Federal Register / Vol. 70, No. 214 / Monday, November 7, 2005 / Proposed Rules 67399 

published elsewhere in this issue of the 

Federal Register.] 

PART 25—GIFT TAX; GIFTS MADE 

AFTER DECEMBER 31, 1954 

Par. 11. The authority citation for part 

25 continues to read, in part, as follows: 

Authority: 26 U.S.C. 7805 * * * 

Par. 12. Section 25.6081–1 is added to 

read as follows: 

§ 25.6081–1 Automatic extension of time 

for filing gift tax returns. 

[The text of proposed § 25.6081–1 is 

the same as the text of § 25.6081–1T 

published elsewhere in this issue of the 

Federal Register.] 

PART 26—GENERATION-SKIPPING 

TRANSFER TAX REGULATIONS 

UNDER THE TAX REFORM ACT OF 

1986 

Par. 13. The authority citation for part 

26 continues to read, in part, as follows: 

Authority: 26 U.S.C. 7805 * * * 

Par. 14. Section 26.6081–1 is added to 

read as follows: 

§ 26.6081–1 Automatic extension of time 

for filing generation-skipping transfer tax 

returns. 

[The text of proposed § 26.6081–1 is 

the same as the text of § 26.6081–1T 

published elsewhere in this issue of the 

Federal Register.] 

PART 53—FOUNDATION AND SIMILAR 

EXCISE TAXES 

Par. 15. The authority citation for part 

53 continues to read, in part, as follows: 

Authority: 26 U.S.C. 7805 * * * 

Par. 16. Section 53.6081–1 is added to 

read as follows: 

§ 53.6081–1 Automatic extension of time 

for filing the return to report taxes due 

under section 4951 for self-dealing with a 

nuclear decommissioning fund. 

[The text of proposed § 53.6081–1 is 

the same as the text of § 53.6081–1T 

published elsewhere in this issue of the 

Federal Register.] 

PART 55—EXCISE TAX ON REAL 

INVESTMENT TRUSTS AND 

REGULATED INVESTMENT 

COMPANIES 

Par. 17. The authority citation for part 

55 continues to read, in part, as follows: 

Authority: 26 U.S.C. 6001, 6011, 6071, 

6091, and 7805 * * * 

Par. 18. Section 55.6081–1 is added to 

read as follows: 

§ 55.6081–1 Automatic extension of time 

for filing a return due under Chapter 44. 

[The text of proposed § 55.6081–1 is 

the same as the text of § 55.6081–1T 

published elsewhere in this issue of the 

Federal Register.] 

PART 156—EXCISE TAX ON 

GREENMAIL 

Par. 19. The authority citation for part 

156 continues to read, in part, as 

follows: 

Authority: 26 U.S.C. 6001, 6011, 6061, 

6071, 6091, 6161, and 7805 * * * 

Par. 20. Section 156.6081–1 is added 

to read as follows: 

§ 156.6081–1 Automatic extension of time 

for filing a return due under Chapter 54. 

[The text of proposed § 156.6081–1 is 

the same as the text of § 156.6081–1T 

published elsewhere in this issue of the 

Federal Register.] 

PART 157—EXCISE TAX ON 

STRUCTURED SETTLEMENT 

FACTORING TRANSACTIONS 

Par. 21. The authority citation for part 

157 continues to read, in part, as 

follows: 

Authority: 26 U.S.C. 7805 * * * 

Par. 22. Section 157.6081–1 is added 

to read as follows: 

§ 157.6081–1 Automatic extension of time 

for filing a return due under Chapter 55. 

[The text of proposed § 157.6081–1 is 

the same as the text of § 157.6081–1T 

published elsewhere in this issue of the 

Federal Register.] 

PART 301—PROCEDURE AND 

ADMINISTRATION 

Par. 23. The authority citation for part 

301 continues to read, in part, as 

follows: 

Authority: 26 U.S.C. 7805 * * * 

Par. 24. Section 301.6081–2 is added 

to read as follows: 

§ 301.6081–2 Automatic extension of time 

for filing an information return with respect 

to certain foreign trusts. 

[The text of proposed § 301.6081–2 is 

the same as the text of § 301.6081–2T 

published elsewhere in this issue of the 

Federal Register.] 

Mark E. Matthews, 

Deputy Commissioner for Services and 

Enforcement. 

[FR Doc. 05–21982 Filed 11–4–05; 8:45 am] 

BILLING CODE 4830–01–P 

POSTAL SERVICE 

39 CFR Part 111 

Proposal To Require the Electronic 

Verification System (e-VS) for 

Destination Entry Parcel Shipments 

AGENCY: United States Postal Service. 

ACTION: Proposed rule. 

SUMMARY: The Postal Service is 

proposing to require the use of the 

Electronic Verification System (e-VS) 

which is an electronic manifest system, 

for postage manifesting and payment of 

all Parcel Select mailings. This includes 

all Standard Mail machinable parcels or 

other Package Services Parcels (Bound 

Printed Matter, Library Mail, or Media 

Mail) authorized for commingling with 

Parcel Select Mailings. This requirement 

would contribute to reduced costs and 

greater efficiencies. The Postal Service 

is also exploring expanding the program 

to all parcel mailings in the future. The 

proposed rule is being published with 

an intended implementation date of no 

sooner than 1 year from the date of 

publication of the Federal Register final 

rule. The proposed rule would apply as 

follows: 

• Parcel shippers/consolidators and 

mailers claiming Parcel Select rates 

would be required to use e-VS for 

postage manifesting and payment. 

• Parcel shippers/consolidators and 

mailers who commingle Standard Mail 

machinable parcels or other Package 

Services parcels with Parcel Select as 

authorized by Mailing Standards of the 

United States Postal Service, Domestic 

Mail Manual (DMM), 705.6.0 and 

705.7.0, would be required to use e-VS 

for postage manifesting and payment. 

DATES: Comments must be received on 

or before December 7, 2005. 

ADDRESSES: Mail or deliver comments to 

the Manager, Business Mailer Support, 

U.S. Postal Service, 475 L’Enfant Plaza, 

SW., Room 2P846, Washington, DC 

20260–0846. Copies of all written 

comments will be available for 

inspection and photocopying between 9 

a.m. and 4 p.m., Monday through 

Friday, at the Postal Service 

Headquarters Library, 475 L’Enfant 

Plaza, SW., 11th Floor North, 

Washington, DC. 

FOR FURTHER INFORMATION CONTACT: John 

Gullo via e-mail at 

john.f.gullo@usps.gov, by phone at (202) 

268–8057 or by writing to e-VS Program 

Manager, Business Mailer Support, 475 

L’Enfant Plaza, SW., Room 2P846, 

Washington, DC 20260–0846. 

Additionally, the following technical 

guides should be reviewed for detailed 

program information: 

67400 Federal Register / Vol. 70, No. 214 / Monday, November 7, 2005 / Proposed Rules 

• The October 2005 draft of 

Publication 205, Electronic Verification 

System Technical Guide (Contact John 

Gullo for a copy.) 

• Publication 91, Confirmation 

Services Technical Guide, which is 

available at http://www.usps.com/cpim/ 

ftp/pubs/pub91/welcome.htm. 

SUPPLEMENTARY INFORMATION: 

Background 

The Postal ServiceTM is moving 

towards a seamless acceptance process 

to promote customer convenience and 

flexibility in the mail induction and 

payment process. The current 

procedures for acceptance and 

verification of parcel mailings are paperdriven and often challenging. Largevolume parcel shippers are tied to the 

schedule of Postal Service verification 

clerks who visit their facilities to verify 

and accept their mail. For destinationentry parcel shippers this poses a 

greater challenge as they must prepare 

paper documentation for each 

scheduled induction event at the time of 

acceptance and verification. This paper 

documentation serves as proof of 

payment and must travel with the parcel 

shipments to each induction location. 

After mail is verified by Postal Service 

clerks, it often flows through 

consolidators and transporters who 

occasionally alter the presentation from 

what was originally presented to the 

Postal Service clerks on PS Form 8125, 

Plant-Verified Drop Shipment (PVDS) 

Verification and Clearance, at 

verification. The challenge to accurately 

project mail profiles for each induction 

event at the time of acceptance is most 

evident when parcels are commingled, 

for example by consolidators and 

transporters, making it even more 

difficult to update the original certified 

paper documentation (PS Form 8125) 

created at the time of acceptance. It is 

also challenging for Postal Service 

clerks at induction facilities to reconcile 

the paper documentation against the 

physical mail. Clearly there is a need to 

provide a more flexible and convenient 

mechanism for mailers to provide and 

update documentation, induct mail, and 

for the Postal Service to verify parcel 

mailings. 

In a move to simplify and improve the 

acceptance, verification, and induction 

process the Postal Service has worked 

with the mailing industry to develop a 

new model for acceptance, verification, 

and induction of package mailings. 

Under this model, commonly referred to 

as the Electronic Verification System 

(e-VS), mailers barcode all packages and 

submit an electronic manifest to the 

Postal Service. This manifest lists all 

barcoded packages and includes 

pertinent information such as weight, 

destination, and induction facility to 

support postage and fee information. 

Mail is no longer verified at mailers’

plants and mailers are no longer 

required to create paper documentation 

(PS Form 8125) describing induction 

activities. Mailers simply present the 

mail at the desired facilities. The Postal 

Service draws statistical samples of the 

mailings at the appropriate plants and 

delivery units, and compares these 

against the electronic manifest 

submitted to verify the accuracy of the 

mailing. Electronic reports provide 

information on the discrepancies noted 

which facilitate an automated 

reconciliation process. 

E-VS offers significant benefits to both 

the mailers and the Postal Service. 

Mailers no longer have to wait for Postal 

Service verification clerks to verify their 

mail. Each package is barcoded, 

providing greater specificity in 

accounting and postage. Electronic 

manifests eliminate the need for paper 

documentation, greatly improve the 

efficiency of operations and reporting, 

and provide greater flexibility for 

updating information. In today’s 

environment where mailers engage in 

dynamic scheduling, electronic 

manifests enable them to update 

information as change occurs. Mailers 

can pay the Postal Service closer to the 

time of mailing as electronic manifests 

can be received right before the mail is 

inducted. E-VS also facilitates 

convenient payment capabilities as 

payment is debited electronically upon 

receipt of the documentation. The e-VS 

electronic infrastructure provides a 

wealth of online reports for the mailers 

to attain up-to-date mailing and 

transaction information. E-VS is 

accessible 24 hours a day, 7 days a 

week, which facilitates convenient 

information sharing between the Postal 

Service and mailers. E-VS eliminates the 

need for mailers to provide paper 

documentation and postage statements, 

thereby contributing to reduced costs 

and greater efficiencies. 

Given the significant benefits that 

e-VS offers, the Postal Service is 

announcing plans to mandate its use for 

postage manifesting and payment of all 

Parcel Select mailings. This includes all 

Standard Mail machinable parcels or 

other Package Services parcels (Bound 

Printed Matter, Library Mail, or Media 

Mail) authorized for commingling with 

Parcel Select mailings. The Postal 

Service is also exploring expanding the 

program to all parcel mailings in the 

future. 

Participation in e-VS has two 

fundamental requirements. The first is 

the ability to create and transmit an 

electronic manifest to the Postal Service. 

This information replaces today’s 

hardcopy manifest, postage statement, 

and PS Form 8125. The second 

requirement is the application of a 

unique barcode on each parcel. 

Standardized e-VS barcode formats 

include the Confirmation Services 

barcodes (i.e., Delivery ConfirmationTM

and Signature ConfirmationTM) and the 

Package Services enroute barcode as an 

alternative for parcels not containing 

Confirmation Services. 

The Postal Service will mandate 

implementation no sooner than 1 year 

from the date of a published final rule 

to allow mailers time to comply with 

the requirements for e-VS. The 

requirements and specifications for e-VS 

are outlined in the October 2005 draft of 

Publication 205, Electronic Verification 

System Technical Guide, and are 

available by contacting John Gullo via 

e-mail at john.f.gullo@usps.gov. 

E-VS represents a significant 

milestone in strengthening the 

partnership between the Postal Service 

and the mailing community by offering 

a convenient and flexible solution for 

parcel shippers. 

Requirements for e-VS Participants 

The following requirements are 

mandatory for e-VS participants: 

• Mailers/Parcel shippers are 

required to pay any appropriate presort 

or destination entry mailing fees per the 

DMM; 

• Mailers/Parcel shippers must pay 

the appropriate postage by successfully 

transmitting electronic manifest files to 

the PostalOne! e-VS application using 

the electronic file format identified in 

the October 2005 draft of Publication 

205; 

• Mailers/Parcel shippers must apply 

an authorized UCC/EAN 128 e-VS 

barcode in compliance with Publication 

205; 

» The mailer ID used in the barcode 

must be exclusive for the e-VS program 

and must be unique to the parcel 

shipper or its client. 

» Each barcode must be unique for a 

period of 1 year. 

» Since Delivery Confirmation 

service does not require any additional 

fees for Parcel Select items, mailers/ 

shippers are encouraged to apply a 

Delivery Confirmation service barcode 

to all Parcel Select pieces. 

» Delivery Confirmation service is 

available on other Package Services and 

Standard Mail parcels for $0.13 when 

using the electronic option. Mailers/ 

shippers may elect to apply an alternate 

e-VS barcode as described in the 

October 2005 draft of Publication 205 to 

avoid paying the $0.13 fee. However, no 

Federal Register / Vol. 70, No. 214 / Monday, November 7, 2005 / Proposed Rules 67401 

delivery information will be available 

when using this barcode. 

All specifications and requirements 

for e-VS can be found in the October 

2005 draft of Publication 205 and 

Publication 91. 

Manifest Mailing Operations Using e-VS 

Mailers and shippers who meet 

program requirements may ship parcels 

using the following procedure: 

1. The mailer/parcel shipper transmits 

an electronic manifest to the Postal 

Service detailing all e-VS parcels to be 

deposited into the mail stream on or 

before the date of mailing; 

2. The Electronic Verification System 

generates a postage statement based on 

the information received from the 

mailer’s manifest and submits it to 

PostalOne! 

The PostalOne! system is a new 

information infrastructure deployed by 

the Postal Service to facilitate 

convenient centralized payment 

capabilities and electronic postage 

reporting. It features an automated, 

streamlined alternative to the existing 

hardcopy documentation used in the 

business mail acceptance process. The 

PostalOne! system links a customer’s 

mailing information electronically with 

acceptance, verification, and payment 

systems, eliminating most of the 

paperwork. It also provides a wealth of 

online information customers can use to 

manage their businesses more 

efficiently. 

3. Postage is debited from the mailer’s 

PostalOne! payment account, and 

account information including current 

balances and transactions is updated in 

the e-VS Web site. The mailer/parcel 

shipper is able to access the Web site to 

view postage statements and associated 

funds debited from the mailer’s account; 

4. The mailer/parcel shipper 

transports and enters the mail at the 

appropriate destination entry Postal 

Service facility: 

• Destination Bulk Mail Center 

(DBMC). 

• Destination Auxiliary Service 

Facility (DASF). 

• Destination Sectional Center 

Facility (DSCF). 

• Destination Delivery Unit (DDU). 

5. As parcels are deposited at the 

destination entry facilities, random 

parcels are sampled and the resulting 

data is transmitted to the e-VS 

application. The sampling process 

collects information to verify that the 

postage paid for the sampled parcels has 

been correctly calculated based on 

parcel characteristics, including: 

• Entry and destination ZIP Code. 

• Zone. 

• Size. 

• Rate markings. 

• Weight. 

• Barcode information. 

Based on the data collected, e-VS 

calculates the appropriate postage for 

the sampled parcels and compares the 

calculated postage to the postage 

reported on the manifest. The results of 

the comparison are recorded in the e-VS 

database and used to calculate the 

postage adjustment factor (PAF) 

described in the next section. 

6. When barcodes are scanned during 

the normal processing and delivery 

operations (e.g., delivery scans collected 

for Delivery Confirmation), the barcode 

data is transmitted to the e-VS 

application to determine if parcels are 

‘‘mis-shipped’’ or ‘‘un-manifested’’. 

‘‘Mis-shipped’’ parcels are mail pieces 

that have been dropped at the incorrect 

destination entry facility. ‘‘Unmanifested’’ parcels are mail pieces that 

have been scanned but do not appear on 

the mailer’s manifest. 

7. As sample data is received, the 

e-VS application compares the data to 

the mailer’s electronic manifest. This 

process is used to measure the accuracy 

of the mailer’s electronic manifest for 

proper postage payment. 

8. The mailer/parcel shipper is 

assessed postage for discrepancies 

found in their electronic manifest 

through the processes previously 

described in items 5–7. These 

assessments include additional postage 

for mis-shipped and incorrectly rated 

parcels, as well as postage for unmanifested parcels. 

Postage Assessments 

The e-VS program will collect postage 

daily based on the electronic manifest(s) 

received that day from mailers. In 

addition, postage will be calculated and 

assessed for the following types of errors 

when detected: 

• If parcels are dropped at an 

incorrect entry location and the Postal 

Service transports the parcels to the 

correct destination, mailers/parcel 

shippers will be charged the difference 

between the manifested postage and the 

single-piece rate for the parcel. 

• If a parcel is not identified on a 

manifest, the mailer ID in the barcode 

will be used to determine ownership 

and responsibility of the parcel and to 

establish accountability for payment of 

postage. Postage for these parcels will be 

based on data collected at destinating 

Postal Service facilities on these parcels. 

The mailer/parcel shipper will be 

allowed to reconcile ‘‘un-manifested’’

parcels by transmitting an electronic 

manifest for the parcels within 10 days 

of the close of the mailing period. Any 

‘‘un-manifested’’ parcels receiving a 

manifest record prior to the 10th day 

will be removed from this assessment. 

• If total paid postage for the parcels 

on a manifest is understated by more 

than 1.5%, a Postage Adjustment Factor, 

or PAF, is calculated by dividing the 

total postage from the sampled parcels 

by the postage claimed for the sampled 

parcels on the mailer’s manifest. If the 

PAF exceeds 1.015, then the manifested 

postage amount for the entire mailing 

period is multiplied by the PAF to 

determine the additional postage due. A 

mailing period is defined as a calendar 

month for purposes of calculating 

adjustments in e-VS. 

Postage Payment Schedule 

Under the e-VS program, the 

collection of postage occurs as follows: 

• The mailer’s PostalOne! payment 

account is debited on a daily basis. 

Payment for each manifest is debited on 

the day the manifest is submitted. 

• The mailer’s PostalOne! payment 

account is debited weekly for misshipped postage accumulated from the 

previous week. 

• At the end of each mailing period, 

defined as a calendar month, the 

mailer’s PostalOne! payment account is 

debited for postage assessed for (1) unmanifested parcels and (2) for any 

postage adjustments necessary if their 

PAF is greater than 1.015. The PAF 

adjustment and postage assessment for 

un-manifested parcels are processed on 

the 21st day of the month following the 

mailing period to allow mailers time to 

investigate and reconcile discrepancies. 

Between the end of a mailing period and 

the 21st day of the following month, 

there are two 10-day review periods: 

• The first 10-day period is a mailer 

review period and begins immediately 

after the end of the mailing period and 

extends through the 10th day of the 

month following the mailing period. 

During this period, the mailer may 

submit manifests to account for unmanifested parcels. 

• The second 10-day period is a 

Postal Service/mailer joint review 

period and begins immediately 

following the mailer review period and 

extends through the 20th day of the 

month following the mailing period. 

During this period, at the mailer’s 

request, the mailer may jointly review 

the sampling data with the Postal 

Service to dispute any data indicating a 

postage adjustment is due. 

• Appeals and refund requests must 

be submitted in writing to the Business 

Mailer Support manager within 30 days 

following the end of the Postal Service/ 

Mailer joint review period. 

67402 Federal Register / Vol. 70, No. 214 / Monday, November 7, 2005 / Proposed Rules 

e–VS Implementation 

Implementation will occur no earlier 

than 1 year from the date of the 

published final rule. This one year 

implementation period will provide 

mailers with ample time to comply with 

e-VS standards, as well as time to 

perform testing necessary to ensure 

satisfactory operation. 

Although exempt from the notice and 

comment requirements of the 

Administrative Procedure Act [5 U.S.C. 

of 553(b), (c)] regarding proposed 

rulemaking by 39 U.S.C. 410(a), the 

Postal Service invites public comment 

on the following proposed revisions to 

the Code of Federal Regulations. See 39 

CFR 111.1. 

List of Subjects in 39 CFR Part 111 

Postal Service. 

PART 111—[AMENDED] 

1. The authority citation for 39 CFR 

part 111 continues to read as follows: 

Authority: 5 U.S.C. 552(a); 39 U.S.C. 101, 

401, 403, 404, 414, 3001–3011, 3201–3219, 

3403–3406, 3621, 3626, 5001. 

2. Revise the following sections of the 

Mailing Standards of the United States 

Postal Service, Domestic Mail Manual 

(DMM) as provided below: 

Mailing Standards of the United States 

Postal Service 

Domestic Mail Manual 

* * * * * 

400 Discount Mail Parcels 

* * * * * 

440 Standard Mail 

* * * * * 

446 Enter and Deposit 

* * * * * 

2.0 Destination Entry 

* * * * * 

2.3 Postage Payment 

[Revise 2.3 to read as follows:] 

Except for mailings paid using the 

Electronic Verification System (e-VS), 

mailers pay postage at the Post Office 

where they are authorized to present 

mailings for verification. For mailings 

paid using e-VS, mailers must pay 

postage to the Post Office where they 

hold the permit imprint. Prior to 

mailing, mailers must ensure that they 

have paid the correct mailing fee(s) for 

the current 12-month period at the Post 

Office where they are paying postage for 

the mailing. 

* * * * * 

2.7 Verification 

* * * * * 

2.7.2 Mail Separation and 

Presentation 

[Revise 2.7.2 to read as follows:] 

Effective January 1, 2007, mailers who 

commingle Standard Mail parcels with 

Parcel Select mailings authorized under 

705.6.0 must present mailings and pay 

postage using the Electronic Verification 

System (e-VS) (See 705.2.9). Until 

January 1, 2007 or unless they are 

already presenting mailings using e-VS, 

mailers must present destination entry 

rate mailings for verification and 

acceptance as follows: 

a. Present mailings for verification 

and acceptance at a business mail entry 

unit (BMEU) located at a destination 

BMC, destination sectional center 

facility, or other destination postal 

facility designated by the Postal Service; 

or 

b. Present mailings for Postal Service 

verification under a plant-verified drop 

shipment (PVDS) system (see 705.15.0), 

and then enter mailings at destination 

entry facilities under the following 

conditions: 

1. Mailers must ensure that mailings 

are accompanied by a Form 8125, 8125–

C, or 8125–CD completed by the mailer 

and the verifying Post Office. 

2. Mailers must separate mailings for 

deposit at one destination postal facility 

from mailings for deposit at other 

facilities to allow reconciliation with 

each accompanying Form 8125, 8125–C, 

or 8125–C. 

3. Mailers may deposit only PVDS 

mailings at a destination delivery unit 

not co-located with a postal facility 

having a BMEU. 

c. When Periodicals mail is on the 

same vehicle as Standard Mail, mailers 

should load the Periodicals mail toward 

the tail of the vehicle so that it can be 

offloaded first. 

[Delete 2.7.3 and renumber 2.7.4 to 2.7.7 

as 2.7.3 to 2.7.6.] 

* * * * * 

450 Parcel Post 

* * * * * 

454 Postage Payment and 

Documentation 

1.0 Basic Standards for Postage 

Payment 

* * * * * 

1.2 Postage Payment 

[Revise 1.2 to read as follows:] 

Mailers must pay postage and fees to 

the Post Office where they are 

authorized to present mailings for 

verification. See 456.2.2.4 for additional 

information about paying postage and 

fees for Parcel Select mailings. 

* * * * * 

456 Enter and Deposit 

* * * * * 

2.0 Parcel Select 

* * * * * 

2.2 Rate Eligibility for Parcel Select 

Rates 

* * * * * 

2.2.4 Postage Payment 

[Revise 2.2.4 to read as follows:] 

Postage payment is subject to the 

following: 

a. Mailers must pay postage and fees 

to the Post Office where they are 

authorized to present mailings for 

verification, except under 2.2.4b. Except 

for plant-verified drop shipments (see 

705.15.0) or metered mail drop 

shipments (see 705.17.0), mailers must 

have a meter license or permit imprint 

authorization at the parent Post Office 

for mailings deposited for entry at a 

DBMC or ASF, at a DSCF, or at a DDU. 

b. Effective January 1, 2007, mailers 

who mail parcels claimed at the Parcel 

Select rate must use the Electronic 

Verification System (e-VS) as described 

in 705.2.9. Mailers using e-VS must pay 

postage and fees to the Post Office 

where they hold the permit imprint. 

* * * * * 

2.4.3 Mail Separation and 

Presentation 

[Revise 2.4.3 to read as follows:] 

Effective January 1, 2007, mailers 

must present all Parcel Select mailings 

using the Electronic Verification System 

(e-VS) (see 705.2.4.3). Until January 1, 

2007, mailers may present Parcel Select 

mailings without using e-VS. Mailers 

must have destination entry rate mail 

verified under a PVDS system (see 

705.15.0) or present mailings for 

verification and acceptance at a BMEU 

located at a designated destination 

postal facility. Mailers may deposit only 

PVDS mailings at a destination delivery 

unit not co-located with a Post Office or 

other Postal Service facility having a 

business mail entry unit. Mailers 

presenting destination entry mailings to 

the Postal Service must meet the 

following requirements: 

a. Mark each piece of DBMC, DSCF, 

or DDU rate Parcel Post as either ‘‘Parcel 

Post’’ or ‘‘Parcel Select,’’ according to 

standards in 402.2.2. Also, effective 

January 1, 2007, mailers also must mark 

each piece ‘‘e-VS,’’ adjacent to the rate 

marking. 

b. Separate DBMC rate mailings by 

zone for permit imprint mailings of 

Federal Register / Vol. 70, No. 214 / Monday, November 7, 2005 / Proposed Rules 67403 

identical-weight pieces that are not 

mailed using a special postage payment 

system under 705.2.0 through 705.4.0, 

or that are not mailed under 455.1.4. 

c. Except for PVDS mailings presented 

using e-VS, mailers must ensure that all 

PVDS mailings are accompanied by a 

Form 8125, 8125–C, or 8125–CD 

completed by the mailer and the 

verifying Post Office. 

d. Separate each mailing from other 

mailings for verification. For PVDS 

mailings, separate mailings for deposit 

at different destination postal facilities 

to allow for reconciliation with each 

Form 8125, 8125–C, or 8125–CD, unless 

presenting mailings using e-VS. 

e. Separate mail from freight 

transported on the same vehicle. 

f. If Periodicals mail is on the same 

vehicle as Parcel Post, load the 

Periodicals mail toward the tail of the 

vehicle so that, for each destination 

entry, the Periodicals mail can be 

offloaded first. 

* * * * * 

460 Bound Printed Matter 

* * * * * 

466 Enter and Deposit 

* * * * * 

2.0 Destination Entry 

* * * * * 

2.3 Postage Payment 

[Revise 2.3 to read as follows:] 

Postage payment is subject to the 

following: 

a. Mailers must pay postage and fees 

to the Post Office where they are 

authorized to present mailings for 

verification, except for mail paid using 

the Electronic Verification System (eVS). 

b. Effective January 1, 2007, when 

parcels for any destination rates are 

commingled with Parcel Select mail 

under 705.7.0, mailers must document 

and pay postage using e-VS under 

705.2.9. 

c. For mailings paid using e-VS, 

mailers must pay postage and fees to the 

Post Office where the mailer holds the 

permit imprint. 

* * * * * 

2.8 Verification 

* * * * * 

2.8.2 Mail Separation and 

Presentation 

[Revise text of 2.8.2 to read as follows:] 

Effective January 1, 2007, mailers 

must present all BPM parcel manifest 

mailings commingled with Parcel Select 

mail (under 705.7.0) using the 

Electronic Verification System (e-VS) 

(see 705.2.4.3). Until January 1, 2007, 

mailers may present mailings using a 

Manifest Mailing System (MMS) 

without participating in e-VS. Mailers 

must have destination entry rate mail 

verified under a PVDS system (see 

705.15.0) or present mailings for 

verification and acceptance at a BMEU 

located at a designated destination 

postal facility. Mailers may deposit only 

PVDS mailings at a destination delivery 

unit not co-located with a Post Office or 

other Postal Service facility having a 

business mail entry unit. Mailers 

presenting destination entry mailings to 

the Postal Service must meet the 

following requirements: 

a. Except for mailings presented using 

e-VS, mailers must ensure that all PVDS 

mailings are accompanied by a Form 

8125, 8125-C, or 8125-CD completed by 

the mailer and the verifying Post Office. 

b. Separate each mailing from other 

mailings for verification. For PVDS, 

separate mailings for deposit at different 

destination postal facilities to allow 

reconciliation with each Form 8125, 

8125-C, or 8125-CD, unless presented 

using e-VS. 

c. Separate mail from freight 

transported on the same vehicle. 

d. If Periodicals mail is on the same 

vehicle as Standard Mail, load the 

Periodicals mail toward the tail of the 

vehicle so that, for each destination 

entry, Periodicals mail can be offloaded 

first. 

* * * * * 

700 Special Standards 

* * * * * 

705 Advanced Preparation and 

Special Postage Payment Systems 

* * * * * 

2.0 Manifest Mailing System (MMS) 

2.1 Description 

[Add new 2.1.1 and transfer text from 

old 2.1 to new 2.1.1. Change the last 

sentence in new 2.1.1 to read as 

follows:] 

2.1.1 Using an MMS 

* * * The standards in 2.2 describe 

how to mail using an MMS. 

[Add new item 2.1.2 to read as follows:] 

2.1.2 Required Use of Electronic 

Verification System (e-VS) 

Effective January 1, 2007, mailers 

using MMS when presenting Parcel 

Select mailings under 456.2.0 or 

commingled mailings with Parcel Select 

under 705.6.0 or 705.7.0 also must 

document and pay postage using e-VS 

under 2.9. Business Mailer Support 

(BMS) can provide mailers with 

information for developing and 

receiving approval for these systems. 

* * * * * 

2.4 Authorization 

* * * * * 

2.4.1 Application 

[Revise by adding the following sentence 

to the end of 2.4.1 to read as follows:] 

* * * Publication 205, Electronic 

Verification System Technical Guide 

provides the application procedures for 

mailers required to use e-VS (see 2.1.2). 

To receive a copy, contact the Business 

Mailer Support manager, USPS 

Headquarters (See 608.8.0 for address.). 

* * * * * 

2.4.3 General Requirements for 

Authorization 

* * * * * 

[Revise item b, renumber items c, d, and 

e as items e, f, and g, and add new items 

c and d to read as follows:] 

b. If total postage of pieces sampled 

during verification indicates that the 

mailer has underpaid postage by more 

than 1.5% when compared to the 

manifest, USPS will adjust total postage 

in accordance with procedures in 

Publication 205. USPS will charge e-VS 

participants at the end of the review 

period at the end of the mailing period. 

c. USPS will charge e-VS participants 

the appropriate single-piece rate for misshipped parcels (parcels deposited at 

incorrect destination facilities). USPS 

will transport these mis-shipped parcels 

to the correct destination. 

d. USPS will charge e-VS participants 

for any parcels that do not appear on the 

mailer’s manifest but are identified by 

USPS processing scans as being mailed. 

In addition, USPS will remove these unmanifested parcels from any sampling 

adjustments. 

* * * * * 

2.4.4 Approval Authority 

The final authority for manifest 

mailing approval is as follows: 

* * * * * 

[Revise 2.4.4 b. to read as follows:] 

b. The Business Mailer Support 

manager, USPS Headquarters, approves 

manifest mailing systems that produce 

presorted First-Class Mail and Standard 

Mail mailings, Package Services 

mailings, PVDS mailings, and all 

mailings using e-VS. 

* * * * * 

[Add new 2.9 to read as follows:] 

67404 Federal Register / Vol. 70, No. 214 / Monday, November 7, 2005 / Proposed Rules 

2.9 Electronic Verification System (eVS) 

2.9.1 Required Use 

Effective January 1, 2007, mailers 

depositing parcels at Parcel Select rates 

must document and pay postage using 

e-VS as described in 2.9. In addition, 

mailers authorized to commingle 

Standard Mail machinable parcels or 

Package Service parcels with Parcel 

Select under 705.6.0 and 705.7.0 must 

document and pay postage for all 

parcels in the mailing using e-VS. 

2.9.2 Mailer System 

Mailers must have an automated 

system that produces mail according to 

USPS standards and calculates postage 

accurately. Mailers must assign a 

barcode to each mailpiece in accordance 

with Publication 205, Electronic 

Verification System Technical Guide. 

USPS will scan barcodes during 

sampling to verify information from the 

mailer’s manifest. Mailers also must 

produce and submit an electronic 

manifest, as described in Publication 

205, for each mailing deposited at a 

destination postal facility. USPS will 

scan barcodes during sampling to verify 

information from the mailer’s manifest. 

The electronic manifest must account 

for every piece in the mailing, under the 

following conditions: 

a. For each mailpiece produced, the 

electronic manifest must list the postage 

for the piece and the factors used to 

calculate the correct amount of postage, 

such as the piece weight and destination 

postal zone. 

b. For each record produced, the 

manifest must include the unique 

package identification code represented 

by the barcode on the mailpiece. 

c. When extra services are requested, 

the manifest must include the correct 

fees for each piece. 

2.9.3 Mailer Quality Control 

Mailers must implement a quality 

control program that ensures proper 

mail preparation and provides accurate 

documentation. The service agreement 

must detail the USPS-approved quality 

control procedures. 

2.9.4 Required Barcode 

Mailers must apply an approved 

barcode on the address side of each 

mailpiece. Barcodes must meet 

specifications described in Publication 

205, Electronic Verification System 

Technical Guide. 

2.9.5 Postage Payment 

USPS will calculate postage payment 

and electronically debit postage from 

the mailer’s postage account based on 

information received from the mailer’s 

electronic manifest and data collected 

through USPS operational and sampling 

scans. Mailings deposited under the eVS program must meet the standards for 

permit imprint mail in 604.6.0. Mailers 

must pay for postage through a 

Centralized Account Payment System 

(CAPS) account. 

2.9.6 General Requirements for 

Participation 

General requirements for participation 

are as follows: 

a. Mailers must apply on each 

mailpiece a unique barcode with the 

mailer ID number. 

b. Mailers must transmit an electronic 

manifest on or before the date of 

mailing. 

c. USPS randomly samples parcels 

and considers verification samples to be 

representative of the entire mailing 

period. USPS applies postage 

adjustment calculations, based on 

verification samples, to all mailpieces 

mailed during the mailing period. A 

mailing period is defined as a calendar 

month for purposes of calculating 

adjustments in e-VS. 

d. USPS will adjust the total postage 

for the mailing period if the total 

postage or the total weight of pieces 

sampled during the mailing period 

results in an underpayment by 1.5% or 

greater. 

e. The mailer must pay additional 

postage for any underpayments 

identified by USPS verification. Mailers 

must maintain sufficient funds in their 

postage accounts to cover any 

underpayments discovered after 

acceptance of the mail. 

2.9.7 Authorization 

Mailers must be authorized to 

participate in e-VS according to the 

following procedures: 

a. Mailers must submit an e-VS 

application and supporting 

documentation as specified in 

Publication 205, Electronic Verification 

System Technical Guide, to the Business 

Mailer Support manager, USPS 

Headquarters (See 608.8.0 for address.). 

b. After mailers successfully complete 

development and testing for e-VS, the 

USPS will grant temporary approval. 

USPS will conduct a review within 90 

days of the temporary approval and will 

give final approval if the mailer’s system 

is working as required. The Business 

Mailer Support manager, USPS 

Headquarters, has final authority for eVS participation approval. 

c. After receiving final authorization, 

the mailer and a USPS representative 

must sign a service agreement. The 

agreement contains provisions regarding 

mailer and USPS responsibilities, 

including electronic documentation, 

document retention, quality control, and 

the duration of the agreement. 

2.9.8 Denial 

If USPS denies an e-VS application, 

the mailer may appeal the decision 

within 15 days from the receipt of the 

notice by filing a written appeal, 

including evidence showing why they 

should be authorized to use e-VS. Send 

the appeal to the Business Mail 

Acceptance manager, USPS 

Headquarters, who issues the final 

agency decision (See 608.8.0 for 

address). 

2.9.9 Revocation 

The Business Mailer Support manager 

has authority to revoke authorization for 

e-VS participation for any of the 

following reasons: 

a. A mailer provides incorrect data in 

the electronic manifest and is not able 

or willing to correct the problems. 

b. A mailer is not properly completing 

the required quality control procedures. 

c. The mailings no longer meet e-VS 

criteria established by this standard or 

in the e-VS service agreement. 

d. A mailer does not present mailings 

using e-VS for more than 6 months 

(except as noted in the service 

agreement). 

e. A mailer presents mailings that are 

improperly prepared. 

f. A mailer is not paying proper 

postage. 

2.9.10 Corrective Action 

After USPS issues a notice of 

revocation, to a mailer, the mailer and 

the USPS determine corrective actions, 

including an implementation schedule. 

At the conclusion of the implementation 

period, the USPS reexamines the 

mailer’s system to determine if it 

complies with the program 

requirements. Failure to correct 

identified problems is sufficient 

grounds to sustain revocation of the 

mailer’s e-VS authorization. 

2.9.11 Appeal of Revocation 

After receiving initial notice of 

revocation, a mailer has 15 days from 

the date of receipt of the revocation 

notice to file a written appeal with the 

Business Mail Acceptance manager, 

USPS Headquarters. The appeal must 

include the reason the e-VS 

authorization should not be revoked. 

The mailer may continue to mail using 

e-VS during the appeal process. The 

Business Mail Acceptance manager 

issues the final agency decision. The 

final revocation takes effect 15 days 

Federal Register / Vol. 70, No. 214 / Monday, November 7, 2005 / Proposed Rules 67405 

after the date of the final agency 

decision. 

* * * * * 

6.0 Preparation for Combined Mailings 

of Standard Mail and Package Services 

Parcels 

[Revise title of 6.1 as follows:] 

6.1. Combined Machinable Parcels—

DBMC Entry 

* * * * * 

[Revise title of 6.1.2.] 

6.1.2 Basic Standards 

* * * * * 

6.1.3 Postage Payment 

[Revise 6.1.3 to add requirement for eVS and reorganize to read as follows:] 

Mailers must pay postage for all 

pieces with a permit imprint at the Post 

Office serving the mailer’s plant using 

one of the following postage payment 

systems. The applicable system 

agreement must include procedures for 

combined mailings approved by 

Business Mailer Support. 

a. Manifest Mailing System (MMS), 

under 2.0; 

b. Optional Procedure (OP) Mailing 

System, under 3.0, until January 1, 

2007; or 

c. Alternate Mailing System (AMS), 

under 4.0, until January 1, 2007. 

d. Effective January 1, 2007, for 

mailings presented under 705.6.0, 

mailers must document and pay postage 

using the Electronic Verification System 

under 705.2.9. 

* * * * * 

[Revise title of 6.2 to read as follows:] 

6.2 Combining Parcels—DSCF Entry, 

Parcel Post OBMC Presort and BMC 

Presort 

* * * * * 

6.2.3 Postage Payment 

[Revise text of 6.2.3 to include e-VS 

requirement for DSCF Entry parcels, to 

read as follows:] 

Mailers must pay postage for all 

pieces with a permit imprint at the Post 

Office serving the mailer’s plant using 

an approved manifest mailing system 

under 2.0. The following conditions also 

apply. 

a. The applicable system agreement 

must include procedures for combined 

mailings approved by Business Mailer 

Support. 

b. Effective January 1, 2007, for 

mailings presented under 705.6.0, 

mailers must document and pay postage 

using the Electronic Verification System 

under 705.2.9. 

* * * * * 

7.0 Combining Package Services 

Parcels for Destination Entry 

* * * * * 

7.1 Combining Parcels 

* * * * * 

7.1.2 Basic Standards 

[Add the following sentence at the end 

of 7.1.2b.] 

b. * * * Effective January 1, 2007, for 

mailings presented under 705.7.0, 

mailers must document and pay postage 

using the Electronic Verification System 

under 705.2.9. 

* * * * * 

An appropriate amendment to 39 CFR 

111 to reflect these changes will be 

published if the proposal is adopted. 

Neva R. Watson, 

Attorney, Legislative. 

[FR Doc. 05–22156 Filed 11–4–05; 8:45 am] 

BILLING CODE 7710–12–P 

DEPARTMENT OF TRANSPORTATION 

Federal Motor Carrier Safety 

Administration 

49 CFR Part 385 

[Docket No. FMCSA–1998–3639] 

RIN 2126–AA37 

Safety Fitness Procedures; Withdrawal 

AGENCY: Federal Motor Carrier Safety 

Administration (FMCSA), DOT. 

ACTION: Advance notice of proposed 

rulemaking (ANPRM); withdrawal. 

SUMMARY: The Federal Motor Carrier 

Safety Administration [formerly Office 

of Motor Carriers (OMC) within Federal 

Highway Administration (FHWA)] 

withdraws its July 20, 1998 ANPRM and 

request for comments pertaining to the 

future evolution of the safety fitness 

rating system. After the ANPRM was 

published, FMCSA began the 

Comprehensive Safety Analysis 2010 

Initiative (CSA 2010), a comprehensive 

review and analysis of FMCSA’s current 

commercial motor carrier safety 

compliance and enforcement programs. 

FMCSA held a series of public listening 

sessions pertaining to CSA 2010 in 

September and October 2004. Many 

commenters at those listening sessions 

suggested that FMCSA delay publishing 

a notice of proposed rulemaking 

(NPRM) until the agency makes its final 

decisions regarding its long-term plan 

for monitoring motor carrier safety 

under CSA 2010. Therefore, this 

rulemaking is no longer necessary 

because, as CSA 2010 proceeds, FMCSA 

expects to publish a rulemaking that 

would propose a new and improved 

safety compliance and monitoring 

methodology based on more recent 

information and policy. 

DATES: The ANPRM with request for 

comments published July 20, 1998 is 

withdrawn as of November 7, 2005. 

FOR FURTHER INFORMATION CONTACT: Ms. 

Nicole McDavid, Office of Enforcement 

and Program Delivery, (202) 366–0831, 

Federal Motor Carrier Safety 

Administration, 400 Seventh Street, 

SW., Washington, DC 20590–0001. 

Office hours are from 7:45 a.m. to 4:15 

p.m., e.t., Monday through Friday, 

except Federal holidays. 

SUPPLEMENTARY INFORMATION: 

Background 

On November 6, 1997, FHWA (now 

FMCSA) published a final rule 

incorporating its safety fitness rating 

methodology (SFRM) as Appendix B to 

49 CFR 385. In that document, the 

agency identified its ultimate goal as 

creating a more performance-based 

means of determining the fitness of 

motor carriers to conduct commercial 

motor vehicle (CMV) operations in 

interstate commerce. The final rule 

announced that FHWA would soon 

publish an ANPRM that would address 

the future evolution of its rating system 

methodology. Since that final rule, 

Congress substantially heightened the 

importance of Unsatisfactory ratings by 

amending 49 U.S.C. 31144 to prohibit 

transportation of any property in 

interstate commerce by motor carriers 

with Unsatisfactory ratings. 

(Transportation Equity Act for the 21st 

Century [Pub. L. 105–178, June 9, 1998, 

112 Stat. 107]) 

On July 20, 1998, FHWA issued an 

ANPRM titled ‘‘Safety Fitness 

Procedures’’ (63 FR 38788) seeking 

comments and supporting data on what 

issues should be considered in 

developing a future safety fitness rating 

system. Specifically, the ANPRM 

invited responses to 21 detailed 

questions focusing on what a future 

SFRM should include. 

On October 9, 1999, the Secretary of 

Transportation (Secretary) rescinded his 

authority to FHWA to carry out most of 

the motor carrier functions and 

operations (64 FR 56270, October 19, 

1999) and redelegated that authority to 

the Director of the new Office of Motor 

Carriers. On October 29, 1999, the 

Secretary rescinded his authority to 

FHWA to carry out other duties and 

powers related to motor carrier safety 

vested in the Secretary by statute (64 FR 

58356). Then, on January 1, 2000, 

responsibility for motor carrier