Shortpaid and Unpaid Information-Based Indicia (IBI) Postage and Shortpaid Express Mail Postage, Revised Proposal, 9702-9705 [2011-3798]

Agencies

• Postal Service

[Federal Register Volume 76, Number 35 (Tuesday, February 22, 2011)]
[Proposed Rules]
[Pages 9702-9705]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-3798]


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POSTAL SERVICE

39 CFR Part 111


Shortpaid and Unpaid Information-Based Indicia (IBI) Postage and 
Shortpaid Express Mail Postage, Revised Proposal

AGENCY: Postal Service\TM\.

ACTION: Proposed rule, revised.

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SUMMARY: On November 19, 2009, the Postal Service published a proposed 
rule to revise Mailing Standards of the United States Postal Service, 
Domestic Mail Manual to implement revenue protection procedures for 
shortpaid and unpaid Information Based Indicia (IBI) postage. Comments 
on that proposed rule requested more detailed information on the 
automated procedures the Postal Service will use to identify and verify 
shortpaid and unpaid IBI postage payment and the resolution process 
that will be used to remedy deficiencies. This revised proposal 
provides the more detailed information to DMM sections 604.4, 604.8, 
and 604.10. In addition, this revised proposal includes proposed 
mailing standards to implement revenue protection procedures for 
shortpaid Express Mail[reg] postage.

DATES: We must receive your comments on or before March 24, 2011.

ADDRESSES: Mail or deliver written comments to the Manager, Mailing 
Standards, U.S. Postal Service, 475 L'Enfant Plaza SW., Room 4446, 
Washington DC 20260-5015. You may inspect and photocopy all written 
comments at USPS[reg] Headquarters Library, 475 L'Enfant Plaza SW., 
11th Floor N, Washington DC, between 9 a.m. and 4 p.m., Monday through 
Friday. E-mail comments concerning the proposed rule, containing the 
name and address of the commenter, may be sent to: 
MailingStandards@usps.gov, with a subject line of ``Shortpaid and 
Unpaid Information-Based Indicia Postage and Shortpaid Express 
Mail[reg] Postage.'' Faxed comments are not accepted.

FOR FURTHER INFORMATION CONTACT: Carla Sherry 703-280-7068 or Carol A. 
Lunkins 202-268-7262.

SUPPLEMENTARY INFORMATION: In this revised proposed rule, the Postal 
Service is proposing new procedures to manage shortpaid Express Mail 
postage and a new process to detect mailpieces with shortpaid and 
unpaid IBI postage generated from the following postage evidencing 
systems: Click-N-Ship[reg], IBI postage meters, and PC Postage[reg] 
products.
    In addition, the Postal Service is proposing to implement a new 
Web-based resolution process to remedy shortpaid and unpaid IBI postage 
payment deficiencies, to dispute shortpaid and unpaid IBI postage 
deficiency assessments, and to appeal USPS decisions relative to 
shortpaid and unpaid IBI postage.
    The Postal Service published a proposed rule in the Federal 
Register on November 18, 2009 (74 FR 59494-59496), inviting comments on 
the implementation of revenue protection procedures for IBI postage 
generated by postage evidencing systems.
    Comments were received from the mailing industry requesting more 
detailed information on the automated procedures that the Postal 
Service will implement to identify and verify shortpaid and unpaid IBI 
postage and the resolution process to remedy deficiencies.
    In response to those comments, this revised proposed rule provides 
detailed information on the revenue protection process for shortpaid 
and unpaid IBI postage generated from postage evidencing systems, the 
process to identify and verify shortpaid and unpaid IBI postage, and 
the resolution process to remedy, dispute, or appeal matters relative 
to shortpaid and unpaid IBI postage.

Express Mail Shortpaid Procedure

    To ensure revenue protection for Express Mail paid by any 
authorized postage payment method, the Postal Service is proposing to 
implement new shortpaid Express Mail postage procedures.
    For an Express Mail Next Day, Second Day, Military, or Custom 
Designed Service item received at the origin office of mailing with 
insufficient postage, the mailer is contacted to correct the postage 
deficiency prior to dispatch of the Express Mail item. If the mailer 
cannot be contacted before dispatch from the origin office, the Express 
Mail item is endorsed `Postage Due', marked to show the total 
deficiency of postage and fees, and then dispatched to the destination 
Post Office for delivery to the addressee upon payment of the postage 
due.
    For an Express Mail item with insufficient postage that is 
identified in processing operations or at the destination Post Office, 
the Express Mail item will be endorsed `Postage Due', marked to show 
the total deficiency of postage and fees, and then delivered to the 
addressee upon payment of the postage due. If the payment of postage 
due is refused by the addressee, the Express Mail item is endorsed 
``Return to Sender--Refused.'' The postage deficiency is collected when 
the Express Mail item is returned to the original sender. If the 
original sender chooses to remail the item, a new Express Mail label 
and new postage and fees must be affixed.
    For an Express Mail item with insufficient IBI postage that is 
generated from postage evidencing systems, USPS may follow the process 
identified in DMM 604.4.4.4 through 604.4.4.9 to resolve such revenue 
deficiencies.

Postage Evidencing Systems

    Postage meters, PC Postage products, and Click-N-Ship are 
collectively identified as ``postage evidencing systems.'' A postage 
evidencing system is a device or system of components a customer uses 
to print evidence that postage required for mailing has been paid.
    The Postal Service implemented postage evidencing systems to meet 
the needs of the mailing industry by providing convenient, user-
friendly methods for mailers to print and pay postage. To protect the 
viability of postage evidencing systems, the Postal Service continually 
implements measures to ensure revenue protection.

Postage

    Postage refers to postage and fees due for the applicable price 
category and associated criteria such as class, weight, shape, zone, 
and extra services.

Information-Based Indicia

    Information-Based Indicia (IBI) are digitally generated indicia 
that include a two-dimensional barcode.

Revenue Deficiency

    In this proposed rule, a revenue deficiency includes both shortpaid 
and unpaid postage and occurs when any mailpiece has less postage than 
required for the applicable price category and associated criteria such 
as class, weight, shape, zone, and extra services.

Shortpaid Postage

    Shortpaid postage is a revenue deficiency for which the valid 
postage on a mailpiece is less than the amount due.

Unpaid Postage

    Unpaid postage is a revenue deficiency for which postage is 
deficient due to the use of counterfeited,

[[Page 9703]]

replicated, duplicated, falsified, or otherwise modified postage.

Detection Process for Revenue Deficiency

    As part of the Postal Service's ongoing efforts to increase 
effectiveness, enhance financial controls, and reduce costs, the Postal 
Service is proposing to add a new process using mail processing 
equipment and ancillary information systems to detect and capture 
shortpaid and unpaid IBI postage on mailpieces.
    When the Postal Service detects potential shortpaid or unpaid IBI 
postage on a mailpiece, the Postal Service will subsequently verify the 
postage on the mailpiece to ensure its validity and confirm the amount 
is sufficient. When the Postal Service confirms that the IBI postage on 
a mailpiece is shortpaid or unpaid, corrective measures will be taken 
to recover the applicable revenue deficiency.

Electronic Notification of Revenue Deficiencies

    When the Postal Service identifies shortpaid or unpaid IBI postage 
generated from postage evidencing systems on mailpieces, in most cases, 
the Postal Service will use an electronic process to recover the 
revenue deficiency.
    In such cases, the Postal Service will electronically notify both 
the mailer and the postage evidencing system service provider of the 
revenue deficiency and deliver the mailpiece to the addressee.
    The electronic notification will provide a link to a USPS Web-based 
customer payment portal that will enable the mailer to pay or dispute 
the revenue deficiency.
    Additionally, other non-electronic processes may be used to recover 
a revenue deficiency as required.

Resolution Process

    Where applicable, the Postal Service will provide a resolution 
process that will be accessible through a USPS Web-based customer 
payment portal to enable mailers to pay, dispute or appeal revenue 
deficiencies for IBI postage generated from postage evidencing systems.

Payment Process

    The mailer will have 14 days from the date that the Postal Service 
sends the revenue deficiency electronic notification to pay the 
deficiency. The payment process is as follows:
     During the 14-day resolution period, the mailer must remit 
the payment for the revenue deficiency by accessing a USPS Web-based 
customer payment portal or through an otherwise authorized Postal 
Service payment method as indicated in the electronic notification.
     After 14 days, if a mailer has not paid or taken action to 
dispute a revenue deficiency, the Postal Service may notify the 
mailer's postage evidencing system service provider to temporarily 
suspend the mailer's account.
     When an electronic notification sent to a mailer is 
undeliverable, the Postal Service may notify the mailer's postage 
evidencing system service provider to temporarily suspend the mailer's 
account prior to the end of the 14-day period.
     When a mailer's cumulative revenue deficiency continues to 
increase during the 14-day period, the Postal Service may notify the 
mailer's postage evidencing system service provider to temporarily 
suspend the mailer's account prior to the end of the 14-day period.
     If the mailer feels the revenue deficiency is in error, 
the mailer may dispute the revenue deficiency during this 14-day 
period.

Dispute Process

    The mailer will have 14 days from the date that the Postal Service 
sends the revenue deficiency electronic notification to dispute the 
deficiency. The dispute process is as follows:
     During this 14-day period, the mailer must take action to 
dispute the revenue deficiency by accessing a USPS Web-based customer 
payment portal or through an otherwise authorized Postal Service 
dispute method as indicated in the electronic notification.
     The mailer must provide information to substantiate that 
the postage affixed was valid and sufficient for the postage and 
service fees associated with the mailpiece.
     After 14 days, if a mailer has not taken action to pay or 
dispute a revenue deficiency, the Postal Service will notify the 
mailer's postage evidencing system service provider to temporarily 
suspend the mailer's account.
     When an electronic notification that is sent to a mailer 
is undeliverable, the Postal Service may notify the mailer's postage 
evidencing system service provider to temporarily suspend the mailer's 
account prior to the end of the 14-day period.
     When a mailer's cumulative revenue deficiency continues to 
increase during this 14-day period, the Postal Service may notify the 
mailer's postage evidencing system service provider to temporarily 
suspend the mailer's account prior to the end of the 14-day period.
    The Postal Service will send electronic notification of the 
approved (upheld) or denied dispute to the mailer. If the Postal 
Service upholds the mailer's dispute, then the mailer is required to 
take no further action.

Denied Disputes and the Appeal Process

    When the Postal Service denies a dispute, the mailer will have 7 
days from the date that the Postal Service sends the electronic 
notification of the denied dispute to pay the revenue deficiency or 
file an appeal. The mailer may pay the deficiency or appeal the 
decision by accessing a USPS Web-based customer payment portal or 
through an otherwise authorized Postal Service payment or appeal method 
as indicated in the electronic notification. The appeal process is as 
follows:
     The appeal process requires that the mailer provide 
additional information to substantiate that the postage affixed was 
valid and sufficient for the postage and service fees associated with 
the mailpiece.
     After 7 days, if a mailer has not taken action to pay or 
appeal the revenue deficiency denied in the dispute request, the Postal 
Service may notify the mailer's postage evidencing system service 
provider to temporarily suspend the mailer's account.
     When an electronic notification that is sent to a mailer 
is undeliverable, the Postal Service may notify the mailer's postage 
evidencing system service provider to temporarily suspend the mailer's 
account prior to the end of the 7-day period.
     When a mailer's cumulative revenue deficiency continues to 
increase during this 7-day period, the Postal Service may notify the 
mailer's postage evidencing system service provider to temporarily 
suspend the mailer's account prior to the end of the 7-day period.
    The Postal Service will make a final decision regarding the appeal 
request. If the Postal Service upholds the mailer's appeal, the Postal 
Service will notify the mailer of the decision, and the mailer is 
required to take no further action.

Denied Appeals

    When the Postal Service denies the appeal request, the Postal 
Service will notify the mailer of the denial decision. The mailer must 
pay the revenue deficiency, within 7 days from the date that the Postal 
Service sends the electronic notification of appeal denial, by 
accessing a USPS Web-based customer payment portal or through an

[[Page 9704]]

otherwise authorized Postal Service payment method as indicated in the 
electronic notification. The process for denied appeals is as follows:
     After 7 days of the denied appeal electronic notification, 
if a mailer has not taken action to pay the revenue deficiency, the 
Postal Service will notify the mailer's postage evidencing system 
service provider to temporarily suspend the mailer's account.
     When an electronic notification to a mailer is 
undeliverable, the Postal Service may notify the mailer's postage 
evidencing system service provider to temporarily suspend the mailer's 
account prior to the end of the 7-day period.
     When a mailer's cumulative revenue deficiency continues to 
increase during this 7-day period, the Postal Service may notify the 
mailer's postage evidencing system service provider to temporarily 
suspend the mailer's account prior to the end of the 7-day period.

Denial of Use of Postage Evidencing Systems

    When a mailer fails to meet the standards in the DMM, submits false 
or incomplete information, or deposits shortpaid and unpaid mailpieces 
in the mailstream, the Postal Service may deny a mailer use of a 
postage evidencing system.
    Any mailer who deposits mailpieces with shortpaid or unpaid IBI 
postage or fees may be subject to some or all of the following proposed 
actions:
     Collection of the shortpaid or unpaid postage.
     Revocation of the mailer's account privileges.
     Civil and criminal fines and penalties pursuant to 
existing Federal law.
    Although the USPS is exempt from the notice and comment 
requirements of the Administrative Procedure Act [5 U.S.C. of 553(b), 
(c)] regarding proposed rulemaking by 39 U.S.C. 410(a), we invite 
public comments on the following proposed revisions to Mailing 
Standards of the United States Postal Service, Domestic Mail Manual 
(DMM), incorporated by reference in the Code of Federal Regulations. 
See 39 CFR part 111.1.

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 part 111 continues 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:
* * * * *

600 Basic Standards for All Mailing Services

* * * * *

604 Postage Payment Methods

* * * * *

4.0 Postage Meters and PC Postage Products (``Postage Evidencing 
Systems'')

4.1 Basic Information

* * * * *

4.1.2 Product Categories

    * * * The primary characteristics of postage meters and PC 
Postage products are described below.
* * * * *
[Revise items b and c of 4.1.2 as follows:]

    b. PC Postage products allow mailers to purchase and print 
postage with Information-Based Indicia (IBI) directly onto 
mailpieces, shipping labels, and USPS-approved customized labels.
    c. USPS (Click-N-Ship) and USPS-approved commercial providers 
offer PC Postage products for mailers through subscription service 
agreements.
* * * * *

4.2 Authorization To Use Postage Evidencing Systems

* * * * *

4.2.4 Denial of Use

[Revise paragraph of 4.2.4 as follows:]

    The Postal Service may deny a mailer authorization to use a 
postage evidencing system when a mailer:
    a. Fails to comply with mailing standards.
    b. Submits false or incomplete information.
    c. Enters shortpaid or unpaid mailpieces in the mailstream.

[Renumber current item 4.2.5 as 4.2.6 and add new item 4.2.5 as 
follows:]

4.2.5 Surrender of Postage Evidence System

    If authorization to use a Postage Evidencing System is denied, 
the mailer must surrender the systems, upon request, to the postage 
evidencing system service provider, USPS, or USPS agent.

4.2.6 Appeal Process

[Revise text of renumbered 4.2.6 as follows:]

    Appeals regarding standards in 4.0 or on the basis of 
noncompliance may be filed as follows:
    a. For appeals regarding IBI postage, mailers must appeal under 
4.4.8.
    b. All other appeals must be in writing to the manager, Postage 
Technology Management (see 608.8.1 for address).

4.3 Postage Payment

4.3.1 Paying for Postage

[Revise the first sentence of 4.3.1 as follows:]

    The value of the postage on each mailpiece must be equal to or 
greater than the amount due for the applicable price and extra 
service fees, or another amount permitted by mailing standards. * * 
*
* * * * *
[Renumber current items 4.4 through 4.6 as new 4.5 through 4.7, and 
add new item 4.4 as follows:]

4.4 Shortpaid and Unpaid Information-Based Indicia

4.4.1 Definitions

    Mailpieces bearing shortpaid postage are those for which the 
total postage and fees affixed are less than the postage required 
for the applicable price and extra services fees. Mailpieces bearing 
unpaid Information-Based Indicia (IBI) are those for which the 
mailer has not paid the postage or service fees due to the use of 
counterfeited, replicated, duplicated, falsified, otherwise modified 
IBI, or IBI with zero value.

4.4.2 Detection Process for Revenue Deficiency

    When mailpieces with shortpaid or unpaid postage are found in 
the mailstream, USPS will use manual and automated processes to 
detect and verify the revenue deficiencies.

4.4.3 Handling of Mailpieces With IBI Postage Revenue Deficiencies

    When the Postal Service confirms shortpaid or unpaid IBI 
postage, the Postal Service will take corrective measures that may 
include:
    a. Delivering the mailpiece to the addressee and collecting the 
revenue deficiency from the addressee as postage due.
    b. Collecting the revenue deficiency from the sender as 
described in 4.4.4 through 4.4.9.
    c. Returning the mailpiece to the sender.

4.4.4 Electronic Notification of Revenue Deficiencies

    When the Postal Service confirms a revenue deficiency for a 
mailpiece with IBI postage, the Postal Service may use an electronic 
process to recover the deficiency from the mailer. In these cases, 
the Postal Service will electronically notify both the mailer and 
the postage evidencing system service provider of the revenue 
deficiency and will deliver the mailpiece to the addressee. The 
notification will provide a link to a USPS Web-based customer 
payment portal that will enable the mailer to pay or dispute the 
revenue deficiency.

4.4.5 Resolution Process

    The Postal Service will provide a resolution process through a 
USPS Web-based customer payment portal.

4.4.6 Payment Process

    The mailer will have 14 days from the date that the Postal 
Service sends the electronic notification to pay the revenue 
deficiency. The mailer must submit payment for the revenue 
deficiency during this 14-day period by accessing a Postal Service 
Web-based

[[Page 9705]]

customer payment portal or choose another method identified in the 
notification. The mailer may choose to dispute (see 4.4.7) the 
revenue deficiency during this 14-day period. The Postal Service may 
notify the postage evidencing system service provider to temporarily 
suspend the mailer's account under the following conditions:
    a. After 14 days, if a mailer has not paid or disputed a revenue 
deficiency.
    b. When an electronic notification to a mailer is undeliverable.
    c. When a mailer's cumulative revenue deficiency increases 
during the 14-day period due to additional mailpieces being 
identified as shortpaid or unpaid.

4.4.7 Dispute Process

    To begin the dispute process, the mailer must access a Postal 
Service Web-based customer payment portal or choose another method 
identified in the electronic notification to substantiate that the 
postage affixed was valid and sufficient for the postage and fees. 
The process is as follows:
    a. The mailer will have 14 days from the date that the Postal 
Service sends the notification to dispute the revenue deficiency.
    b. The Postal Service will send electronic notification to the 
mailer of its decision to uphold or deny the dispute. If the Postal 
Service upholds the dispute, the mailer is not required to take 
further action.

4.4.8 Denied Disputes and the Appeal Process

    When the Postal Service denies a mailer's dispute of a revenue 
deficiency, the mailer will have 7 days from the date the Postal 
Service sends the notification of the denial to pay the revenue 
deficiency or file an appeal. To pay the dispute or file an appeal, 
the mailer must access a Postal Service Web-based customer payment 
portal or choose another method identified in the notification. To 
appeal, the mailer must provide additional information to 
substantiate that the postage affixed was valid and sufficient for 
the postage and fees. The Postal Service will send electronic 
notification to the mailer of its decision to uphold or deny the 
appeal. If the Postal Service upholds the appeal, the mailer is not 
required to take further action. The Postal Service may notify the 
postage evidencing system service provider to temporarily suspend 
the mailer's account under the following conditions:
    a. After 7 days, if a mailer has not paid or appealed a revenue 
deficiency.
    b. When an electronic notification to a mailer is undeliverable.
    c. When a mailer's cumulative revenue deficiency increases 
during the 7-day period due to additional mailpieces being 
identified as shortpaid or unpaid.

4.4.9 Denied Appeals

    When the Postal Service denies the appeal, the mailer must pay 
the revenue deficiency within 7 days from the date that the Postal 
Service sends the electronic notification of denial by accessing a 
Postal Service Web-based customer payment portal or choosing another 
USPS-authorized method identified in the notification. The Postal 
Service may notify the postage evidencing system service provider to 
temporarily suspend the mailer's account under the following 
conditions:
    a. After 7 days, if a mailer has not paid the revenue 
deficiency.
    b. When an electronic notification to a mailer is undeliverable.
    c. When a mailer's cumulative revenue deficiency increases 
during the 7-day period due to additional mailpieces being 
identified as shortpaid or unpaid.
* * * * *

8.1 Insufficient Postage

8.1.1 Definition

[Revise the second and third sentences of 8.1.1 as follows:]

    * * * Such individual pieces (or quantities fewer than 10) are 
delivered to the addressee on payment of the charges marked on the 
mail. For mailings of 10 or more pieces, the mailer is notified so 
that the postage charges may be paid before dispatch. For any 
mailpiece with insufficient postage generated by postage evidencing 
systems, the USPS may follow the process in 4.4.4 through 4.4.9.
* * * * *
[Renumber current item 8.1.7 as 8.1.8 and add new 8.1.7 as follows:]

8.1.7 Express Mail Corporate Accounts and Federal Agency Accounts

    Express Mail Corporate accounts and Federal government accounts 
that use a ``Postage and Fees Paid'' indicia are debited for the 
correct amount of postage and fees at the time of mailing.

[Revise the heading and text of renumbered 8.1.8 as follows:]

8.1.8 Express Mail With Insufficient Postage--Acceptance

    When any Express Mail item is received at the office of mailing 
with insufficient postage, the Postal Service will contact the 
mailer to correct the postage deficiency prior to dispatch of the 
item. If the mailer cannot be contacted prior to dispatch, the 
Postal Service will:
    a. Endorse the item ``Postage Due.''
    b. Mark the item to show the total deficiency of postage and 
fees.
    c. Dispatch the item to the destination Post Office for delivery 
to the addressee upon payment of the postage due.
    d. If payment is refused by addressee, endorse the item ``Return 
to Sender--Refused'' and return the item to the sender upon 
collection of the postage deficiency.

[Add new items 8.1.9 through 8.1.11 as follows:]

8.1.9 Express Mail With Insufficient Postage--Processing Operations

    For an Express Mail item with insufficient postage identified in 
processing operations or at the destination Post Office, the Postal 
Service will:
    a. Endorse the item ``Postage Due.''
    b. Mark the item to show the total deficiency of postage and 
fees.
    c. Deliver the item to the addressee upon payment of the postage 
due.
    d. If payment is refused by addressee, endorse the item ``Return 
to Sender--Refused'' and return the item to the sender, upon 
collection of the postage deficiency.

8.1.10 Express Mail With Insufficient IBI Postage--Postage Evidencing 
Systems

    For an Express Mail item with insufficient IBI postage generated 
by postage evidencing systems, USPS may follow the process in 4.4.4 
through 4.4.9.

8.1.11 Remailing Express Mail With Insufficient Postage

    The Postal Service returns an Express Mail item with 
insufficient postage to the sender upon collection of the postage 
deficiency when an effort to contact the sender before dispatch 
fails and when the addressee refuses to pay the postage due. Under 
these circumstances, if the sender remails the item, the sender must 
affix a new Express Mail label with new postage and fees to the 
item.
* * * * *

10.0 Revenue Deficiency

10.1 General

* * * * *

10.1.2 Appeal of Ruling

[Revise the first sentence of 10.1.2 as follows:]

    Except as provided in 4.4.4 through 4.4.9, 10.2, and 703.1.0, a 
mailer may appeal a revenue deficiency assessment by sending a 
written appeal to the postmaster or manager in 10.1.2a through 
10.1.2c within 30 days of receipt of the notification. * * *
* * * * *
    We will publish an appropriate amendment to 39 CFR 111 to reflect 
these changes if our proposal is adopted.

Neva R. Watson,
General Counsel, Legislative.
[FR Doc. 2011-3798 Filed 2-18-11; 8:45 am]
BILLING CODE 7710-12-P