
144.853 Preparation

a. Additional Requirements.
Metered mail deposited at entry post offices by authorization under
144.85 must be prepared in segments for entry at postal facilities
according to schemes and schedules provided by the Postal Service.  Further,
each segment must be prepared for dispatch without additional postal
processing or handling, and deposited at places and times specified by the
Postal Service.  Other preparation stipulated by the Postal Service may extend
beyond that which is required to qualify for the rate paid for the mail.
Failure to meet these requirements may be grounds for revocation of the
authorization (see 144.817).

b. Transportation.
Transportation for the consolidated mailing must be provided by the mailer,
unless otherwise supplied by the Postal Service as provided by 154.

c. Endorsement.
A drop shipment authorization endorsement is not required for pieces mailed
under 144.85.

d. Other Requirements.
The applicable preparation and documentation requirements that apply to the
rates claimed in the mailing remain unaffected by entry under 144.85.

e. Documentation.
Documentation supporting each consolidated mailing, including the volume
collected from each meter licensee, must be maintained by the
mailer/consolidator for at least 1 year from the date of mailing, and made
available for postal inspection upon request.

f. Further Consolidation.
Mail collected from licensees for mailing under 144.85 may not be
further collected or consolidated by any other mailer or consolidator.

144.9 Manufacture and Distribution of Postage Meters

144.91 Authorization to Manufacture and Lease

144.911 Qualification.
Any concern desiring authorization to manufacture and lease postage meters
for use by mailers under 144.13 must

a.
satisfy the Postal Service as to its integrity and financial responsibility;

b.
obtain approval of at least one model postage meter incorporating all the
features and safeguards specified in 144.92;

c.
have, or establish, and maintain under its supervision and control adequate
manufacturing facilities suitable to carry out the provisions of
144.94 to the satisfaction of the Office of Classification and Rates
Administration of the Postal Service (such facilities must be subject to
inspection by representatives of the Office of Classification and Rates
Administration); and

d.
have, or establish, and maintain adequate facilities for the control,
distribution, and maintenance of postage meters and their replacement when
necessary.

144.912 Application.
Any person or concern seeking authorization to manufacture postage meters
must submit an application to the Office of Classification and Rates
Administration, in person or in writing.  On qualification and approval, the
applicant is authorized in writing to manufacture postage meters and to lease
them to mailers.  The name of the manufacturer is to be listed in
144.13.

144.913 Suspension.
The Postal Service may require a manufacturer to suspend production and
distribution of any or all of his models of postage meters, pending
investigation to determine whether his authorization should be revoked, and
the Postal Service must fully advise him of the facts which may warrant such
action.  The manufacturer is given opportunity to demonstrate or achieve
compliance with all the lawful requirements within a reasonable, specified
time limit.

144.914 Revocation.
Authorization may be revoked by the Office of Classification and Rates
Administration if the manufacturer engages in any scheme or enterprise of an
unlawful character or fails to comply with any of the provisions of
144.

144.915 Changes in Ownership or Control.
Any person or concern desiring to acquire ownership or control of an
authorized meter manufacturer must also satisfy the Office of Classification
and Rates Administration as to its integrity and financial responsibility.

144.92 Specifications.
Postage meters must incorporate all of the following features and
safeguards:

a.
A postage meter may be either the detachable portion containing the
printing die and registering mechanism of a mailing machine, or it may be
complete in itself.  In either case, it must be suitable for the mailer to
bring to the post office for setting or examination.

b.
A postage meter may be capable of printing one denomination of postage and
registering the number of such impressions made (single denomination), or it
may be capable of printing several denominations and registering either
multiples of the smallest unit printed (multidenomination) or the currency
value of the impressions made (omnidenomination).  The printing die or dies,
counters, and counteractuating mechanism must be inseparable in the unit
brought to the post office for setting.

c.
In each postage meter, there must be two accurate and dependable counting
devices, one ascending and registering the total imprinted, the other
descending and registering the balance of the last setting remaining unused.
The descending register must actuate a locking mechanism, preventing further
operation of the meter after the register has reduced to an amount less than
the largest denomination printable in one operation or to zero.  In electronic
meters, the locking device must prevent printing if the amount which would be
printed would reduce the descending register to less than zero.  The
descending register must be so constructed as to be easily set at the post
office for any amount of postage or number of impressions within its capacity,
prepaid by the mailer.

d.
The entire meter must be encased in a substantial housing.  The descending
register must be accessible to the post office by means of a door equipped
with a suitable lock and with provision for a post office seal. The
requirement that accessibility to the descending register be restricted does
not apply to Computerized Remote Postage Meter Resetting System electronic
meters which have no access to the descending register of the meter.
Descending registers on this type of meter are only reset electronically by
coded input.  The ascending register and all other components must be so
shielded as not to be accessible even when the door is open.  The readings of
both registers must be easily obtainable at any time between operations,
either by visibility through closed windows, or by imprint on tape or card, or
by a combination of the two methods.  The housing must be of such construction
that it is impossible to alter the readings of the ascending register except
by normal operation, or to gain access to the internal components, except for
setting the descending register as provided in 144.92c, without
mutilation.

e.
The printing die must either conform in design to one already in use or be
approved by the Office of Classification and Rates Administration, USPS
Headquarters, Washington, DC 5903.  It must include the serial number of the
meter and identification of the manufacturer, and be so constructed or
shielded that it is not practically possible without proper registration in
the ascending and descending register to obtain imprints fraudulently.  It
must be attached to the meter in a manner (such as with breakoff screws) that
it is not practicable to remove or replace it fraudulently.

f.
The meter die must include a postmark to print the name of the city and
state from which mail is dispatched and the date of mailing.  The meter
postmark may include a ZIP Code in accordance with 144.46.  The
postmark must be printed at the left of, but adjacent to, the denomination
stamp and may be either included in an overall design with the denomination
stamp or separated from it.  Provision must be made so that the date may be
either printed or omitted as required by the Office of Classification and
Rates Administration on the various classes of mail.  Provision may be made to
print an hour of mailing either within, or in a close position outside, the
postmark.  Provision may also be made to print designations such as "Nonprofit
Org.," and the like, adjacent to, and in the same operation with, the meter
stamp.  The denomination die must not be completely exposed at any time during
the process of installing or removing postmark dies, daters, hour type, or
special designation slugs, or when changing the date.

g.
A meter may be designed to print a "meter slogan" or "ad plate" to the left
of, and adjacent to, the postmark.  The size and position of a slogan or meter
ad must be such that it does not interfere with or obscure the meter stamp or
postmark, and it must be possible to install the plate easily without exposing
the meter stamp die.  Plates must be made of suitable, durable material which
does not soften or disintegrate while in use.  They must be well-fitted and so
securely fastened to the printing mechanism that they do not become loose or
detached or otherwise interfere with proper operation of a meter.

h.
The entire meter must be of sufficiently solid, substantial, and dependable
construction as to protect the Postal Service amply against loss of revenue
from fraud, manipulation, misoperation, or breakdown.

i.
In addition to the features and safeguards described in 144.92a
through 144.92h above, electronic meters must

(1)
Have either nonvolatile ascending and descending registers or a solid-state
memory which stores the data for the ascending and descending registers.
Solid-state memories which rely on applied voltage for memory retention must
be powered by batteries which have a minimum support life of 5 years from date
of battery renewal with no external power applied, and which have sufficient
redundancy to be self-checking.

(2)
Be able to display the amounts in both the ascending and the descending
registers (not necessarily at the same time).

(3)
Be able to display--free from accidental changes--the amount of postage
which is to be printed next.

(4)
Be resettable by postal employees, preferably without customized equipment.

(5)
Contain a fault-detection device for computational security which
automatically locks out the meter and prevents printing of additional postage
in the event of malfunction.

(6)
Meet Postal Service test specifications contained in United States Postal
Service Specification, Postage Meters, Electronic,  USPS-M-942(RCD).
Persons wishing to manufacture electronic postage meters may obtain a copy of
this Postal Service test specification from U.S. Postal Service, Office of
Classification and Rates Administration.

j.
Auxiliary equipment required for the operation of the postage meters must
be part of the final production models submitted for postal approval.  Failure
of the auxiliary equipment, which could cause malfunction in postage meter
operation, is considered the same as a postage meter failure.

144.93 Test Plans, Testing, and Approval

144.931 Test Plans.
To receive Postal Service approval, a postage meter must be tested.
Manufacturers of electronic meters must submit a detailed test plan to the
Office of Classification and Rates Administration for approval at least 60
days prior to the conduct of the tests.  The test plan must include tests
which, if passed by a meter, prove compliance by the meter with all postal
requirements.  The test plan must list the parameters to be tested, test
equipment, procedures, test sample sizes, and test data formats.  Also, it
must include detailed descriptions, specifications, design drawings, schematic
diagrams, and explanations of the purposes of all special test equipment and
nonstandard or noncommercial instrumentation.

144.932 Submission of Each Model.
Each model meter proposed for manufacture must be approved by the Office of
Classification and Rates Administration after being tested by the Engineering
and Development Center, at the expense of the manufacturer.  A preliminary
working model which meets the specifications in 144.92 may be
submitted for tentative approval.  No meters of any model may be distributed
or used for payment of postage until a complete unit made to production
drawings and specifications has been submitted, tested, and approved, except
as may be specifically authorized for preliminary field testing.

144.933 Security Examination.
Each model meter proposed for manufacture must be examined to see that it
incorporates all the mechanical features and safeguards required by
144.92 and that it amply protects the Postal Service against loss of
revenue.

144.934 Endurance Test.
Each model meter proposed for manufacturing must pass without error or
breakdown the following described printing cycle endurance test, which
includes operation of the printing mechanism with proper registration of the
selected postage value in both the ascending and descending registers:

a.
For meters which operate at 100 or more printing cycles per minute--4
million cycles.  For meters which operate at less than 100 printing cycles per
minute (and cannot be used interchangeably on power-base machines which
operate at 100 or more printing cycles per minute)--2 million cycles.

b.
For multidenomination and omnidenomination meters, postage value selection
elements must be tested for one-half million operations.  A complete operation
includes selection of a value and return to zero.

c.
Balance register lockout operation must be performed at the start of, at
intervals during, and at the end of the printing cycle test.

144.935 Approval.
The Office of Classification and Rates Administration reserves the right
before approval to require additional examination and testing as necessary to
resolve any doubts regarding the security or endurance characteristics of any
meter which is proposed for manufacture.  After approval has been given to
manufacture and distribute a meter, no changes affecting the basic features or
safeguards of a meter may be made without authorization by the Office of
Classification and Rates Administration.

144.936 Approval Conditions.
The Postal Service may require, and reserves future rights to require, that
production models of approved meters be deposited with the Office of
Classification and Rates Administration.

144.937 Tests after Approval.
Additional meters from a current manufacturer must be submitted to the
Postal Service for testing, at the expense of the manufacturer, as may be
requested by the Office of Classification and Rates Administration.

144.94 Safeguards

144.941 Materials and Workmanship.
All meters must closely adhere to the quality in materials and workmanship
of the approved production model and must be manufactured with suitable jigs,
dies, tools, etc., to ensure proper maintenance and interchangeability of
parts.

144.942 Breakdown Tests.
At reasonably frequent intervals, the manufacturer must take meters at
random from production and subject them to breakdown tests to make certain
that quality and performance standards are maintained.

144.943 Protection of Printing Dies and Keys.
During the process of fabricating parts and assembling postage meters, the
manufacturer must exercise due care to prevent loss or theft of keys or of
serially numbered postage-printing dies or component parts (such as
denomination-printing dies, or auxiliary power supply and meter-setting
equipment for electronic meters) which might be used in some manner to defraud
the Postal Service of revenue.  All serially numbered printing dies produced
should be accounted for by assembly into meters or by evidence of mutilization
or destruction.  Postage printing dies removed from meters and not suitable
for reassembly must also be mutilated so they cannot be used, or must be
completely destroyed.

144.944 Destruction of Meter Stamps.
All meter stamps printed in the process of testing dies or meters must be
collected and destroyed daily.

144.945 Inspection of New and Rebuilt Meters.
All new and rebuilt meters must be carefully inspected before leaving the
manufacturer's meter service station.

144.946 Keys and Setting Equipment.
The meter manufacturer must furnish keys and other essential equipment for
setting the meters to all post offices under whose jurisdiction his meters are
licensed for use.  These items must be protected and must not be furnished to
persons not authorized by the U.S. Postal Service to have them.

144.95 Distribution

144.951 Facilities.
Authorized manufacturers must maintain adequate facilities for the
distribution, control, and maintenance of postage meters.  All such facilities
are subject to inspection by representatives of the Office of Classification
and Rates Administration.

144.952 Controls.
Each authorized manufacturer is required to do the following:

a.
Retain title permanently to all meters of his manufacture except those
purchased by the Postal Service.

b.
Lease meters only to mailers to whom meter licenses have been issued by the
Postal Service.

c.
Supply only those meter slogan or ad plates which meet the requirements of
the Office of Classification and Rates Administration for suitable quality and
content.

d.
Deliver meters to post offices or postal stations only--never to mailers
until the meters are set and sealed at a post office as specified in
144.35 or 144.38.

e.
Take reasonable precautions in the transportation and storage of meters to
prevent their reaching the hands of unauthorized individuals.

f.
Report immediately to the local postmaster the loss or theft of any meters,
or the recovery of any lost or stolen meters.  The local police must be
advised of the theft or recovery of any meter.

g.
Provide the New York Postal Data Center (NYPDC) with a compatible computer
magnetic tape that lists all customer meters in service, at the close of
business each reporting period.  Include in each file record the serial
number, ZIP Code, or finance number of the licensing post office and the
user's name and address.  The file is due at the NYPDC on March 15 each year
for meters of record on January 31.  Manufacturers are responsible for
reconciling differences and for maintaining accurate records.  This includes
reconciliation of differences with licensing post offices by the
manufacturer's branches or dealers, which results from meters which are not on
either postal or manufacturer's records.

h.
Maintain at manufacturer's headquarters a complete record by serial number
of all meters manufactured, showing all movements of each from the time it is
produced until it is scrapped, and the reading of the ascending register each
time it is checked into or out of service through a post office.  These
records must be available for inspection by officials of the Postal Service at
any time during business hours.  These records may be destroyed 3 years after
the meter is scrapped.

i.
Cancel a lease agreement with any mailer whose meter license is canceled by
the Postal Service and remove the meter promptly.

j.
Promptly remove from service any meter which the Postal Service indicates
should be removed from service.  When a meter license is canceled, all meters
in use by the licensee must be removed from service.

k.
Maintain a permanent record by serial number of all meter keys issued to
postmasters, as well as those sections of the manufacturer's establishment in
which their use is essential, preferably in the form of signed receipt cards.
The record must include the date, location, and details of any losses, thefts,
or recoveries of such keys.

l.
Examine each meter withdrawn from service for failure to record its
operations correctly and accurately, and report to the Postal Service the
mechanical condition or fault which caused the failure.

m.
Provide a PDC with a compatible computer tape of lost or stolen meters,
quarterly.  The file is due on January 1, April 1, July 1, and October 1.
Files consisting of less than 100 meters may be provided on a printout.

144.96 Maintenance

144.961 Replacement.
The manufacturer must maintain his meters in proper operating condition for
mailers by replacing them when necessary or desirable to forestall mechanical
breakdown.

144.962 Inspection of Meters in Use

a.
The manufacturer must have all of its meters in service with mailers
inspected at least twice annually at approximately 6-month intervals.
Inspection must be sufficiently thorough to determine that each meter is
clean, in proper operating condition, and that it is recording its operations
correctly and accurately, as follows:

(1)
Compare the meter serial number on the meter with the serial number on the
source document (manufacturer's records).

(2)
Record the ascending and descending register readings and calculate the
total readings.

(3)
Obtain the customer's copy of the most recent Form 3603 and verify the
control total after the last setting with the control total calculated during
the proof of register procedure.

(4)
Verify the accuracy of postage selection, denomination indicator wheels or
electronic display, and denomination printing wheels following the proof of
registers by printing a .00 meter stamp and comparing the register readings
after printing with the recorded register readings.

(5)
Check to determine that the post office seal is in place, properly
compressed, reads "US-PO" or "US-PS," and that the seal wire is properly wound
and tightly gripped by compressed lead, and tightly pulled up to the lock
cover or post.

(6)
Check to determine that the lock cover properly protects the lock and has
not been loosened, bent, or tampered with.

(7)
Depending on the meter manufacturer or model, perform the following:

(a)
Check to ensure that the meter fits on the meter base properly.

(b)
Check all breakoff screws to determine that none is missing, loose, or
shows signs of having been removed.

(c)
Operate the dater and meter ad selector dials to test the dater, postmark
die, and meter ad plate.

(d)
Check the alignment and condition of engraving on the denomination printing
wheels, when visible.

(e)
Check the descending register door for damage, pry marks, or scarring.
Make certain that the door cannot be opened without unlocking it.

(f)
Examine the meter drum for damage, pry marks or scarring.

(g)
Examine the meter cover for pry marks or scarring near the post office lock
or breakoff screws, any drilled holes, or any signs of attempted entry into
the internal mechanism of the meter.

(h)
Closely examine the postage meter stamp die for excessive wear, damage,
breakage, or scars from prying, and the postage die retaining screws for signs
of wear to ensure that none is missing or shows signs of having been removed.

(i)
Check the register, counter, and display windows for breakage or cloudiness.

(j)
Obtain the signature of the meter holder to indicate that a meter
inspection has taken place.

(8)
Report immediately to the mailer's licensing postmaster any irregularities
found in the operation of the meter or indications of its improper use, and
take appropriate steps to replace or remove the meter.

b.
If a meter manufacturer cannot locate one or more of its meters in service
using the address information in its files, take the following steps:

(1)
Contact the mailer's licensing postmaster and verify the location of the
meter or meter holder.  If new address information is obtained, the meter
inspection must be performed promptly.

(2)
If no valid address for the meter or meter holder is available and the
meter cannot be located, notify the postmaster at the setting post office in
writing.  Request that if the specified meter is presented for setting or
examination it be retained and the manufacturer or its representative be
notified immediately to perform the required inspection or examination.

(3)
If the postmaster is unable to determine a valid address for the meter
holder, revocation procedures must be instituted.  If after the license
revocation procedure has been completed the meter is presented for setting or
examination, the meter must be retained and the manufacturer notified in
accordance with 144.313.

144.963 Repair of Internal Mechanism.
Repair or reconditioning of meters involving access to internal mechanisms
must be performed only within a factory or suitable meter repair department
under the direct control and supervision of the manufacturer. Meters must be
checked out of service through the post office of setting before they are
opened or any internal repairs are undertaken.

144.97 Computerized Remote Postage Meter Resetting

144.971 Deposit with Postal Service.
Each manufacturer leasing meters equipped with computerized resetting
equipment must maintain on deposit an amount, to be held in a Postal Service
account, which represents the average daily postage set on these meters during
the most recently concluded Postal Service accounting quarter.  The amount of
this deposit is calculated by dividing the total value of the manufacturer's
computerized settings during the last quarter by the number of Postal Service
workdays in that quarter.  The deposit must be adjusted to reflect each such
calculation within 30 days after the close of each Postal Service quarter.

144.972 Bond.
The manufacturer must provide an indemnity bond equal to an average day's
computerized resettings as determined for the calculation of the advance
deposit pursuant to 144.971, provided, however, that this bond must
not be less than $10,000.  The purpose of this bond is to indemnify the Postal
Service for loss of postal revenue resulting from erroneous or unauthorized
meter settings.

144.973 Revenue Protection.
The Postal Service and the manufacturer must conduct periodic assessments
of the revenue-protection features in the system.  If the results of such
reviews indicate either a loss of postal revenue or nonprepayment of postage,
resulting from the use of the system, the manufacturer must take appropriate
corrective measures.

144.974 Equipment.
The postage meters, used in the computerized resetting system must conform
to the specifications in 144.92.  They must be tested in accordance
with 144.93, and conform to the safeguards, distribution, and
maintenance requirements of 144.94, 144.95, and
144.96 so as to protect the Postal Service against loss of revenue
from fraud, manipulation, misoperation, or breakdown.

144.975 Operation

a.
The manufacturer must establish a trustee account at a bank or banks
approved by the Postal Service to handle the deposits of customers.  The
manufacturer must make arrangements with such banks under which the banks are
to inform the manufacturer of the amounts of customer funds received each
banking day.

b.
The manufacturer must require each customer to deposit and maintain funds
in his account which are adequate to cover the desired postage increment prior
to each resetting transaction call.  The manufacturer must require each
trustee bank to notify the manufacturer daily of the amount received from each
customer.  Manufacturers must ensure that their data center computer is
programmed to reflect each customer deposit.

c.
The manufacturer must require each customer requesting that his meter be
reset to provide the meter serial number, the customer account number, and the
meter's ascending and descending register readings.  Before providing an
appropriate lock combination, the manufacturer must verify that the
information provided by the customer is consistent with the records, and that
there are adequate funds in the customer's account to pay the postage setting
requested.  Immediately following each such resetting, the manufacturer must
direct the trustee bank to charge the customer's account for the amount of the
postage reset.  The manufacturer provides the customer with a statement
documenting each transaction, or a monthly statement documenting all
transactions during that period.  All statements must include the balance
remaining in the customer's account after each transaction (see
144.386).

d.
Each banking day, the manufacturer must request the trustee banks to
transfer, by 10 a.m. local trustee bank time, amounts payable to the Postal
Service as a result of the transactions during the previous day to a
designated Federal Reserve Bank.

e.
The manufacturer must ensure that each customer transaction is registered
as a computer entry transferring an appropriate dollar amount from the
customer's deposit account to a postal payment-due amount.  The manufacturer
must make a payment from its own funds to the appropriate Postal Service
account for each transaction not fully covered by an advance deposit in the
customer's account.

f.
The manufacturer must not have access to funds on deposit at trustee banks
except for purposes of refunding trust account deposits to customers and
transferring payments for postage to Postal Service accounts.

144.976 Reports.
The manufacturer must provide the following reports.  The information which
must be provided in each report is specified below.

a.
The daily Funds Transfer Report  must provide a summary of the
total reset activity for each business day.  It is used to confirm the daily
funds authorized for transfer from the trustee bank to the designated Federal
Reserve Bank.  The report must include the following information:

(1)
The identification of the report and the date of the activity being
reported.

(2)
The time the funds were authorized for transfer.

(3)
The amount of funds authorized for transfer to the Postal Service Federal
Reserve Bank account.

b.
The daily Detail Transaction Log,  available to the Postal Service
on request, details the total activity for a given business day, and must
include the following:

(1)
The identification of the report and the date of the activity being
reported.

(2)
The identification of individual transactions.  Each entry must show the
following information:

(a)
The transaction number--a sequential number which identifies each item
entered into the transaction log.

(b)
The customer's name.

(c)
The meter serial number.

(d)
The post office finance number and station/branch ZIP Code.

(e)
The control totals--both for before and after transaction, the difference
being the amount of the reset increment.

(f)
The transaction amount--the value of postage set into each customer's meter
for each transaction using the combinations issued.

(3)
A report of the meters checked into and out of service.

(4)
The clearing transaction--this total is the amount of money authorized for
transfer from the trustee bank to the Postal Service for the period being
reported.

c.
The Accounting Period, Resetting by Post Office Report File must be
submitted at the end of each accounting period to each licensing post office.
It must include the serial numbers of all CMRS meters licensed at the post
office arranged in examining-unit order.  It must also include the customer
names and the amount of any resettings which have taken place for each meter
during the accounting period being reported.  Total postage set into CMRS
meters during that period for that post office must also be shown.  On the
report, entries for meters newly added are marked with the letter "A;" meters
to be deleted from subsequent reports are marked with the letter "D."

d.
The Computerized Meter Resetting System Revenue Summary by Post Office
Report File  must be submitted to the designated postal data center at the
end of each accounting period.  The manufacturer must incorporate all
resetting transaction data into one accounting period summary report file
identifying the revenue, number of meters set, finance number, and ZIP Code
for each post office.

e.
A Six-Month Examination Notice  for each meter is forwarded to the
customer approximately 3 weeks prior to each CMRS meter's scheduled 6-month
examination due date.

f.
A Record of Postage Meter Settings  for each meter withdrawn from
service for faulty operation affecting registration is sent to the licensing
post office.  It contains a record of detailed resetting information through
the last scheduled examination.

144.977 Inspection of Records and Facilities.
The manufacturer must make its facilities involved in the operation of the
computerized resetting system and all records concerning the operation of the
system available for inspection by representatives of the Postal Service at
all reasonable times.

144.98 Notice of Proposed Changes in Regulations.
So far as may be consistent with the public interest, before any changes
are made in the regulations in 144, the Postal Service must give
notice of any proposed changes sufficiently far in advance of the proposed
effective date to enable persons who manufacture, or who may be interested in
manufacturing, postage meters a reasonable opportunity to be heard and to
adjust their operations to accord with the proposed changes if they are
adopted.

145 Permit Imprints

145.1 General

145.11  Definition.
Mailers may be authorized to mail material without affixing postage if
payment of postage is made at the time of mailing from an advance deposit
account established with the Postal Service for that purpose.  Each piece of
mail sent by a mailer under this method of payment must bear a permit imprint
to indicate that postage has been paid.  This method of payment may be used to
pay special service fees as well as postage.  Permit imprint mailings that
have postage paid through an advance deposit account must be weighed by the
Postal Service to verify the accuracy of the piece counts claimed and the
total weight of the mailing, unless acceptance under an alternative procedure,
as described in 145.7, 145.8, or 145.9, is
authorized by the rates and classification center.  See 382.6,
382.7, 661.4, and 661.5 for regulations governing
the preparation of ZIP+4 Barcoded rate mailings in which pieces paid by permit
imprint are combined with pieces bearing precanceled stamps and/or meter
stamps.

145.12 Application

145.121 Filing.
A permit to use permit imprints and pay postage in cash at the time of, or
in advance of, mailing may be obtained by submitting Form 3601 with a fee of
$75, to the post office where mailings are made.  The postmaster gives the
applicant a receipt for the fee on Form 3544.  There is no other fee for the
use of permit imprints, as long as the permit remains active (see
145.13).

145.122 Other Fees.
The applicant must also pay an annual bulk mailing fee if matter is mailed
at Presorted First-Class rates, third-class bulk rates, Presorted Special
Fourth-Class rates, or destination BMC entry rates (see 315,
341, 612, 712, 742, and 743).

145.123 Assignment of Numbers.
The post office must issue a permit imprint number that is unique to the
permit holder from a sequence of numbers reserved for that purpose.  Although
more than one post office may issue numbers from identical sequences, any
number must be issued only once by each post office.

145.13 Revocation

145.131
The permit is revoked if used in operating any unlawful scheme or
enterprise, for nonuse during any 12-month period, or for any noncompliance
with the regulations governing the use of permit imprints.

145.132
The permit holder must be notified in writing by the postmaster if the
permit is to be revoked and the reasons for revocation.  Form 3604 may be used
if revocation is for nonuse.

145.133
The permit holder may appeal the revocation to the postmaster.  If no
written statement of objection is filed by the permit holder within 10 days,
the postmaster must cancel the permit.

145.134
If revocation is because of nonuse and the permit holder indicates that he
plans to resume mailings within a 90-day period, the permit is continued for a
period not to exceed 90 days.

145.135
If the postmaster does not grant the appeal, he must notify the customer.

145.136
The permit holder may appeal the initial decision to the field division
general manager/postmaster or the rates and classification center (if the
initial decision was made at the division level).  The appeal must be
submitted in writing to the postmaster, who forwards the appeal to the
appropriate division or center.

145.2 Preparation of Permit Imprints

145.21 General.
Embossed or unembossed permit imprints may be made by printing press, hand
stamp, lithography, mimeograph, multigraph, address plate, or similar device.
They may not be typewritten or hand-drawn.  The content of the imprint must be
in accordance with 145.3, and the format in accordance with
145.4.  No other forms of imprints may be used.  The imprint must be
legible and must be of a color that contrasts sufficiently with the paper and
the imprint's background to make the imprint readable.  A different color may
be used to highlight the background of a permit imprint.

145.22  Placement of Permit Imprints

145.221  All Mail.
In determining placement of the permit imprint, the mailpiece must be
oriented so that the address can be read without turning the mailpiece.  The
length is the dimension that is parallel to the address (see 127c).
The entire permit imprint must be aligned parallel with the length of the
mailpiece, and placed in the upper right corner of the address side, of the
address area, or of the address label.

145.222  Letter-Size Mail.
For letter-size mail, placement of the permit imprint should not interfere
with either the optical character reader (OCR) read area or the barcode clear
zone (see Exhibit 122.33). *viewer dmm125.pcx*

145.223  Bound Printed Matter.
For fourth-class bound printed matter, the position (but not the format) of
the permit imprint may be varied so that automatic data processing equipment
may be used to simultaneously print the address, imprint, and other postal
information.

145.23  Bulk Third-Class Mail Bearing References to Expedited Handling or
Delivery.
With the exception of postcard-size mail and imprints placed on address
labels, permit imprints on bulk third-class mail bearing references to
expedited handling or delivery (such as "Priority," "Express," "Overnight,"
etc.) must be prepared as follows:

a.
Mailers must display the words "Bulk Rate"  or "Nonprofit Org." more
prominently than any other words used in the permit imprint.

b.
Mailers must leave a clear space of not less than 3/8 inch around the
entire permit imprint.

145.3 Contents of Permit Imprints

145.31 First-Class Mail.
Permit imprints must show city and state, "First-Class Mail" or "Priority"
or "Priority Mail," "U.S. Postage Paid," and permit number.  They may show the
mailing date, amount of postage paid, or the number of ounces for which
postage is paid (see Exhibit 145.41a *viewer dmm175.pcx*  Exhibit
145.41b *viewer dmm176.pcx*  Exhibit 145.41c *viewer dmm177.pcx*
 Exhibit 145.41d *viewer dmm178.pcx*  and Exhibit 145.41e).
*viewer dmm179.pcx*   The ZIP Code of the permit holder may be shown
immediately following the name of the state or in a separate inscription
reading "ZIP Code 00000," when it is possible to include the ZIP Code without
creating uncertainty as to the permit holder's correct address or permit
number. Instead of printing the city and state of mailing in the permit
imprint, mailers may print the endorsement "Mailed from ZIP Code," followed by
the 5-digit ZIP Code assigned to the postmaster at the office of mailing. The
permit imprint indicia may also include the markings required by
362.  Only the postmaster's ZIP Code listed in Publication 65,
National Five-Digit ZIP Code and Post Office Directory, may be printed
in the permit imprint.

145.32 Second-Class Mail.
There is no permit imprint for second-class mail.  Second-class
publications mailed by publishers or news agents must be prepared with the
second-class imprint and other markings as prescribed in 429.42 and
429.6.  The second-class imprint is not a permit imprint.  Copies of
second-class publications not mailed by publishers or news agents or otherwise
not eligible for the publisher's second-class rates in 411.2 and/or
411.3 must be mailed at applicable rates other than second-class
(Express Mail, or First-, third-, or fourth-class) (see 411.4).

145.33  Thirdand Fourth-Class Mail.
Thirdand fourth-class mail permit imprints must contain the same
information as required in First-Class Mail imprints, except the date and the
words "First-Class" or "Priority" or "Priority Mail" must be omitted.  Permit
indicia may include the amount of postage paid, weight of piece, and markings
required by 629.6, 725.1, or 760.

145.34 Mail With Special Services.
Permit mail with special services paid by permit must show "First-Class
Mail," if First-Class Mail; "U.S. Postage and Fees Paid;" city and state; and
permit number.  The company's name may be shown in place of the city and
permit number, in accordance with 145.35.

145.35 Company Permit Imprints for Any Class of Mail

145.351  Availability.
The city, state, and permit number may be omitted if the permit holder has
permits at two or more post offices, and if the exact name of the company or
individual holding the permits is shown in the permit imprint.

145.352  Return Address

a.
When a company permit imprint is used, the mailing piece must bear a
complete domestic return address as described in 122.15, which
should be located in the upper left corner of the address side as recommended
by 122.31.

b.
On unendorsed bulk third-class mail, the return address may appear below
the permit imprint.

145.353  Records.
For 1 year, the permit holder must maintain, and make available for review
upon the request of postal officials, the following records for each mailing
bearing a company permit imprint.

a.
The post office at which the mailing was made;

b.
The dates of mailing;

c.
The total weight of the mailing;

d.
The weight of a single piece;

e.
The total number of pieces mailed;

f.
The amount of postage paid;  and

g.
A sample of the mailing piece.

145.4 Format of Permit Imprints

145.41
Permit imprints for other than official mail or Mailgrams must be prepared
in one of the formats shown in Exhibit 145.41a *viewer dmm175.pcx*
Exhibit 145.41b *viewer dmm176.pcx*  Exhibit 145.41c *viewer
dmm177.pcx*  Exhibit 145.41d *viewer dmm178.pcx*  and Exhibit
145.41e). *viewer dmm179.pcx*   Any of these formats may be used to
display the information prescribed by 145.3.

(FORMATS NOT SHOWN)

145.42
Permit imprints for Mailgrams and official mail must be prepared in one of
the formats shown in 145.42a through 145.42d.



a.
Format for Western Union Mailgram Message (see 145.93.)

(FORMAT NOT SHOWN)


MAILGRAM
Postage Charges
PAID
Western Union



b.
Formats for Official Mail (First-Class)


FIRST-CLASS MAIL
POSTAGE & FEES PAID
Agency Name
Permit No. G-



PRESORTED
FIRST-CLASS MAIL
POSTAGE & FEES PAID
Agency Name
Permit No. G-



FIRST-CLASS
CARRIER ROUTE PRESORT
POSTAGE & FEES PAID
Agency Name
Permit No. G-



ZIP+4
POSTAGE & FEES PAID
Agency Name
Permit No. G-



ZIP+4 PRESORT
POSTAGE & FEES PAID
Agency Name
Permit No. G-



c.
Formats for Official Mail (Third-Class)

(FORMAT NOT SHOWN)


THIRD-CLASS MAIL
POSTAGE & FEES PAID
Agency Name
Permit No. G-



BULK RATE
POSTAGE & FEES PAID
Agency Name
Permit No. G-



BULK RATE
CARRIER ROUTE PRESORT
POSTAGE & FEES PAID
Agency Name
Permit No. G-



d.
Formats for Official Mail (Fourth-Class)

(FORMAT NOT SHOWN)


FOURTH-CLASS MAIL
POSTAGE & FEES PAID
Agency Name
Permit No. G-



SPECIAL FOURTH-CLASS RATE
POSTAGE & FEES PAID
Agency Name
Permit No. G-



PRESORTED
SPECIAL FOURTH-CLASS RATE
POSTAGE & FEES PAID
Agency Name
Permit No. G-



BOUND PRINTED MATTER
POSTAGE & FEES PAID
Agency Name
Permit No. G-



BULK RATE
BOUND PRINTED MATTER
POSTAGE & FEES PAID
Agency Name
Permit No. G-


145.5 Mailings With Permit Imprints

145.51 Minimum Quantity.
Permit imprint mailings must consist of a minimum of 200 pieces or 50
pounds, except as provided in 145.52.  Minimum quantities of mail
necessary to mail at the nonpresorted ZIP+4 rate, or at any of the Presorted
First-Class rates, the fourth-class bulk zone rate, the Presorted Special
Fourth-Class rate and the bulk bound printed matter rates, are higher.  See
the appropriate chapter for the class of mail in question.

145.52 Exceptions to Minimum Quantities.
A mailing consisting of less than the required minimum is accepted by the
Postal Service, if one of the following requirements is met:

a. First-Class Mail.
An occasional mailing for a mailer whose total daily mailings are not much
more than 200 pieces but who, to cooperate with the post office, presents a
portion of his mailings early in the day.

b. All Classes of Mail.
A large mailing which extends over two or more consecutive days and the
deposit, made to complete the mailing, is less than the minimum.  To be
considered an exception, the mailer must include an explanation on the
applicable mailing statement.

145.53 Preparation of Mailing.
The mailer must arrange all pieces with the address side facing the same
way.  It is recommended that the mailer separate the pieces to the finest
extent possible in the manner prescribed in 360, 440,
640, 724, and 760.  Within each class of mail,
each group of pieces prepared as a separate mailing must be presented with a
completed mailing statement (see 145.55).  Pieces in fourth-class
mailings on which postage is paid at different zone rates must be separated by
zone.

145.54 Place of Mailing.
Mail must be deposited at the post office which issued the permit or at a
station or branch designated by the postmaster.  Permit imprint mail is
accepted at the main post office or at classified stations and branches where
there is a separation of financial and mailhandling activities.

145.55 Mailing Statement.
The mailing statement applicable to the class of mail (see 380,
460, 660, or 780) must be completed in ink,
typewriter, or computer printer to provide all the information required on the
form.  The statement must be signed by the mailer and presented with the
corresponding mailing.  If a receipt is desired for a mailing paid by permit
imprint, the mailer must submit the required mailing statement in duplicate.
If approved by the entry office postmaster, a computerized facsimile of the
applicable Postal Service mailing statement may be submitted provided it is in
the same format and includes all information required by the Postal Service
mailing statement, although portions may be omitted if they solely concern
rates not being claimed for the mailing.

145.56 Prepayment of Postage Required.
The mailer must pay for each mailing when it is presented at the post
office, or make an advance deposit sufficient to cover more than one mailing.
Payments for postage or deposits must be made at points designated by the
postmaster.  These payments are not accepted by employees handling the mail.
When the deposit becomes less than enough to pay for an entire mailing, an
additional amount must be deposited before any mailings are made.  Credit for
postage is not allowed.  Postage may not be paid partly in money and partly by
postage stamps, except as provided in 661.221d.  Compute postage as
required by 380, 460, 660, or 780, as
appropriate to the class of mail.

145.6 Use of Permit Imprints

145.61 General.
Permit imprints indicate that the postage for matter on which they appear
has been paid under the permit imprint system.  Therefore, imprints must not
ordinarily appear on matter which has not had postage so paid thereon (as, for
example, matter which is circulated as an enclosure with other matter either
by mail or by means other than mail).

a.
See 136.31 for specific information about the use of permit
imprints to pay postage for Firstand third-class enclosures in second-class
publications.

b.
Permit imprints may appear on address labels, wrappers, envelopes, and
other containers, and on complete mailpieces which have not had postage paid
thereon under the permit imprint system, provided it would be impracticable to
omit the permit imprint (e.g., when envelopes are shipped from a printer to a
permit imprint permit holder).

145.62 Place of Acceptance.
Permit imprint matter is accepted for mailing only at the post office shown
in the permit imprint, except (a) when company permit imprints are used as
provided for by 145.35 or (b) when arrangements for acceptance at
other post offices are made under the provisions of 145.8.


]
DMM175Exhibit 145.41a, Formats for First-Class
Mail]


]
DMM176Exhibit 145.41b, Formats for Thirdand
Fourth-Class Mail (Date and Class of Mail Omitted). Note:
qqWhen this form of permit imprint is used, the markings required by
629.6, 725.1, or 760 must appear below or to
the left of the permit imprint on the mailpieces or as otherwise specified.]


]
DMM177Exhibit 145.41c,  Formats for Third-Class
Mail (Regular Single-Piece and Bulk Rates)]


]
DMM178Exhibit 145.41d,  Formats for Third-Class
Mail (Special Single-Piece and Bulk Rates) (Authorized Organizations Only)]


]
DMM179Exhibit 145.41e,  Formats for
Fourth-Class Bulk-Rate Mail]



145.7 Manifest Mailing System (MMS)

145.71 Purpose.
The Manifest Mailing System (MMS) permits the Postal Service to accept and
verify mailings containing nonidentical weight and/or rate pieces of the same
mail class (except for second-class) and processing category, when generated
by the mailer in accordance with the regulations set forth below.  The MMS is
designed for situations in which postage charges cannot be adequately verified
by weighing or when normal acceptance procedures are impractical.

145.72 General Qualification Requirements.
In order to use MMS, the conditions in 145.721 and
145.722 must be met.

145.721 Service Agreement.
A service agreement must be signed by the mailer, the postmaster, and the
general manager, rates and classification center, before the first MMS mailing
is presented to the Postal Service.  The service agreement contains the
standard provisions common to all participating mailers; they concern the
responsibilities of the mailer and the Postal Service, document retention, and
the duration of the agreement.  The agreement also incorporates a number of
attachments making up an approved manifest, sample mailpiece or label, and the
approved quality control procedures.

145.722 Automated Mail Production.
The mailer must have an automated mail production system which generates
mail consistent with all applicable DMM regulations and calculates postage
accurately as follows:

a. Letter-Size Mail.
The automated system must fully determine the qualifying presort level and
the correct rate of postage.  The system must also perform the presort
sortation and number each piece in consecutive order.

b. Nonletter-Size Mail.
The mailer must have an automated mail production system which calculates
postage accurately before the mailing is presented to the Postal Service.

]
DMM181Exhibit 145.7,
Letter-Size Keyline Information]


145.723 Computerized Manifest.
Each mailpiece must be uniquely identified by the mailer.  Letter-size mail
(as defined in 128.2) must bear the prescribed "keyline"
information, as outlined in 145.742a.  The automated system must
provide a computer-generated manifest list for each mailing that permits
Postal Service verification of the postage amount and levels of Presort, as
applicable.  The manifest list must account for every piece in the mailing and
must include the following information:

a. Letter-Size Mail.
The manifest must list destination ZIP Codes, presort categories, batch
number ranges, postage amounts, cumulative postage amounts, and ZIP+4 or ZIP+4
barcode information, when appropriate. A computer-generated mailing statement
or a summary list showing the required information appearing on the mailing
statement must be included as the last page of the manifest.

b. Nonletter-Size Mail.
The manifest must list the postage for each piece and those factors, such
as destinating postal zone and piece weight, that are used to calculate the
correct amount of postage for the particular class of mail.  Each page of the
manifest must show cumulative postage totals. A computer-generated mailing
statement or a summary list showing the required information appearing on the
mailing statement must be included as the last page of the manifest.

c. Special Services.
When special services, such as collect on delivery (COD) or registry are
used, the manifest must include the applicable fees for each piece.

145.724 Identification.
Each piece in a manifest mailing must bear a unique piece identification
number.

145.725 Mailer Quality Control.
The mailer must implement a quality control program that (a) demonstrates
that the mail is properly prepared and (b) provides accurate documentation.
The service agreement must include a detailed description of the Postal
Service approved quality control procedures.  Each mailing under an MMS
agreement must be accompanied by a statement by the mailer certifying that the
approved quality control verification has been performed.

145.726 Permit Imprint.
Mailings deposited under the MMS program must qualify as permit imprint
mailings in accordance with 145.1, except that for letter-size mail
the qualified rate category endorsement must appear in the keyline.

145.727 Batch Definition.
Mailings consisting of Firstor third-class letter-size mail must be
prepared in batches produced in presort order and consecutively numbered to
ensure that the Postal Service can conduct a valid sample of the MMS mailings.
 A batch is a small group of pieces within a sortation level, such as carrier
route, 5-digit, or 3-digit ZIP Code.  A batch may consist of pieces of
different weight increments and rate categories.  The batch size is specified
in the applicable customer publication and can only be modified with the
concurrence of the general manager, RCC, in an addendum to the service
agreement.

145.728 Mailing Statement.
The mailer must submit a complete and accurate mailing statement with each
mailing (see 145.55).    If approved by the entry office postmaster,
a computerized facsimile of the applicable Postal Service mailing statement
may be submitted provided it is in the same format and includes all
information required by the Postal Service mailing statement, although
portions may be omitted if they solely concern rates not being claimed for the
mailing.

145.729 Manual Adjustment.
An approved method for adjusting the manifest list and mailing statement
must be used when pieces of mail have been mutilated, spoiled, or destroyed
during normal processing operations and cannot be presented as part of the
mailing. The following postage adjustment methods for spoiled mail are
acceptable:

a.
Write the adjustments directly on the manifest, list the consecutive serial
number, weight increment, rate category and postage of each item (as
appropriate) next to the batch which includes the serial number; or

b.
Prepare a separate list as an attachment to the manifest showing individual
spoiled pieces.  The list must include the following information (as
applicable): the consecutive serial number, weight increment, rate category,
and postage.

Note: Vendor-supplied software that assigns consecutive serial numbers
at the end of the processing operation may require a different method in
determining adjustments for spoiled or destroyed mail.  With a vendor-supplied
system, mail may be mutilated, spoiled, or destroyed during normal processing
operations and not be included as part of the manifest summary list because
the consecutive serial number and keyline information has not yet been
applied.  The omission of the spoiled mailpiece may disqualify the remaining
mail from the presort rate claimed.  (For example, 10 pieces were originally
addressed for ZIP Code 14623, carrier route 16, and one piece for carrier
route 16 was spoiled during processing.  The remaining nine pieces no longer
qualify at the carrier route presort rates.  The manifest should be adjusted
to reflect the rate of postage for which the pieces now qualify.)  Each piece
that had been processed, therefore, would show incorrect information in the
keyline because of the spoiled mailpiece.  Vendors may include as part of
their software program a separate line entry on the manifest summary list to
account for adjustments caused by spoiled mailpieces.  When the system
determines that spoiled mailpieces disqualify the remaining pieces claimed at
the presort rate, the system may recalculate the postage at the correct rate
and indicate the difference amount in the adjustment column.

c.
The total number of pieces and postage is deducted at the end of the
manifest and on the mailing statement.

145.73 Additional Technical Information.
The Postal Service has published a series of customer publications to help
mailers develop systems meeting the requirements for each class in MMS.
Mailers who develop systems that meet DMM regulations and the specifications
and guidelines outlined in the customer publication receive approval for their
manifesting application.

145.74 Markings

145.741 Compliance.
When mailings are made under 145.7, mailers may comply with other
applicable marking requirements by using the following alternatives:

a. Letter-Size Mail.
The markings required by 362 and 629.6 may be placed in a
keyline as described in 145.742.

b. Nonletter-Size Mail.
The markings required by 362, 629.6, 762,
763, 764, and 767 may be

(1)
incorporated as part of the permit imprint; or

(2)
printed, computer-printed or rubber-stamped above the address and
immediately below or to the left of the permit imprint; or

(3)
produced as otherwise specified in the MMS authorization; or

(4)
provided in an endorsement line in the address area, directly above the top
line of the address.

Note: When this option is used, no additional information other than
carrier route information may appear on the endorsement line.

145.742 Letter-Size Mail.
Requirements for keyline contents, rate category abbreviation, and keyline
location are as follows:

a. Keyline Contents.
The following keyline data must be printed in the following order on each
piece of letter-size First-Class Mail and third-class mail (except as
indicated) included in a MMS mailing:

(1)
Consecutive piece number unique to each piece;

(2)
Weight increment (First-Class only);

(3)
Rate category for which the mailpiece qualifies; and

(4)
Postage paid according to weight and rate category.

b. Mailer Keyline Codes.
Codes for internal mailer use may be printed to the right of the
postage-paid information.  A break of at least two spaces must appear between
the postage paid and any internal code information.

c. Rate Category Abbreviations.
The only acceptable rate category abbreviations for letter-size mail
keyline data are the following:

(1) First-Class Mail:

(a) ZB - 5-DIGIT ZIP+4 BARCODED

(b) TB - 3-DIGIT ZIP+4 BARCODED

(c) NB - NONPRESORTED ZIP+4 BARCODED

(d) ZP - ZIP+4 PRESORT

(e) ZN - NONPRESORTED ZIP+4

(f) FP - PRESORTED FIRST-CLASS

(g) CP - CARRIER ROUTE PRESORT

(h) FN - NONPRESORTED FIRST-CLASS

(2)  BULK THIRD-CLASS MAIL

(Regular and Special Rates):

(a) ZB - 5-DIGIT ZIP+4 BARCODED

(b) TB - 3-DIGIT ZIP+4 BARCODED

(c) BB - BASIC ZIP+4 BARCODED

(d) ZP - 3/5 ZIP+4

(e) ZN - BASIC ZIP+4

(f) CP - CARRIER ROUTE

(g) FD - 3/5 PRESORT

(h) BA - BASIC PRESORT

(i) DB - DESTINATION BMC

(j) DS - DESTINATION SCF

(k) DD - DESTINATION DELIVERY UNIT

(l) ST - SATURATION WALK-SEQUENCE

Note: All mailpieces that qualify for more than one rate of postage
must indicate each rate category abbreviation, separated by a "/" (slash) in
the keyline.  For example, a mailpiece that qualifies for the 3/5 ZIP+4 rate
of postage and is entered at the destination SCF must have a keyline that
includes both the "ZP" and "DS" rate abbreviations separated by a slash (e.g.,
ZP/DS).

d. Keyline Location.
The keyline must be printed either in a position at least two (2) lines
above the address or in the lower left corner of the envelope.  See Exhibit
145.7, Letter-Size Keyline Information *viewer dmm181.pcx*
For letter-size mail, the placement of the keyline must not interfere with
the OCR read area or barcode clear zone (see Exhibit 122.33). *viewer
dmm125.pcx*   When window envelopes are used, keyline data may be
printed on the insert in a position above the address provided the address and
keyline data are entirely visible through the window with at least 1/8 of an
inch clearance between the window and the edge of the panel.

145.743 Nonletter-Size Mail.
Requirements for the unique mailpiece number, location, and acceptable
methods for listing on the manifest are as follows:

a.
The unique number must be computer-generated. It can be a product number or
any other number devised by the mailer, as long as numbers are not duplicated
within the mailing.

b.
The unique number must be printed in one of the following locations:

(1)
Directly above the address;

(2)
The lower left corner of the mailing label; or

(3)
One space/line below the permit imprint.

c.
The numbers must be printed in ascending order or ascending order within
each 5-digit, 3-digit, BMC ZIP Code area, or within each zone on the manifest
list.

145.75 Authorization Procedures

145.751 Applications.
The mailer must submit an MMS application to the postmaster of each post
office where mailings are to be deposited.  Applications and detailed
information about mailer requirements and responsibilities and qualifying
criteria are available through post offices.  The application formally
expresses to the local postmaster the mailer's interest in MMS and provides
information essential to obtaining authorization.

145.752 Service Agreement and Support Documentation.
After completing development of a manifest mailing system that meets postal
specifications, the mailer is required to submit the basic manifest service
agreement and the following documentation as attachments to the service
agreement:

a.
An appropriate addendum, which proposes any requirements not covered in the
basic service agreement;

b.
Sample manifest list with corresponding sample mailing pieces;

c.
Sample mailing statement;

d.
A detailed description of the quality control procedures to be conducted by
the mailer;

e.
A copy of the application originally submitted; and

f.
Any additional documents outlined in the basic service agreement.

145.753 Review Procedures.
The mailer must submit the signed basic service agreement, and required
attachments/supporting documentation, to the post office for consideration
under the following review procedure:

a.
The postmaster reviews the MMS agreement and system, provides a letter of
recommendation to either approve or disapprove the MMS program (the letter
must include a statement specifying the reasons for the decision), signs the
agreement (only if approval is recommended), and forwards the entire package
to the field division general manager/postmaster.

b.
The field division general manager/postmaster reviews the MMS agreement and
system, provides a letter of recommendation to either approve or disapprove
the MMS program (the letter must include a statement specifying the reasons
for the decision), signs the agreement (only if approval is recommended), and
forwards the entire package to the appropriate general manager, rates and
classification center (RCC).

c.
The general manager, RCC, makes the initial decision to grant or deny an
MMS authorization, pursuant to 145.754 and 145.76.  Prior
to approving an authorization, the general manager, RCC, may modify the
attachments to the basic service agreement where necessary to meet Postal
Service needs and requirements.  Representatives from the division and/or RCC
may visit the mailer's plant to examine the proposed operation as part of the
review procedure.  A manifest mailing system is not valid and may not be
implemented before an MMS agreement is signed by the general manager, RCC.

145.754 Conditions of Authorization.
The following conditions apply to all manifest mailing systems:

a. Postage Adjustments.
Mailers are required to make postage adjustments for overpayments or
underpayments identified during postal verification.  Verification samples are
deemed to be representative of the entire mailing, and postage adjustment
calculations are applied to the total mailing.  Mailers who choose a computer
software program which automatically skips to the next weight increment for
borderline weight pieces are not required to make a postage adjustment due to
the computer software program.  However, if differences are detected other
than those generated by the software program (e.g., postage computations or
weight calculations), postage adjustments are applied to the total mailing as
specified in 145.754a.

b. Postage Error Penalty.
Whenever the sampling verification determines that the postage error
exceeds 1.5% of the corrected postage, a penalty is assessed.  The total
corrected postage and a penalty equal to 10% of the postage error calculation
are deducted from the permit imprint advance deposit account.

c. Authorization Period.
A manifest mailing system is authorized for a period not to exceed 2 years.
 Authorizations may be renewed following a Postal Service review that shows
the system remains qualified.

d. System Modification.
Mailers must provide advance written notice to the Postal Service of any
plans to modify or adjust the system that affects the calculation of postage,
generation of required mailing documentation, or mail presorting prior to
preparing and presenting the mailing for acceptance.

e. Advance Deposit Account.
Postage must be paid through an advance deposit account and funds in the
account may be deducted by the Postal Service to cover any deficiency
discovered after acceptance of the mail.

145.755 Concurrent Authorization at Stage I of the System Certification
Program

a. General.
Stage I of System Certification is a comprehensive program for documenting
mailer ability to conform to the requirements of MMS.

b. Authorization.
Any mailer approved after October 1, 1990, to mail under an MMS is
automatically certified at Stage I of the System Certification Program.
Mailers who mail under an MMS approved before October 1, 1990, are certified
only if a determination is made that they would qualify if they reapplied
under current regulations.

c. List of Stage I Certified Mailers.
The Postal Service periodically publishes a list of the names of those
mailers who have been certified under 145.7 at Stage I of the System
Certification Program.  Mailers who prefer not to have their company names
included on the list must notify the Postal Service at the time of
certification.

145.76 Approving or Denying Authorization

145.761 Responsibility.
The general manager, rates and classification center (RCC), serving the
post office to which the mailer submitted the proposed service agreement,
ensures that all required documentation has been provided and approves or
denies authorizations for all options available under the Manifest Mailing
System.

145.762 Approval.
If a decision is made to grant an MMS authorization, the general manager,
RCC, signs the agreement and forwards it, with instructions for administering
it, to the field division general manager/postmaster, who ensures that (a) the
service agreement is re-signed by the mailer if an attachment was modified by
the RCC; (b) the agreement is signed by the administering postmaster; and (c)
all affected parties are provided with a copy of the signed agreement.  The
division must return the original signed agreement to the RCC serving the
administering post office.

145.763 Denial.
If a decision is made to deny an authorization, the general manager, RCC,
must notify the mailer, the administering post office, and the field division,
in writing, stating the reason for denial.  The mailer may appeal a denial,
within 15 days from the receipt of the notice by the mailer, by filing a
written appeal, including additional evidence as to why the manifest mailing
system should be authorized, with the Director, Office of Classification and
Rates Administration.  The Director reviews the appeal and issues the final
agency decision.  The Director notifies the mailer, the administering post
office, the field division, and the RCC of the decision.  The mailer sends the
appeal to the director, Office of Classification and Rates Administration,
U.S. Postal Service (for address, see Address List in Appendices).

145.77 Authorization Renewals.
An MMS authorization may be renewed following a review conducted prior to
the expiration date by the general manager, RCC, or designated person, to
determine that the system remains qualified.  A new service agreement is
initiated under one of the following conditions:

a. Approved Without Modifications.
When the review of the MMS determines that the system remains qualified
without any modifications, the existing service agreement is extended for a
2-year period. The approval to extend the existing agreement may be
accomplished by an addendum that states the new expiration date, signed by the
administering postmaster, the field division general manager/postmaster, the
general manager, RCC, and the mailer.

b. Approved With Mailer Modifications.
When the review of the MMS determines that the system has been modified,
but remains qualified, a new service agreement must be prepared that outlines,
in detail, the changes to the system. The revised service agreement must be
signed by the administering postmaster, the field division general
manager/postmaster, the general manager, RCC, and the mailer.

c. Approved With Postal Service Modifications.
When the review determines that the system can only be renewed with
modifications required by the Postal Service, the mailer must be so informed
and, if the mailer agrees, a new agreement is prepared and signed as in
145.77b.

Note: When the review of the MMS indicates that the system no longer
qualifies under the MMS program, or when the mailer does not agree to Postal
Service modifications, the procedures for revocation of an MMS authorization
apply (see 145.78).

145.78 Revocation

145.781 Conditions.
The general manager, RCC, may revoke an MMS authorization for any of the
following reasons:

a.
If the mailer has provided incorrect data on the manifest list and appears
unable or unwilling to correct the problems;

b.
If it is discovered that the mailer is not properly performing the required
quality control verification procedures;

c.
If the MMS no longer meets the criteria established by this regulation and
those outlined in the MMS service agreement;

d.
If there have been no mailings presented under MMS for more than 6 months
(except as provided in the service agreement); or

e.
If the mailer continues to present mailings that are improperly prepared
and/or proper postage is not paid.

145.782 Notification.
Whenever any of the grounds for revocation set forth in 145.781
exist, the field division general manager/postmaster must notify the mailer,
in writing, of the nature of the discrepancy and the need for corrective
action prior to any revocation action.  The mailer and the division manager
determine the actions to be taken and set up an implementation schedule.  The
general manager, RCC, prescribes the time period for corrective action.  When
the mailer has completed the necessary corrective measures to bring the system
into compliance, the division manager must be notified and a follow-up review
conducted.  Failure to correct identified problems is sufficient grounds to
revoke a mailer's MMS authorization.

145.783 Revocation Procedures.
The following procedures apply to a revocation:

a.
If, after notification, the mailer is unable or unwilling to correct the
discrepancies cited by the Division Manager within the timeframe allotted, the
division manager must advise the mailer in writing that a recommendation to
revoke the authorization to mail under MMS was forwarded to the general
manager, RCC.

b.
The general manager, RCC, reviews the recommendation and supporting
documentation to determine whether revocation is appropriate.  The general
manager makes the initial decision to revoke an MMS authorization.  If the
general manager decides to revoke the MMS authorization, the mailer must be
notified directly of the decision, with a copy to the postmaster and field
division.

c.
The mailer may appeal this decision in writing within 15 days from the date
of receipt of the notice.  The mailer's appeal should contain evidence
explaining why the MMS authorization should not be revoked.  The appeal must
be filed with the general manager, RCC.  The mailer may continue to present
mail under the MMS pending a decision on appeal.

d.
If evidence provided by the mailer indicates that the authorization should
be continued, the general manager, RCC, may reverse the decision.

e.
If the general manager, RCC, does not find sufficient evidence to reverse
the revocation, the appeal is forwarded to the director, Office of
Classification and Rates Administration, U.S. Postal Service (for address, see
Address List in Appendices).

f.
The Director issues the final agency decision and notifies the mailer, the
administering post office, the field division, and the RCC of the decision.
The revocation decision is effective 15 days after receipt by the mailer.

145.8 Optional Procedure (OP) Mailing System

145.81 Purpose.
Optional procedures establish a method of accepting mail for situations in
which postage charges can be adequately verified by means other than weighing
and where normal acceptance procedures requiring weighing of mail are
impractical.  An OP Mailing System is a method of verifying and accepting
First-, third-, and fourth-class permit imprint mail consisting of identical
or nonidentical weight pieces by comparing a mailer's financial, production,
and other business records in lieu of the standard verification procedures of
weighing mail in bulk.  Publication 407, Optional Procedure (OP) Mailing
System, contains step-by-step instructions for customers interested in
mailing under an OP Mailing System.  Handbook DM-107, Mailing Systems,
Chapter 5, Optional Procedure (OP) Mailing System, contains
instructions and procedures for post offices to administer an OP Mailing
System.

145.82 General Qualification Requirements.
An OP Mailing System is authorized for a period not to exceed 2 years when
all of the following conditions are met:

(a)
the mailer's plant is operating and mailing at the time the application is
submitted;

(b)
the mailer's records provide a sound audit trail which ensures that proper
postage is collected;

(c)
mailings qualify as permit imprint mailings in accordance with
145; and

(d)
the administering post office/division ensures compliance with all
provisions of Publication 407 through adequate staffing with trained,
qualified employees who must be present at the time mailings are submitted by
the mailer for acceptance, loaded onto vehicles, and dispatched.

