Tentative Agreement Reached on Nonprofit Postal Rate

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The U.S. Postal Service has reached an agreement with nonprofit and commercial mailers on legislative language that will propose a new method for setting nonprofit postage rates in the current rate case.

The framework of the proposal, which was drawn up earlier this month, aims to:

* set nonprofit periodical rates at 95 percent of the counterpart commercial rate. As a result, nonprofit mailers would receive a 5 percent discount off the commercial rate, excluding the advertising portion.

* set the revenue-per-piece for nonprofit Standard A mail to reflect a 40 percent discount off the revenue-per-piece for commercial Standard A mail.

The USPS along with the Alliance of Nonprofit Mailers, the Direct Marketing Association, PostCom and the Magazine Publishers of America worked closely to craft this legislation, which the groups believe will ultimately address shortcomings in the rate case proposal.

Amy Gotwals, assistant director at the Alliance of Nonprofit Mailers, Washington, said the proposal "makes nonprofit rate relief a very real possibility on Capitol Hill." She also said the draft language will now be inserted into the Postal Modernization Act, H.R. 22.

The National Federation of Mailers, which originally resisted the proposal, also has shown some support.

However, H.R. 22 is still stalled; although, Rep. John McHugh, R-NY, chairman of the House subcommittee on the postal service, continues to work with mailers and the USPS to push it forward. Insiders say the bill will be reintroduced after Memorial Day.

If the bill is passed, the nonprofit language will be inserted into the postal rate case now being examined by the Postal Rate Commission.

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