[Federal Register Volume 63, Number 44 (Friday, March 6, 1998)]
[Proposed Rules]
[Pages 11199-11200]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-5772]


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POSTAL SERVICE

39 CFR Part 111


Eligibility Requirements for Certain Nonprofit Standard Mail Rate 
Matter

AGENCY: Postal Service.

ACTION: Proposed rule.

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SUMMARY: This proposed rule will amend the standards for mail matter 
eligible to be sent at the Nonprofit Standard Mail rates. Specifically, 
mail matter that seeks or solicits membership dues payments may contain 
``promotional'' material concerning membership benefits when certain 
criteria are met.

DATES: Comments must be received on or before April 6, 1998.

ADDRESSES: Written comments should be mailed or delivered to Manager, 
Business Mail Acceptance, USPS Headquarters, 475 L'Enfant Plaza SW., 
Washington, DC 20260-6808. Copies of all written comments will be 
available for inspection and photocopying between 9 a.m. and 4 p.m., 
Monday through Friday, in Room 6801 at the above address.

FOR FURTHER INFORMATION CONTACT: Jerome M. Lease, 202-268-5188.

SUPPLEMENTARY INFORMATION: Nonprofit organizations authorized to mail 
at the Nonprofit Standard Mail rates often list ``member benefits'' 
when soliciting new members or renewals. The Postal Service has long 
held that references to benefits are ``permissible,'' i.e., not 
considered solicitations under the statutory restrictions on matter 
eligible for the nonprofit rates, provided advertising, promotional, or 
application materials for such benefits are not included in the 
mailpiece.
    The Postal Service position is based on 39 U.S.C. 3626(j)(2)(B), 
which is implemented in Domestic Mail Manual (DMM) E670.5.7b, and 
states that an authorized nonprofit organization's material is not 
disqualified from being mailed at the Nonprofit Standard Mail rates 
solely because that material contains, but is not primarily devoted to, 
references to and a response card or other instructions for making 
inquiries about services or benefits available from membership in the 
authorized organization, if advertising, promotional, or application 
materials for such services or benefits are not included. If 
advertising, promotional, or application materials are present in a 
mailpiece that announces the availability of membership services or 
benefits, the mailpiece is not eligible for the Nonprofit Standard Mail 
rates unless the provision of such services or benefits is 
``substantially related'' to the exercise or performance by the 
organization of one or more of the purposes under which the 
organization qualified to mail at the Nonprofit Standard Mail rates or, 
if the benefit is for travel, insurance, or financial instruments such 
as credit cards which are subject to separate rules, other prescribed 
exceptions are met. See 39 U.S.C. 3626(j) and DMM E670.5.4.
    The Postal Service considers descriptive information printed in 
conjunction with the generic name of a service or product constituting 
a membership benefit, to be promotional. For example, information such 
as ``low cost,'' ``no annual fee,'' or ``5% interest rate'' to describe 
a credit card offered as a membership benefit would be considered 
promotional material (in the same manner as words such as 
``delicious,'' ``nutritional,'' or ``inexpensive'' would be considered 
promotional if used to describe food products) which may make the 
mailpiece ineligible for the Nonprofit Standard Mail rates. Purchase 
terms and conditions, and brand names are also considered promotional.
    On November 14, 1997, the Postal Service published a final rule in 
the Federal Register allowing solicitations for contributions or 
membership dues payments that offer ``backend premiums'' not to be 
considered advertising for the premium(s) when certain criteria are met 
(See 62 FR 61014-61015 (November 14, 1997)). In doing so, the Postal 
Service determined to consider the solicitation as a single 
transaction, and considered whether it was predominantly a request for 
contributions or dues payments. The Postal Service believes it 
appropriate to adopt a similar approach with respect to the 
announcements of benefits available to members. Nevertheless, the 
Postal Service is mindful of section 39 U.S.C 3626(j)(2)(B), which 
prohibits the inclusion of advertising, promotional, or application 
materials in conjunction with these advertisements.
    The Postal Service proposes an amendment to Domestic Mail Manual 
E670.5.7b., to provide that a solicitation for new members or renewal 
of membership may, to a minor extent, describe membership benefits with 
the use of promotional terms provided it can be determined by an actual 
measurement that the piece is primarily a solicitation for new members 
or a renewal offer. For purposes of this exception, minor is defined as 
less than half. Measurement would be performed in accordance with the 
same standards for measuring advertising and nonadvertising in a 
Periodicals publication. See DMM P200.1.7. This change, which will 
affect mailings made after the date any rule change is adopted and not 
retroactively to previous mailings, only applies to the solicitation 
letter itself, and not to any brochures, circulars, flyers, or other 
separate, distinct, or independent documents. Any advertising, 
promotional, or application materials in these latter documents may 
cause the mailpiece to be ineligible for the nonprofit rates. The 
proposal does establish a limited exception for an organization which 
prepares a standard, preprinted document, consisting of a single sheet, 
that lists and describes its member benefits. This document may be

[[Page 11200]]

enclosed with and considered part of the solicitation letter for 
purposes of applying the proposed test, provided that the letter does 
not itself list or describe the member benefits. The latter may, 
however, refer the addressee to the separate list of benefits. (For 
example, the letter may state: ``For a description of benefits 
available to members, please see the attached sheet'', as long as no 
promotional material concerning the benefits is included.)
    Although exempt from the notice and comment requirements of the 
Administrative Procedure Act {5 U.S.C. 553{b}, {c}} regarding proposed 
rulemaking by 39 U.S.C. 410{a}, the Postal Service invites comments on 
the following proposed revisions of the DMM, incorporated by reference 
in the Code of Federal Regulations. (see CFR part 111).

List of Subjects in 39 CFR Part 111

    Postal Service.

PART 111--[AMENDED]

    1. The authority citation for 39 CFR part 111 continues to read as 
follows:

    Authority: 5 U.S.C. 552(a); 39 U.S.C. 101, 401, 403, 404, 3001-
3011, 3201-3219, 3403-3406, 3621, 3626, 5001.

    2. Amend Domestic Mail Manual E670.5.7, by revising b. to read as 
follows:
E  Eligibility
* * * * *
E670  Nonprofit Standard Mail
* * * * *
* * * * *
5.0  ELIGIBLE AND INELIGIBLE MATTER
* * * * *
5.7  Other Matter
    An authorized nonprofit organization's material is not disqualified 
from being mailed at the Nonprofit Standard Mail rates solely because 
that material contains, but is not primarily devoted to:
* * * * *
    b. References to and a response card or other instructions for 
making inquiries about services or benefits available from membership 
in the authorized organization, if advertising, promotional, or 
application materials for such services or benefits are not included. 
For purposes of this section, descriptions of member benefits available 
as a part of membership including the use of adjectives, terms, 
conditions, and brand names, are permissible when they are a minor part 
of a solicitation or renewal request for membership payments. For 
purposes of this provision, ``minor'' is defined as ``less than half.'' 
Measurement is made in accordance with P200.1. The solicitation or 
renewal request in which, to a minor degree, member benefits may be 
promoted is considered to include only a printed letter to prospective 
members or current members whose membership is about to expire, and not 
to any separate, distinct, or independent brochure, circular, flyer, or 
other documents. Such separate documents will be considered advertising 
if they contain any advertising, promotional, or application materials. 
Exception: A separate document prepared by the qualifying organization, 
consisting of one sheet, will be considered to be part of the 
solicitation letter if it describes the organization's member benefits 
and the solicitation letter does not describe the organization's 
benefits but instead refers the reader to the separate document.
* * * * *
    An appropriate amendment to 39 CFR 111.3 to reflect these changes 
will be published if the proposal is adopted.
Stanley F. Mires,
Chief Counsel, Legislative.
[FR Doc. 98-5772 Filed 3-5-98; 8:45 am]
BILLING CODE 7710-12-U