Treatment of Cigarettes and Smokeless Tobacco as Nonmailable Matter, 24534-24541 [2010-10660]
Download as PDF
24534
Federal Register / Vol. 75, No. 86 / Wednesday, May 5, 2010 / Proposed Rules
(Authority: 38 U.S.C. 501, 2044)
§ 62.73
Technical assistance.
VA will provide technical assistance,
as necessary, to eligible entities to meet
the requirements of this part. Such
technical assistance will be provided
either directly by VA or through grants
or contracts with appropriate public or
non-profit private entities.
(Authority: 38 U.S.C. 501, 2044, 2064)
erowe on DSK5CLS3C1PROD with PROPOSALS-1
§ 62.80 Withholding, suspension,
deobligation, termination, and recovery of
funds by VA.
(a) Recovery of funds. VA will recover
from the grantee any supportive services
grant funds that are not used in
accordance with the requirements of
this part. VA will issue to the grantee a
notice of intent to recover supportive
services grant funds. The grantee will
then have 30 days to submit
documentation demonstrating why the
supportive services grant funds should
not be recovered. After review of all
submitted documentation, VA will
determine whether action will be taken
to recover the supportive services grant
funds.
(b) VA actions when grantee fails to
comply. When a grantee fails to comply
with the terms, conditions, or standards
of the supportive services grant, VA
may, on 7-days notice to the grantee,
withhold further payment, suspend the
supportive services grant, or prohibit
the grantee from incurring additional
obligations of supportive services grant
funds, pending corrective action by the
grantee or a decision to terminate in
accordance with paragraph (c) of this
section. VA will allow all necessary and
proper costs that the grantee could not
reasonably avoid during a period of
suspension if such costs meet the
provisions of the applicable Federal
Cost Principles.
(c) Termination. Supportive services
grants may be terminated in whole or in
part only if paragraphs (c)(1), (c)(2), or
(c)(3) of this section apply.
(1) By VA, if a grantee materially fails
to comply with the terms and
conditions of a supportive services grant
award and this part.
(2) By VA with the consent of the
grantee, in which case VA and the
grantee will agree upon the termination
conditions, including the effective date
and, in the case of partial termination,
the portion to be terminated.
(3) By the grantee upon sending to VA
written notification setting forth the
reasons for such termination, the
effective date, and, in the case of partial
termination, the portion to be
terminated. However, if VA determines
in the case of partial termination that
VerDate Mar<15>2010
15:17 May 04, 2010
Jkt 220001
the reduced or modified portion of the
supportive services grant will not
accomplish the purposes for which the
supportive services grant was made, VA
may terminate the supportive services
grant in its entirety under either
paragraphs (c)(1) or (c)(2) of this section.
(d) Deobligation of funds. (1) VA may
deobligate all or a portion of the
amounts approved for use by a grantee
if:
(i) The activity for which funding was
approved is not provided in accordance
with the approved application and the
requirements of this part;
(ii) Such amounts have not been
expended within a 1-year period from
the date of the signing of the supportive
services grant agreement;
(iii) Other circumstances set forth in
the supportive services grant agreement
authorize or require deobligation.
(2) At its discretion, VA may readvertise in a Notice of Fund
Availability the availability of funds
that have been deobligated under this
section or award deobligated funds to
applicants who previously submitted
applications in response to the most
recently published Notice of Fund
Availability.
(Authority: 38 U.S.C. 501, 2044)
§ 62.81 Supportive services grant closeout
procedures.
Supportive services grants will be
closed out in accordance with the
following procedures upon the date of
completion:
(a) No later than 90 days after the date
of completion, the grantee must refund
to VA any unobligated (unencumbered)
balance of supportive services grant
funds that are not authorized by VA to
be retained by the grantee.
(b) No later than 90 days after the date
of completion, the grantee must submit
all financial, performance and other
reports required by VA to closeout the
supportive services grant. VA may
authorize extensions when requested by
the grantee.
(c) If a final audit has not been
completed prior to the date of
completion, VA retains the right to
recover an appropriate amount after
considering the recommendations on
disallowed costs once the final audit has
been completed.
(Authority: 38 U.S.C. 501, 2044)
[FR Doc. 2010–10372 Filed 5–4–10; 8:45 am]
BILLING CODE P
PO 00000
Frm 00041
Fmt 4702
Sfmt 4702
POSTAL SERVICE
39 CFR Part 111
Treatment of Cigarettes and
Smokeless Tobacco as Nonmailable
Matter
Postal ServiceTM.
Proposed rule.
AGENCY:
ACTION:
SUMMARY: The Postal Service proposes
to revise Mailing Standards of the
United States Postal Service, Domestic
Mail Manual (DMM®) 601.11, pertaining
to the mailing of tobacco cigarettes and
smokeless tobacco. These provisions
implement specific requirements to be
in compliance with the Prevent All
Tobacco Cigarettes Trafficking (PACT)
Act, Public Law No. 111–154, which
restricts the mailability of cigarettes and
smokeless tobacco.
DATES: Submit comments on or before
May 17, 2010.
ADDRESSES: Mail or deliver written
comments to the Manager, Mailing
Standards, U.S. Postal Service, 475
L’Enfant Plaza, SW., Room 3436,
Washington, DC 20260–3436. You may
inspect and photocopy all written
comments at USPS Headquarters
Library, 475 L’Enfant Plaza, SW., 11th
Floor North, Washington, DC, between 9
a.m. and 4 p.m., Monday through
Friday. E-mail comments, containing
the name and address of the commenter,
may be sent to:
MailingStandards@usps.gov, with a
subject line of ‘‘PACT Act.’’ Faxed
comments are not accepted.
FOR FURTHER INFORMATION CONTACT:
Anthony Alverno, 202–268–2997, or
Mary Collins, 202–268–5440.
SUPPLEMENTARY INFORMATION:
On March 31, 2010, the Prevent All
Cigarette Trafficking (PACT) Act of
2009, Public Law No. 111–154 was
enacted. The Act’s purposes include:
• Requiring Internet-based and other
remote sellers of cigarettes and
smokeless tobacco to comply with laws
applied to other tobacco retailers;
• Creating disincentives for the illegal
smuggling of tobacco products;
• Enhancing enforcement tools to
deal with cigarette smuggling;
• Stemming trafficking;
• Increasing collection of federal,
state, and local excise taxes on cigarettes
and smokeless tobacco; and
• Preventing youth access through
Internet and contraband sales.
Section 3 of the PACT Act pertains to
the Postal Service and creates a new
section 1716E of Title 18, U.S. Code.
Section 3 of the PACT Act provides that,
subject to certain exceptions, cigarettes,
including roll-your-own tobacco and
E:\FR\FM\05MYP1.SGM
05MYP1
erowe on DSK5CLS3C1PROD with PROPOSALS-1
Federal Register / Vol. 75, No. 86 / Wednesday, May 5, 2010 / Proposed Rules
smokeless tobacco are nonmailable.
Exceptions in the PACT Act permit the
mailing of cigarettes and/or smokeless
tobacco in narrowly defined
circumstances, as described below.
• Noncontiguous States: Intrastate
shipments within Alaska or Hawaii;
• Business/Regulatory Purposes:
Shipments transmitted between verified
and authorized tobacco industry
businesses for business purposes, or
between such businesses and federal or
state agencies for regulatory purposes;
• Certain Individuals: Infrequent,
lightweight shipments mailed between
adult individuals;
• Consumer Testing: Shipments of
cigarettes sent by verified and
authorized manufacturers to adult
smokers for consumer testing purposes;
and
• Public Health: Shipments by federal
agencies for public health purposes
under similar rules applied to
manufacturers conducting consumer
testing.
The PACT Act provides that the
Postal Service cannot accept or transmit
any package that it knows, or has
reasonable cause to believe, contains
nonmailable smokeless tobacco or
cigarettes. The proposed rule explains
that the Postal Service has reasonable
cause to not accept for delivery or
transmit a package based on:
• A statement on a publicly available
Web site, or an advertisement, by any
person that the person will mail matter
which is nonmailable under this section
in return for payment; or
• The fact that the mailer or other
person on whose behalf a mailing is
being made is on the U.S. Attorney
General’s List of Unregistered or
Noncompliant Delivery Sellers.
Nonmailable cigarettes and smokeless
tobacco deposited in the mail are
subject to seizure and forfeiture.
Senders of nonmailable cigarettes or
smokeless tobacco are subject to
criminal fines, imprisonment, and civil
penalties.
Section 6 of the PACT Act provides
that the nonmailability provisions, as
well as the noncontiguous states
exception, take effect 90 days after
enactment. With respect to the
remaining exceptions, the PACT Act
requires the Postal Service to
promulgate a final rule no later than 180
days after enactment of the PACT Act.
18 U.S.C. 1716E(b)(3)(B)(i), (4)(B)(i),
(5)(C)(i). The Postal Service accordingly
will attempt to publish a final rule
effective June 29, 2010, that, at a
minimum, will cover the general
nonmailability provisions and the
noncontiguous states exception. The
Postal Service will attempt to issue a
VerDate Mar<15>2010
15:17 May 04, 2010
Jkt 220001
final rule to give effect to the remaining
exceptions to the PACT Act as soon as
possible, but no later than September
27, 2010.
The Postal Service offers the
following observations on the various
aspects of the proposed rule below.
Definitions: Consistent with the PACT
Act, the proposed rule uses the
definitions of cigarettes, roll-your-own
tobacco, smokeless tobacco, cigars,
consumer testing, and states found in
federal law in Titles 15, 18, and 26 of
the U.S. Code. As provided in 18 U.S.C.
1716E(b)(1), cigars are excluded from
the mailability ban and therefore may be
mailed regardless of any conditions
required for the mailing of other
applicable products under the PACT
Act exceptions.
Mailability: The proposed rule
incorporates the PACT Act mailability
restrictions for cigarettes and smokeless
tobacco.
Coverage of Exceptions: The PACT
Act governs the permissibility of certain
items within the Postal Service’s
mailstream network. The complex
verification requirements for the PACT
Act’s exceptions, combined with the
strict consequences of any
noncompliance, render it impracticable
for these requirements to be made
applicable to mail originating or
destinating outside of the Postal
Service’s service area. Therefore, the
Postal Service does not believe that any
alternative exists at this time to allow
U.S. mailers to tender cigarettes and
smokeless tobacco as outbound
international mail or to receive them as
inbound international mail under the
PACT Act’s exceptions. The proposed
rule incorporates these principles by
restricting the exceptions’ applicability
to domestic mail, but not to mail treated
as domestic under Mailing Standards of
the United States Postal Service,
Domestic Mail Manual (DMM) 608.2.2
or international mail as defined in DMM
608.2.3.
The applicability of these proposed
rules to domestic mail under DMM
608.2.1 would include mail to, from,
and between military installations,
Army Post Offices (APOs), Fleet Post
Offices (FPOs), and Diplomatic Post
Offices (DPOs), except for mail treated
as domestic under DMM 608.2.2.
Delivery rules would apply to overseas
military mail as practicable under the
certain individuals’ exception. Hold for
Pickup service would not be required
for delivery to APO, FPO, and DPO
addresses.
Noncontiguous States Exception: The
PACT Act permits the mailing of
cigarettes and smokeless tobacco within
the State of Alaska and within the State
PO 00000
Frm 00042
Fmt 4702
Sfmt 4702
24535
of Hawaii. 18 U.S.C. 1716E(b)(2). The
proposed rule would require that intraAlaskan and intra-Hawaiian shipments
of cigarettes or smokeless tobacco:
• Be presented in a face-to-face
transaction with a postal employee
(thereby enabling acceptance personnel
to verify that the shipment will
destinate in the noncontiguous state of
origin),
• Destinate in the state of origin,
• Bear a return address that is within
the state of origin, and
• Be marked with the following
exterior marking on the address side of
the mailpiece: ‘‘INTRASTATE
SHIPMENT OF CIGARETTES OR
SMOKELESS TOBACCO.’’
Business/Regulatory Purposes
Exception: Eligible mailers and
recipients under the business/regulatory
purposes exception include federal and
state agencies, 18 U.S.C.
1716E(b)(3)(A)(ii), as well as ‘‘legally
operating businesses that have all
applicable State and Federal
Government licenses or permits and are
engaged in tobacco product
manufacturing, distribution, wholesale,
export, import, testing, investigation, or
research.’’ 18 U.S.C. 1716E(b)(3)(A)(i).
The PACT Act charges the Postal
Service with verifying that any person
submitting an otherwise nonmailable
tobacco product into the mails, and any
person receiving such a product through
the mails, as authorized under the
business/regulatory purposes exception,
is a business or government agency
within the scope of the exception. 18
U.S.C. 1716E(b)(3)(B)(ii)(I)–(II).
The Postal Service proposes to require
that each customer seeking to avail itself
of this exception submit an application
to the manager, Pricing and
Classification Service Center (PCSC).
The application requires the customer to
furnish information about its legal
status, any applicable licenses, and
authority under which it operates. In
addition, the applicant would be
required to furnish similar information
for all entities to which its mailings
under this exception are addressed and
to identify all locations where the
applicant will present mail containing
cigarettes and smokeless tobacco. The
applicant would be required to update
this information anytime it intends to
mail to an entity or at a location not
previously on its list. Only those
shipments addressed to designated
recipients and presented at designated
locations would be eligible for the
business/regulatory purposes exception.
Before tendering any shipment under
this exception, the mailer must present
proof that the Postal Service has
E:\FR\FM\05MYP1.SGM
05MYP1
erowe on DSK5CLS3C1PROD with PROPOSALS-1
24536
Federal Register / Vol. 75, No. 86 / Wednesday, May 5, 2010 / Proposed Rules
authorized the mailer to tender such
shipments at that location.
Based on information furnished in the
customer’s application, the Postal
Service will make determinations of
eligibility to mail under this exception.
The applicant bears the burden of
establishing its and its recipients’
eligibility as legally operating
businesses that have all applicable state
and federal government licenses or
permits and that are engaged in tobacco
product manufacturing, distribution,
wholesale, export, import, testing,
investigation, or research; or, in the case
of mailings for regulatory purposes, the
applicant’s or its recipient’s status as a
federal or state agency. Customers
whose applications or amendments to
existing applications are denied in
whole or in part may appeal to the
manager, PCSC. The proposed rule
provides that eligibility to mail under
the business/regulatory purposes
exception may be revoked by the
manager, PCSC, in the event of failure
to comply with any applicable rules and
regulations. Decisions by the manager,
PCSC, to uphold the denial of an
application or to revoke a customer’s
eligibility under the business/regulatory
purposes exception may be appealed to
the Judicial Officer under 39 CFR part
953. In order to ensure that eligibility
determinations remain current, the
proposed rule provides that any
authorization to mail under this
exception will lapse if the mailer does
not actually tender any such mail
during any six-month period, and that
the mailer must submit a new
application for eligibility for any future
mailings after that point.
The PACT Act requires that eligible
shipments under this exception be sent
via mail classes that provide for the
‘‘tracking and confirmation of the
delivery.’’ 18 U.S.C.
1716E(b)(3)(B)(ii)(III). The mail service
that fulfills this requirement is Express
Mail service, which offers tracking
information and confirmation of
delivery. Consequently, the proposed
rule specifies that eligible shipments
under the business/regulatory purposes
exception would be required to use
Express Mail service.
The PACT Act provides that eligible
mailings be ‘‘marked with marking that
makes it clear to employees of the
United States Postal Service that it is a
permitted mailing of otherwise
nonmailable tobacco products that may
be delivered only to a permitted
government agency or business and may
not be delivered to any residence or
individual person.’’ 18 U.S.C.
1716E(b)(3)(B)(ii)(VI). The Postal
Service accordingly proposes that each
VerDate Mar<15>2010
15:17 May 04, 2010
Jkt 220001
mailing tendered under the business/
regulatory purposes exception bear the
following marking: ’’PERMITTED
TOBACCO PRODUCT—DELIVER ONLY
TO ADDRESSED BUSINESS/
AGENCY— RECIPIENT MUST
FURNISH PROOF OF AGE AND
EMPLOYMENT OR AGENCY.’’ The
marking would be required to appear on
the exterior of the address side of the
mailing container.
The PACT Act requires that the Postal
Service maintain information, to
include ‘‘the identity of the business or
government entity submitting the
mailing containing otherwise
nonmailable tobacco products for
delivery and the identity of the business
or government entity receiving the
mailing’’ for a three-year period
beginning on the date of the mailing. 18
U.S.C. 1716(b)(3)(B)(ii)(IV)–(V). Such
information must be made available to
designated law enforcement agencies
during the designated period of
retention. The Postal Service
understands this retention requirement
to apply to sender and recipient name
and address information for each
mailing. Currently, the Postal Service
does not organize or retain handwritten
or typed Express Mail mailing labels for
the designated statutory retention
period. To comply with this
requirement, the Postal Service
proposes that all customers seeking to
mail under this exception use Express
Mail service with Return Receipt. The
Return Receipt must bear the sender’s
eligibility number issued by the PCSC as
well as the addressee’s full name and
address, and be made returnable to the
manager, PCSC, which will retain the
record for the requisite period. Further,
the business or government name and
full mailing address of the sender and
recipient would be required to appear
on the Express Mail label, and match
those listed on the customer’s
application on file with the Postal
Service. 18 U.S.C. 1716E(b)(3)(B)(ii)(IV).
The PACT Act provides that eligible
mailings under the business/regulatory
purposes exception ‘‘be delivered only
to a verified employee of the recipient
business or government agency, who is
not a minor and who shall be required
to sign for the mailing.’’ 18 U.S.C.
1716E(b)(3)(B)(ii)(VII). For this
exception, the term ‘‘minor’’ is defined
as ‘‘an individual who is less than the
minimum age required for the legal sale
or purchase of tobacco products as
determined by applicable law at the
place the individual is located.’’ 18
U.S.C. 1716E(b)(3)(C). To implement
this requirement, the proposed rule
would require that Express Mail service
be used without the option for waiver of
PO 00000
Frm 00043
Fmt 4702
Sfmt 4702
signature. Further, to ensure that
delivery is effected on a person who is
a representative of the company and not
a minor, the proposed rule would
require that all Express Mail shipments
under this exception be required to be
delivered using Hold for Pickup service.
Hold for Pickup is shipped directly to
a postal retail location, in lieu of being
deposited at the recipient’s address. The
package is held until the recipient
retrieves it during retail office hours.
This measure would reduce the
potential that underage or unauthorized
individuals may receive a nonmailable
shipment of cigarettes or smokeless
tobacco. Furthermore, the recipient
would be required to furnish proof of
age through production of a driver’s
license, passport, or other governmentissued photo identification that lists age
or date of birth, as well as proof that the
recipient is an employee or agent of the
business or government entity identified
on the mailing label.
Certain Individuals: The exception for
certain individuals generally permits
the mailing of small quantities of
cigarettes or smokeless tobacco sent
non-commercially by individual adults
to businesses or other adults. 18 U.S.C.
1716E(b)(4)(A). Such shipments can
include, but are not limited to, the
following:
• Cigarettes and smokeless tobacco
exchanged as gifts between individual
adults; and
• The return by a consumer of a
damaged or unacceptable tobacco
product to the manufacturer.
For purposes of the certain
individuals’ exception, the PACT Act
requires the Postal Service to ‘‘verify
that any person submitting an otherwise
nonmailable tobacco product into the
mails * * * is the individual identified
on the return address label of the
package and is not a minor.’’ 18 U.S.C.
1716E(b)(4)(B)(ii)(I). Further, for a
mailing addressed to an individual
recipient, the PACT Act specifies that
the sender affirm that the recipient is
not a minor. 18 U.S.C.
1716E(b)(4)(B)(ii)(II). For purposes of
this exception, a minor is ‘‘an individual
who is less than the minimum age
required for the legal sale or purchase of
tobacco products as determined by
applicable law at the place the
individual is located.’’ 18 U.S.C.
1716E(b)(4)(C).
To give effect to these statutory
requirements, the proposed rule
provides that shipments by individuals
of cigarettes or smokeless tobacco would
be required to bear the sender’s name in
the return address, and that such
shipments be presented in a face-to-face
transaction with a postal employee. In
E:\FR\FM\05MYP1.SGM
05MYP1
erowe on DSK5CLS3C1PROD with PROPOSALS-1
Federal Register / Vol. 75, No. 86 / Wednesday, May 5, 2010 / Proposed Rules
this manner, the Postal Service would
be able to discharge its obligation to
verify the sender’s age and confirm that
the sender’s identification matches the
name listed in the return address. Age
and identity would be verified through
the use of government-issued photo
identification that lists age or date of
birth, such as a driver’s license or
passport. Further, for shipments
addressed to an individual, the
proposed rule would require that the
recipient’s first and last name appear in
the address block (in lieu of a generic
descriptor, such as ‘‘resident’’ or
‘‘occupant’’) on the mailpiece. To fulfill
the requirements of the PACT Act, the
proposed rule specifies that at the time
of the mailing, the customer would be
required to orally affirm to the accepting
postal employee that the recipient is not
a minor under the laws applicable to the
recipient at the destination location.
The PACT Act also specifies
additional quantity and frequency
limitations on the certain individuals’
exception. In particular, such mailings
cannot weigh in excess of 10 ounces. 18
U.S.C. 1716E(b)(4)(B)(ii)(III). Shipments
entered under this exception are capped
at no more than 10 mailings in any 30day period. 18 U.S.C.
1716E(b)(4)(B)(ii)(VII). Further, as with
the business/regulatory purposes
exception, such mailings may only be
sent via mail classes that provide for the
‘‘tracking and confirmation of the
delivery.’’ 18 U.S.C.
1716E(b)(4)(B)(ii)(IV). Again, the mail
service that fulfills this requirement is
Express Mail, which offers tracking
information and confirmation of
delivery. As explained above, the
proposed rule specifies that eligible
shipments under the certain
individuals’ exception would be
required to use Express Mail with Hold
for Pickup service.
The PACT Act provides that mailings
under the certain individuals’ exception
‘‘shall not be delivered or placed in the
possession of any individual who has
not been verified as not being a minor.’’
18 U.S.C. 1716E(b)(4)(B)(ii)(V). To
implement this requirement, the
proposed rule would require that
Express Mail be delivered in the context
of a face-to-face interaction between the
recipient and postal employee, thereby
enabling age verification. Each piece
would be required to be marked with a
special marking, thereby triggering the
need for age verification at delivery:
‘‘PERMITTED TOBACCO PRODUCT—
DELIVER ONLY TO AGE-VERIFIED
ADULT OF LEGAL AGE.’’ To ensure
that delivery is effected on a person who
is not a minor, the proposed rule would
require that Express Mail shipments
VerDate Mar<15>2010
15:17 May 04, 2010
Jkt 220001
(other than Express Mail shipments to
APO, FPO, or DPO addresses) under this
exception be delivered using Hold for
Pickup service, whereby the shipment
would be held at a postal retail unit for
pickup by the recipient. Further, the
recipient would be required to furnish
proof of age through production of a
driver’s license, passport, or other
government-issued photo identification
that lists age or date of birth.
The proposed rule provides that
eligibility to mail under the certain
individuals’ exception may be revoked
by the manager, PCSC, in the event of
failure to comply with any applicable
rules and regulations. A customer may
appeal an adverse decision to the
manager, Mailing Standards. Decisions
by the manager, Mailing Standards, to
revoke a customer’s eligibility under
this exception may be appealed to the
Judicial Officer under 39 CFR part 953.
Consumer Testing: The exception for
consumer testing permits a legally
operating cigarette manufacturer (or
legally authorized agent) to mail
cigarettes to verified adult smokers
solely for consumer testing purposes. 18
U.S.C. 1716E(b)(5)(A). Consumer testing
is defined in the PACT Act as ‘‘testing
limited to formal data collection and
analysis for the specific purpose of
evaluating the product for quality
assurance and benchmarking purposes
of cigarette brands or sub-brands among
existing adult smokers.’’ 18 U.S.C.
1716E(b)(5)(D)(ii). Notably, the statutory
exception applies only to cigarettes and
cigarette manufacturers (or legally
authorized agents) and not to smokeless
tobacco or non-manufacturer
participants in the tobacco industry.
The PACT Act limits eligibility to
cigarette manufacturers that have ‘‘a
permit, in good standing, issued under
section 5713 of the Internal Revenue
Code of 1986’’ and the legally authorized
agents of such manufacturers. 18 U.S.C.
1716E(b)(5)(A)(i). The PACT Act
requires the Postal Service to ‘‘verify
that any person submitting a tobacco
product into the mails under this
paragraph is a legally operating cigarette
manufacturer permitted to make a
mailing under this paragraph, or an
agent legally authorized by the legally
operating cigarette manufacturer to
submit the tobacco product into the
mails on behalf of the manufacturer.’’ 18
U.S.C. 1716E(b)(5)(C)(ii)(I). As with the
business/regulatory purposes exception,
the Postal Service intends to discharge
this obligation by requiring customers to
submit an application to the manager,
PCSC, for eligibility to mail under this
exception. The application would
require the applicant to provide
information to establish that the
PO 00000
Frm 00044
Fmt 4702
Sfmt 4702
24537
customer, or the customer’s principal if
the customer is a manufacturer’s agent,
is a cigarette manufacturer in good
standing under 26 U.S.C. 5713. In
addition, the applicant would be
required to identify all locations where
mail containing cigarettes for consumer
testing will be presented. Any changes
to the customer’s information or entry
locations would require a subsequently
filed amendment to the customer’s
application. As part of its application,
the customer would sign a certification
to the effect that the customer will
comply with the following PACT Act
requirements, 18 U.S.C.
1716E(b)(5)(C)(ii)(II)–(III):
• Any recipient of consumer testing
shipments of cigarettes is an adult
established smoker;
• No recipient has made any payment
for the cigarettes;
• Any recipient will sign a written
statement to the effect indicating that
the recipient wishes to receive the
mailings;
• The manufacturer or the legally
authorized agent of the manufacturer
will offer the opportunity for any
recipient to withdraw the recipient’s
written statement at least once in every
three-month period; and
• Any package mailed under this
exception will contain not more than 12
packs of cigarettes (240 cigarettes), on
which all taxes levied by the destination
state and locality have been paid and all
related destination state tax stamps or
other tax-payment indicia have been
applied.
To facilitate administration and
enforcement of this exception, the
proposed rule also requires that the
customer certify that it will maintain
records establishing compliance with
these obligations for a three-year period
from the date of each mailing.
Customers must provide copies of
records establishing compliance to the
manager, PCSC, upon request no later
than ten business days after the date of
the request. Before tendering any
shipment under this exception, the
mailer must present proof that the
Postal Service has authorized the mailer
to tender such shipments at that
location.
Customers whose applications are
denied by the Manager, PCSC, may
appeal to the manager, Mailing
Standards. The proposed rule provides
that eligibility to mail under the
consumer testing exception may be
revoked by the manager, Mailing
Standards, in the event of failure to
comply with any applicable rules and
regulations. Decisions by the manager,
Mailing Standards, to uphold the denial
of an application or to revoke a
E:\FR\FM\05MYP1.SGM
05MYP1
erowe on DSK5CLS3C1PROD with PROPOSALS-1
24538
Federal Register / Vol. 75, No. 86 / Wednesday, May 5, 2010 / Proposed Rules
customer’s eligibility under the
consumer testing exception may be
appealed to the Judicial Officer under
39 CFR part 953. To ensure that
eligibility determinations remain
current with respect to mailers’
behavior, the proposed rule provides
that any authorization to mail under this
exception would lapse if the mailer does
not actually tender any such mail
during any six-month period, and that
the mailer must submit a new
application for eligibility for any future
mailings after that point.
The PACT Act establishes quantity,
frequency, and other limitations. The
proposed rule accordingly limits
quantity to twelve packs of cigarettes
per package and frequency of no more
than one package from any one
manufacturer to an adult smoker during
any 30-day period. 18 U.S.C.
1716E(b)(5)(A)(ii)–(iii). The proposed
rule also implements PACT Act
requirements for payment of destination
state and locality taxes and the use of
tax stamps or other indicia. 18 U.S.C.
1716E(b)(5)(A)(iv). Additionally, the
proposed rule incorporates conditions
for consumer testing:
• That no payment by the recipient
for the cigarettes is permitted;
• The recipient must be paid a fee for
participation in consumer tests;
• The recipient must evaluate the
cigarettes and provide feedback to the
manufacturer in connection with the
consumer test; and
• The total calendar-year distribution
of cigarettes under the consumer testing
exception may not exceed one percent
of the manufacturer’s total cigarette
sales for the prior calendar year.
18 U.S.C. 1716E(b)(5)(A)(v)(I)–(III),
(B)(ii).
Consistent with the PACT Act, the
mailing of cigarettes for consumer
testing purposes would not be permitted
to states that prohibit the delivery of
cigarettes to individuals, and these rules
shall not preempt, limit, or otherwise
affect any related state laws. 18 U.S.C.
1716E(b)(5)(B)(i). The proposed rule
provides that customers maintain
records to establish compliance with all
of these requirements for three years.
The PACT Act requires that eligible
shipments under this exception be sent
via mail systems that provide for the
‘‘tracking and confirmation of the
delivery.’’ 18 U.S.C.
1716E(b)(5)(C)(ii)(IV). As explained
above, the mail service that fulfills this
requirement is Express Mail service,
which offers tracking information and
confirmation of delivery. Consequently,
the proposed rule specifies that eligible
shipments under the consumer testing
VerDate Mar<15>2010
15:17 May 04, 2010
Jkt 220001
exception would be required to use
Express Mail service.
The PACT Act provides that eligible
mailings under the consumer testing
exception be delivered ‘‘only to the
named recipient and only after verifying
that the recipient is an adult.’’ 18 U.S.C.
1716E(b)(5)(C)(ii)(VII). For purposes of
the consumer testing exception, the
term ‘‘adult’’ is defined in this exception
as ‘‘an individual who is not less than
21 years of age.’’ 18 U.S.C.
1716E(b)(5)(D)(i). To implement this
requirement, the proposed rule would
require that Express Mail service be
used without the option for waiver of
signature. Further, to ensure that
delivery is effected on a person who is
the named individual on the package
and at least 21 years of age, the
proposed rule would require that all
Express Mail shipments under this
exception be required to be delivered
using Hold for Pickup service. For age
and identity verification, the recipient
would be required to furnish proof of
age through production of a driver’s
license, passport, or other governmentissued photo identification that lists age
or date of birth.
The PACT Act provides that eligible
mailings ‘‘be marked with marking that
makes it clear to employees of the
United States Postal Service that it is a
permitted mailing of otherwise
nonmailable tobacco products that may
be delivered only to the named recipient
after verifying that the recipient is an
adult.’’ 18 U.S.C. 1716E(b)(5)(C)(ii)(VI).
The Postal Service accordingly proposes
that each mailing tendered under the
consumer testing exception bear the
following marking: ‘‘PERMITTED
TOBACCO PRODUCT—DELIVER ONLY
TO ADDRESSEE UPON AGE
VERIFICATION—AGE 21 OR ABOVE.’’
The marking would be required to
appear on the exterior of the address
side of the mailing container, so as to
ensure that eligible shipments are
correctly identified as falling under the
consumer testing exception.
The PACT Act requires that the Postal
Service maintain records ‘‘relating to a
mailing’’ under the consumer testing
exception for a three-year period
beginning on the date of the mailing. 18
U.S.C. 1716E(b)(5)(C)(ii)(V). Such
information must be made available to
certain law enforcement agencies during
the designated period of retention. The
Postal Service understands this
retention requirement to apply to
mailing information, including sender
and address information, for each
mailing. Currently, the Postal Service
does not organize or retain handwritten
or typed Express Mail mailing labels for
the designated statutory retention
PO 00000
Frm 00045
Fmt 4702
Sfmt 4702
period. To comply with this
requirement, the Postal Service
proposes that customers seeking to mail
under this exception use Express Mail
service with Return Receipt. The Return
Receipt must bear the sender’s
eligibility number issued by the PCSC,
as well as the addressee’s full name and
address, and be made returnable to the
Manager, PCSC, who will retain the
record for the requisite period.
Public Health: The PACT Act
provides that federal government
agencies ‘‘involved in the consumer
testing of tobacco products solely for
public health purposes may mail
cigarettes under the same requirements,
restrictions, and rules and procedures
that apply to consumer testing mailings
of cigarettes by manufacturers,’’ with the
exception that the agency shall not be
required to pay recipients for
participating in testing. 18 U.S.C.
1716E(b)(6). The proposed rule
accordingly creates a public health
exception for federal agencies. This
exception is made subject to the same
mailing standards as those applied to
manufacturers involved in consumer
testing, with the exception that federal
agencies do not need to comply with the
mailing standard requiring that the
customer certify that the recipient is
being paid a fee for participation in
consumer tests.
The Postal Service accordingly invites
comments on the following proposed
revision of the Mailing Standards of the
United States Postal Service, Domestic
Mail Manual, incorporated by reference
in the Code of Federal Regulations. See
39 CFR 111.
List of Subjects in 39 CFR Part 111
Administrative practice and
procedure, Postal Service.
Accordingly, 39 CFR part 111 is
proposed to be amended as follows:
PART 111—[AMENDED]
1. The authority citation for 39 CFR
part 111 is revised to read as follows:
Authority: 5 U.S.C. 552(a); 13 U.S.C. 301–
307; 18 U.S.C. 1692–1737; 39 U.S.C. 101,
401, 403, 404, 414, 416, 3001–3011, 3201–
3219, 3403–3406, 3621, 3622, 3626, 3632,
3633, and 5001.
2. Revise the following sections of
Mailing Standards of the United States
Postal Service, Domestic Mail Manual
(DMM) as follows:
Mailing Standards of the United States
Postal Service, Domestic Mail Manual
(DMM)
*
E:\FR\FM\05MYP1.SGM
*
*
05MYP1
*
*
Federal Register / Vol. 75, No. 86 / Wednesday, May 5, 2010 / Proposed Rules
600 Basic Standards for All Mailing
Services
601
Mailability
*
*
*
*
*
[Renumber current 601.11 and 12 as
new 12 and 13, and add new 11 as
follows:]
11
11.1
Cigarettes and Smokeless Tobacco
Definitions
For this standard, we define terms as
follows:
a. Cigarette: any roll of tobacco
wrapped in paper or in any substance
not containing tobacco, and any roll of
tobacco wrapped in any substance
containing tobacco which, because of its
appearance, the type of tobacco used in
the filler, or its packaging and labeling,
is likely to be offered to, or purchased
by, consumers as a cigarette. The term
cigarette includes roll-your-own tobacco
and excludes cigars.
b. Smokeless tobacco: any finely cut,
ground, powdered, or leaf tobacco that
is intended to be placed in the oral or
nasal cavity or otherwise consumed
without being combusted.
c. Cigar: any roll of tobacco wrapped
in leaf tobacco or in any substance
containing tobacco, unless, because of
its appearance, the type of tobacco used
in the filler, or its packaging and
labeling, the product is likely to be
offered to, or purchased by, consumers
as a cigarette.
d. Roll-your-own tobacco: any tobacco
which, because of its appearance, type,
packaging, or labeling, is suitable for use
and likely to be offered to, or purchased
by, consumers as tobacco for making
cigarettes or cigars, or for use as
wrappers thereof.
e. Consumer testing: testing limited to
formal data collection and analysis for
the specific purpose of evaluating the
product for quality assurance and
benchmarking purposes of cigarette
brands or sub-brands among existing
adult smokers.
f. State: any of the 50 states of the
United States, the District of Columbia,
and any commonwealth, territory, or
possession of the United States.
erowe on DSK5CLS3C1PROD with PROPOSALS-1
11.2
Nonmailability
Except as provided in 11.8.3, all
cigarettes (including roll-your-own
tobacco) and smokeless tobacco are
nonmailable and shall not be deposited
in or carried through the Postal Service
mailstream. The Postal Service will not
accept for delivery or transmit any
package that it knows, or has reasonable
cause to believe, contains nonmailable
cigarettes or smokeless tobacco. In the
event the Postal Service reasonably
VerDate Mar<15>2010
15:17 May 04, 2010
Jkt 220001
suspects that a mailer is tendering
nonmailable cigarettes or smokeless
tobacco, then the mailer bears the
burden of proof in establishing
eligibility to mail. Nonmailable
cigarettes and smokeless tobacco
deposited in the mail are subject to
seizure and forfeiture. Any nonmailable
cigarettes and smokeless tobacco
products seized and forfeited shall be
destroyed or retained by the Federal
Government for the detection or
prosecution of crimes or related
investigations and then destroyed.
Senders of nonmailable cigarettes and
smokeless tobacco may be subject to
seizure and forfeiture of assets, criminal
fines, imprisonment, and civil penalties.
The Postal Service has reasonable cause
not to accept for delivery or transmit a
package based on:
a. A statement on a publicly available
website, or an advertisement, by any
person that the person will mail matter
which is nonmailable under this section
in return for payment; or
b. The fact that the mailer or other
person on whose behalf a mailing is
being made is on the U.S. Attorney
General’s List of Unregistered or
Noncompliant Delivery Sellers.
11.3 Mailability Exceptions
Cigarettes and smokeless tobacco are
mailable if one of the conditions in 11.4
through 11.8 is met. These exceptions
only apply to domestic mail under
608.2.1, including mail to, from, and
between military installations and Army
Post Office (APO), Fleet Post Office
(FPO), and Diplomatic Post Office (DPO)
addresses, with the exception that
delivery procedures for overseas
military mail under the certain
individuals’ exception in 11.6 may vary
as practicable. These exceptions do not
apply to mail treated as domestic under
608.2.2 or international mail as defined
in 608.2.3.
11.4 Mailing Within Noncontiguous
States
Intra-Alaskan and intra-Hawaiian
shipments of cigarettes or smokeless
tobacco are mailable, provided that such
mailings:
a. Are presented in a face-to-face
transaction with a postal employee
within the state;
b. Destinate in the same state of
origin;
c. Bear a valid complete return
address that is within the state of origin;
and
d. Are marked with the following
exterior marking on the address side of
the mailpiece: ‘‘INTRASTATE
SHIPMENT OF CIGARETTES OR
SMOKELESS TOBACCO.’’
PO 00000
Frm 00046
Fmt 4702
Sfmt 4702
24539
11.5 Exception for Business/
Regulatory Purposes
Eligibility to mail and to receive mail
under the business/regulatory purposes
exception is limited to federal and state
government agencies and legally
operating businesses that have all
applicable state and federal government
licenses or permits and are engaged in
tobacco product manufacturing,
distribution, wholesale, export, import,
testing, investigation, or research, only
under the conditions in 11.5.1 through
11.5.3.
11.5.1
Application
Each customer seeking to mail
cigarettes or smokeless tobacco under
the business/regulatory purposes
exception must complete an application
letter requesting to mail under the
business/regulatory purposes exception.
a. The applicant must furnish:
1. Information about its legal status,
any applicable licenses, and authority
under which it operates;
2. Information about the legal status,
any applicable licenses, and operational
authority for all entities to which the
applicant’s mailings under this
exception will be addressed; and
3. All locations where mail containing
cigarettes and smokeless tobacco will be
presented.
The applicant must update this
information anytime it intends to mail
to an entity not on its list. Only those
shipments containing otherwise
nonmailable tobacco addressed to
recipients on the customer’s list of
designated recipients would be eligible
for the business/regulatory purposes
exception.
b. The applicant must establish its
and its recipients’ eligibility as legally
operating businesses that have all
applicable state and federal government
licenses or permits and are engaged in
tobacco product manufacturing,
distribution, wholesale, export, import,
testing, investigation, or research; or, in
the case of mailings for regulatory
purposes, as a federal or state agency.
c. Applications must be mailed to the
manager, Pricing & Classification
Service Center (PCSC), see 608.8.0 for
address. The manager, PCSC, issues the
initial agency decision of a
determination of eligibility to mail
under the business/regulatory purposes
exception.
d. Customers whose applications or
amendments to existing applications are
denied in whole or in part may appeal
to the manager, Mailing Standards (see
608.8.0).
e. Eligibility to mail under the
business/regulatory purposes exception
E:\FR\FM\05MYP1.SGM
05MYP1
24540
Federal Register / Vol. 75, No. 86 / Wednesday, May 5, 2010 / Proposed Rules
erowe on DSK5CLS3C1PROD with PROPOSALS-1
may be revoked by the manager, Mailing
Standards, in the event of failure to
comply with any applicable rules and
regulations. Decisions by the manager,
Mailing Standards, to uphold the denial
of an application or to revoke a
customer’s eligibility under the
business/regulatory purposes exception
may be appealed to the Judicial Officer
under 39 CFR part 953.
f. Upon written request by a state or
federal agency, the manager, Mailing
Standards, may, in his or her discretion,
waive certain application requirements
for mailings entered by the requesting
state or federal agency for regulatory
purposes.
g. Any determination of eligibility to
mail under this exception shall lapse if
the authorized mailer does not tender
any mail under this exception within
any six-month period. After that time,
the affected mailer must apply for and
receive new authorization for any
mailings under this exception.
11.5.2 Mailing
Customers eligible to mail under the
business/regulatory purposes exception
may enter mailings of cigarettes and
smokeless tobacco only at the locations
specified in the customer’s application.
Before mailing any shipment under this
exception, the mailer must present proof
that the PCSC has authorized the mailer
to mail such shipments at that location.
All mailings under the business/
regulatory purposes exception must:
a. Be entered as Express Mail with
Hold for Pickup service (waiver of
signature not permitted) (see 113);
b. Be accompanied by a request for
return receipt (PS Form 3811, see
503.6), which must bear the sender’s
eligibility number issued by the PCSC as
well as the addressee’s full name and
address, and be made returnable to the
manager, PCSC — Tobacco Mailing Unit
(see 608.8.0 for address), which will
retain the record for a three-year period;
c. Bear the marking ‘‘PERMITTED
TOBACCO PRODUCT—DELIVER ONLY
TO ADDRESSED BUSINESS/
AGENCY—RECIPIENT MUST FURNISH
PROOF OF AGE AND EMPLOYMENT
OR AGENCY.’’ on the address side of the
mailpiece; and
d. bear the business or government
agency name and full mailing addresses
of both the sender and recipient, both of
which must match exactly those listed
on the customer’s application on file
with the Postal Service.
11.5.3 Delivery
Mailings bearing the marking for
business/regulatory purposes can only
be delivered to a verified employee of
the addressee business or government
VerDate Mar<15>2010
15:17 May 04, 2010
Jkt 220001
agency. The recipient must show proof
that he or she is an employee or agent
of the business or government identified
as the addressee on the mailing label.
Delivery is completed under the
following conditions:
a. The recipient must be an adult of
at least the minimum age for the legal
sale or purchase of tobacco products at
the place of delivery. The recipient must
furnish proof of age via a driver’s
license, passport, or other governmentissued photo identification that lists age
or date of birth.
b. Once age and the recipient’s
identity as an employee or agent of the
addressee are established, the recipient
must sign PS Form 3849 and PS Form
3811 in the appropriate signature
blocks.
11.6
Exception for Certain Individuals
The exception for certain individuals
permits the mailing of small quantities
of cigarettes or smokeless tobacco by
individual adults to businesses or to
other adults. Such shipments may
include, but are not limited to, cigarettes
and smokeless tobacco exchanged as
gifts between individual adults and a
damaged or unacceptable tobacco
product returned by a consumer to the
manufacturer. Eligibility to mail under
the certain individuals’ exception may
be revoked by the manager, PCSC, in the
event of failure to comply with any
applicable rules and regulations. A
customer may appeal an adverse initial
decision to the manager, Mailing
Standards (see 608.8.0). The mailer
bears the burden of proof in establishing
eligibility in the event of revocation.
Decisions by the manager, Mailing
Standards, to revoke a customer’s
eligibility under this exception may be
appealed to the Judicial Officer under
39 CFR part 953. Mailings under this
exception must be made under the
conditions in 11.6.1 through 11.6.3.
11.6.1.
Entry and Acceptance
Mailings under the certain
individuals’ exception must be entered
under the following conditions:
a. Cigarettes or smokeless tobacco
may only be mailed via a face-to-face
transaction with a postal employee.
b. Cigarettes or smokeless tobacco
may only be entered by an adult of at
least the minimum age for the legal sale
or purchase of tobacco products at the
place of entry.
c. The individual presenting the
mailing must furnish government-issued
photo identification that lists age or date
of birth, such as a driver’s license or
passport, at the time of the mailing. The
name on the identification must match
PO 00000
Frm 00047
Fmt 4702
Sfmt 4702
the name of the sender appearing in the
return address block of the mailpiece.
d. For mailings addressed to an
individual, at the time the mailing is
presented, the customer must orally
confirm that the addressee is an adult of
at least the minimum age for the legal
sale or purchase of tobacco products at
the place of delivery.
11.6.2
Mailing
No customer may send or cause to be
sent more than 10 mailings under this
exception in any 30-day period. All
mailings under the certain individual’s
exception must:
a. Be entered as Express Mail with
Hold for Pickup service requested
(except overseas military mail
shipments (waiver of signature not
available)); see 113.
b. Bear the marking ‘‘PERMITTED
TOBACCO PRODUCT—DELIVER ONLY
TO AGE-VERIFIED ADULT OF LEGAL
AGE’’ on the address side of the exterior
of the mailpiece;
c. Bear the full name and mailing
address of the sender and recipient on
the Express Mail label;
d. Weigh no more than 10 ounces.
11.6.3
Delivery
Delivery under the certain
individuals’ exception is made under
the following conditions:
a. The recipient signing for the
Express Mail article must be an adult of
at least the minimum age for the legal
sale or purchase of tobacco products at
the place of delivery.
b. The recipient must furnish proof of
age via a driver’s license, passport, or
other government-issued photo
identification that lists age or date of
birth.
c. Once age is established, the
recipient must sign PS Form 3849 in the
appropriate signature block.
11.7
Exception for Consumer Testing
The exception for consumer testing
permits a legally operating cigarette
manufacturer or a legally authorized
agent of a legally operating cigarette
manufacturer to mail cigarettes to
verified adult smokers solely for
consumer testing purposes. The
manufacturer for which mailings are
entered under this exception must have
a permit, in good standing, issued under
26 U.S.C. 5713. The consumer testing
exception applies only to cigarettes and
not smokeless tobacco. Items must be
mailed under conditions in 11.7.1
through 11.7.3.
11.7.1
Application
Each customer seeking to mail
cigarettes under the consumer testing
E:\FR\FM\05MYP1.SGM
05MYP1
erowe on DSK5CLS3C1PROD with PROPOSALS-1
Federal Register / Vol. 75, No. 86 / Wednesday, May 5, 2010 / Proposed Rules
exception must submit an application
letter to mail under consumer testing
exception. The applicant must furnish:
a. Information to establish that the
customer, or the customer’s principal if
the customer is a manufacturer’s agent,
is a cigarette manufacturer in good
standing under 26 U.S.C. 5713;
b. If the customer is an agent of a
manufacturer, complete details about
the agency relationship with the
manufacturer; and
c. All locations where mail containing
cigarettes for consumer testing will be
presented.
d. As part of its application, the
applicant must certify in writing that it
will comply with the following
requirements:
1. Any recipient of consumer testing
samples of cigarettes is an adult
established smoker;
2. No recipient has made any payment
for the cigarettes;
3. Every recipient will sign a
statement indicating that the recipient
wishes to receive the mailings;
4. The manufacturer or the legally
authorized agent of the manufacturer
will offer the opportunity for any
recipient to withdraw the recipient’s
written statement at least once in every
three-month period;
5. Any package mailed under this
exception will contain not more than 12
packs of cigarettes (maximum of 240
cigarettes) on which all taxes levied on
the cigarettes by the state and locality of
delivery have been paid and all related
state tax stamps or other tax-payment
indicia have been applied; and
6. The manufacturer will maintain
records establishing compliance with
these obligations for a three-year period
from the date of each mailing.
e. The applicant must establish its
eligibility by submitting applications to
the manager, Pricing & Classification
Service Center (PCSC).
f. The applicant must provide any
requested copies of records establishing
compliance to the manager, PCSC (see
608.8.0), and/or the manager, Mailing
Standards (see 608.8.0), upon request no
later than 10 business days after the date
of the request.
g. The manager, PCSC, issues the
initial agency decision of a
determination of eligibility to mail
under the consumer testing exception.
Customers whose applications are
denied in whole or in part may appeal
to the manager, Mailing Standards.
Eligibility to mail under the consumer
testing exception may be revoked by the
manager, Mailing Standards, in the
event of failure to comply with any
applicable rules and regulations.
Decisions by the manager, Mailing
VerDate Mar<15>2010
15:17 May 04, 2010
Jkt 220001
Standards, to uphold the denial of an
application or to revoke a customer’s
eligibility under the consumer testing
exception may be appealed to the
Judicial Officer under 39 CFR part 953.
h. Any determination of eligibility to
mail under this exception shall lapse if
the authorized mailer does not tender
any mail under this exception within
any six-month period. After that time,
the affected mailer must apply for and
receive new authorization for any
further mailings under this exception.
11.7.2 Mailing
Customers eligible to mail under the
consumer testing exception may enter
mailings of cigarettes only at the
locations specified in the customer’s
application and under the following
conditions:
a. Before tendering any shipment
under this exception, the mailer must
present proof that the PCSC has
authorized the mailer to tender such
shipments at that location.
b. All mailings under the consumer
testing exception:
1. Must be entered as Express Mail
with Hold for Pickup service requested
(waiver of signature not available); see
113.
2. Be accompanied by a request for
return receipt (PS Form 3811; see
503.6), which must bear the sender’s
eligibility number issued by the PCSC,
as well as the addressee’s full name and
address, and be made returnable to the
manager, PCSC—Tobacco Mailing Unit
(see 608.8.0 for address);
3. Must bear the marking
‘‘PERMITTED TOBACCO PRODUCT—
DELIVER ONLY TO ADDRESSEE UPON
AGE VERIFICATION—AGE 21 OR
ABOVE’’ on the address side of the
exterior of the mailpiece;
4. Must bear the full mailing
addresses of both the sender and
recipient on the Express Mail label. The
name and address of the sender must
match exactly those listed on the
customer’s application on file with the
PCSC;
5. Are limited in tobacco contents to
no more than 12 packs of cigarettes
(maximum 240 cigarettes) on which all
taxes levied on the cigarettes by the
destination state and locality have been
paid and all related state tax stamps or
other tax-payment indicia have been
applied;
6. May not be addressed to an
addressee residing in a state that
prohibits the delivery or shipment of
cigarettes to individuals in the
destination state;
7. May be sent only to an addressee
who has not made any payment for the
cigarettes, is being paid a fee for
PO 00000
Frm 00048
Fmt 4702
Sfmt 9990
24541
participation in consumer tests, and has
agreed to evaluate the cigarettes and
furnish feedback to the manufacturer in
connection with the consumer test.
c. Customers must maintain records to
establish compliance with the
requirements in 11.7.
d. Mailing frequency may not exceed
more than one package from any
manufacturer to an adult smoker during
any 30-day period.
e. Nothing in these rules shall
preempt, limit, or otherwise affect any
related state laws.
11.7.3
Delivery
Mailings bearing the marking for
consumer testing can only be delivered
to the named addressee under the
following conditions:
a. The recipient signing for the
Express Mail Hold for Pickup service
(see 113) article must be an adult of at
least 21 years of age.
b. The recipient must furnish proof of
age through production of a driver’s
license, passport, or other governmentissued photo identification that lists age
or date of birth.
c. The name on the identification
must match the name of the addressee
on the Express Mail label.
d. Once age is established, the
recipient must sign the PS Form 3849
and PS Form 3811 in the appropriate
signature blocks.
11.8
Public Health Exception
Federal government agencies involved
in the consumer testing of tobacco
products solely for public health
purposes may mail cigarettes under the
mailing standards of 11.7, except as
provided herein. The federal agency
shall not be subject to the requirement
that the recipient be paid a fee for
participation in consumer tests. Upon
written request, the manager, Mailing
Standards, may, in his or her discretion,
waive certain of the application
requirements.
*
*
*
*
*
We will publish an appropriate
amendment to 39 CFR part 111 to reflect
these changes when the proposal is
adopted.
Stanley F. Mires,
Chief Counsel, Legislative.
[FR Doc. 2010–10660 Filed 5–3–10; 4:15 pm]
BILLING CODE 7710–12–P
E:\FR\FM\05MYP1.SGM
05MYP1
Agencies
[Federal Register Volume 75, Number 86 (Wednesday, May 5, 2010)]
[Proposed Rules]
[Pages 24534-24541]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-10660]
=======================================================================
-----------------------------------------------------------------------
POSTAL SERVICE
39 CFR Part 111
Treatment of Cigarettes and Smokeless Tobacco as Nonmailable
Matter
AGENCY: Postal ServiceTM.
ACTION: Proposed rule.
-----------------------------------------------------------------------
SUMMARY: The Postal Service proposes to revise Mailing Standards of the
United States Postal Service, Domestic Mail Manual (DMM[supreg])
601.11, pertaining to the mailing of tobacco cigarettes and smokeless
tobacco. These provisions implement specific requirements to be in
compliance with the Prevent All Tobacco Cigarettes Trafficking (PACT)
Act, Public Law No. 111-154, which restricts the mailability of
cigarettes and smokeless tobacco.
DATES: Submit comments on or before May 17, 2010.
ADDRESSES: Mail or deliver written comments to the Manager, Mailing
Standards, U.S. Postal Service, 475 L'Enfant Plaza, SW., Room 3436,
Washington, DC 20260-3436. You may inspect and photocopy all written
comments at USPS Headquarters Library, 475 L'Enfant Plaza, SW., 11th
Floor North, Washington, DC, between 9 a.m. and 4 p.m., Monday through
Friday. E-mail comments, containing the name and address of the
commenter, may be sent to: MailingStandards@usps.gov, with a subject
line of ``PACT Act.'' Faxed comments are not accepted.
FOR FURTHER INFORMATION CONTACT: Anthony Alverno, 202-268-2997, or Mary
Collins, 202-268-5440.
SUPPLEMENTARY INFORMATION:
On March 31, 2010, the Prevent All Cigarette Trafficking (PACT) Act
of 2009, Public Law No. 111-154 was enacted. The Act's purposes
include:
Requiring Internet-based and other remote sellers of
cigarettes and smokeless tobacco to comply with laws applied to other
tobacco retailers;
Creating disincentives for the illegal smuggling of
tobacco products;
Enhancing enforcement tools to deal with cigarette
smuggling;
Stemming trafficking;
Increasing collection of federal, state, and local excise
taxes on cigarettes and smokeless tobacco; and
Preventing youth access through Internet and contraband
sales.
Section 3 of the PACT Act pertains to the Postal Service and
creates a new section 1716E of Title 18, U.S. Code. Section 3 of the
PACT Act provides that, subject to certain exceptions, cigarettes,
including roll-your-own tobacco and
[[Page 24535]]
smokeless tobacco are nonmailable. Exceptions in the PACT Act permit
the mailing of cigarettes and/or smokeless tobacco in narrowly defined
circumstances, as described below.
Noncontiguous States: Intrastate shipments within Alaska
or Hawaii;
Business/Regulatory Purposes: Shipments transmitted
between verified and authorized tobacco industry businesses for
business purposes, or between such businesses and federal or state
agencies for regulatory purposes;
Certain Individuals: Infrequent, lightweight shipments
mailed between adult individuals;
Consumer Testing: Shipments of cigarettes sent by verified
and authorized manufacturers to adult smokers for consumer testing
purposes; and
Public Health: Shipments by federal agencies for public
health purposes under similar rules applied to manufacturers conducting
consumer testing.
The PACT Act provides that the Postal Service cannot accept or
transmit any package that it knows, or has reasonable cause to believe,
contains nonmailable smokeless tobacco or cigarettes. The proposed rule
explains that the Postal Service has reasonable cause to not accept for
delivery or transmit a package based on:
A statement on a publicly available Web site, or an
advertisement, by any person that the person will mail matter which is
nonmailable under this section in return for payment; or
The fact that the mailer or other person on whose behalf a
mailing is being made is on the U.S. Attorney General's List of
Unregistered or Noncompliant Delivery Sellers.
Nonmailable cigarettes and smokeless tobacco deposited in the mail
are subject to seizure and forfeiture. Senders of nonmailable
cigarettes or smokeless tobacco are subject to criminal fines,
imprisonment, and civil penalties.
Section 6 of the PACT Act provides that the nonmailability
provisions, as well as the noncontiguous states exception, take effect
90 days after enactment. With respect to the remaining exceptions, the
PACT Act requires the Postal Service to promulgate a final rule no
later than 180 days after enactment of the PACT Act. 18 U.S.C.
1716E(b)(3)(B)(i), (4)(B)(i), (5)(C)(i). The Postal Service accordingly
will attempt to publish a final rule effective June 29, 2010, that, at
a minimum, will cover the general nonmailability provisions and the
noncontiguous states exception. The Postal Service will attempt to
issue a final rule to give effect to the remaining exceptions to the
PACT Act as soon as possible, but no later than September 27, 2010.
The Postal Service offers the following observations on the various
aspects of the proposed rule below.
Definitions: Consistent with the PACT Act, the proposed rule uses
the definitions of cigarettes, roll-your-own tobacco, smokeless
tobacco, cigars, consumer testing, and states found in federal law in
Titles 15, 18, and 26 of the U.S. Code. As provided in 18 U.S.C.
1716E(b)(1), cigars are excluded from the mailability ban and therefore
may be mailed regardless of any conditions required for the mailing of
other applicable products under the PACT Act exceptions.
Mailability: The proposed rule incorporates the PACT Act
mailability restrictions for cigarettes and smokeless tobacco.
Coverage of Exceptions: The PACT Act governs the permissibility of
certain items within the Postal Service's mailstream network. The
complex verification requirements for the PACT Act's exceptions,
combined with the strict consequences of any noncompliance, render it
impracticable for these requirements to be made applicable to mail
originating or destinating outside of the Postal Service's service
area. Therefore, the Postal Service does not believe that any
alternative exists at this time to allow U.S. mailers to tender
cigarettes and smokeless tobacco as outbound international mail or to
receive them as inbound international mail under the PACT Act's
exceptions. The proposed rule incorporates these principles by
restricting the exceptions' applicability to domestic mail, but not to
mail treated as domestic under Mailing Standards of the United States
Postal Service, Domestic Mail Manual (DMM) 608.2.2 or international
mail as defined in DMM 608.2.3.
The applicability of these proposed rules to domestic mail under
DMM 608.2.1 would include mail to, from, and between military
installations, Army Post Offices (APOs), Fleet Post Offices (FPOs), and
Diplomatic Post Offices (DPOs), except for mail treated as domestic
under DMM 608.2.2. Delivery rules would apply to overseas military mail
as practicable under the certain individuals' exception. Hold for
Pickup service would not be required for delivery to APO, FPO, and DPO
addresses.
Noncontiguous States Exception: The PACT Act permits the mailing of
cigarettes and smokeless tobacco within the State of Alaska and within
the State of Hawaii. 18 U.S.C. 1716E(b)(2). The proposed rule would
require that intra-Alaskan and intra-Hawaiian shipments of cigarettes
or smokeless tobacco:
Be presented in a face-to-face transaction with a postal
employee (thereby enabling acceptance personnel to verify that the
shipment will destinate in the noncontiguous state of origin),
Destinate in the state of origin,
Bear a return address that is within the state of origin,
and
Be marked with the following exterior marking on the
address side of the mailpiece: ``INTRASTATE SHIPMENT OF CIGARETTES OR
SMOKELESS TOBACCO.''
Business/Regulatory Purposes Exception: Eligible mailers and
recipients under the business/regulatory purposes exception include
federal and state agencies, 18 U.S.C. 1716E(b)(3)(A)(ii), as well as
``legally operating businesses that have all applicable State and
Federal Government licenses or permits and are engaged in tobacco
product manufacturing, distribution, wholesale, export, import,
testing, investigation, or research.'' 18 U.S.C. 1716E(b)(3)(A)(i). The
PACT Act charges the Postal Service with verifying that any person
submitting an otherwise nonmailable tobacco product into the mails, and
any person receiving such a product through the mails, as authorized
under the business/regulatory purposes exception, is a business or
government agency within the scope of the exception. 18 U.S.C.
1716E(b)(3)(B)(ii)(I)-(II).
The Postal Service proposes to require that each customer seeking
to avail itself of this exception submit an application to the manager,
Pricing and Classification Service Center (PCSC). The application
requires the customer to furnish information about its legal status,
any applicable licenses, and authority under which it operates. In
addition, the applicant would be required to furnish similar
information for all entities to which its mailings under this exception
are addressed and to identify all locations where the applicant will
present mail containing cigarettes and smokeless tobacco. The applicant
would be required to update this information anytime it intends to mail
to an entity or at a location not previously on its list. Only those
shipments addressed to designated recipients and presented at
designated locations would be eligible for the business/regulatory
purposes exception. Before tendering any shipment under this exception,
the mailer must present proof that the Postal Service has
[[Page 24536]]
authorized the mailer to tender such shipments at that location.
Based on information furnished in the customer's application, the
Postal Service will make determinations of eligibility to mail under
this exception. The applicant bears the burden of establishing its and
its recipients' eligibility as legally operating businesses that have
all applicable state and federal government licenses or permits and
that are engaged in tobacco product manufacturing, distribution,
wholesale, export, import, testing, investigation, or research; or, in
the case of mailings for regulatory purposes, the applicant's or its
recipient's status as a federal or state agency. Customers whose
applications or amendments to existing applications are denied in whole
or in part may appeal to the manager, PCSC. The proposed rule provides
that eligibility to mail under the business/regulatory purposes
exception may be revoked by the manager, PCSC, in the event of failure
to comply with any applicable rules and regulations. Decisions by the
manager, PCSC, to uphold the denial of an application or to revoke a
customer's eligibility under the business/regulatory purposes exception
may be appealed to the Judicial Officer under 39 CFR part 953. In order
to ensure that eligibility determinations remain current, the proposed
rule provides that any authorization to mail under this exception will
lapse if the mailer does not actually tender any such mail during any
six-month period, and that the mailer must submit a new application for
eligibility for any future mailings after that point.
The PACT Act requires that eligible shipments under this exception
be sent via mail classes that provide for the ``tracking and
confirmation of the delivery.'' 18 U.S.C. 1716E(b)(3)(B)(ii)(III). The
mail service that fulfills this requirement is Express Mail service,
which offers tracking information and confirmation of delivery.
Consequently, the proposed rule specifies that eligible shipments under
the business/regulatory purposes exception would be required to use
Express Mail service.
The PACT Act provides that eligible mailings be ``marked with
marking that makes it clear to employees of the United States Postal
Service that it is a permitted mailing of otherwise nonmailable tobacco
products that may be delivered only to a permitted government agency or
business and may not be delivered to any residence or individual
person.'' 18 U.S.C. 1716E(b)(3)(B)(ii)(VI). The Postal Service
accordingly proposes that each mailing tendered under the business/
regulatory purposes exception bear the following marking: ''PERMITTED
TOBACCO PRODUCT--DELIVER ONLY TO ADDRESSED BUSINESS/AGENCY-- RECIPIENT
MUST FURNISH PROOF OF AGE AND EMPLOYMENT OR AGENCY.'' The marking would
be required to appear on the exterior of the address side of the
mailing container.
The PACT Act requires that the Postal Service maintain information,
to include ``the identity of the business or government entity
submitting the mailing containing otherwise nonmailable tobacco
products for delivery and the identity of the business or government
entity receiving the mailing'' for a three-year period beginning on the
date of the mailing. 18 U.S.C. 1716(b)(3)(B)(ii)(IV)-(V). Such
information must be made available to designated law enforcement
agencies during the designated period of retention. The Postal Service
understands this retention requirement to apply to sender and recipient
name and address information for each mailing. Currently, the Postal
Service does not organize or retain handwritten or typed Express Mail
mailing labels for the designated statutory retention period. To comply
with this requirement, the Postal Service proposes that all customers
seeking to mail under this exception use Express Mail service with
Return Receipt. The Return Receipt must bear the sender's eligibility
number issued by the PCSC as well as the addressee's full name and
address, and be made returnable to the manager, PCSC, which will retain
the record for the requisite period. Further, the business or
government name and full mailing address of the sender and recipient
would be required to appear on the Express Mail label, and match those
listed on the customer's application on file with the Postal Service.
18 U.S.C. 1716E(b)(3)(B)(ii)(IV).
The PACT Act provides that eligible mailings under the business/
regulatory purposes exception ``be delivered only to a verified
employee of the recipient business or government agency, who is not a
minor and who shall be required to sign for the mailing.'' 18 U.S.C.
1716E(b)(3)(B)(ii)(VII). For this exception, the term ``minor'' is
defined as ``an individual who is less than the minimum age required
for the legal sale or purchase of tobacco products as determined by
applicable law at the place the individual is located.'' 18 U.S.C.
1716E(b)(3)(C). To implement this requirement, the proposed rule would
require that Express Mail service be used without the option for waiver
of signature. Further, to ensure that delivery is effected on a person
who is a representative of the company and not a minor, the proposed
rule would require that all Express Mail shipments under this exception
be required to be delivered using Hold for Pickup service. Hold for
Pickup is shipped directly to a postal retail location, in lieu of
being deposited at the recipient's address. The package is held until
the recipient retrieves it during retail office hours. This measure
would reduce the potential that underage or unauthorized individuals
may receive a nonmailable shipment of cigarettes or smokeless tobacco.
Furthermore, the recipient would be required to furnish proof of age
through production of a driver's license, passport, or other
government-issued photo identification that lists age or date of birth,
as well as proof that the recipient is an employee or agent of the
business or government entity identified on the mailing label.
Certain Individuals: The exception for certain individuals
generally permits the mailing of small quantities of cigarettes or
smokeless tobacco sent non-commercially by individual adults to
businesses or other adults. 18 U.S.C. 1716E(b)(4)(A). Such shipments
can include, but are not limited to, the following:
Cigarettes and smokeless tobacco exchanged as gifts
between individual adults; and
The return by a consumer of a damaged or unacceptable
tobacco product to the manufacturer.
For purposes of the certain individuals' exception, the PACT Act
requires the Postal Service to ``verify that any person submitting an
otherwise nonmailable tobacco product into the mails * * * is the
individual identified on the return address label of the package and is
not a minor.'' 18 U.S.C. 1716E(b)(4)(B)(ii)(I). Further, for a mailing
addressed to an individual recipient, the PACT Act specifies that the
sender affirm that the recipient is not a minor. 18 U.S.C.
1716E(b)(4)(B)(ii)(II). For purposes of this exception, a minor is ``an
individual who is less than the minimum age required for the legal sale
or purchase of tobacco products as determined by applicable law at the
place the individual is located.'' 18 U.S.C. 1716E(b)(4)(C).
To give effect to these statutory requirements, the proposed rule
provides that shipments by individuals of cigarettes or smokeless
tobacco would be required to bear the sender's name in the return
address, and that such shipments be presented in a face-to-face
transaction with a postal employee. In
[[Page 24537]]
this manner, the Postal Service would be able to discharge its
obligation to verify the sender's age and confirm that the sender's
identification matches the name listed in the return address. Age and
identity would be verified through the use of government-issued photo
identification that lists age or date of birth, such as a driver's
license or passport. Further, for shipments addressed to an individual,
the proposed rule would require that the recipient's first and last
name appear in the address block (in lieu of a generic descriptor, such
as ``resident'' or ``occupant'') on the mailpiece. To fulfill the
requirements of the PACT Act, the proposed rule specifies that at the
time of the mailing, the customer would be required to orally affirm to
the accepting postal employee that the recipient is not a minor under
the laws applicable to the recipient at the destination location.
The PACT Act also specifies additional quantity and frequency
limitations on the certain individuals' exception. In particular, such
mailings cannot weigh in excess of 10 ounces. 18 U.S.C.
1716E(b)(4)(B)(ii)(III). Shipments entered under this exception are
capped at no more than 10 mailings in any 30-day period. 18 U.S.C.
1716E(b)(4)(B)(ii)(VII). Further, as with the business/regulatory
purposes exception, such mailings may only be sent via mail classes
that provide for the ``tracking and confirmation of the delivery.'' 18
U.S.C. 1716E(b)(4)(B)(ii)(IV). Again, the mail service that fulfills
this requirement is Express Mail, which offers tracking information and
confirmation of delivery. As explained above, the proposed rule
specifies that eligible shipments under the certain individuals'
exception would be required to use Express Mail with Hold for Pickup
service.
The PACT Act provides that mailings under the certain individuals'
exception ``shall not be delivered or placed in the possession of any
individual who has not been verified as not being a minor.'' 18 U.S.C.
1716E(b)(4)(B)(ii)(V). To implement this requirement, the proposed rule
would require that Express Mail be delivered in the context of a face-
to-face interaction between the recipient and postal employee, thereby
enabling age verification. Each piece would be required to be marked
with a special marking, thereby triggering the need for age
verification at delivery: ``PERMITTED TOBACCO PRODUCT--DELIVER ONLY TO
AGE-VERIFIED ADULT OF LEGAL AGE.'' To ensure that delivery is effected
on a person who is not a minor, the proposed rule would require that
Express Mail shipments (other than Express Mail shipments to APO, FPO,
or DPO addresses) under this exception be delivered using Hold for
Pickup service, whereby the shipment would be held at a postal retail
unit for pickup by the recipient. Further, the recipient would be
required to furnish proof of age through production of a driver's
license, passport, or other government-issued photo identification that
lists age or date of birth.
The proposed rule provides that eligibility to mail under the
certain individuals' exception may be revoked by the manager, PCSC, in
the event of failure to comply with any applicable rules and
regulations. A customer may appeal an adverse decision to the manager,
Mailing Standards. Decisions by the manager, Mailing Standards, to
revoke a customer's eligibility under this exception may be appealed to
the Judicial Officer under 39 CFR part 953.
Consumer Testing: The exception for consumer testing permits a
legally operating cigarette manufacturer (or legally authorized agent)
to mail cigarettes to verified adult smokers solely for consumer
testing purposes. 18 U.S.C. 1716E(b)(5)(A). Consumer testing is defined
in the PACT Act as ``testing limited to formal data collection and
analysis for the specific purpose of evaluating the product for quality
assurance and benchmarking purposes of cigarette brands or sub-brands
among existing adult smokers.'' 18 U.S.C. 1716E(b)(5)(D)(ii). Notably,
the statutory exception applies only to cigarettes and cigarette
manufacturers (or legally authorized agents) and not to smokeless
tobacco or non-manufacturer participants in the tobacco industry.
The PACT Act limits eligibility to cigarette manufacturers that
have ``a permit, in good standing, issued under section 5713 of the
Internal Revenue Code of 1986'' and the legally authorized agents of
such manufacturers. 18 U.S.C. 1716E(b)(5)(A)(i). The PACT Act requires
the Postal Service to ``verify that any person submitting a tobacco
product into the mails under this paragraph is a legally operating
cigarette manufacturer permitted to make a mailing under this
paragraph, or an agent legally authorized by the legally operating
cigarette manufacturer to submit the tobacco product into the mails on
behalf of the manufacturer.'' 18 U.S.C. 1716E(b)(5)(C)(ii)(I). As with
the business/regulatory purposes exception, the Postal Service intends
to discharge this obligation by requiring customers to submit an
application to the manager, PCSC, for eligibility to mail under this
exception. The application would require the applicant to provide
information to establish that the customer, or the customer's principal
if the customer is a manufacturer's agent, is a cigarette manufacturer
in good standing under 26 U.S.C. 5713. In addition, the applicant would
be required to identify all locations where mail containing cigarettes
for consumer testing will be presented. Any changes to the customer's
information or entry locations would require a subsequently filed
amendment to the customer's application. As part of its application,
the customer would sign a certification to the effect that the customer
will comply with the following PACT Act requirements, 18 U.S.C.
1716E(b)(5)(C)(ii)(II)-(III):
Any recipient of consumer testing shipments of cigarettes
is an adult established smoker;
No recipient has made any payment for the cigarettes;
Any recipient will sign a written statement to the effect
indicating that the recipient wishes to receive the mailings;
The manufacturer or the legally authorized agent of the
manufacturer will offer the opportunity for any recipient to withdraw
the recipient's written statement at least once in every three-month
period; and
Any package mailed under this exception will contain not
more than 12 packs of cigarettes (240 cigarettes), on which all taxes
levied by the destination state and locality have been paid and all
related destination state tax stamps or other tax-payment indicia have
been applied.
To facilitate administration and enforcement of this exception, the
proposed rule also requires that the customer certify that it will
maintain records establishing compliance with these obligations for a
three-year period from the date of each mailing. Customers must provide
copies of records establishing compliance to the manager, PCSC, upon
request no later than ten business days after the date of the request.
Before tendering any shipment under this exception, the mailer must
present proof that the Postal Service has authorized the mailer to
tender such shipments at that location.
Customers whose applications are denied by the Manager, PCSC, may
appeal to the manager, Mailing Standards. The proposed rule provides
that eligibility to mail under the consumer testing exception may be
revoked by the manager, Mailing Standards, in the event of failure to
comply with any applicable rules and regulations. Decisions by the
manager, Mailing Standards, to uphold the denial of an application or
to revoke a
[[Page 24538]]
customer's eligibility under the consumer testing exception may be
appealed to the Judicial Officer under 39 CFR part 953. To ensure that
eligibility determinations remain current with respect to mailers'
behavior, the proposed rule provides that any authorization to mail
under this exception would lapse if the mailer does not actually tender
any such mail during any six-month period, and that the mailer must
submit a new application for eligibility for any future mailings after
that point.
The PACT Act establishes quantity, frequency, and other
limitations. The proposed rule accordingly limits quantity to twelve
packs of cigarettes per package and frequency of no more than one
package from any one manufacturer to an adult smoker during any 30-day
period. 18 U.S.C. 1716E(b)(5)(A)(ii)-(iii). The proposed rule also
implements PACT Act requirements for payment of destination state and
locality taxes and the use of tax stamps or other indicia. 18 U.S.C.
1716E(b)(5)(A)(iv). Additionally, the proposed rule incorporates
conditions for consumer testing:
That no payment by the recipient for the cigarettes is
permitted;
The recipient must be paid a fee for participation in
consumer tests;
The recipient must evaluate the cigarettes and provide
feedback to the manufacturer in connection with the consumer test; and
The total calendar-year distribution of cigarettes under
the consumer testing exception may not exceed one percent of the
manufacturer's total cigarette sales for the prior calendar year.
18 U.S.C. 1716E(b)(5)(A)(v)(I)-(III), (B)(ii).
Consistent with the PACT Act, the mailing of cigarettes for
consumer testing purposes would not be permitted to states that
prohibit the delivery of cigarettes to individuals, and these rules
shall not preempt, limit, or otherwise affect any related state laws.
18 U.S.C. 1716E(b)(5)(B)(i). The proposed rule provides that customers
maintain records to establish compliance with all of these requirements
for three years.
The PACT Act requires that eligible shipments under this exception
be sent via mail systems that provide for the ``tracking and
confirmation of the delivery.'' 18 U.S.C. 1716E(b)(5)(C)(ii)(IV). As
explained above, the mail service that fulfills this requirement is
Express Mail service, which offers tracking information and
confirmation of delivery. Consequently, the proposed rule specifies
that eligible shipments under the consumer testing exception would be
required to use Express Mail service.
The PACT Act provides that eligible mailings under the consumer
testing exception be delivered ``only to the named recipient and only
after verifying that the recipient is an adult.'' 18 U.S.C.
1716E(b)(5)(C)(ii)(VII). For purposes of the consumer testing
exception, the term ``adult'' is defined in this exception as ``an
individual who is not less than 21 years of age.'' 18 U.S.C.
1716E(b)(5)(D)(i). To implement this requirement, the proposed rule
would require that Express Mail service be used without the option for
waiver of signature. Further, to ensure that delivery is effected on a
person who is the named individual on the package and at least 21 years
of age, the proposed rule would require that all Express Mail shipments
under this exception be required to be delivered using Hold for Pickup
service. For age and identity verification, the recipient would be
required to furnish proof of age through production of a driver's
license, passport, or other government-issued photo identification that
lists age or date of birth.
The PACT Act provides that eligible mailings ``be marked with
marking that makes it clear to employees of the United States Postal
Service that it is a permitted mailing of otherwise nonmailable tobacco
products that may be delivered only to the named recipient after
verifying that the recipient is an adult.'' 18 U.S.C.
1716E(b)(5)(C)(ii)(VI). The Postal Service accordingly proposes that
each mailing tendered under the consumer testing exception bear the
following marking: ``PERMITTED TOBACCO PRODUCT--DELIVER ONLY TO
ADDRESSEE UPON AGE VERIFICATION--AGE 21 OR ABOVE.'' The marking would
be required to appear on the exterior of the address side of the
mailing container, so as to ensure that eligible shipments are
correctly identified as falling under the consumer testing exception.
The PACT Act requires that the Postal Service maintain records
``relating to a mailing'' under the consumer testing exception for a
three-year period beginning on the date of the mailing. 18 U.S.C.
1716E(b)(5)(C)(ii)(V). Such information must be made available to
certain law enforcement agencies during the designated period of
retention. The Postal Service understands this retention requirement to
apply to mailing information, including sender and address information,
for each mailing. Currently, the Postal Service does not organize or
retain handwritten or typed Express Mail mailing labels for the
designated statutory retention period. To comply with this requirement,
the Postal Service proposes that customers seeking to mail under this
exception use Express Mail service with Return Receipt. The Return
Receipt must bear the sender's eligibility number issued by the PCSC,
as well as the addressee's full name and address, and be made
returnable to the Manager, PCSC, who will retain the record for the
requisite period.
Public Health: The PACT Act provides that federal government
agencies ``involved in the consumer testing of tobacco products solely
for public health purposes may mail cigarettes under the same
requirements, restrictions, and rules and procedures that apply to
consumer testing mailings of cigarettes by manufacturers,'' with the
exception that the agency shall not be required to pay recipients for
participating in testing. 18 U.S.C. 1716E(b)(6). The proposed rule
accordingly creates a public health exception for federal agencies.
This exception is made subject to the same mailing standards as those
applied to manufacturers involved in consumer testing, with the
exception that federal agencies do not need to comply with the mailing
standard requiring that the customer certify that the recipient is
being paid a fee for participation in consumer tests.
The Postal Service accordingly invites comments on the following
proposed revision of the Mailing Standards of the United States Postal
Service, Domestic Mail Manual, incorporated by reference in the Code of
Federal Regulations. See 39 CFR 111.
List of Subjects in 39 CFR Part 111
Administrative practice and procedure, Postal Service.
Accordingly, 39 CFR part 111 is proposed to be amended as follows:
PART 111--[AMENDED]
1. The authority citation for 39 CFR part 111 is revised to read as
follows:
Authority: 5 U.S.C. 552(a); 13 U.S.C. 301-307; 18 U.S.C. 1692-
1737; 39 U.S.C. 101, 401, 403, 404, 414, 416, 3001-3011, 3201-3219,
3403-3406, 3621, 3622, 3626, 3632, 3633, and 5001.
2. Revise the following sections of Mailing Standards of the United
States Postal Service, Domestic Mail Manual (DMM) as follows:
Mailing Standards of the United States Postal Service, Domestic Mail
Manual (DMM)
* * * * *
[[Page 24539]]
600 Basic Standards for All Mailing Services
601 Mailability
* * * * *
[Renumber current 601.11 and 12 as new 12 and 13, and add new 11 as
follows:]
11 Cigarettes and Smokeless Tobacco
11.1 Definitions
For this standard, we define terms as follows:
a. Cigarette: any roll of tobacco wrapped in paper or in any
substance not containing tobacco, and any roll of tobacco wrapped in
any substance containing tobacco which, because of its appearance, the
type of tobacco used in the filler, or its packaging and labeling, is
likely to be offered to, or purchased by, consumers as a cigarette. The
term cigarette includes roll-your-own tobacco and excludes cigars.
b. Smokeless tobacco: any finely cut, ground, powdered, or leaf
tobacco that is intended to be placed in the oral or nasal cavity or
otherwise consumed without being combusted.
c. Cigar: any roll of tobacco wrapped in leaf tobacco or in any
substance containing tobacco, unless, because of its appearance, the
type of tobacco used in the filler, or its packaging and labeling, the
product is likely to be offered to, or purchased by, consumers as a
cigarette.
d. Roll-your-own tobacco: any tobacco which, because of its
appearance, type, packaging, or labeling, is suitable for use and
likely to be offered to, or purchased by, consumers as tobacco for
making cigarettes or cigars, or for use as wrappers thereof.
e. Consumer testing: testing limited to formal data collection and
analysis for the specific purpose of evaluating the product for quality
assurance and benchmarking purposes of cigarette brands or sub-brands
among existing adult smokers.
f. State: any of the 50 states of the United States, the District
of Columbia, and any commonwealth, territory, or possession of the
United States.
11.2 Nonmailability
Except as provided in 11.8.3, all cigarettes (including roll-your-
own tobacco) and smokeless tobacco are nonmailable and shall not be
deposited in or carried through the Postal Service mailstream. The
Postal Service will not accept for delivery or transmit any package
that it knows, or has reasonable cause to believe, contains nonmailable
cigarettes or smokeless tobacco. In the event the Postal Service
reasonably suspects that a mailer is tendering nonmailable cigarettes
or smokeless tobacco, then the mailer bears the burden of proof in
establishing eligibility to mail. Nonmailable cigarettes and smokeless
tobacco deposited in the mail are subject to seizure and forfeiture.
Any nonmailable cigarettes and smokeless tobacco products seized and
forfeited shall be destroyed or retained by the Federal Government for
the detection or prosecution of crimes or related investigations and
then destroyed. Senders of nonmailable cigarettes and smokeless tobacco
may be subject to seizure and forfeiture of assets, criminal fines,
imprisonment, and civil penalties. The Postal Service has reasonable
cause not to accept for delivery or transmit a package based on:
a. A statement on a publicly available website, or an
advertisement, by any person that the person will mail matter which is
nonmailable under this section in return for payment; or
b. The fact that the mailer or other person on whose behalf a
mailing is being made is on the U.S. Attorney General's List of
Unregistered or Noncompliant Delivery Sellers.
11.3 Mailability Exceptions
Cigarettes and smokeless tobacco are mailable if one of the
conditions in 11.4 through 11.8 is met. These exceptions only apply to
domestic mail under 608.2.1, including mail to, from, and between
military installations and Army Post Office (APO), Fleet Post Office
(FPO), and Diplomatic Post Office (DPO) addresses, with the exception
that delivery procedures for overseas military mail under the certain
individuals' exception in 11.6 may vary as practicable. These
exceptions do not apply to mail treated as domestic under 608.2.2 or
international mail as defined in 608.2.3.
11.4 Mailing Within Noncontiguous States
Intra-Alaskan and intra-Hawaiian shipments of cigarettes or
smokeless tobacco are mailable, provided that such mailings:
a. Are presented in a face-to-face transaction with a postal
employee within the state;
b. Destinate in the same state of origin;
c. Bear a valid complete return address that is within the state of
origin; and
d. Are marked with the following exterior marking on the address
side of the mailpiece: ``INTRASTATE SHIPMENT OF CIGARETTES OR SMOKELESS
TOBACCO.''
11.5 Exception for Business/Regulatory Purposes
Eligibility to mail and to receive mail under the business/
regulatory purposes exception is limited to federal and state
government agencies and legally operating businesses that have all
applicable state and federal government licenses or permits and are
engaged in tobacco product manufacturing, distribution, wholesale,
export, import, testing, investigation, or research, only under the
conditions in 11.5.1 through 11.5.3.
11.5.1 Application
Each customer seeking to mail cigarettes or smokeless tobacco under
the business/regulatory purposes exception must complete an application
letter requesting to mail under the business/regulatory purposes
exception.
a. The applicant must furnish:
1. Information about its legal status, any applicable licenses, and
authority under which it operates;
2. Information about the legal status, any applicable licenses, and
operational authority for all entities to which the applicant's
mailings under this exception will be addressed; and
3. All locations where mail containing cigarettes and smokeless
tobacco will be presented.
The applicant must update this information anytime it intends to
mail to an entity not on its list. Only those shipments containing
otherwise nonmailable tobacco addressed to recipients on the customer's
list of designated recipients would be eligible for the business/
regulatory purposes exception.
b. The applicant must establish its and its recipients' eligibility
as legally operating businesses that have all applicable state and
federal government licenses or permits and are engaged in tobacco
product manufacturing, distribution, wholesale, export, import,
testing, investigation, or research; or, in the case of mailings for
regulatory purposes, as a federal or state agency.
c. Applications must be mailed to the manager, Pricing &
Classification Service Center (PCSC), see 608.8.0 for address. The
manager, PCSC, issues the initial agency decision of a determination of
eligibility to mail under the business/regulatory purposes exception.
d. Customers whose applications or amendments to existing
applications are denied in whole or in part may appeal to the manager,
Mailing Standards (see 608.8.0).
e. Eligibility to mail under the business/regulatory purposes
exception
[[Page 24540]]
may be revoked by the manager, Mailing Standards, in the event of
failure to comply with any applicable rules and regulations. Decisions
by the manager, Mailing Standards, to uphold the denial of an
application or to revoke a customer's eligibility under the business/
regulatory purposes exception may be appealed to the Judicial Officer
under 39 CFR part 953.
f. Upon written request by a state or federal agency, the manager,
Mailing Standards, may, in his or her discretion, waive certain
application requirements for mailings entered by the requesting state
or federal agency for regulatory purposes.
g. Any determination of eligibility to mail under this exception
shall lapse if the authorized mailer does not tender any mail under
this exception within any six-month period. After that time, the
affected mailer must apply for and receive new authorization for any
mailings under this exception.
11.5.2 Mailing
Customers eligible to mail under the business/regulatory purposes
exception may enter mailings of cigarettes and smokeless tobacco only
at the locations specified in the customer's application. Before
mailing any shipment under this exception, the mailer must present
proof that the PCSC has authorized the mailer to mail such shipments at
that location. All mailings under the business/regulatory purposes
exception must:
a. Be entered as Express Mail with Hold for Pickup service (waiver
of signature not permitted) (see 113);
b. Be accompanied by a request for return receipt (PS Form 3811,
see 503.6), which must bear the sender's eligibility number issued by
the PCSC as well as the addressee's full name and address, and be made
returnable to the manager, PCSC -- Tobacco Mailing Unit (see 608.8.0
for address), which will retain the record for a three-year period;
c. Bear the marking ``PERMITTED TOBACCO PRODUCT--DELIVER ONLY TO
ADDRESSED BUSINESS/AGENCY--RECIPIENT MUST FURNISH PROOF OF AGE AND
EMPLOYMENT OR AGENCY.'' on the address side of the mailpiece; and
d. bear the business or government agency name and full mailing
addresses of both the sender and recipient, both of which must match
exactly those listed on the customer's application on file with the
Postal Service.
11.5.3 Delivery
Mailings bearing the marking for business/regulatory purposes can
only be delivered to a verified employee of the addressee business or
government agency. The recipient must show proof that he or she is an
employee or agent of the business or government identified as the
addressee on the mailing label. Delivery is completed under the
following conditions:
a. The recipient must be an adult of at least the minimum age for
the legal sale or purchase of tobacco products at the place of
delivery. The recipient must furnish proof of age via a driver's
license, passport, or other government-issued photo identification that
lists age or date of birth.
b. Once age and the recipient's identity as an employee or agent of
the addressee are established, the recipient must sign PS Form 3849 and
PS Form 3811 in the appropriate signature blocks.
11.6 Exception for Certain Individuals
The exception for certain individuals permits the mailing of small
quantities of cigarettes or smokeless tobacco by individual adults to
businesses or to other adults. Such shipments may include, but are not
limited to, cigarettes and smokeless tobacco exchanged as gifts between
individual adults and a damaged or unacceptable tobacco product
returned by a consumer to the manufacturer. Eligibility to mail under
the certain individuals' exception may be revoked by the manager, PCSC,
in the event of failure to comply with any applicable rules and
regulations. A customer may appeal an adverse initial decision to the
manager, Mailing Standards (see 608.8.0). The mailer bears the burden
of proof in establishing eligibility in the event of revocation.
Decisions by the manager, Mailing Standards, to revoke a customer's
eligibility under this exception may be appealed to the Judicial
Officer under 39 CFR part 953. Mailings under this exception must be
made under the conditions in 11.6.1 through 11.6.3.
11.6.1. Entry and Acceptance
Mailings under the certain individuals' exception must be entered
under the following conditions:
a. Cigarettes or smokeless tobacco may only be mailed via a face-
to-face transaction with a postal employee.
b. Cigarettes or smokeless tobacco may only be entered by an adult
of at least the minimum age for the legal sale or purchase of tobacco
products at the place of entry.
c. The individual presenting the mailing must furnish government-
issued photo identification that lists age or date of birth, such as a
driver's license or passport, at the time of the mailing. The name on
the identification must match the name of the sender appearing in the
return address block of the mailpiece.
d. For mailings addressed to an individual, at the time the mailing
is presented, the customer must orally confirm that the addressee is an
adult of at least the minimum age for the legal sale or purchase of
tobacco products at the place of delivery.
11.6.2 Mailing
No customer may send or cause to be sent more than 10 mailings
under this exception in any 30-day period. All mailings under the
certain individual's exception must:
a. Be entered as Express Mail with Hold for Pickup service
requested (except overseas military mail shipments (waiver of signature
not available)); see 113.
b. Bear the marking ``PERMITTED TOBACCO PRODUCT--DELIVER ONLY TO
AGE-VERIFIED ADULT OF LEGAL AGE'' on the address side of the exterior
of the mailpiece;
c. Bear the full name and mailing address of the sender and
recipient on the Express Mail label;
d. Weigh no more than 10 ounces.
11.6.3 Delivery
Delivery under the certain individuals' exception is made under the
following conditions:
a. The recipient signing for the Express Mail article must be an
adult of at least the minimum age for the legal sale or purchase of
tobacco products at the place of delivery.
b. The recipient must furnish proof of age via a driver's license,
passport, or other government-issued photo identification that lists
age or date of birth.
c. Once age is established, the recipient must sign PS Form 3849 in
the appropriate signature block.
11.7 Exception for Consumer Testing
The exception for consumer testing permits a legally operating
cigarette manufacturer or a legally authorized agent of a legally
operating cigarette manufacturer to mail cigarettes to verified adult
smokers solely for consumer testing purposes. The manufacturer for
which mailings are entered under this exception must have a permit, in
good standing, issued under 26 U.S.C. 5713. The consumer testing
exception applies only to cigarettes and not smokeless tobacco. Items
must be mailed under conditions in 11.7.1 through 11.7.3.
11.7.1 Application
Each customer seeking to mail cigarettes under the consumer testing
[[Page 24541]]
exception must submit an application letter to mail under consumer
testing exception. The applicant must furnish:
a. Information to establish that the customer, or the customer's
principal if the customer is a manufacturer's agent, is a cigarette
manufacturer in good standing under 26 U.S.C. 5713;
b. If the customer is an agent of a manufacturer, complete details
about the agency relationship with the manufacturer; and
c. All locations where mail containing cigarettes for consumer
testing will be presented.
d. As part of its application, the applicant must certify in
writing that it will comply with the following requirements:
1. Any recipient of consumer testing samples of cigarettes is an
adult established smoker;
2. No recipient has made any payment for the cigarettes;
3. Every recipient will sign a statement indicating that the
recipient wishes to receive the mailings;
4. The manufacturer or the legally authorized agent of the
manufacturer will offer the opportunity for any recipient to withdraw
the recipient's written statement at least once in every three-month
period;
5. Any package mailed under this exception will contain not more
than 12 packs of cigarettes (maximum of 240 cigarettes) on which all
taxes levied on the cigarettes by the state and locality of delivery
have been paid and all related state tax stamps or other tax-payment
indicia have been applied; and
6. The manufacturer will maintain records establishing compliance
with these obligations for a three-year period from the date of each
mailing.
e. The applicant must establish its eligibility by submitting
applications to the manager, Pricing & Classification Service Center
(PCSC).
f. The applicant must provide any requested copies of records
establishing compliance to the manager, PCSC (see 608.8.0), and/or the
manager, Mailing Standards (see 608.8.0), upon request no later than 10
business days after the date of the request.
g. The manager, PCSC, issues the initial agency decision of a
determination of eligibility to mail under the consumer testing
exception. Customers whose applications are denied in whole or in part
may appeal to the manager, Mailing Standards. Eligibility to mail under
the consumer testing exception may be revoked by the manager, Mailing
Standards, in the event of failure to comply with any applicable rules
and regulations. Decisions by the manager, Mailing Standards, to uphold
the denial of an application or to revoke a customer's eligibility
under the consumer testing exception may be appealed to the Judicial
Officer under 39 CFR part 953.
h. Any determination of eligibility to mail under this exception
shall lapse if the authorized mailer does not tender any mail under
this exception within any six-month period. After that time, the
affected mailer must apply for and receive new authorization for any
further mailings under this exception.
11.7.2 Mailing
Customers eligible to mail under the consumer testing exception may
enter mailings of cigarettes only at the locations specified in the
customer's application and under the following conditions:
a. Before tendering any shipment under this exception, the mailer
must present proof that the PCSC has authorized the mailer to tender
such shipments at that location.
b. All mailings under the consumer testing exception:
1. Must be entered as Express Mail with Hold for Pickup service
requested (waiver of signature not available); see 113.
2. Be accompanied by a request for return receipt (PS Form 3811;
see 503.6), which must bear the sender's eligibility number issued by
the PCSC, as well as the addressee's full name and address, and be made
returnable to the manager, PCSC--Tobacco Mailing Unit (see 608.8.0 for
address);
3. Must bear the marking ``PERMITTED TOBACCO PRODUCT--DELIVER ONLY
TO ADDRESSEE UPON AGE VERIFICATION--AGE 21 OR ABOVE'' on the address
side of the exterior of the mailpiece;
4. Must bear the full mailing addresses of both the sender and
recipient on the Express Mail label. The name and address of the sender
must match exactly those listed on the customer's application on file
with the PCSC;
5. Are limited in tobacco contents to no more than 12 packs of
cigarettes (maximum 240 cigarettes) on which all taxes levied on the
cigarettes by the destination state and locality have been paid and all
related state tax stamps or other tax-payment indicia have been
applied;
6. May not be addressed to an addressee residing in a state that
prohibits the delivery or shipment of cigarettes to individuals in the
destination state;
7. May be sent only to an addressee who has not made any payment
for the cigarettes, is being paid a fee for participation in consumer
tests, and has agreed to evaluate the cigarettes and furnish feedback
to the manufacturer in connection with the consumer test.
c. Customers must maintain records to establish compliance with the
requirements in 11.7.
d. Mailing frequency may not exceed more than one package from any
manufacturer to an adult smoker during any 30-day period.
e. Nothing in these rules shall preempt, limit, or otherwise affect
any related state laws.
11.7.3 Delivery
Mailings bearing the marking for consumer testing can only be
delivered to the named addressee under the following conditions:
a. The recipient signing for the Express Mail Hold for Pickup
service (see 113) article must be an adult of at least 21 years of age.
b. The recipient must furnish proof of age through production of a
driver's license, passport, or other government-issued photo
identification that lists age or date of birth.
c. The name on the identification must match the name of the
addressee on the Express Mail label.
d. Once age is established, the recipient must sign the PS Form
3849 and PS Form 3811 in the appropriate signature blocks.
11.8 Public Health Exception
Federal government agencies involved in the consumer testing of
tobacco products solely for public health purposes may mail cigarettes
under the mailing standards of 11.7, except as provided herein. The
federal agency shall not be subject to the requirement that the
recipient be paid a fee for participation in consumer tests. Upon
written request, the manager, Mailing Standards, may, in his or her
discretion, waive certain of the application requirements.
* * * * *
We will publish an appropriate amendment to 39 CFR part 111 to
reflect these changes when the proposal is adopted.
Stanley F. Mires,
Chief Counsel, Legislative.
[FR Doc. 2010-10660 Filed 5-3-10; 4:15 pm]
BILLING CODE 7710-12-P