those proposals that the office of

Stamp Services determines satisfy the

requirements of § 551.4 will be

forwarded for consideration by the

Citizens’ Stamp Advisory Committee,

which is described in Administrative

Support Manual (ASM) section 644.5.

For availability of ASM 644.5, contact

the Office of Stamp Services (202) 268–

2319.

(d) The Citizens’ Stamp Advisory

Committee will review eligible

proposals forwarded by the office of

Stamp Services. Based on the proposals

submitted, the Citizens’ Stamp Advisory

Committee will make recommendations

on a cause and eligible recipient

executive agency(ies) to the postmaster

general. If no eligible proposals are

recommended, the Postal Service will

solicit additional proposals through

publication of a notice in the Federal

Register and through other means as it

determines in its discretion.

(e) Meetings of the Citizens’ Stamp

Advisory Committee are closed, and

deliberations of the Citizens’ Stamp

Advisory Committee are predecisional

in nature.

(f) The postmaster general will act on

the recommendations of the Citizens’

Stamp Advisory Committee. The

decision of the postmaster general shall

consist of the final agency decision.

(g) The office of Stamp Services will

notify the executive agency(ies) in

writing of a decision designating the

agency(ies) as recipients of funds from

a semipostal stamp.

(h)(1) A proposal submission may

designate one or two recipient executive

agencies to receive funds, but if more

than one executive agency is proposed,

the proposal must specify the

percentage shares of differential

revenue, net of the Postal Service’s

reasonable costs, to be given to each

agency. If percentage shares are not

specified, it is presumed that the

proposal intends that the funds be split

evenly between the agencies. If more

than two recipient executive agencies

are proposed to receive funds and the

proposal is selected, the proposal is

treated as prescribed by paragraph (h)(3)

of this section.

(2) If more than one proposal is

submitted for the same cause, and the

proposals would have different

executive agencies receiving funds, the

funds would be evenly divided among

the executive agencies, with no more

than two agencies being designated to

receive funds, as determined by the vice

president and consumer advocate.

(3) Within 10 days of receipt of a

notice indicating that it has been

selected to receive funds, a selected

agency could request a proportionately

larger share if it can demonstrate that its

share of total funding of the cause from

other sources (excluding any additional

funds available as a result of the

semipostal stamp) exceeds that of the

other recipient executive agency. The

request must be in writing and must be

sent to the manager of Stamp Services.

In those cases, the determination

regarding the proportional share to be

divided among the recipient executive

agencies is made by the Postal Service’s

vice president and consumer advocate.

(i) As either a separate matter, or in

combination with recommendations on

a cause and a recipient executive

agency(ies), the Citizens’ Stamp

Federal Register / Vol. 66, No. 113 / Tuesday, June 12, 2001 / Rules and Regulations 31827

Advisory Committee will recommend to

the postmaster general a design (i.e.,

artwork) for the semipostal stamp. The

postmaster general will make a final

determination on the design to be

featured.

§ 551.4 Submission requirements and

selection criteria.

(a) Proposals on recipient executive

agencies and causes must satisfy the

following requirements:

(1) Interested persons must timely

submit an original and 20 copies of the

proposal. For purposes of this section,

interested persons include, but are not

limited to, individuals, corporations,

associations, and executive agencies

under 5 U.S.C. 105. Interested persons

submitting proposals are also

encouraged to submit an Adobe Acrobat

(.pdf) file saved on a 3.5 inch diskette

or CD–ROM diskette containing the

entire contents of the submission. In

extraordinary circumstances, the office

of Stamp Services may, in its discretion,

consider a late-filed proposal.

(2) The proposal submission must be

signed by the individual or a duly

authorized representative and must

provide the mailing address, phone

number, fax number (if available), and

E-mail address (if available) of a

designated point of contact.

(3) The submission must describe the

cause and the purposes for which the

funds would be spent.

(4) The submission must demonstrate

that the cause to be funded has broad

national appeal, and that the cause is in

the national public interest and furthers

human welfare. Respondents are

encouraged to submit supporting

documentation demonstrating that

funding the cause would benefit the

national public interest.

(5) The submission must be

accompanied by a letter from an

executive agency or agencies on agency

letterhead representing that:

(i) it is an executive agency as defined

under 5 U.S.C. 105,

(ii) it is willing and able to implement

the proposal, and

(iii) it is willing and able to meet the

requirements of the Semipostal

Authorization Act, if it is selected. The

letter must be signed by a duly

authorized representative of the agency.

(b) Proposal submissions become the

property of the Postal Service and are

not returned to interested persons who

submit them. Interested persons who

submit proposals are not entitled to any

remuneration, compensation, or any

other form of payment, whether their

proposal submissions are selected or

not, for any reason.

(c) The following persons are

disqualified from submitting proposals:

(1) Any contractor of the Postal

Service that may stand to benefit

financially from the Semipostal Stamp

Program; or

(2) Members of the Citizens’ Stamp

Advisory Committee and their

immediate families, and employees or

contractors of the Postal Service, and

their immediate families, who are

involved in any decision-making related

to causes, recipient agencies, or artwork

for the Semipostal Stamp Program.

(d) Consideration for evaluation will

not be given to proposals that request

support for the following:

Anniversaries; public works; people;

specific organizations or associations;

commercial enterprises or products;

cities, towns, municipalities, counties,

or secondary schools; hospitals,

libraries, or similar institutions;

religious institutions; causes that do not

further human welfare; or causes

determined by the Postal Service or the

Citizens’ Stamp Advisory Committee to

be inconsistent with the spirit, intent, or

history of the Semipostal Authorization

Act.

(e) Artwork and stamp designs should

not be submitted with proposals.

§ 551.5 Frequency and other limitations.

(a) The Postal Service is authorized to

issue semipostal stamps for a 10-year

period beginning on the date on which

semipostal stamps are first sold to the

public under 39 U.S.C. 416. The 10-year

period will commence after the sales

period of the Breast Cancer Research

Stamp is concluded in accordance with

the Stamp Out Breast Cancer Act, as

amended by the Semipostal

Authorization Act. The office of Stamp

Services will determine the date of

commencement of the 10-year period.

(b) The Postal Service will offer only

one semipostal stamp for sale at any

given time during the 10-year period.

(c) The sales period for any given

semipostal stamp is limited to no more

than 2 years, as determined by the office

of Stamp Services.

(d) Prior to or after the issuance of a

given semipostal stamp, the Postal

Service reserves the right to withdraw

the semipostal stamp from sale, or to

reduce the sales period, if, inter alia:

(1) Its sales or revenue statistics are

lower than expected,

(2) The sales or revenue projections

are lower than previously expected, or

(3) The cause or recipient executive

agency does not further, or comply with,

the statutory purposes or requirements

of the Semipostal Authorization Act.

The decision to withdraw a semipostal

stamp is to be made by the postmaster

general, after review of supporting

documentation prepared by the office of

Stamp Services.

§ 551.6 Pricing.

(a) The Semipostal Authorization Act

prescribes that the price of a semipostal

stamp is the ‘‘rate of postage that would

otherwise regularly apply, plus a

differential not to exceed 25 percent.’’

For purposes of this provision, the FirstClass Mail’’ single-piece first-ounce rate

of postage will be considered ‘‘the rate

of postage that would otherwise

regularly apply.’’

(b) The prices of semipostal stamps

are determined by the Governors of the

United States Postal Service in

accordance with the requirements of 39

U.S.C. 416.

§ 551.7 Calculation of funds for recipient

executive agencies.

(a) The Postal Service is to determine

its reasonable costs in executing its

responsibilities pursuant to the

Semipostal Authorization Act, as

specified in § 551.8. These costs are

offset against the revenue received

through sale of each semipostal stamp

in excess of the First-Class Mail singlepiece first-ounce rate in effect at the

time of purchase.

(b) Any reasonable costs offset by the

Postal Service shall be retained by it,

along with revenue from the sale of the

semipostal stamps, as recorded by sales

units through the use of a specially

designated account.

(c) The Postal Service is to pay

designated recipient executive

agency(ies) the remainder of the

differential revenue less an amount to

recover the reasonable costs of the

Postal Service, as determined under

§ 551.8.

(d) The amounts for recipient

executive agencies are transferred in a

manner and frequency determined by

mutual agreement, consistent with the

requirements of 39 U.S.C. 416.

§ 551.8 Cost offset policy.

(a) Postal Service policy is to recover

from the differential revenue for each

semipostal stamp those costs that are

determined to be attributable to the

semipostal stamp and that would not

normally be incurred for

commemorative stamps having similar

sales; physical characteristics; and

marketing, promotional, and public

relations activities (hereinafter

‘‘comparable stamps’’).

(b) Overall responsibility for tracking

costs associated with semipostal stamps

will rest with the office of the vice

president, Finance, Controller.

Individual organizational units

31828 Federal Register / Vol. 66, No. 113 / Tuesday, June 12, 2001 / Rules and Regulations

incurring costs will provide supporting

documentation to the office of the vice

president, Finance, Controller.

(c) For each semipostal stamp, the

office of the vice president, Finance,

Controller, shall, based on judgment and

available information, identify the

comparable commemorative stamp(s)

and create a profile of the typical cost

characteristics of the comparable

stamp(s) (e.g., manufacturing process,

gum type), thereby establishing a

baseline for cost comparison purposes.

The determination of comparable

commemorative stamps may change

during or after the sales period, if the

projections of stamp sales differ from

actual experience.

(d) Except as specified, all costs

associated with semipostal stamps will

be tracked by the office of the vice

president, Finance, Controller. Costs

that will not be tracked include:

(1) Costs that the Postal Service

determines to be inconsequentially

small, which include those cost items

not exceeding $3,000 per invoice;

(2) Costs for which the cost of tracking

would be burdensome (e.g., costs for

which the cost of tracking exceeds the

cost to be tracked);

(3) Costs attributable to mail to which

semipostal stamps are affixed (which

are attributable to the appropriate class

and/or subclass of mail); and

(4) Administrative and support costs

that the Postal Service would have

incurred whether or not the Semipostal

Stamp Program had been established.

(e) Cost items recoverable from the

differential revenue may include, but

are not limited to, the following:

(1) Packaging costs in excess of the

cost to package comparable stamps;

(2) Printing costs of flyers and special

receipts;

(3) Costs of changes to equipment;

(4) Costs of developing and executing

marketing and promotional plans in

excess of the cost for comparable

stamps; and

(5) Other costs specific to the

semipostal stamp that would not

normally have been incurred for

comparable stamps.

(f) The Semipostal Stamp Program

incorporates the following provisions

that are intended to maximize

differential revenues available to the

selected causes. These include, but are

not limited to, the following:

(1) Avoiding, to the extent practicable,

promotional costs that exceed those of

comparable stamps;

(2) Establishing restrictions on the

number of concurrently issued

semipostal stamps; and

(3) Making financial and retail system

changes in conjunction with regularly

scheduled revisions.

(g) Other costs attributable to

semipostals but which would normally

be incurred for comparable stamps

would be recovered through the postage

component of the semipostal stamp

price. These include, but are not limited

to, the following:

(1) Costs of stamp design (including

market research);

(2) Costs of stamp production and

printing;

(3) Costs of stamp shipping and

distribution;

(4) Estimated training costs for field

staff, except for special training

associated with semipostal stamps;

(5) Costs of stamp sales (including

employee salaries and benefits);

(6) Costs associated with the

withdrawal of the stamp issue from sale;

(7) Costs associated with the

destruction of unsold stamps; and

(8) Costs associated with the

incorporation of semipostal stamp

images into advertising for the Postal

Service as an entity.

Stanley F. Mires,

Chief Counsel, Legislative.

[FR Doc. 01–14748 Filed 6–11–01; 8:45 am]

BILLING CODE 7710–12–U