Study on Reduced Postal Rates, 22449-22451 [E8-9210]
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Federal Register / Vol. 73, No. 81 / Friday, April 25, 2008 / Notices
comments must be provided either at
the transcribed public meeting or in
writing. Persons may pre-register to
attend or present oral comments at the
meeting by contacting Mr. J.P. Leous,
the NRC Environmental Project
Manager, at 1–800–368–5642, extension
2864, or by e-mail at
Vogtle_LR_EIS@nrc.gov no later than
May 16, 2008. Members of the public
may also register to provide oral
comments within 15 minutes of the start
of each session. Individual, oral
comments may be limited by the time
available, depending on the number of
persons who register. If special
equipment or accommodations are
needed to attend or present information
at the public meeting, the need should
be brought to Mr. J.P. Leous’ attention
no later than May 16, 2008, to provide
the NRC staff adequate notice to
determine whether the request can be
accommodated.
For Further Information Contact: Mr.
J.P. Leous, Projects Branch 1, Division of
License Renewal, Office of Nuclear
Reactor Regulation, U.S. Nuclear
Regulatory Commission, Mail Stop O–
11F1, Washington, DC 20555–0001. Mr.
Leous may be contacted at the
aforementioned telephone number or email address.
Dated at Rockville, Maryland, this 21st day
of April, 2008.
For the Nuclear Regulatory Commission.
Louise Lund,
Branch Chief, Reactor Projects Branch 1,
Division of License Renewal, Office of Nuclear
Reactor Regulation.
[FR Doc. E8–9085 Filed 4–24–08; 8:45 am]
BILLING CODE 7590–01–P
POSTAL REGULATORY COMMISSION
[Docket No. PI2008–4; Order No. 72]
Study on Reduced Postal Rates
Postal Regulatory Commission.
ACTION: Notice.
AGENCY:
Stephen L. Sharfman, General Counsel,
202–789–6820 and
stephen.sharfman@prc.gov.
SUPPLEMENTARY INFORMATION:
I. Introduction
The Postal Accountability and
Enhancement Act (PAEA), Public Law
109–435, 120 Stat. 3218 (2006), directs
the Commission to prepare several
reports on special topics. One directive
requires the Commission to examine an
exception to the cooperative mail rule to
determine whether this change in
eligibility for reduced postage contains
adequate safeguards to protect against
abuses of rates for nonprofit mail and
deception of consumers. The
Commission is to report the results of
this examination to the Postal Service,
along with any recommendations it
deems appropriate. If the Postal Service
fails to act thereon, the Commission
may take such action it deems necessary
to prevent abuse of rates or deception of
consumers. See section 711, 120 Stat.
3248 (2006).1
The Commission establishes Docket
No. PI2008–4 to facilitate compliance
with the directive in section 711 and
seeks comments from the public on the
scope and nature of the examination,
report, and potential recommendations.
39 U.S.C. 505 requires the designation
of an officer of the Commission in all
public proceedings to represent the
interests of the general public. The
Commission designates Katja M.
Eichinger to serve as the Public
Representative. Pursuant to this
designation, Ms. Eichinger will direct
the activities of Commission personnel
assigned to assist her and, upon request,
will provide their names for the record.
Neither she nor any of the assigned
personnel will participate in or provide
advice on any Commission decision in
this proceeding.
Initial comments due June 24,
2008; reply comments due July 24,
2008.
II. The Cooperative Mail Rule
The cooperative mail rule is a
longstanding provision in the DMM. It
traditionally has controlled access to
reduced postage rates by limiting the
ability of an entity that is eligible for
reduced rates to ‘‘cooperate’’ or partner
with another entity in a mailing and still
retain its reduced rate eligibility for the
mailing in question. The rule generally
accomplishes this, in brief, by requiring
that each cooperating entity
independently qualify for nonprofit
rates at the post office of mailing; by
Submit comments
electronically via the Commission’s
Filing Online system at https://
www.prc.gov.
1 Section 711 of the PAEA refers to section
E670.5.3 of the Domestic Mail Manual (DMM). The
text of this provision now appears at DMM
§ 703.1.6.3 due to a reorganization of the DMM.
SUMMARY: The Commission seeks
comments from the public on a study of
a postal rule that allows certain
fundraising mailings to be sent at
reduced rates. The comments will assist
the Commission in preparing a
statutorily-required report and
recommendations.
DATES:
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FOR FURTHER INFORMATION CONTACT:
ADDRESSES:
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22449
requiring that the mail matter being sent
be that of the eligible entity; and by
prohibiting ‘‘sharing’’ a permit with an
entity not authorized to mail at reduced
rates. These restrictions effectively
foreclose a nonprofit from cooperating
with a for-profit entity if the mailing is
to be sent at nonprofit rates, unless the
cooperation involves a legitimate
principal-agent relationship in a fee-forservice arrangement. See DMM
§ 703.1.6.3.
The traditional rationale for imposing
limits on cooperative mailings has been
that access to reduced rates is a
privilege—initially subsidized by
taxpayers, but more recently by other
mailers—and that the limits help
prevent abuse of this privilege. The
extent of the benefit has varied in the
years since its introduction, but eligible
cooperative mailings currently pay 60
percent of the Regular Standard Mail
rate.
III. The Emergence of the Fundraising
Exception
In 2003, the Postal Service initiated
an administrative rulemaking to address
a revision to the cooperative mail rule.
The rulemaking resulted in a revision,
effective November 13, 2003, widely
referred to as the Fundraising
Exception. In practical effect, this
revision expands eligibility in a limited
respect by exempting fundraising
mailings seeking only monetary
donations from application of the
DMM’s conditions for an eligible
cooperative mailing. See 68 FR 23937
(May 6, 2003) and 68 FR 58273 (October
9, 2003), setting out the proposed and
final rule, respectively. The revision
requires that the cooperating nonprofit
entity either receive a detailed donor list
(containing the name of donor, contact
information, and the amount of
donation) from its mailing partner or
execute a written waiver of such receipt.
A. The Fundraising Exemption, as
Initially Proposed
The Postal Service notice of proposed
rulemaking included a discussion of the
history of the cooperative mail rule and
its application to fundraising mailings;
the traditional role of Congress with
respect to eligibility for nonprofit
Standard Mail rates; recent concerns
about the impact of the cooperative mail
rule on fundraising mailings; and
proposed legislation to exempt certain
fundraising mail from the rule. It noted,
with respect to the impact of the rule on
fundraising mailings, that over the last
several years, some nonprofit
organizations have made the Postal
Service aware of concerns that the
application of the cooperative mail rule
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22450
Federal Register / Vol. 73, No. 81 / Friday, April 25, 2008 / Notices
was having a serious effect on their
ability to solicit donations and, in some
cases, might threaten the existence of
many nonprofit organizations,
particularly given the economic climate
many in the nonprofit sector were
facing. It noted that the organizations
that seemed to be the focus of most of
the concern included those that, due to
being new, of small size, or for other
reasons, have to seek the assistance of
professional fundraising organizations
in seeking donations, rather than
conduct their fundraising campaigns inhouse. 68 FR 23938 (May 6, 2003). It
added:
sroberts on PROD1PC70 with NOTICES
In many cases, the arrangements between
the professional fundraiser and the nonprofit
are cooperative under the longstanding
application of the cooperative mail rule.
Indeed, the Postal Service understands that
some states require contractual terms
between nonprofits and some (but not all)
types of professional fundraisers to contain
elements that would cause the resultant
fundraising mailings to violate the
cooperative mail rule.
Id.
The Postal Service said it was
sensitive to the plight of these nonprofit
organizations, but was reluctant to
propose an administrative solution
because expanding or reducing
eligibility to mail at nonprofit or other
preferred status traditionally has been a
legislative function; discriminating
between its customers is prohibited by
statute, except where authorized by law;
and expanding eligibility for nonprofit
rates could create a significant
competitive advantage for a newlyeligible mailer, relative to those still
mailing at the commercial rate. Id. It
also noted that some members of the
nonprofit industry had raised a concern
that if contractual terms between
nonprofits and fundraisers were no
longer a postal concern (given an
exemption from application of the
cooperative mail rule), some fundraisers
might impose financial terms that could
take advantage of unsophisticated
nonprofits or even seek to create
nonprofit organizations of their own to
enrich themselves off of fundraising
mailings, rather than to benefit the
public. Id.
The Postal Service acknowledged the
seriousness of the issues raised by the
nonprofits, but characterized them as
appearing primarily to raise consumer
protection concerns, rather than postal
concerns. It therefore considered them a
type of social policy concern best
addressed elsewhere, such as through
Federal legislation or the state officials
who regulate the relationship between
professional fundraisers and nonprofit
organizations. Id. However, noting that
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Jkt 214001
Federal legislation addressing this topic
had been introduced but had no
guarantee of passage and reiterating its
reluctance to tread in an area
historically addressed through
legislation, the Postal Service said it had
decided to propose a rule to eliminate
application of the cooperative mail rule
on mailings by authorized nonprofit
organizations seeking monetary
donations. Id. As to the breadth of the
proposal, the Postal Service raised six
cautions. Three pertained to the scope
of the exception. First, the Postal
Service noted that the proposal:
* * * only exempts fundraising mailings
seeking monetary donations. Mailings that
include solicitations for products or services,
whether through sale, lease, or other
arrangements, will not be exempt from
application of the cooperative mail rule. If
there is a cooperative arrangement involving
such goods or services, the mailpiece will not
be eligible for Nonprofit Standard mail rates.
Id. at 23939. The rationale for this
limitation, according to the Postal
Service, was that exempting mailings
that advertise goods or services from
application of the cooperative mail rule
would create significant potential for
abuse by commercial organizations and
may also place small businesses and
other for-profit organizations who sell
similar goods and services at a
significant competitive disadvantage. Id.
Second, the Postal Service said the
exemption was only from application of
the cooperative mail rule, and that
affected mailings would continue to be
subject to all other applicable postal
standards. Id. Third, it said the
exemption would only apply to
nonprofit organizations authorized to
mail at nonprofit Standard Mail rates;
other organizations so entitled, which
are voter registration officials and
certain qualified political committees,
would not be exempt. Id.
The next point was that the rule, if
adopted, would be a change of postal
policy rather than a clarification of
existing standards, and thus would be
prospective only, effective on the date of
adoption. It would not form the basis for
a request for a refund. Id. The Postal
Service’s fifth point was that the
proposed rule ‘‘would not establish
safeguards to address the concern that
some professional fundraisers may seek
to take advantage of unsophisticated
clients.’’ Id. It added:
In our discussions with nonprofit
representatives and Congressional
representatives, no consensus was reached
on an effective and administratively feasible
method to accomplish this goal. However,
this rulemaking does not prevent other
interested federal or state agencies from
regulating such practices. Moreover, it is also
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Fmt 4703
Sfmt 4703
hoped that the nonprofit sector may
undertake educational efforts to inform
potential targets of such practices.
Id.
The Postal Service’s final point was
that it would be alert to the
consequences of the new standard,
should it be adopted, and might revisit
the exception and consider a further
rulemaking or other appropriate
administrative measures if it resulted in
the types of abuses that had been
discussed or any other unintended
consequences. Id.
B. The Fundraising Exception as
Adopted
In the explanation accompanying the
final rule, the Postal Service
characterized the 67 comments it had
received as diverse in terms of types of
entities represented and broad as to the
range of views.2 Its overall assessment
was that a significant majority of the
comments urged adoption of the rule as
proposed. However, it acknowledged
that a small number recommended the
proposal be withdrawn or that it be
adopted with additional restrictions,
while ‘‘a lesser number’’ of commenters
recommended that the exception be
expanded. It also said that several
commenters had recommended making
the rule retroactive. Id.
In response to the comments, the
Postal Service modified the proposed
rule in several respects. It added a
condition related to donor lists by
providing that the fundraising
exemption applies only where the
nonprofit organization is either given a
list of the donors, their contact
information, and the amount of their
donations, or waives, in writing, the
receipt of such list. Id. at 58276. It
extended eligibility for the exemption
from authorized nonprofits to voter
election officials and certain qualified
political committees. Id. It also revised
the rule to clarify two points: (1) The
exception applies only where the
monetary donations solicited are for the
entity authorized to mail at nonprofit
rates, and (2) operates prospectively
only. Id.
The Postal Service discussed, but did
not accept, commenters’ suggestions
that would have resulted in a regulation
that:
—Prohibited or restricted close ties
between the cooperating entities;
2 Commenters included nonprofit organizations
and organizations representing such organizations;
professional fundraisers and organizations
representing these commercial entities;
Congressional representatives; private individuals;
and an organization representing state officials that
regulate charities. 68 FR 58274 (October 9, 2003).
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Federal Register / Vol. 73, No. 81 / Friday, April 25, 2008 / Notices
—Required written approval of the
contract by the cooperating
nonprofit’s board of directors; and
—Mandated inclusion of certain
contractual terms related to numerous
control or ownership issues, such as
receipt and exclusive ownership of a
donor list; direct deposit of funds into
the nonprofit’s bank account; and
intellectual property in the mailing.
Id. at 58274–76.
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IV. Invitation to Comment
The preceding summary makes clear
that the Fundraising Exception expands
eligibility for nonprofit Standard Mail
rates for certain types of mailings, but
does so in a relatively limited way. It
also makes clear that the Fundraising
Exception, as adopted, did not include
many of the checks, or safeguards, some
commenters believed should be
included to ward off abuse of nonprofit
rates and consumer deception. The
Commission invites comments from the
general public to facilitate its
examination of whether the Fundraising
Exception contains adequate safeguards
to protect against abuse of nonprofit
rates and consumer protection, and
preparation of the related report and
recommendations. Comments may
address any relevant topic; however, the
Commission also presents the following
questions to help focus the discussion.
A. Abuse of Nonprofit Rates
The directive in section 711 speaks to
abuse of nonprofit rates, rather than
fraud. In connection with the scope and
extent of abuse that may occur under
the Fundraising Exemption, the
Commission is especially interested in
the following matters:
1. The 2003 rulemaking
acknowledged that commenters had
raised concerns about several types of
abusive fundraising practices, including
predatory credit arrangements. To what
extent have these practices occurred,
since the 2003 revision, in connection
with mailings sent under the
Fundraising Exemption?
2. Have there been any material
changes in fundraising practices since
the Postal Service’s 2003 rulemaking
that give rise to new concerns about
abuse in connection with the
Fundraising Exception?
3. To what extent has the nonprofit
sector engaged in education efforts
designed to inform nonprofits,
especially those considered especially
vulnerable to overreaching or predatory
partners, about the scope of the
Fundraising Exception and potential
abuses? Also, are there reliable means of
measuring or assessing the success of
these efforts?
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20:20 Apr 24, 2008
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4. To what extent has the Postal
Service (including any organizational
division) engaged in education efforts
specifically directed at the Fundraising
Exception and potential abuses? Are
there reliable means of measuring or
assessing the success of these efforts?
5. What information and data are
available about the extent to which the
Fundraising Exception has been used by
mailers eligible for nonprofit rates since
adoption in 2003, in terms of features
such as number and type of entities
using the Fundraising Exception,
volume, and total postage involved?
22451
3. Comments on issues related to the
directive in section 711 of the PAEA are
due June 24, 2008.
4. Reply comments are due July 24,
2008.
5. The Secretary shall arrange for
publication of this Notice in the Federal
Register.
By the Commission.
Steven W. Williams,
Secretary.
[FR Doc. E8–9210 Filed 4–24–08; 8:45 am]
BILLING CODE 7710–FW–P
B. Deception of Consumers
POSTAL SERVICE
The directive in section 711 also
extends to deception of consumers. The
Commission is interested in
commenters’ views on all relevant
aspects of consumer deception,
including:
1. The 2003 rulemaking mentioned
that there were a growing number of
State laws on charitable fundraising that
created a potential for conflict with
cooperative mail as then formulated.
Has there been an increase in the
number of States proposing or adopting
such laws? What safeguards or
protections are included in these laws?
Do these laws pose any conflicts with
the 2003 Fundraising Exception or did
this Exception satisfactorily resolve
relevant concerns?
2. To what extent has the Postal
Service undertaken efforts to educate
consumers (in the capacity of a donor or
potential donor responding to a mailed
solicitation) about abuses or potential
fundraising abuses?
3. To what extent have individual
States engaged in efforts to educate
consumers (in the capacity of a donor or
potential donor responding to a mailed
solicitation) about abuses or potential
fundraising abuses?
4. To what extent has deception of
potential donors been reported or
documented by the Postal Service,
nonprofit mailer organizations, State or
local consumer protection agencies, or
others?
Board of Governors Sunshine Act
Meeting
V. Ordering Paragraphs
It is ordered:
1. The Commission establishes Docket
No. PI2008–4, Inquiry into Cooperative
Mail Rule Exception, to facilitate
compliance with section 711 of the
Postal Accountability and Enhancement
Act.
2. The Commission designates Katja
M. Eichinger as the Public
Representative representing the interests
of the general public in this proceeding.
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Fmt 4703
Sfmt 4703
Board Votes To Close April 14, 2008,
Meeting
By telephone vote on April 14, 2008,
the Board of Governors of the United
States Postal Service voted unanimously
to close to public observation its
meeting held via teleconference. The
Board determined that prior public
notice was not possible.
Items Considered
1. Strategic Planning.
2. Personnel Matters and
Compensation Issues.
General Counsel Certification
The General Counsel of the United
States Postal Service has certified that
the meeting was properly closed under
the Government in the Sunshine Act.
Contact Person for More Information:
Requests for information about the
meeting should be addressed to the
Deputy General Counsel, William R.
Gilligan, at (202) 268–2952.
William R. Gilligan,
Deputy General Counsel.
[FR Doc. E8–8865 Filed 4–24–08; 8:45 am]
BILLING CODE 7710–12–M
SECURITIES AND EXCHANGE
COMMISSION
Sunshine Act Meeting
Notice is hereby given, pursuant to
the provisions of the Government in the
Sunshine Act, Public Law 94–409, that
the Securities and Exchange
Commission will hold a Closed Meeting
on Tuesday, April 29, 2008 at 2 p.m.
Commissioners, Counsel to the
Commissioners, the Secretary to the
Commission, and recording secretaries
will attend the Closed Meeting. Certain
staff members who have an interest in
the matters may also be present.
E:\FR\FM\25APN1.SGM
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Agencies
[Federal Register Volume 73, Number 81 (Friday, April 25, 2008)]
[Notices]
[Pages 22449-22451]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-9210]
=======================================================================
-----------------------------------------------------------------------
POSTAL REGULATORY COMMISSION
[Docket No. PI2008-4; Order No. 72]
Study on Reduced Postal Rates
AGENCY: Postal Regulatory Commission.
ACTION: Notice.
-----------------------------------------------------------------------
SUMMARY: The Commission seeks comments from the public on a study of a
postal rule that allows certain fundraising mailings to be sent at
reduced rates. The comments will assist the Commission in preparing a
statutorily-required report and recommendations.
DATES: Initial comments due June 24, 2008; reply comments due July 24,
2008.
ADDRESSES: Submit comments electronically via the Commission's Filing
Online system at https://www.prc.gov.
FOR FURTHER INFORMATION CONTACT: Stephen L. Sharfman, General Counsel,
202-789-6820 and stephen.sharfman@prc.gov.
SUPPLEMENTARY INFORMATION:
I. Introduction
The Postal Accountability and Enhancement Act (PAEA), Public Law
109-435, 120 Stat. 3218 (2006), directs the Commission to prepare
several reports on special topics. One directive requires the
Commission to examine an exception to the cooperative mail rule to
determine whether this change in eligibility for reduced postage
contains adequate safeguards to protect against abuses of rates for
nonprofit mail and deception of consumers. The Commission is to report
the results of this examination to the Postal Service, along with any
recommendations it deems appropriate. If the Postal Service fails to
act thereon, the Commission may take such action it deems necessary to
prevent abuse of rates or deception of consumers. See section 711, 120
Stat. 3248 (2006).\1\
---------------------------------------------------------------------------
\1\ Section 711 of the PAEA refers to section E670.5.3 of the
Domestic Mail Manual (DMM). The text of this provision now appears
at DMM Sec. 703.1.6.3 due to a reorganization of the DMM.
---------------------------------------------------------------------------
The Commission establishes Docket No. PI2008-4 to facilitate
compliance with the directive in section 711 and seeks comments from
the public on the scope and nature of the examination, report, and
potential recommendations. 39 U.S.C. 505 requires the designation of an
officer of the Commission in all public proceedings to represent the
interests of the general public. The Commission designates Katja M.
Eichinger to serve as the Public Representative. Pursuant to this
designation, Ms. Eichinger will direct the activities of Commission
personnel assigned to assist her and, upon request, will provide their
names for the record. Neither she nor any of the assigned personnel
will participate in or provide advice on any Commission decision in
this proceeding.
II. The Cooperative Mail Rule
The cooperative mail rule is a longstanding provision in the DMM.
It traditionally has controlled access to reduced postage rates by
limiting the ability of an entity that is eligible for reduced rates to
``cooperate'' or partner with another entity in a mailing and still
retain its reduced rate eligibility for the mailing in question. The
rule generally accomplishes this, in brief, by requiring that each
cooperating entity independently qualify for nonprofit rates at the
post office of mailing; by requiring that the mail matter being sent be
that of the eligible entity; and by prohibiting ``sharing'' a permit
with an entity not authorized to mail at reduced rates. These
restrictions effectively foreclose a nonprofit from cooperating with a
for-profit entity if the mailing is to be sent at nonprofit rates,
unless the cooperation involves a legitimate principal-agent
relationship in a fee-for-service arrangement. See DMM Sec. 703.1.6.3.
The traditional rationale for imposing limits on cooperative
mailings has been that access to reduced rates is a privilege--
initially subsidized by taxpayers, but more recently by other mailers--
and that the limits help prevent abuse of this privilege. The extent of
the benefit has varied in the years since its introduction, but
eligible cooperative mailings currently pay 60 percent of the Regular
Standard Mail rate.
III. The Emergence of the Fundraising Exception
In 2003, the Postal Service initiated an administrative rulemaking
to address a revision to the cooperative mail rule. The rulemaking
resulted in a revision, effective November 13, 2003, widely referred to
as the Fundraising Exception. In practical effect, this revision
expands eligibility in a limited respect by exempting fundraising
mailings seeking only monetary donations from application of the DMM's
conditions for an eligible cooperative mailing. See 68 FR 23937 (May 6,
2003) and 68 FR 58273 (October 9, 2003), setting out the proposed and
final rule, respectively. The revision requires that the cooperating
nonprofit entity either receive a detailed donor list (containing the
name of donor, contact information, and the amount of donation) from
its mailing partner or execute a written waiver of such receipt.
A. The Fundraising Exemption, as Initially Proposed
The Postal Service notice of proposed rulemaking included a
discussion of the history of the cooperative mail rule and its
application to fundraising mailings; the traditional role of Congress
with respect to eligibility for nonprofit Standard Mail rates; recent
concerns about the impact of the cooperative mail rule on fundraising
mailings; and proposed legislation to exempt certain fundraising mail
from the rule. It noted, with respect to the impact of the rule on
fundraising mailings, that over the last several years, some nonprofit
organizations have made the Postal Service aware of concerns that the
application of the cooperative mail rule
[[Page 22450]]
was having a serious effect on their ability to solicit donations and,
in some cases, might threaten the existence of many nonprofit
organizations, particularly given the economic climate many in the
nonprofit sector were facing. It noted that the organizations that
seemed to be the focus of most of the concern included those that, due
to being new, of small size, or for other reasons, have to seek the
assistance of professional fundraising organizations in seeking
donations, rather than conduct their fundraising campaigns in-house. 68
FR 23938 (May 6, 2003). It added:
In many cases, the arrangements between the professional
fundraiser and the nonprofit are cooperative under the longstanding
application of the cooperative mail rule. Indeed, the Postal Service
understands that some states require contractual terms between
nonprofits and some (but not all) types of professional fundraisers
to contain elements that would cause the resultant fundraising
mailings to violate the cooperative mail rule.
Id.
The Postal Service said it was sensitive to the plight of these
nonprofit organizations, but was reluctant to propose an administrative
solution because expanding or reducing eligibility to mail at nonprofit
or other preferred status traditionally has been a legislative
function; discriminating between its customers is prohibited by
statute, except where authorized by law; and expanding eligibility for
nonprofit rates could create a significant competitive advantage for a
newly-eligible mailer, relative to those still mailing at the
commercial rate. Id. It also noted that some members of the nonprofit
industry had raised a concern that if contractual terms between
nonprofits and fundraisers were no longer a postal concern (given an
exemption from application of the cooperative mail rule), some
fundraisers might impose financial terms that could take advantage of
unsophisticated nonprofits or even seek to create nonprofit
organizations of their own to enrich themselves off of fundraising
mailings, rather than to benefit the public. Id.
The Postal Service acknowledged the seriousness of the issues
raised by the nonprofits, but characterized them as appearing primarily
to raise consumer protection concerns, rather than postal concerns. It
therefore considered them a type of social policy concern best
addressed elsewhere, such as through Federal legislation or the state
officials who regulate the relationship between professional
fundraisers and nonprofit organizations. Id. However, noting that
Federal legislation addressing this topic had been introduced but had
no guarantee of passage and reiterating its reluctance to tread in an
area historically addressed through legislation, the Postal Service
said it had decided to propose a rule to eliminate application of the
cooperative mail rule on mailings by authorized nonprofit organizations
seeking monetary donations. Id. As to the breadth of the proposal, the
Postal Service raised six cautions. Three pertained to the scope of the
exception. First, the Postal Service noted that the proposal:
* * * only exempts fundraising mailings seeking monetary
donations. Mailings that include solicitations for products or
services, whether through sale, lease, or other arrangements, will
not be exempt from application of the cooperative mail rule. If
there is a cooperative arrangement involving such goods or services,
the mailpiece will not be eligible for Nonprofit Standard mail
rates.
Id. at 23939. The rationale for this limitation, according to the
Postal Service, was that exempting mailings that advertise goods or
services from application of the cooperative mail rule would create
significant potential for abuse by commercial organizations and may
also place small businesses and other for-profit organizations who sell
similar goods and services at a significant competitive disadvantage.
Id.
Second, the Postal Service said the exemption was only from
application of the cooperative mail rule, and that affected mailings
would continue to be subject to all other applicable postal standards.
Id. Third, it said the exemption would only apply to nonprofit
organizations authorized to mail at nonprofit Standard Mail rates;
other organizations so entitled, which are voter registration officials
and certain qualified political committees, would not be exempt. Id.
The next point was that the rule, if adopted, would be a change of
postal policy rather than a clarification of existing standards, and
thus would be prospective only, effective on the date of adoption. It
would not form the basis for a request for a refund. Id. The Postal
Service's fifth point was that the proposed rule ``would not establish
safeguards to address the concern that some professional fundraisers
may seek to take advantage of unsophisticated clients.'' Id. It added:
In our discussions with nonprofit representatives and
Congressional representatives, no consensus was reached on an
effective and administratively feasible method to accomplish this
goal. However, this rulemaking does not prevent other interested
federal or state agencies from regulating such practices. Moreover,
it is also hoped that the nonprofit sector may undertake educational
efforts to inform potential targets of such practices.
Id.
The Postal Service's final point was that it would be alert to the
consequences of the new standard, should it be adopted, and might
revisit the exception and consider a further rulemaking or other
appropriate administrative measures if it resulted in the types of
abuses that had been discussed or any other unintended consequences.
Id.
B. The Fundraising Exception as Adopted
In the explanation accompanying the final rule, the Postal Service
characterized the 67 comments it had received as diverse in terms of
types of entities represented and broad as to the range of views.\2\
Its overall assessment was that a significant majority of the comments
urged adoption of the rule as proposed. However, it acknowledged that a
small number recommended the proposal be withdrawn or that it be
adopted with additional restrictions, while ``a lesser number'' of
commenters recommended that the exception be expanded. It also said
that several commenters had recommended making the rule retroactive.
Id.
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\2\ Commenters included nonprofit organizations and
organizations representing such organizations; professional
fundraisers and organizations representing these commercial
entities; Congressional representatives; private individuals; and an
organization representing state officials that regulate charities.
68 FR 58274 (October 9, 2003).
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In response to the comments, the Postal Service modified the
proposed rule in several respects. It added a condition related to
donor lists by providing that the fundraising exemption applies only
where the nonprofit organization is either given a list of the donors,
their contact information, and the amount of their donations, or
waives, in writing, the receipt of such list. Id. at 58276. It extended
eligibility for the exemption from authorized nonprofits to voter
election officials and certain qualified political committees. Id. It
also revised the rule to clarify two points: (1) The exception applies
only where the monetary donations solicited are for the entity
authorized to mail at nonprofit rates, and (2) operates prospectively
only. Id.
The Postal Service discussed, but did not accept, commenters'
suggestions that would have resulted in a regulation that:
--Prohibited or restricted close ties between the cooperating entities;
[[Page 22451]]
--Required written approval of the contract by the cooperating
nonprofit's board of directors; and
--Mandated inclusion of certain contractual terms related to numerous
control or ownership issues, such as receipt and exclusive ownership of
a donor list; direct deposit of funds into the nonprofit's bank
account; and intellectual property in the mailing.
Id. at 58274-76.
IV. Invitation to Comment
The preceding summary makes clear that the Fundraising Exception
expands eligibility for nonprofit Standard Mail rates for certain types
of mailings, but does so in a relatively limited way. It also makes
clear that the Fundraising Exception, as adopted, did not include many
of the checks, or safeguards, some commenters believed should be
included to ward off abuse of nonprofit rates and consumer deception.
The Commission invites comments from the general public to facilitate
its examination of whether the Fundraising Exception contains adequate
safeguards to protect against abuse of nonprofit rates and consumer
protection, and preparation of the related report and recommendations.
Comments may address any relevant topic; however, the Commission also
presents the following questions to help focus the discussion.
A. Abuse of Nonprofit Rates
The directive in section 711 speaks to abuse of nonprofit rates,
rather than fraud. In connection with the scope and extent of abuse
that may occur under the Fundraising Exemption, the Commission is
especially interested in the following matters:
1. The 2003 rulemaking acknowledged that commenters had raised
concerns about several types of abusive fundraising practices,
including predatory credit arrangements. To what extent have these
practices occurred, since the 2003 revision, in connection with
mailings sent under the Fundraising Exemption?
2. Have there been any material changes in fundraising practices
since the Postal Service's 2003 rulemaking that give rise to new
concerns about abuse in connection with the Fundraising Exception?
3. To what extent has the nonprofit sector engaged in education
efforts designed to inform nonprofits, especially those considered
especially vulnerable to overreaching or predatory partners, about the
scope of the Fundraising Exception and potential abuses? Also, are
there reliable means of measuring or assessing the success of these
efforts?
4. To what extent has the Postal Service (including any
organizational division) engaged in education efforts specifically
directed at the Fundraising Exception and potential abuses? Are there
reliable means of measuring or assessing the success of these efforts?
5. What information and data are available about the extent to
which the Fundraising Exception has been used by mailers eligible for
nonprofit rates since adoption in 2003, in terms of features such as
number and type of entities using the Fundraising Exception, volume,
and total postage involved?
B. Deception of Consumers
The directive in section 711 also extends to deception of
consumers. The Commission is interested in commenters' views on all
relevant aspects of consumer deception, including:
1. The 2003 rulemaking mentioned that there were a growing number
of State laws on charitable fundraising that created a potential for
conflict with cooperative mail as then formulated. Has there been an
increase in the number of States proposing or adopting such laws? What
safeguards or protections are included in these laws? Do these laws
pose any conflicts with the 2003 Fundraising Exception or did this
Exception satisfactorily resolve relevant concerns?
2. To what extent has the Postal Service undertaken efforts to
educate consumers (in the capacity of a donor or potential donor
responding to a mailed solicitation) about abuses or potential
fundraising abuses?
3. To what extent have individual States engaged in efforts to
educate consumers (in the capacity of a donor or potential donor
responding to a mailed solicitation) about abuses or potential
fundraising abuses?
4. To what extent has deception of potential donors been reported
or documented by the Postal Service, nonprofit mailer organizations,
State or local consumer protection agencies, or others?
V. Ordering Paragraphs
It is ordered:
1. The Commission establishes Docket No. PI2008-4, Inquiry into
Cooperative Mail Rule Exception, to facilitate compliance with section
711 of the Postal Accountability and Enhancement Act.
2. The Commission designates Katja M. Eichinger as the Public
Representative representing the interests of the general public in this
proceeding.
3. Comments on issues related to the directive in section 711 of
the PAEA are due June 24, 2008.
4. Reply comments are due July 24, 2008.
5. The Secretary shall arrange for publication of this Notice in
the Federal Register.
By the Commission.
Steven W. Williams,
Secretary.
[FR Doc. E8-9210 Filed 4-24-08; 8:45 am]
BILLING CODE 7710-FW-P