authorized by the U.S. Postal Service to have them.

(e) Distribution-(1) Facilities. Authorized manufacturers must maintain adequate facilities for the distribution, control, and maintenance of postage meters. All such facilities are subject to inspection by representatives of the Finance Department.

(2) Controls. Each authorized manufacturer is required to:

(i) Retain title permanently to all meters of his manufacture except such as may be purchased by the U.S. Postal Service for use in post offices.

(ii) Lease his meters only to mailers to whom meter licenses have been issued by the post office.

(iii) Supply on those meter slogan or ad plates that meet the requirements of the U.S. Postal Service for suitable quality and content.

(iv) Deliver meters to post offices or postal stations only-never to mailers until set and sealed at a post office.

(v) Take reasonable precautions in the transportation and storage of his meters to prevent their reaching the hands of unauthorized individuals.

(vi) Report the loss or theft of any of his meters, or the recovery of any lost or stolen meters, immediately to the local postmaster, the local police, and the Regional Director for the region in which the meter is licensed for use.

(vii) Report to the appropriate postal data center of the U.S. Postal Service each time a meter is presented at a post office for initial setting or to be checked out of service-the report to include the name and address of the mailer, the post office or postal station through which it was handled, and the readings of both registers at the time the meter left or was returned to the manufacturer's possession.

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

(ix) Cancel his lease agreement with any mailer whose meter license is can

celed by the U.S. Postal Service, and remove his meter promptly.

in

(x) Maintain a permanent record by serial number of all meter keys issued to postmasters as well as those sections of the manufacturer's establishment which their use is essential, preferably in the form of signed receipt cards. Report the loss or theft of any of his meter setting keys, or the recovery of lost or stolen keys to the Regional Postmaster General.

(xi) Examine each meter withdrawn from service for failure to record its operations correctly and accurately, and report to the U.S. Postal Service the mechanical condition or fault which caused the failure. See § 144.3(d).

(xii) Submit such other reports to the U.S. Postal Service as may be required from time to time.

Replacement.

(f) Maintenance—(1) The manufacturer must maintain his meters in proper operating condition for mailers by replacing them when necessary or desirable to forestall mechanical breakdown.

(2) Inspection of meters in use. The manufacturer must have all of his meters in service with mailers inspected at least twice annually at approximate 6-month intervals. Inspections must be sufficiently thorough to determine that each meter is clean, in proper operating condition, is recording its operations correctly and accurately, that neither the post office seal nor any seal placed by the manufacturer to prevent access to the mechanism has been removed or tampered with, and that there are no other indications of tampering. The meter register readings must be compared with the control figure last recorded by the postal setting employee in the meter user's Form 3602-A, "Daily Record of Meter Register Readings," to confirm the accuracy of the registers. If the post office control figure has not been recorded, obtain such figure immediately from post office to confirm accuracy of registers. Any irregularities found in the operation of a meter at any time or any improper usage of a meter must be reported immediately to the mailer's postmaster, and appropriate steps must be taken to have the meter discontinued.

(3) Repair of internal mechanism. Repair or reconditioning of meters involving access to internal mechanisms must be performed only within a factory or suitable meter repair department under the direct control and supervision

of the manufacturer. Meters must be checked out of service through the post office of setting before they are opened or any internal repairs are undertaken.

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

[36 F.R. 6751, Apr. 8, 1971]

(a) Application. A permit to use permit imprints and pay postage in cash at the time of mailing may be obtained by submitting Form 3601, Application to Mail Without Affixing Postage Stamps, with a fee of $15, to the post office where mailings will be made. The postmaster will give the applicant a receipt for the fee on Form 3544. No other fee for use of permit imprints has to be paid so long as the permit is active. However, the applicant must also pay an annual bulk mailing fee if he mails third-class matter at bulk rates. See § 134.4 (b) (1).

§ 145.2 Preparation of permit imprints. Permit imprints may be made by printing press, handstamp, lithography, mimeograph, multigraph, addressograph, or similar device. They may not be typewritten or hand drawn. The imprint must be prepared both as to style and content in one of the forms shown in § 145.4. No other forms of imprints may be used. The

66-087-72—13

imprint must be legible and must be of a color that contrasts sufficiently with the paper to make the imprint readable. The entire imprint must be placed in the upper right corner of the address side of each piece, parallel with the length of the piece.

§ 145.3 Content of permit imprints.

(a) First-class mail. Permit imprints must show city and State; date (may be omitted); "First-Class Mail; U.S. Postage Paid;" followed by either the amount of postage paid or the number of ounces for which postage is paid; and permit number. The ZIP Code of the permit holder may be shown immediately following the name of the State or in a separate inscription reading ZIP Code 00000 when it is possible to include the ZIP Code without creating uncertainty as to permit holder's correct address or permit number.

(b) Second-, third-, and fourth-class mail. Permit imprints must show same information as first-class, except the date and the words "First-Class Mail" must be omitted. The amount of postage may be omitted on matter mailed at bulk third-class pound rates, but should be included when it is known per-piece rates will apply.

(c) Company permit imprints for any class of mail. The city, State, and permit number may be omitted if the permit holder has permits at two or more post offices, provided the exact name of the company or individual holding the permits is shown in the permit imprint. When this style of company permit imprint is used, the mailing piece must bear a complete return address. The permit holder must maintain for a 3-year period and make available for inspection and audit upon request of post office officials, records showing the post office at which any particular mailing was made, date of mailing, total weight of the mailing, weight of a single piece, and the amount of postage paid. A sample piece from the mailing must also be available.

§ 145.4 Form of permit imprints.

Permit imprints must be prepared in one of the forms illustrated. The addition of extraneous matter is not permitted.

§ 145.5

Nonprofit Org. U.S. POSTAGE

PAID PERMIT No.1

CALIF

Mailings with permit imprints.

(a) Minimum quantities. Except as stated in § 145.5 (b), minimum quantities required to be mailed at one time are as follows:

(1) First-class mail. 300 pieces of identical weight.

(2) Second- and third-class mail. 300 pieces of identical matter, except 50 pounds or 200 pieces of identical thirdclass bulk mail.

(3) Fourth-class mail. 250 pieces of identical matter.

(4) International mail. See Publication 42, "International Mail". 300 pieces of identical matter.

(b) Exceptions to minimum quantities. When any mailing consists of less than the required minimum, enter an explanation on the "Mailing Statement, Form 3602". Exceptions may be made for the following reasons only:

(1) First-class mail. Occasional exception for a mailer whose total daily mailings are not much more than 300 but who, to cooperate with the post office, present a portion of his mailings early in the day.

(2) All classes of mail. When a large mailing extends over two or more consecutive days and the last deposit, made

Nonprofit Org. U.S. POSTAGE 1.6C PAID Permit No. 1

Nonprofit Organization

U.S. POSTAGE

1.6C PAID New York, N.Y Permit No. 1

to complete the mailing, is less than the minimum.

(c) Preparation for mailing. The mailer must arrange all pieces with the address side facing the same way. It is recommended that the mailer separate the pieces to the finest extent possible in the manner prescribed by §§ 125.3(b) and 134.4 (c). Each class of mail must be separately presented with a separate "Mailing Statement, Form 3602". Fourth-class mailings on which postage is paid at different zone rates must be separated according to the postage paid on each piece.

(d) Place of mailing. Deposit mail at the post office that issued the permit or at a station or branch designated by the postmaster. Permit imprint mail shall be accepted at the main post office or at classified stations and branches where there is a separation of financial and mail-handling activities.

(e) Mailing statement. Prepare and sign a "Mailing Statement, Form 3602," for each mailing. The statement must be prepared by typewriter, ink, or indelible pencil to show the mailer's address, permit number, class of mail, number of pieces in the mailing, and weight of single piece. For third-class bulk mailings,

additional information required by the "Mailing Statement" must be shown. If a receipt is desired, present a duplicate copy of Form 3602, which will be initialed by the accepting employee after verification and returned to the mailer.

(f) Payment of postage-(1) Prepayment in full required. The mailer must pay for each mailing when it is presented at the post office, or make an advance deposit of enough to cover more than one mailing. Payments for postage or deposits must be made at points designated by the postmaster. These payments will not be accepted by employees handling the mail. Advance deposits may be made by mail. When the deposit becomes less than enough to pay for an entire mailing, an additional amount must be deposited before any mailings are made. Credit for postage is not allowed. Postage may not be paid partly in money and partly by postage stamps, except as provided in § 145.5(f) (3). Whenever the computation of postage results in a fraction of a cent in the total, the next higher even cent must be paid.

(2) Fractional postage on meter mailings. The mailer must pay fractional postage in cash as provided in § 145.5 (f) (1) when the meter stamps do not fully pay the minimum per piece charge on bulk third-class mailings. The postmaster will issue a permit under which such payments shall be recorded separately from payments made for regular permit imprint mailings. A separate application fee (see § 145.1(a) of this chapter) must be paid for the permit to pay fractional postage payments in cash. A statement on Form 3602 for the cash portion (see § 144.5 (e) of this chapter) and a statement on Form 3602-PC for the meter payment portion (see § 134.4 (b) (4) (ii)) shall be filed by the mailer.

(g) Post Office computation of postage-(1) Random samples. Enough pieces will be selected at random from the entire lot to determine whether the whole mailing consists of identical pieces.

(2) Weight of single piece. Determine the exact weight of a single piece and the amount of postage required. When scales do not show exact weight of a single piece, weigh enough pieces to balance beam and divide total weight by number weighed.

Example:

20 pieces weigh exactly 31⁄2 ounces. 3.520 0.175 ounce.

(3) Total number of pieces. Ascertain the total number of pieces by one of the following methods:

(i) Find the total weight in pounds, exclusive of tare. (For definition of tare, see § 145.5(g) (5).) Reduce the pounds to ounces and divide the total number of ounces by the weight of a single piece. Example:

Mailer's statement shows 1,240 pieces in

mailing which weigh 13 pounds, 9 ounces. A single piece weighs 0.175 ounce. Convert weight to ounces: 13 x16+9=217

ounces.

217 0.175=1,240 pieces.

(ii) Find the total weight, exclusive of tare, and the total weight exactly of 100 pieces in ounces and fractions of an ounce. Divide the total weight by the weight of 100 pieces. This will give the total number of hundreds and fractions of a hundred in the entire lot. Example:

Mailer's statement shows 124,400 pieces in mailing which weigh 1,360 pounds, 10 ounces. A single piece weighs 0.175 ounce. Convert weight to ounces: 1,360 × 16+10= 21,770.

Weight of 100 pieces: 0.175 × 100=17.5. 21,770÷17.5=1,244.

1,244 X 100=124,400 pieces.

(4) Agreement with mailing statement. The result of either of these methods of computation should agree with the number of pieces shown on the statement of mailing. If they do not agree the matter will be taken up with the mailer and, if necessary, further examination and verification will be made.

(5) Tare. Tare includes sacks, cartons, or other containers, hand trucks, skids, or similar pieces of equipment upon which the mail may be placed during the weighing operation. The standard weights for new sacks are 3 pounds, 7 ounces for a No. 1 size; 2 pounds, 8 ounces for a No. 2 size; and 1 pound, 12 ounces for a No. 3 size. § 145.6

Additional services.

Postage may be paid by means of permit imprints on matter which is entitled to be registered, or sent as certified, insured, or COD mail.

§ 145.7 Improper use of permit imprints.

(a) Distributed outside the mail and as enclosures. Since permit imprints indicate that the matter on which they appear has had postage paid thereon under

the permit imprint system, they must not ordinarily appear on matter which has not had postage so paid thereon, as, for example, matter which is circulated by means other than mail or which is circulated as an enclosure with other matter either by mail or by means other than mail. Permit imprints may appear on address labels, wrappers, envelopes, and other containers, and on complete mailing pieces, which have not had postage paid thereon under the permit imprint system, provided it would be impracticable to omit the permit imprint, as, for example, when envelopes are shipped from a printer to a permit imprint permit holder.

(b) Place of acceptance. Permit imprint matter will be accepted for mailing only at the post office shown in the permit imprint except when company permit imprints are used as provided for by § 145.3(c) or when arrangements for acceptance at other post offices are made under the provisions of § 145.8.

(c) Nonpermit mailings. Permit imprints must be obliterated from matter which is mailed as nonpermit imprint matter prepaid with postage by means of stamps or meter stamps.

§ 145.8

Optional procedure for accepting permit imprint mail.

(a) Objective. The purpose of this optional procedure is to provide for the acceptance of permit imprint mail using the minimum amount of space, time, and manpower, and utilizing the latest developments in mechanization, facilities, and transportation while maintaining adequate control of the collection of correct postage charges.

(b) Procedure. Weighing of the entire mailing on scales is not required. Postage is computed from the mailers' Mailing Statement, Form 3602 or Mailing Statement-4th Class Bulk Rates, Form 3605, which must always show the total number of pieces. The total computed weight must also be shown when it is known that the minimum per piece postage charge will not apply.

(c) Verification. Sample pieces from each mailing shall be weighed by a post office employee, either at the mailers' plant or at the post office, to determine whether the pound or the minimum per piece postage charges apply. Post office employees may be sent on rotating assignments to the mailers' plants to weigh sample pieces and observe prepara

tion of mail by mailers only when the mail is not to be delivered to the post office for dispatch or when considered necessary and authorized in writing by Regional Postmasters General. Mailers must maintain for a 3-year period, and make available for inspection and audit upon request of post office officials, all production and billing records relating to any particular mailing. A sample piece from the mailing must also be available.

(d) Limited use of optional procedure. The optional procedure must be approved by the Regional Postmaster General in each case. It will be approved only when the mailers can make one or more of the following arrangements which are mutually beneficial to the mailers and the Postal Service:

(1) Loading at the mailers' plant the major portion of the mailings into single or combination destination trailers with any remaining portion transported at the mailers' expense and risk from the plant to an acceptance place such as a special acceptance facility or sectional center facility designated by the Regional Postmaster General.

(2) Transportation of the entire mailing at the mailer's expense and risk from the plant to the acceptance place designated by the Regional Director.

(3) Merger by mailers of different varieties and classes of mailing pieces into direct sacks which could not be prepared if the pieces were mailed separately.

(4) Unusual arrangements for which the Regional Postmaster General has obtained approval from the Office of Rates and Classification, Finance Department.