[Congressional Record Volume 146, Number 69 (Wednesday, June 7, 2000)]
[Senate]
[Pages S4669-S4670]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. COCHRAN (for himself and Mr. Akaka):
  S. 2686. A bill to amend chapter 36 of title 39, United States Code, 
to modify rates relating to reduced rate mail matter, and for other 
purposes; to the Committee on Governmental Affairs.


 legislation to improve the process for establishing nonprofit postage 
                                 rates

  Mr. COCHRAN. Mr. President, today I am introducing a bill to improve 
the process used by the United States Postal Service to establish 
postage rates for nonprofit and other reduced-rate mailers.
  Under the current rate setting procedure, nonprofit postage rates 
have changed significantly, often rising more than corresponding 
commercial rates. In fact, in some cases, nonprofit mail rates have 
increased so much that the nonprofit rates are higher than similar 
commercial rates. According to the Postal Service, the unpredictable 
rate changes experienced by nonprofit mailers stem from difficulties 
the Service has had with gathering accurate cost data for small 
subclasses of mail.
  By establishing a structured relationship between nonprofit and 
commercial postage rates, this legislation would protect all categories 
of nonprofit mail from unpredictable rate swings in the future. The 
bill would set nonprofit and classroom Periodical rates at 95 percent 
of the commercial counterpart rates (excluding the advertising 
portion), set nonprofit Standard A rates at 60 percent of the 
commercial Standard A rates, and set Library and Educational Matter 
rates at 95 percent of the rates for the special subclass of commercial 
Standard B mail.
  The Postal Service recently proposed to increase postage rates for 
all classes of mail, and this proposal is now pending before the Postal 
Rate Commission. As part of its request, the Postal Service asked for 
nonprofit postage rates that are premised on the enactment of this, or 
similar, legislation to change the process for setting nonprofit mail 
rates. Without this legislation, nonprofit mailers will face potential 
double-digit rate hikes.
  This bill achieves an appropriate balance between nonprofit and 
commercial postage rates, and provides nonprofit mailers with much 
needed rate predictability. It is a compromise solution that is 
supported by the United States Postal Service and several major 
commercial and nonprofit mailer associations, including: the Alliance 
of Nonprofit Mailers, the National Federation of Nonprofits, the Direct 
Marketing Association, the Magazine Publishers of America, and the 
Association of Postal Commerce.
  I invite my colleagues to support this effort to protect nonprofit 
mailers by improving the method for establishing nonprofit postage 
rates.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 2686

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SPECIAL RATEMAKING PROVISIONS.

       (a) Establishment of Regular Rates for Mail Classes With 
     Certain Preferred Subclasses.--Section 3622 of title 39, 
     United States Code, is amended--
       (1) by redesignating subsection (c) as subsection (d); and
       (2) by inserting after subsection (b) the following:
       ``(c) Regular rates for each class or subclass of mail that 
     includes 1 or more special rate categories for mail under 
     former section 4358(d) or (e), 4452(b) or (c), or 4554(b) or 
     (c) of

[[Page S4670]]

     this title shall be established by applying the policies of 
     this title, including the factors of section 3622(b) of this 
     title, to the costs attributable to the regular rate mail in 
     each class or subclass combined with the mail in the 
     corresponding special rate categories authorized by former 
     section 4358(d) or (e), 4452(b) or (c), or 4554(b) or (c) of 
     this title.''.
       (b) Residual Rule for Preferred Periodical Mail.--Section 
     3626(a)(3)(A) of title 39, United States Code, is amended to 
     read as follows:
       ``(3)(A) Except as provided in paragraph (4) or (5), rates 
     of postage for a class of mail or kind of mailer under former 
     section 4358 of this title shall be established in a manner 
     such that the estimated revenues to be received by the Postal 
     Service from such class of mail or kind of mailer shall be 
     equal to the sum of--
       ``(i) the estimated costs attributable to such class of 
     mail or kind of mailer; and
       ``(ii) the product derived by multiplying the estimated 
     costs referred to in clause (i) by the applicable percentage 
     under subparagraph (B).''.
       (c) Special Rule for Nonprofit and Classroom Periodicals.--
     Section 3626(a)(4) of title 39, United States Code, is 
     amended to read as follows:
       ``(4)(A) Except as specified in subparagraph (B), rates of 
     postage for a class of mail or kind of mailer under former 
     section 4358(d) or (e) of this title shall be established so 
     that postage on each mailing of such mail shall be as nearly 
     as practicable 5 percent lower than the postage for a 
     corresponding regular-rate category mailing.
       ``(B) With respect to the postage for the advertising pound 
     portion of any mail matter under former section 4358(d) or 
     (e) of this title, the 5-percent discount specified in 
     subparagraph (A) shall not apply if the advertising portion 
     exceeds 10 percent of the publication involved.''.
       (d) Special Rule for Nonprofit Standard (A) Mail.--Section 
     3626(a) of title 39, United States Code, is amended by adding 
     at the end the following:
       ``(6) The rates for mail matter under former sections 
     4452(b) and (c) of this title shall be established as 
     follows:
       ``(A) The estimated average revenue per piece to be 
     received by the Postal Service from each subclass of mail 
     under former sections 4452(b) and (c) of this title shall be 
     equal, as nearly as practicable, to 60 percent of the 
     estimated average revenue per piece to be received from the 
     most closely corresponding regular-rate subclass of mail.
       ``(B) For purposes of subparagraph (A), the estimated 
     average revenue per piece of each regular-rate subclass shall 
     be calculated on the basis of expected volumes and mix of 
     mail for such subclass at current rates in the test year of 
     the proceeding.
       ``(C) Rate differentials within each subclass of mail 
     matter under former sections 4452(b) and (c) shall reflect 
     the policies of this title, including the factors set forth 
     in section 3622(b) of this title.''.
       (e) Special Rule for Library and Educational Matter.--
     Section 3626(a) of title 39, United States Code, as amended 
     by subsection (d) of this section, is amended by adding at 
     the end the following:
       ``(7) The rates for mail matter under former sections 
     4554(b) and (c) of this title shall be established so that 
     postage on each mailing of such mail shall be as nearly as 
     practicable 5 percent lower than the postage for a 
     corresponding regular-rate mailing.''.

     SEC. 2. TRANSITIONAL AND TECHNICAL PROVISIONS.

       (a) Transitional Provision for Nonprofit Standard (A) 
     Mail.--In any proceeding in which rates are to be established 
     under chapter 36 of title 39, United States Code, for mail 
     matter under former sections 4452(b) and (c) of that title, 
     pending as of the date of enactment of section 1 of this Act, 
     the estimated reduction in postal revenue from such mail 
     matter caused by the enactment of section 3626(a)(6)(A) of 
     that title, if any, shall be treated as a reasonably 
     assignable cost of the Postal Service under section 
     3622(b)(3) of that title.
       (b) Technical Amendment.--Section 3626(a)(1) of title 39, 
     United States Code, is amended by striking ``4454(b), or 
     4454(c)'' and inserting ``4554(b), or 4554(c)''.
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