[Federal Register Volume 75, Number 102 (Thursday, May 27, 2010)]
[Rules and Regulations]
[Pages 29662-29671]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-12869]


=======================================================================
-----------------------------------------------------------------------

POSTAL SERVICE

39 CFR Part 111


Treatment of Cigarettes and Smokeless Tobacco as Nonmailable 
Matter

AGENCY: Postal Service\TM\.

ACTION: Final rule.

-----------------------------------------------------------------------

[[Page 29663]]

SUMMARY: The Postal Service is revising Mailing Standards of the United 
States Postal Service, Domestic Mail Manual (DMM[reg]) 601.11, 
pertaining to the mailing of tobacco cigarettes and smokeless tobacco. 
These provisions implement specific requirements of the Prevent All 
Tobacco Cigarettes Trafficking (PACT) Act, which restricts the 
mailability of cigarettes and smokeless tobacco.

DATES: Effective Date: June 29, 2010.

FOR FURTHER INFORMATION CONTACT: Anthony Alverno, 202-268-2997, or Mary 
Collins, 202-268-5440.

SUPPLEMENTARY INFORMATION: 
    On May 5, 2010, the Postal Service published a proposed rule 
Federal Register (75 FR 24534-24541) to implement the Prevent All 
Cigarette Trafficking (PACT) Act of 2009, Public Law 111-154. 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 by:
     Creating disincentives for the illegal smuggling of 
tobacco products;
     Enhancing enforcement tools to deal with cigarette 
smuggling;
     Stemming trafficking, which increases the 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 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 cigarettes or smokeless tobacco. As in the 
proposed rule, the final 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 website, 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 is 
accordingly publishing this final rule to be effective on June 29, 
2010. In this manner, all of the provisions, including the exceptions 
will be available to mailers as of June 29, 2010.

Response to Comments Received

    The Postal Service received several comments in response to the 
proposed rule. We discuss the comments below and our response to each.
    One commenter, an association of state officials engaged in legal 
and law enforcement issues, expressed favorable comments on the 
proposed rule. The commenter stated that ``strong and effective 
implementation'' of the PACT Act would further the Act's stated 
objectives, and the proposed rule furthers those criteria. The 
commenter explicitly endorsed the ``reasonable cause'' standard in 
proposed section 601.11.2, by noting that it provides ``a workable and 
effective means of identifying packages that are nonmailable under the 
PACT Act.'' The commenter also expressed support for the proposed 
rule's prohibition of cigarettes and smokeless tobacco in international 
mail.
    A second commenter offered suggestions on several aspects of the 
proposed rule. First, the commenter suggested that a cross-reference in 
601.11.2 was a typographical error, and the Postal Service has 
corrected the error in the final rule. Second, the commenter 
recommended that DMM 601.11.5.1b specify more detailed documentation 
requirements regarding a mailer's official licensing. This 
recommendation is well-taken, and although the Postal Service does not 
believe that it should be incorporated into the final rule at this 
time, the Postal Service will take the recommendation under advisement 
and will apply it as necessary in its administration of the application 
process.
    The same commenter also offered suggestions about the ``certain 
individuals'' exception in DMM 601.11.6. The commenter noted that the 
proposed rule neglected to include explicit restriction of the 
exception to noncommercial uses, including gifts not connected in any 
way with a commercial transaction. The Postal Service agrees with this 
recommendation and has incorporated language in DMM 601.11.6 to address 
the specific concerns. In a suggestion shared with comments by a 
consumer advocacy group, the commenter also recommended that a sender 
under the certain individuals exception be required to make his or her 
required affirmation in writing, under penalty of perjury, rather than 
orally. The PACT Act does not require that this affirmation be in 
writing, however, and the Postal Service believes that such a 
requirement would diminish administrative efficiency while not 
contributing appreciably to compliance or enforcement, given the 
additional procedures for verifying recipient age.
    Finally, the commenter recommended that the consumer testing 
exception be revised in two ways. Under the commenter's proposal, the 
written certification in proposed DMM 601.11.7.1d (restyled as 
subparagraph b in the final rule) should include all of the conditions 
of 18 U.S.C. 1716E(b)(5)(A)(v), not just the requirement that no 
payment be made by the recipient. (The consumer advocacy group 
suggested similar changes and that other conditions for the exception 
be incorporated within the certification.) The citation to clause 
1716E(b)(5)(A)(v) is inapposite, however: The cited provision specifies 
general conditions for the exception, but not for the mailer's 
certification. The certification requirements are set forth expressly 
in 18 U.S.C. 1716E(b)(5)(C)(ii)(II), and the Postal

[[Page 29664]]

Service believes it has accurately captured them in the proposed and 
final rules. The commenter also submits that the proposed DMM 
601.11.7.2d is overbroad, in that it implies that a recipient can only 
receive one consumer-test mailing from any manufacturer at all in a 30-
day period, rather than one mailing from any one manufacturer. In 
response to the commenter's suggestion, the final rule has been revised 
accordingly to track the language of the statute.
    As noted above, the Postal Service received a comment from a 
consumer advocacy group that touched on several aspects of the proposed 
rule. The commenter recommended that mailers under the business/
regulatory purposes and consumer testing exceptions be required to 
update their applications for all changes in pertinent information and 
that the mailers be required annually to verify the continuing accuracy 
of their information. As explained below, the Postal Service has 
clarified the updating requirement in the final rule. The commenter 
also noted that, as proposed, the consumer testing exception in DMM 
601.11.7.2b6 would not apply to recipients ``residing'' in a state that 
prohibits such shipments, whereas the corresponding PACT Act provision 
applies to any individuals ``located'' in such a state. The observation 
is apt, and the Postal Service has revised the final rule accordingly.
    The commenter suggested that the advice in DMM 601.11.2 regarding 
penalties is insufficiently specific and offers more detailed language 
for different types of violations. The Postal Service believes that 
this suggestion is unnecessary and goes beyond the intent of the 
proposed language, which is simply to alert mailers of the potential 
consequences of noncompliant mailings. To the extent that greater 
specificity might be desired, that specificity can be found in the text 
of the PACT Act itself. See 18 U.S.C. 1716E(c)-(e). The commenter also 
recommended that the Postal Service require mailers under the consumer 
testing exception to provide a list of all potential recipients and 
that the Postal Service not accept any such mailing to individuals not 
listed. The Postal Service declines this suggestion as unnecessary, 
given that the mailer is already obligated to maintain records on all 
mailings. Moreover, it is unclear how such a requirement would enhance 
Postal Service administration or serve any clear purpose. The commenter 
further advised that the Postal Service should bar any consumer test 
mailings that weigh significantly more than 12 packs of cigarettes, or 
12 ounces. While the Postal Service appreciates the desire for more 
specific guidelines, the Postal Service declines the proposal, as a 
weight-based standard is an ill-fitting proxy for a content-based 
regulation, and the proposal could bar a substantial amount of 
legitimate mailings. For example, a lesser number of packs combined 
with heavier non-cigarette matter could penetrate a weight cap without 
transgressing the PACT Act's 12-pack limit. Finally, the commenter 
advises that pipe tobacco, ``little cigars,'' and other tobacco 
products labeled as such may present challenges in applying the PACT 
Act. The concern is duly noted and discussed further in response to two 
of the other comments.
    The Postal Service received one comment from a tribal nation. The 
comment notes a lack of tribal consultation concerning the proposed 
rule, citing a Presidential Memorandum on Consultation (November 5, 
2009), a treaty commitment, and Executive Order 13175. The Presidential 
memorandum and Executive Order 13175 apply to ``agencies'' as defined 
in 44 U.S.C. 3502(1), however, and not specifically to the Postal 
Service, which is an independent establishment of the executive branch. 
39 U.S.C. 101; see Kuzma v. United States Postal Service, 798 F.2d 29, 
32 (2d Cir. 1986), cert. denied, 479 U.S. 1043 (1987); see also Shane 
v. Buck, 658 F. Supp. 908,914-15 (D. Utah 1985), aff'd, 817 F.2d 87 
(10th Cir. 1987). The proposed rule is not limited in effect to any 
tribal nation or to tribal nations generally; rather, it applies to all 
users of the mails nationwide in the same manner as all other postal 
regulations. Moreover, the Postal Service has also provided adequate 
notice and an opportunity for meaningful and timely input through the 
rulemaking process, and the commenter is invited to contact the persons 
identified in this notice to arrange any further consultations that the 
commenter would find helpful.
    The commenter also advised that the Postal Service should forgo 
enforcement of the PACT Act's mailability requirements until after the 
Department of Justice has compiled the List of Unregistered or 
Noncompliant Delivery Sellers required by Section 2A(e) of the PACT 
Act. The Postal Service understands that the list may not be available 
until 180 days after the PACT Act's enactment, but notes that Congress 
has directed the mailability provisions to take effect 90 days after 
enactment. Until the list is available, it cannot be used for 
enforcement of the mailability rules. Nevertheless, the Postal Service 
notes that the statute provides other criteria, including a mailer's 
advertising, for determining whether it has reasonable cause to believe 
a mailing contains nonmailable tobacco products.
    One commenter questioned whether infrequent lightweight shipments 
of tobacco between individuals would be allowed under the PACT Act. 
Consistent with the PACT Act and the proposed rule, the final rule 
permits individual customers to send shipments of cigarettes and 
smokeless tobacco to other individuals in certain contexts. All intra-
State shipments will be permitted within Alaska and Hawaii, including 
shipments between two individuals located within one of those states. 
Otherwise, individual customers may mail small quantities of cigarettes 
and smokeless tobacco in domestic mail, subject to the requirements to 
the ``certain individuals'' exception described in DMM 601.11.6. This 
includes mail to Army Post Office (APO), Fleet Post Office (FPO), and 
Diplomatic Post Office (DPO) locations where cigarettes and smokeless 
tobacco are not restricted by the host country. See Overseas Military/
Diplomatic Mail in the Postal Bulletin.
    One commenter advised that the regulation is unnecessary, while 
another expressed concern that the proposed rule would lead to loss of 
employment for postal employees and higher postage increases. To 
clarify, the Postal Service is implementing requirements imposed by the 
PACT Act. The Postal Service does not have discretion to waive the 
Act's requirements. One of the consequences of the legislation is to 
prohibit sales transactions of cigarettes and smokeless tobacco 
conducted by mail. One of the commenters further suggested that clove 
cigarettes, which the commenter believed to be classified as cigars, 
purchased from vendors abroad would appear to fall within the scope of 
the proposed rule. Under Section 907(a)(1)(A) of the Federal Food, 
Drug, and Cosmetic Act, as amended by the Family Smoking Prevention and 
Tobacco Control Act (Pub. L. 111-31), flavored cigarettes and tobacco 
products marketed as cigarettes, including those with clove flavoring, 
are prohibited in the United States. To the extent that bona fide 
cigars are concerned, a cigar is defined, for purposes of the PACT Act, 
as 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. 
The PACT Act and the proposed rule's mailability prohibitions would not 
apply to imported tobacco products that are, in

[[Page 29665]]

fact, classified by U.S. Federal authorities as cigars. Other 
requirements may, however, apply to imported, mailable tobacco 
products, and as such, foreign mailers should contact private counsel 
or customs authorities to determine any applicable importation 
requirements.
    Another commenter inquired whether it would be permissible to mail 
two to three cans of ``snus'' from Sweden to a friend in the United 
States. Because the Postal Service understands snus to be a form of 
smokeless tobacco, as defined by the PACT Act, it would fall within the 
scope of the rules at hand. As explained in the proposed rule, 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 United States. Therefore, the 
Postal Service does not believe that any alternative exists at this 
time to allow U.S. persons to send or receive smokeless tobacco 
products, such as snus, in international mail under the PACT Act's 
exceptions.
    Two comments were received from retail associations. One expressed 
full support for the proposed rule, and offered no changes in 
connection with the rulemaking. The other association offered several 
suggestions. First, the commenter suggested that the required markings 
be changed from ``PERMITTED TOBACCO PRODUCT'' to ``PERMITTED TOBACCO 
MAILING,'' for consistency with the PACT Act. This suggestion is well-
taken and adopted in the final rule. The commenter also suggested that 
for certain exceptions, the term ``PERMITTED'' be deleted from the 
marking. The Postal Service believes that the term ``PERMITTED'' is 
acceptable in the context of all exceptions, since it serves as an 
instruction to personnel that the mailing is permissible and not 
prohibited from the mail. The commenter also suggested that the Postal 
Service require an oath or affirmation for all exceptions to the effect 
that all taxes have been paid on the tobacco product being mailed. As 
the commenter noted, the consumer testing exception requires that all 
taxes be paid on consumer testing samples; however, Congress did not 
impose similar restrictions in the context of other exceptions. The 
Postal Service disagrees with the commenter that oaths or affirmations 
regarding tax compliance are necessary upon mailing under the other 
exceptions, particularly considering that the exceptions' collective 
scope excludes all commercial transactions with consumers, where the 
issue of taxation would be most acute. Finally, the commenter suggested 
that postal retail locations include signage to the effect that it is 
illegal to mail tobacco (subject to certain exceptions) and that severe 
penalties apply. The commenter noted that its suggestion does not need 
to be part of the final rule. The Postal Service appreciates that there 
is a need for public education, but agrees with the commenter that such 
signage need not be part of the final rule.
    One commenter questioned whether the scope of the proposed rule as 
it applies to ``little cigars,'' which the commenter states are roughly 
the same size as a cigarette, are often wrapped in reconstituted 
tobacco, and often have a filter. The commenter stated that the 
definitions used in the PACT Act are ambiguous and should be clarified. 
In particular, the commenter suggested that the definition in the 
proposed rule incorporate Alcohol, Tobacco, and Firearms Revenue Ruling 
73-22 with respect to the classification of little cigars. The Postal 
Service disagrees with the commenter that the definitions should be 
further clarified at this time, and notes that the definitions are 
taken directly from the definitions in the PACT Act. The Postal Service 
does not believe this rulemaking can resolve all of the issues 
presented by the commenter, particularly since the product described in 
the commenter's letter is not uniform.
    One commenter, a tobacco company, offered several observations on 
the proposed rule. First, with respect to the business/regulatory 
purposes exception, the commenter stated that the requirement for 
advance applications by mailers would prove to be an administrative 
burden on the Postal Service and would result in delays. The commenter 
offered similar observations on the consumer testing exception and 
suggested that the Postal Service simply require registration in 
advance. The Postal Service appreciates these concerns and is examining 
methods to streamline the process, including the possible use of a 
standardized form for applications, should the anticipated volume of 
applications so warrant. However, Congress specifically charged the 
Postal Service with verifying that mailings under these exceptions are 
sent by businesses with all proper licenses, an obligation that inheres 
a measure of due diligence.
    Second, the commenter advised that the required markings on the 
packages comply with section 2A(b) of the Jenkins Act, which requires 
that delivery sellers apply the following marking to eligible 
shipments: ``CIGARETTES/SMOKELESS TOBACCO: FEDERAL LAW REQUIRES THE 
PAYMENT OF ALL APPLICABLE EXCISE TAXES, AND COMPLIANCE WITH APPLICABLE 
LICENSING AND TAX-STAMPING OBLIGATIONS.'' The commenter further 
suggested that the Postal Service either not require its own separate 
markings or else unify its required markings for simplicity. The Postal 
Service disagrees with this suggestion. As an initial matter, section 
2A(b) of the Jenkins Act applies to shipments of delivery sellers. Such 
shipments are explicitly prohibited from the mail, with the exception 
of shipments entirely within Alaska and Hawaii. Consequently, this 
marking is not pertinent to excepted postal shipments, since delivery 
sales may not be sent via U.S. mail (except within Alaska and Hawaii). 
Moreover, unique markings on excepted postal shipments are essential, 
because the acceptance and delivery rules vary according to the 
applicable exception, and the markings offer important guidance to 
postal personnel responsible for handling tobacco shipments. As an 
example, the minimum age for delivery of a consumer testing or public 
health cigarette sample is always 21; however, a shipment delivered to 
an individual may be subject to a lower minimum age (18 or 19, 
depending on State or local law). There is no way for postal employees 
to apply the correct minimum age requirement absent the use of a unique 
marking.
    Third, the commenter suggested that the Postal Service work with 
interested parties to further enhance these rules in order to 
streamline the overall process of compliance. The Postal Service 
welcomes the opportunity to further improve these rules and encourages 
customers to continue to submit their ideas for improvement.
    Another comment submitted by a tobacco company offered several 
suggestions on the proposed rule. First, the commenter disagreed with 
the proposed rule's requirement that excepted shipments (except intra-
State shipments in Alaska and Hawaii) use ``hold for pickup'' service. 
The commenter believed that this requirement would be unduly burdensome 
and would affect its business operations. The commenter offered several 
illustrations to show the difficulties imposed by the hold for pickup 
requirement and urged that it not be incorporated in the final rule. 
The Postal Service appreciates the commenter's concerns; however, the 
final rule maintains the requirement for Express Mail with hold for 
pickup for the business/regulatory purposes,

[[Page 29666]]

certain individuals, consumer testing, and public health exceptions 
because such a measure will enable the Postal Service to focus its 
resources on implementing the PACT Act's unique delivery requirements, 
which have no precedent in postal operations. This, in turn, will 
enable the Postal Service to tailor the training it must give to 
personnel involved in the delivery of packages, which in turn will 
provide better controls to prevent tobacco from reaching minors. 
Nevertheless, the Postal Service's management is in the process of 
examining whether its services should be changed to align better with 
the PACT Act's requirements. The PACT Act's short timeframe for 
implementation does not permit the Postal Service to develop more 
creative product solutions that may serve the commenter's needs at this 
early stage.
    The commenter also raised several questions about the application 
process. Specifically, the commenter queried whether a form will be 
created and submitted. At this time, the final rule speaks of an 
application letter. Between the final rule's publication in the Federal 
Register and its effective date or some time thereafter, however, the 
Postal Service may decide to develop a form for use in the application 
process. The Postal Service will update its DMM regulations should a 
form be instituted in lieu of an application letter.
    The commenter also questioned the application process, and 
suggested that rules regarding updates to applications be clarified. As 
noted above, the PACT Act charges the Postal Service with verifying the 
eligibility of a customer using the business/regulatory purposes, 
consumer testing, and public health exceptions. Consequently, the final 
rule requires that a mailer maintain the accuracy of all information in 
its application. Additionally, with respect to the business/regulatory 
purposes exception, the Postal Service is explicitly charged with 
responsibility of verifying the eligibility of the addressees to which 
business/regulatory mailings are sent. For this reason, a mailer cannot 
mail to an addressee until the eligibility of that addressee is 
verified, which implies that the applicant must await the issuance of 
an updated eligibility letter listing the addressee as an eligible 
recipient of a business/regulatory mailing.
    The commenter also questioned the use of eligibility numbers issued 
by the Pricing and Classification Service Center (PCSC). The point of 
the eligibility number is simply to facilitate the organization of 
Return Receipts sent to the PCSC for shipments under the business/
regulatory purposes, consumer testing, and public health exceptions. 
For clarity, the final rule indicates that each authorization letter 
under those exceptions will be assigned its own unique number. In 
addition, the final rule is clarified to state that the eligibility 
number must appear in the return address of the return receipt, and 
mailings must be returned to sender if the mailer's eligibility number 
is missing in the address block of the return receipt.
    The commenter questioned the requirement that the applicant must 
reapply if no mailings take place every six months. The goal of this 
objective is to prevent eligible mailers from allowing information in 
their applications to become stale. The Postal Service nevertheless 
understands the potential paperwork burden on applicants and has 
determined to change this requirement from six months to three years. 
The Postal Service believes that that time frame is adequate to address 
the commenter's concerns while continuing to meet the Postal Service's 
administrative needs.
    Finally, the commenter questioned whether the final rule will 
include regulations governing all exceptions, and if not, then whether 
any shipments may be tendered under the various exceptions. The PACT 
Act nonmailability rules and intra-Alaska/intra-Hawaii exception become 
effective on June 29, 2010, which is 90 days after the enactment of the 
PACT Act. Although the PACT Act grants the Postal Service up to 180 
days (or through September 27, 2010) to implement rules to implement 
the business/regulatory purposes, certain individuals, consumer 
testing, and public health exceptions, the Postal Service has 
undertaken to unify its rulemaking into a single, final rule. The 
Postal Service does not have the discretion to postpone the 
effectiveness of the start date of the nonmailability prohibitions, and 
postponement of the final rule would have no effect insofar as the 
criminal and civil penalties of the PACT Act are concerned. Finally, 
the commenter suggested that the final rule be delayed until all of its 
concerns are addressed. Because delay in issuance of the final rule 
would imply that no mailer could send cigarettes or smokeless tobacco 
under any of the exceptions (excluding the noncontiguous states 
exception), the commenter's suggestion is not adopted.
    A commenter noted that the proposed rule does not expressly provide 
that pipe tobacco is mailable. The PACT Act restricts the mailability 
of items that the Postal Service has reasonable cause under the PACT 
Act to believe contain cigarettes or smokeless tobacco, as those terms 
are defined in Section 1 of the Jenkins Act of 1949 (15 U.S.C. 375(2), 
(12) (as amended)). If a product falls outside of the PACT Act's 
definitions for cigarettes or smokeless tobacco, then the product is 
not subject to the PACT Act's restrictions, except where it happens to 
fall within the scope of the PACT Act's reasonable cause standard. The 
fact that the PACT Act explicitly acknowledges the mailability of 
cigars, but not pipe tobacco or other extraneous tobacco products, does 
not suggest the nonmailability of those other tobacco products.
    The commenter went on to state that cigars and pipe tobacco must be 
mailable in all cases, citing Section 8 of the PACT Act. Section 8 
expresses the sense of Congress that states should still be able to tax 
the remote sales of tobacco products. Section 8 of the PACT Act is not 
an affirmative statement of mailability. More significant than this 
statement of general intent is the PACT Act's operative provision, 
codified at 18 U.S.C. 1716E(a)(1), that the Postal Service ``shall not 
accept for delivery or transmit through the mails any package that it * 
* * has reasonable cause to believe contains [nonmailable] cigarettes 
or smokeless tobacco.'' Thus, Congress generally directed that a 
package be refused if the Postal Service has reasonable cause to 
believe it contains nonmailable cigarettes or smokeless tobacco. To the 
extent that Section 8 has any bearing on the instant rulemaking, it 
does not pose a conflict: States remain generally empowered to impose 
and collect taxes on tobacco products to the extent that those products 
can legally be sent through the mail or otherwise.
    The commenter further requested guidelines as to the burden of 
proof for a mailer to contest an initial finding of nonmailability. The 
amount and type of evidence required to overcome reasonable cause would 
depend on the facts of a particular case.
    Finally, the commenter expressed concern that, to the extent the 
proposed rule's ``reasonable cause'' standard relies on the presence of 
an entity on the Attorney General's List of Unregistered or 
Noncompliant Delivery Sellers, the standard could bar all shipments 
from such entities, including shipments that do not contain cigarettes 
or smokeless tobacco. In the commenter's opinion, this exceeds the PACT 
Act's restrictions and the Postal Service's authority. The Postal 
Service disagrees. The PACT Act itself, and not merely the Postal 
Service's proposed rule, defines ``reasonable cause'' as including the

[[Page 29667]]

presence of an entity on the Attorney General's List of Unregistered or 
Noncompliant Delivery Sellers, regardless of the package's actual 
contents. 18 U.S.C. 1716E(a)(2)(B). Furthermore, the commenter's 
attempt to distinguish between ``delivery sellers'' and sellers of 
other tobacco is unavailing, as the Attorney General's List of 
Unregistered or Noncompliant Delivery Sellers pertains to delivery 
sellers of cigarettes and smokeless tobacco, and not remote sellers of 
other tobacco products. See 15 U.S.C. 375(5)-(6), 376A(e)(1)(A) (as 
amended).

Explanation of Changes From Proposed Rule

    The final rule includes several additional changes and corrections. 
The first pertains to section 503 and 608 of the DMM, which includes 
standards for return receipt service. As explained in the proposed 
rule, the Postal Service's administration of the PACT Act exceptions 
results in a requirement under certain exceptions that customers use 
return receipts and make them returnable to the Pricing & 
Classification Service Center (PCSC). Because return receipts are 
typically made returnable to the sender, the final rule includes a 
revision to DMM 503 and 608 that implements this procedure.
    Another change pertains to mail destined to APO/FPO/DPO 
destinations under the ``certain individuals'' exception. Changes to 
DMM sections 601.11.3 and 601.11.6.2 clarify that mailings of 
cigarettes and smokeless tobacco are permitted to these destinations 
only if not otherwise restricted according to the requirements of the 
host country. Mailings from or between APO/FPO/DPO destinations are not 
eligible, however, because Hold for Pickup labels are not offered at 
these destinations for delivery in the United States.
    The final rule is clarified to ensure that proper controls are 
applied to shipments under certain exceptions. In particular, the final 
rule is modified to require face-to-face transactions (excluding 
Carrier Pickup and Pickup on Demand arrangements). The final rule is 
also clarified to the effect that Carrier Pickup and Pickup on Demand 
services are not available for permissible shipments of cigarettes and 
smokeless tobacco. These changes are reflected in DMM sections 
601.11.4, 601.11.5.2, 601.11.6.1, and 601.11.7.2.
    Nonsubstantive changes were made in the arrangement of the text in 
DMM section 601.11.2, so that standards related to the reasonable cause 
standard appear in sequence.
    The updating requirements for applicants under the business/
regulatory and consumer testing exceptions are clarified to apply to 
all information furnished on the customer's application for as long as 
the mailer continues to mail under either exception. This results in a 
reorganization of some text in DMM section 601.11.5.1 and the addition 
of text in DMM section 601.11.7.1a.
    Language has been added to DMM section 601.11.6 to clarify that the 
certain individuals exception is only available for noncommercial 
shipments, and that senders must not receive direct or indirect 
compensation of any kind in connection with the contents being mailed.
    The verbiage for markings used for each exception, as listed in DMM 
sections 601.11.5.2c, 601.11.6.3b, and 601.11.7.2b3, has been changed 
from ``PERMITTED TOBACCO PRODUCT'' to ``PERMITTED TOBACCO MAILING.'' 
Further, the marking and text of the delivery procedures for shipments 
under the business/regulatory purposes exception in DMM section 
601.11.5 were clarified to exclude delivery to the addressee's agents, 
as the PACT Act only permits employees of the addressee to retrieve 
such shipments. 18 U.S.C. 1716E(b)(3)(B)(ii)(VII).
    As explained above, the restriction on the number of mailings to a 
tester from any one manufacturer under the consumer testing exception 
in DMM section 601.11.7.2d was revised to conform to the PACT Act.
    For clarity, the final rule indicates that each authorization 
letter under the business/regulatory purposes, consumer testing, and 
public health exceptions will be assigned its own unique eligibility 
number, as noted in DMM sections 601.11.5.1c and 601.11.7.1e. Further, 
the final rule is clarified to state that the eligibility number must 
appear in the return address of the return receipt, and mailings must 
be returned to sender if the mailer's eligibility number is missing in 
the address block of the return receipt. Otherwise, the Postal Service 
cannot fulfill its responsibility to maintain records of the mailing 
because it cannot tie the return receipt to the eligible mailer's 
identity. In addition, the final rule refers to the ``PACT MAILING 
OFFICE'' in lieu of the ``TOBACCO MAILING UNIT'' and provides specific 
addressing in DMM section 608.4.1.
    The period for lapse in authorization and the requirement for re-
application for eligibility under the business/regulatory purposes, 
consumer testing, and public health exceptions has been changed from 
six months to three years. This change is reflected in DMM sections 
601.11.5.1h and 601.7.1f.
    Finally, the final rule clarifies that the required marking for 
each exception is to be placed directly above, directly below, or to 
the left of the postage on the address side of the exterior of the 
mailpiece. This measure ensures that postal personnel will be able to 
identify the piece quickly as one falling within the eligible 
exceptions.
    The Postal Service hereby adopts the following changes to the 
Mailing Standards for the United States Postal Service, Domestic Mail 
Manual (DMM), which is incorporated by reference in the Code of Federal 
Regulations. See 39 CFR 111.1

List of Subjects in 39 CFR Part 111

    Administrative practice and procedure, Postal Service.

    Accordingly, 39 CFR Part 111 is amended as follows:

PART 111--[AMENDED]

0
1. The authority citation for 39 CFR 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.


0
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)

* * * * *

500 Additional Mailing Services

503 Extra Services

* * * * *

6.0 Return Receipt

* * * * *

6.3 Obtaining Service

* * * * *
    [Add two new sentences to the end of the introductory paragraph of 
item 3.1 as follows:]

3.1 At Time of Mailing

    * * * An exception is made for certain restricted mailings of 
cigarettes and smokeless tobacco. When required by 601.11.5.2, 
608.11.7.2, or 608.11.8, a mailer must address the sender's address 
block to the Pricing and Classification Service Center (PCSC) PACT, 
Mailing Office (see 608.4.1 for address)
* * * * *

[[Page 29668]]

600 Basic Standards for All Mailing Services

601 Mailability

* * * * *
    [Renumber current 601.11 and 12 as new 601.12 and 601.13, and add 
new 601.11 as follows:]

11. 0 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 601.11.3, 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. 
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 will not accept for delivery or transmit 
any package that it knows, or has reasonable cause to believe, contains 
nonmailable cigarettes or smokeless tobacco. If 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. The Postal Service has reasonable 
cause not to accept for delivery or transmit a package based on:
    a. 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
    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 sent from the United States 
to Army Post Office (APO), Fleet Post Office (FPO), and Diplomatic Post 
Office (DPO) addresses to which tobacco is not restricted (see 
703.2.3.1), 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 the following:
    a. Mail treated as domestic under 608.2.2;
    b. International mail as defined in 608.2.3; or
    c. Mail presented at APO, FPO, or DPO installations and destined to 
addresses in the United States or other APO, FPO, or DPO addresses.

11.4 Mailing Within Noncontiguous States

    Applicable mailings may not be tendered through Pickup on Demand or 
Carrier Pickup services. 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 under the 
conditions in 11.5.1 to 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.
    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. Only those shipments 
containing otherwise nonmailable tobacco addressed to recipients on the 
customer's list of designated recipients are eligible for the business/
regulatory purposes exception.
    c. Applications must be mailed to the manager, Pricing & 
Classification Service Center (PCSC), see 608.8.4.1 for address. The 
manager, PCSC, issues the initial agency decision of a determination of 
eligibility to mail under the business/regulatory purposes exception. A 
number is assigned to each letter of eligibility.
    d. The applicant must timely update the information in its 
application as

[[Page 29669]]

necessary prior to conducting any mailing for as long as it continues 
to mail under the business/regulatory exception.
    e. 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).
    f. 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. A customer may 
appeal an adverse initial decision to the manager, Mailing Standards 
(see 608.8.0). 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.
    g. Upon written request by a state or Federal agency, the Manager, 
PCSC, may, in his or her discretion, waive certain application 
requirements for mailings entered by the requesting state or Federal 
agency for regulatory purposes.
    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 three-year 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. Applicable 
mailings may not be tendered through Pickup on Demand or Carrier Pickup 
services. 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 in a face-to-face transaction with a postal employee 
as Express Mail with Hold for Pickup service (waiver of signature and 
pickup services not permitted);
    b. Be accompanied by a request for PS Form 3811 return receipt, 
which must bear the sender's PACT eligibility number issued by the PCSC 
in the return address block as well as the addressee's full name and 
address, and be made returnable to the PCSC, PACT Mailing Office (see 
608.4.1 for address);
    c. Bear the marking ``PERMITTED TOBACCO MAILING--DELIVER ONLY TO 
ADDRESSED BUSINESS/AGENCY--RECIPIENT MUST FURNISH PROOF OF AGE AND 
EMPLOYMENT'' on the address side of the mailpiece (place the marking 
directly above, below, or to the left of the postage);
    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 of the business or government identified as the addressee on 
the mailing label 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 of the 
addressee are established, the recipient must sign PS Form 3849 and PS 
Form 3811 in the appropriate signature blocks. If mailer's eligibility 
number is missing in the return address block of the PS Form 3811, the 
mailing must be returned to sender.

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. For purposes of this rule, 
``gifts'' do not include products purchased by one individual for 
another from a third-party vendor through a mail-order transaction, or 
the inclusion of cigarettes or smokeless tobacco at no additional 
charge with other matter pursuant to a commercial transaction. 
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. Applicable mailings may not 
be tendered through Pickup on Demand or Carrier Pickup services.
    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. Each mailing under the 
certain individuals exception must:
    a. Be entered as Express Mail; (waiver of signature and pickup 
services not permitted);
    b. Bear the marking ``PERMITTED TOBACCO MAILING--DELIVER ONLY TO 
AGE-VERIFIED ADULT OF LEGAL AGE'' on the address side of the exterior 
of the mailpiece (place the marking directly above, below, or to the 
left of the postage);
    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;
    e. Not be sent to APO/FPO/DPO addresses to which the mailing of 
tobacco is restricted (see 703.2.3.1);
    f. With the exception of shipments from civilian locations to APO/
FPO/DPO addresses, request delivery through Hold for Pickup service; 
and
    g. Not be entered at an APO/FPO/DPO installation.

[[Page 29670]]

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 Consumer Testing Exception

    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 
exception must submit an application letter to mail under consumer 
testing exception. In support of its application, the following must be 
met:
    a. The applicant must furnish 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; if the customer is an agent of a manufacturer, 
complete details about the agency relationship with the manufacturer; 
and all locations where mail containing cigarettes for consumer testing 
will be presented. The applicant must timely update all information in 
its application as necessary prior to conducting any mailing for as 
long as it continues to mail under the consumer testing exception.
    b. 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.
    c. The application must be submitted to the manager, Pricing & 
Classification Service Center (PCSC) (see 608.8.4.1 for address).
    d. The applicant must provide any requested copies of records 
establishing compliance to the manager, PCSC, and/or the manager, 
Mailing Standards (see 608.8.0), upon request no later than 10 business 
days after the date of the request.
    e. The manager, PCSC, issues the initial agency decision of a 
determination of eligibility to mail under the consumer testing 
exception. A number is assigned to each letter of eligibility. 
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, PCSC, 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.
    f. 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 three-year 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. Applicable mailings may not be tendered through 
Pickup on Demand or Carrier Pickup services. Mailings must be tendered 
under the following conditions:
    a. Before tendering any shipment under this exception, the mailer 
must present proof (PCSC Eligibility letter) 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 in face-to-face transactions with postal 
employees as Express Mail with Hold for Pickup service requested 
(waiver of signature and pickup services not permitted);
    2. be accompanied by a request for PS Form 3811 return receipt, 
which must bear the sender's PACT eligibility number issued by the PCSC 
in the return address block, as well as the addressee's full name and 
address, and be made returnable to PCSC, PACT Mailing Office (see 
608.4.1 for address)
    3. must bear the marking ``PERMITTED TOBACCO MAILING--DELIVER ONLY 
TO ADDRESSEE UPON AGE VERIFICATION--AGE 21 OR ABOVE'' on the address 
side of the mailpiece (place the marking directly above, below, or to 
the left of the postage);
    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 located 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 for a three year period.
    d. Mailing frequency may not exceed more than one package from any 
one 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.

[[Page 29671]]

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 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. If mailer's 
eligibility number is missing in the return address block of the PS 
Form 3811 return receipt, the mailing must be returned to sender.

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, PCSC, may, in his or her discretion, 
waive certain of the application requirements.
* * * * *

608 Postal Information and Resources

* * * * *

8.0 USPS Contact Information

* * * * *

8.4. PCSC and District Business Mail Entry Offices Contact Information

    [Add second listing to the PCSC under the current listing as 
follows:]

4.1 Pricing and Classification Service Center (PCSC)

    For return receipts mailed under the provisions in 601.11.5, 
601.11.7, and 601.11.8, use the following address:
    PCSC, PACT MAILING OFFICE, USPS ELIGIBILITY NO. XX-00-0000, 90 
Church Street Suite 3100, New York, NY 10007-2951
* * * * *
    We will publish an amendment to 39 CFR part 111 to reflect these 
changes.

Stanley F. Mires,
Chief Counsel, Legislative.
[FR Doc. 2010-12869 Filed 5-25-10; 11:15 am]
BILLING CODE 7710-12-P