Two bills introduced in Congress this month would grant postal relief to nonprofit mailers, who say the legislation would counteract increases in the U.S. Postal Service’s proposed rate case.
One bill, the Nonprofit Rate Relief Act, H.R. 4636, was introduced this week by Rep. Chaka Fattah, D-PA, ranking minority member of the House postal service subcommittee. The bill is virtually the same as S. 2686, which was introduced in the Senate earlier in the month by Sens. Thad Cochran, R-MS, and Daniel K. Akaka, D-HI. Cochran is chairman and Akaka is ranking minority member of the subcommittee on international security, proliferation and federal services.
The bills aim to:
* Set 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 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.
Essentially, the bills stipulate 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.
Currently, nonprofit postal rates are set in part by calculating the category’s total attributable costs. However, said Amy Gotwals, assistant director at the Alliance of Nonprofit Mailers, Washington, “The USPS keeps raising [nonprofits’] attributable costs, which is essentially eroding the preferred nonprofit rate. The bills … would stop this from happening by locking in the current relationship nonprofit rates have to commercial rates.”
The USPS formally asked Congress for legislation on these rates in January, when the postal service filed its rate case. At that time, the postal service found an inadvertent error that resulted in nonprofit rates that were higher than commercial rates.
After months of discussions, the language of the bills was developed by the USPS; staffers on Capitol Hill; and officials from the Alliance of Nonprofit Mailers, the National Federation of Nonprofits, the Direct Marketing Association and the Association of Postal Commerce.
Gotwals said this legislation must pass before Congress adjourns in October so that it can be handed over to the Postal Rate Commission in time for incorporation into the rate case before the agency rules on the case in late September. The rate case calls for an average increase of 6.4 percent for commercial Standard A rates and nearly 20 percent for nonprofit rates.
If the bills are not passed and incorporated into the rate case, “nonprofit periodical rates would all but disappear, as they would meet or exceed the commercial rates,” Gotwals said. “And nonprofit Standard A Enhanced Carrier Route rates would increase by as high as 40 percent.”
Gotwals is urging nonprofit mailers to write to members of Congress urging them to pass the legislation.
Nonprofit mailers said they hope both bills move quickly.
Chris Cleghorn, senior vice president of direct mail at the National Easter Seal Foundation, said, “The nonprofit community must quickly get the word out. [These bills] are urgent pieces of legislation that will protect preferred postal rates for nonprofit fundraisers and publishers.”
