Clinton Signs Nonprofit Rate Relief Bill

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President Clinton has signed a bill that grants nonprofit mailers postal relief and counteracts increases proposed in the U.S. Postal Service's current postal rate case.


Under the legislation, S. 2686, signed last week, the cost of processing Nonprofit Standard-A and Periodicals mail will no longer be measured separately. Instead, separate procedures will be used to develop rates for these classes of mail. According to insiders, the USPS' inability to accurately measure nonprofit costs is what created the need for the legislation.


The bill stipulates that nonprofit rates would always be a percentage of commercial rates -- the two categories would always be compiled and counted together -- which nonprofits believe would greatly improve the reliability of USPS data and may eventually lower their rates.


The bill sets nonprofit periodical rates and other preferred rates at 95 percent of the counterpart commercial rate. As a result, nonprofit mailers would receive a 5 percent discount on the commercial rate, excluding the advertising portion.


In addition, it sets the revenue per piece for Nonprofit Standard-A mail to reflect a 40 percent discount on the revenue per piece for commercial Standard-A mail. The USPS would determine Nonprofit Standard-A mail rates after computing the average revenue per piece for all Standard-A mail, then discounting the nonprofit portion by 40 percent.


Because commercial Standard-A mail is more expensive to process -- because of a higher percentage of flats and other odd-sized and heavy pieces -- the actual rates paid by nonprofits would range from 63 percent to 67 percent of the equivalent commercial rates. Those percentages could vary slightly in future rate cases. Nonprofit periodical rates would be the same as the rates for commercial periodicals, minus a 5 percent discount for the editorial portion of the postage. The same rates would apply to classroom periodicals.


The victory is especially sweet for mailers, because the bill can now be given to the Postal Rate Commission in time to be incorporated into the current rate case. If the legislation had not passed both houses of Congress and was not signed into law before Congress adjourned this session, nonprofit rates would be set by the PRC under current law. If that happens, nonprofit rates could increase by double digits, with some rates increasing as much as 48 percent.


The PRC will announce its decision on the rate case Nov. 13.
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