109TH CONGRESS 
1ST SESSION 
H. R. 22
AN ACT 
To reform the postal laws of the United States.
109TH CONGRESS 
1ST SESSION 
H. R. 22
AN ACT 
To reform the postal laws of the United States.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 
(a) SHORT TITLE.—This Act may be cited as the 
‘‘Postal Accountability and Enhancement Act’’. 
(b) TABLE OF CONTENTS.—The table of contents for 
this Act is as follows:
Sec. 1. Short title; table of contents. 
TITLE I—DEFINITIONS; POSTAL SERVICES 
Sec. 101. Definitions. 
Sec. 102. Postal services. 
Sec. 103. Financial transparency. 
TITLE II—MODERN RATE REGULATION 
Sec. 201. Provisions relating to market-dominant products. 
Sec. 202. Provisions relating to competitive products. 
Sec. 203. Provisions relating to experimental and new products. 
Sec. 204. Reporting requirements and related provisions. 
Sec. 205. Complaints; appellate review and enforcement. 
Sec. 206. Workshare discounts. 
Sec. 207. Clerical amendment. 
TITLE III—PROVISIONS RELATING TO FAIR COMPETITION 
Sec. 301. Postal Service Competitive Products Fund. 
Sec. 302. Assumed Federal income tax on competitive products income. 
Sec. 303. Unfair competition prohibited. 
Sec. 304. Suits by and against the Postal Service. 
Sec. 305. International postal arrangements. 
Sec. 306. Redesignation. 
TITLE IV—GENERAL PROVISIONS 
Sec. 401. Qualification requirements for Governors. 
Sec. 402. Obligations. 
Sec. 403. Private carriage of letters. 
Sec. 404. Rulemaking authority. 
Sec. 405. Noninterference with collective bargaining agreements, etc. 
Sec. 406. Bonus and compensation authority. 
Sec. 407. Mediation in collective-bargaining disputes. 
TITLE V—ENHANCED REGULATORY COMMISSION 
Sec. 501. Reorganization and modification of certain provisions relating to the 
Postal Regulatory Commission. 
Sec. 502. Authority for Postal Regulatory Commission to issue subpoenas. 
Sec. 503. Appropriations for the Postal Regulatory Commission. 
Sec. 504. Redesignation of the Postal Rate Commission. 
Sec. 505. Officer of the Postal Regulatory Commission representing the general 
public.
TITLE VI—INSPECTORS GENERAL 
Sec. 601. Inspector General of the Postal Regulatory Commission. 
Sec. 602. Inspector General of the United States Postal Service to be appointed 
by the President. 
TITLE VII—EVALUATIONS 
Sec. 701. Universal postal service study. 
Sec. 702. Assessments of ratemaking, classification, and other provisions. 
Sec. 703. Study on equal application of laws to competitive products. 
Sec. 704. Greater diversity in Postal Service Executive and administrative 
schedule management positions. 
Sec. 705. Plan for assisting displaced workers. 
Sec. 706. Contracts with women, minorities, and small businesses. 
Sec. 707. Rates for periodicals. 
Sec. 708. Assessment of certain rate deficiencies. 
Sec. 709. Network optimization. 
Sec. 710. Assessment of future business model of the postal service. 
Sec. 711. Study on certain proposed amendments. 
Sec. 712. Definition. 
TITLE VIII—MISCELLANEOUS; TECHNICAL AND CONFORMING 
AMENDMENTS 
Sec. 801. Employment of postal police officers. 
Sec. 802. Date of postmark to be treated as date of appeal in connection with 
the closing or consolidation of post offices. 
Sec. 803. Provisions relating to benefits under chapter 81 of title 5, United 
States Code, for officers and employees of the former Post Of-
fice Department. 
Sec. 804. Obsolete provisions. 
Sec. 805. Investments. 
Sec. 806. Reduced rates. 
Sec. 807. Hazardous matter. 
Sec. 808. Provisions relating to cooperative mailings. 
Sec. 809. Technical and conforming amendments. 
TITLE IX—POSTAL PENSION FUNDING REFORM AMENDMENTS 
Sec. 901. Civil Service Retirement System. 
Sec. 902. Health insurance. 
Sec. 903. Repealer. 
Sec. 904. Ensuring appropriate use of escrow and military savings. 
Sec. 905. Effective dates.
TITLE I—DEFINITIONS; POSTAL 
SERVICES 
SEC. 101. DEFINITIONS. 
Section 102 of title 39, United States Code, is 
amended by striking ‘‘and’’ at the end of paragraph (3),
by striking the period at the end of paragraph (4) and 
inserting a semicolon, and by adding at the end the fol-
lowing: 
‘‘(5) ‘postal service’ means the carriage of let-
ters, printed matter, or mailable packages, including 
acceptance, collection, processing, delivery, or other 
functions supportive or ancillary thereto; 
‘‘(6) ‘product’ means a postal service with a 
distinct cost or market characteristic for which a 
rate or rates are, or may reasonably be, applied; 
‘‘(7) ‘rates’, as used with respect to products, 
includes fees for postal services; 
‘‘(8) ‘market-dominant product’ or ‘product in 
the market-dominant category of mail’ means a 
product subject to subchapter I of chapter 36; 
‘‘(9) ‘competitive product’ or ‘product in the 
competitive category of mail’ means a product sub-
ject to subchapter II of chapter 36; 
‘‘(10) ‘Consumer Price Index’ means the Con-
sumer Price Index for All Urban Consumers pub-
lished monthly by the Bureau of Labor Statistics of 
the Department of Labor; and 
‘‘(11) ‘year’, as used in chapter 36 (other than 
subchapters I and VI thereof), means a fiscal year.’’.
SEC. 102. POSTAL SERVICES. 
(a) IN GENERAL.—Section 404 of title 39, United 
States Code, is amended—
(1) in subsection (a), by striking paragraph (6) 
and by redesignating paragraphs (7) through (9) as 
paragraphs (6) through (8), respectively; and 
(2) by adding at the end the following: 
‘‘(c) Nothing in this title shall be considered to permit 
or require that the Postal Service provide any special non-
postal or similar services, except that nothing in this sub-
section shall prevent the Postal Service from providing any 
special nonpostal or similar services provided by the Postal 
Service as of January 4, 2005.’’. 
(b) 
CONFORMING
AMENDMENT.—Section 
1402(b)(1)(B)(ii) of the Victims of Crime Act of 1984 (98 
Stat. 2170; 42 U.S.C. 10601(b)(1)(B)(ii)) is amended by 
striking ‘‘404(a)(8)’’ and inserting ‘‘404(a)(7)’’. 
SEC. 103. FINANCIAL TRANSPARENCY. 
(a) IN GENERAL.—Section 101 of title 39, United 
States Code, is amended by redesignating subsections (d) 
through (g) as subsections (e) through (h), respectively, 
and by inserting after subsection (c) the following: 
‘‘(d) As an establishment that provides both market-
dominant and competitive products, the Postal Service 
shall be subject to a high degree of transparency, including 
in its finances and operations, to ensure fair treatment
of customers of the Postal Service’s market-dominant 
products and companies competing with the Postal Serv-
ice’s competitive products.’’. 
(b) CONFORMING AMENDMENT.—Section 5001 of 
title 39, United States Code, is amended by striking 
‘‘101(e) and (f)’’ and inserting ‘‘101(f) and (g)’’. 
TITLE II—MODERN RATE 
REGULATION 
SEC. 201. PROVISIONS RELATING TO MARKET-DOMINANT 
PRODUCTS. 
(a) IN GENERAL.—Chapter 36 of title 39, United 
States Code, is amended by striking sections 3621 and 
3622 and inserting the following: 
‘‘§ 3621. Applicability; definitions 
‘‘(a) APPLICABILITY.—This subchapter shall apply 
with respect to—
‘‘(1)(A) single piece first-class letters (both do-
mestic and international); 
‘‘(B) single piece first-class cards (both domes-
tic and international); and 
‘‘(C) special services; 
‘‘(2) all first-class mail not included under 
paragraph (1); 
‘‘(3) periodicals; 
‘‘(4) standard mail;
‘‘(5) media mail; 
‘‘(6) library mail; and 
‘‘(7) bound printed matter, 
subject to any changes the Postal Regulatory Commission 
may make under section 3642. 
‘‘(b) RULE
OF CONSTRUCTION.—Mail matter re-
ferred to in subsection (a) shall, for purposes of this sub-
chapter, be considered to have the meaning given to such 
mail matter under the mail classification schedule. 
‘‘§ 3622. Modern rate regulation 
‘‘(a) AUTHORITY GENERALLY.—The Postal Regu-
latory Commission shall, within 24 months after the date 
of the enactment of this section, by regulation establish 
(and may from time to time thereafter by regulation re-
vise) a modern system for regulating rates and classes for 
market-dominant products. 
‘‘(b) OBJECTIVES.—Such system shall be designed to 
achieve the following objectives: 
‘‘(1) To establish and maintain a fair and equi-
table schedule for rates and classification. 
‘‘(2) To maximize incentives to reduce costs 
and increase efficiency. 
‘‘(3) To create predictability and stability in 
rates.
‘‘(4) To maintain high quality service stand-
ards. 
‘‘(5) To allow the Postal Service pricing flexi-
bility. 
‘‘(6) To assure adequate revenues, including re-
tained earnings, to maintain financial stability. 
‘‘(7) To reduce the administrative burden of the 
ratemaking process. 
‘‘(c) FACTORS.—In establishing or revising such sys-
tem, the Postal Regulatory Commission shall take into ac-
count—
‘‘(1) the value of the mail service actually pro-
vided each class or type of mail service to both the 
sender and the recipient, including but not limited to 
the collection, mode of transportation, and priority 
of delivery; 
‘‘(2) the direct and indirect postal costs attrib-
utable to each class or type of mail service plus that 
portion of all other costs of the Postal Service rea-
sonably assignable to such class or type; 
‘‘(3) the effect of rate increases upon the gen-
eral public, business mail users, and enterprises in 
the private sector of the economy engaged in the de-
livery of mail matter other than letters;
‘‘(4) the available alternative means of sending 
and receiving letters and other mail matter at rea-
sonable costs; 
‘‘(5) the degree of preparation of mail for deliv-
ery into the postal system performed by the mailer 
and its effect upon reducing costs to the Postal 
Service; 
‘‘(6) simplicity of structure for the entire sched-
ule and simple, identifiable relationships between the 
rates or fees charged the various classes of mail for 
postal services; 
‘‘(7) the relative value to the people of the 
kinds of mail matter entered into the postal system 
and the desirability and justification for special clas-
sifications and services of mail; 
‘‘(8) the importance of providing classifications 
with extremely high degrees of reliability and speed 
of delivery and of providing those that do not re-
quire high degrees of reliability and speed of deliv-
ery; 
‘‘(9) the desirability of special classifications 
from the point of view of both the user and of the 
Postal Service;
‘‘(10) the educational, cultural, scientific, and 
informational value to the recipient of mail matter; 
and 
‘‘(11) the policies of this title as well as such 
other factors as the Commission deems appropriate. 
‘‘(d) ALLOWABLE PROVISIONS.—The system for reg-
ulating rates and classes for market-dominant products 
may include one or more of the following: 
‘‘(1) Price caps, revenue targets, or other form 
of incentive regulation. 
‘‘(2) Cost-of-service regulation. 
‘‘(3) Such other form of regulation as the Com-
mission considers appropriate to achieve, consistent 
with subsection (c), the objectives of subsection (b). 
‘‘(e) LIMITATION.—In the administration of this sec-
tion, the Commission shall not permit the average rate in 
any subclass of mail to increase at an annual rate greater 
than the comparable increase in the Consumer Price 
Index, unless it has, after notice and opportunity for a 
public hearing and comment, determined that such in-
crease is reasonable and equitable and necessary to enable 
the Postal Service, under best practices of honest, effi-
cient, and economical management, to maintain and con-
tinue the development of postal services of the kind and 
quality adapted to the needs of the United States.
‘‘(f) TRANSITION RULE.—Until regulations under 
this section first take effect, rates and classes for market-
dominant products shall remain subject to modification in 
accordance with the provisions of this chapter and section 
407, as such provisions were last in effect before the date 
of the enactment of this section.’’. 
(b) REPEALED SECTIONS.—Sections 3623, 3624, 
3625, and 3628 of title 39, United States Code, are re-
pealed. 
(c) REDESIGNATION.—Chapter 36 of title 39, United 
States Code (as in effect after the amendment made by 
section 501(a)(2), but before the amendment made by sec-
tion 202) is amended by striking the heading for sub-
chapter II and inserting the following: 
‘‘SUBCHAPTER I—PROVISIONS RELATING TO 
MARKET-DOMINANT PRODUCTS’’. 
SEC. 202. PROVISIONS RELATING TO COMPETITIVE PROD-
UCTS. 
Chapter 36 of title 39, United States Code, is amend-
ed by inserting after section 3629 the following: 
‘‘SUBCHAPTER II—PROVISIONS RELATING TO 
COMPETITIVE PRODUCTS 
‘‘§ 3631. Applicability; definitions and updates 
‘‘(a) APPLICABILITY.—This subchapter shall apply 
with respect to—
‘‘(1) priority mail; 
‘‘(2) expedited mail; 
‘‘(3) mailgrams; 
‘‘(4) international mail; and 
‘‘(5) parcel post, 
subject to any changes the Postal Regulatory Commission 
may make under section 3642. 
‘‘(b) DEFINITION.—For purposes of this subchapter, 
the term ‘costs attributable’, as used with respect to a 
product, means the direct and indirect postal costs attrib-
utable to such product. 
‘‘(c) RULE
OF CONSTRUCTION.—Mail matter re-
ferred to in subsection (a) shall, for purposes of this sub-
chapter, be considered to have the meaning given to such 
mail matter under the mail classification schedule. 
‘‘§ 3632. Action of the Governors 
‘‘(a) AUTHORITY TO ESTABLISH RATES AND CLASS-
ES.—The Governors shall establish rates and classes for 
products in the competitive category of mail in accordance 
with the requirements of this subchapter and regulations 
promulgated under section 3633. 
‘‘(b) PROCEDURES.—
‘‘(1) IN GENERAL.—Rates and classes shall be 
established in writing, complete with a statement of
explanation and justification, and the date as of 
which each such rate or class takes effect. 
‘‘(2) RATES OR CLASSES OF GENERAL APPLICA-
BILITY.—In the case of rates or classes of general 
applicability in the Nation as a whole or in any sub-
stantial region of the Nation, the Governors shall 
cause each rate and class decision under this section 
and the record of the Governors’ proceedings in con-
nection with such decision to be published in the 
Federal Register at least 30 days before the effective 
date of any new rates or classes. 
‘‘(3) RATES OR CLASSES NOT OF GENERAL AP-
PLICABILITY.—In the case of rates or classes not of 
general applicability in the Nation as a whole or in 
any substantial region of the Nation, the Governors 
shall cause each rate and class decision under this 
section and the record of the proceedings in connec-
tion with such decision to be filed with the Postal 
Regulatory Commission by such date before the ef-
fective date of any new rates or classes as the Gov-
ernors consider appropriate, but in no case less than 
15 days. 
‘‘(4) CRITERIA.—As part of the regulations re-
quired under section 3633, the Postal Regulatory 
Commission shall establish criteria for determining
when a rate or class established under this sub-
chapter is or is not of general applicability in the 
Nation as a whole or in any substantial region of the 
Nation. 
‘‘(c) TRANSITION RULE.—Until regulations under 
section 3633 first take effect, rates and classes for com-
petitive products shall remain subject to modification in 
accordance with the provisions of this chapter and section 
407, as such provisions were as last in effect before the 
date of the enactment of this section. 
‘‘§ 3633. Provisions applicable to rates for competitive 
products 
‘‘The Postal Regulatory Commission shall, within 18 
months after the date of the enactment of this section, 
promulgate (and may from time to time thereafter revise) 
regulations—
‘‘(1) to prohibit the subsidization of competitive 
products by market-dominant products; 
‘‘(2) to ensure that each competitive product 
covers its costs attributable; and 
‘‘(3) to ensure that all competitive products col-
lectively make a reasonable contribution to the insti-
tutional costs of the Postal Service.’’.
SEC. 203. PROVISIONS RELATING TO EXPERIMENTAL AND 
NEW PRODUCTS. 
Subchapter III of chapter 36 of title 39, United 
States Code, is amended to read as follows: 
‘‘SUBCHAPTER III—PROVISIONS RELATING TO 
EXPERIMENTAL AND NEW PRODUCTS 
‘‘§ 3641. Market tests of experimental products 
‘‘(a) AUTHORITY.—
‘‘(1) IN
GENERAL.—The Postal Service may 
conduct market tests of experimental products in ac-
cordance with this section. 
‘‘(2) PROVISIONS
WAIVED.—A product shall 
not, while it is being tested under this section, be 
subject to the requirements of sections 3622, 3633, 
or 3642, or regulations promulgated under those 
sections. 
‘‘(b) CONDITIONS.—A product may not be tested 
under this section unless it satisfies each of the following: 
‘‘(1) SIGNIFICANTLY
DIFFERENT
PRODUCT.—
The product is, from the viewpoint of the mail users, 
significantly different from all products offered by 
the Postal Service within the 2-year period preceding 
the start of the test. 
‘‘(2) MARKET DISRUPTION.—The introduction 
or continued offering of the product will not create 
an unfair or otherwise inappropriate competitive ad-
vantage for the Postal Service or any mailer, par-
ticularly in regard to small business concerns (as de-
fined under subsection (h)). 
‘‘(3) CORRECT CATEGORIZATION.—The Postal 
Service identifies the product, for the purpose of a 
test under this section, as either market dominant or 
competitive, consistent with the criteria under sec-
tion 3642(b)(1). Costs and revenues attributable to 
a product identified as competitive shall be included 
in any determination under section 3633(3) (relating 
to provisions applicable to competitive products col-
lectively). 
‘‘(c) NOTICE.—
‘‘(1) IN GENERAL.—At least 30 days before ini-
tiating a market test under this section, the Postal 
Service shall file with the Postal Regulatory Com-
mission and publish in the Federal Register a no-
tice—
‘‘(A) setting out the basis for the Postal 
Service’s determination that the market test is 
covered by this section; and 
‘‘(B) describing the nature and scope of 
the market test. 
‘‘(2) SAFEGUARDS.—For a competitive experi-
mental product, the provisions of section 504(g)
shall be available with respect to any information re-
quired to be filed under paragraph (1) to the same 
extent and in the same manner as in the case of any 
matter described in section 504(g)(1). Nothing in 
paragraph (1) shall be considered to permit or re-
quire the publication of any information as to which 
confidential treatment is accorded under the pre-
ceding sentence (subject to the same exception as set 
forth in section 504(g)(3)). 
‘‘(d) DURATION.—
‘‘(1) IN GENERAL.—A market test of a product 
under this section may be conducted over a period 
of not to exceed 24 months. 
‘‘(2) EXTENSION AUTHORITY.—If necessary in 
order to determine the feasibility or desirability of a 
product being tested under this section, the Postal 
Regulatory Commission may, upon written applica-
tion of the Postal Service (filed not later than 60 
days before the date as of which the testing of such 
product would otherwise be scheduled to terminate 
under paragraph (1)), extend the testing of such 
product for not to exceed an additional 12 months. 
‘‘(e) DOLLAR-AMOUNT LIMITATION.—
‘‘(1) IN GENERAL.—A product may be tested 
under this section only if the total revenues that are
anticipated, or in fact received, by the Postal Service 
from such product do not exceed $10,000,000 na-
tionwide in any year, subject to paragraph (2) and 
subsection (g). In carrying out the preceding sen-
tence, the Postal Regulatory Commission may limit 
the amount of revenues the Postal Service may ob-
tain from any particular geographic market as nec-
essary to prevent market disruption (as defined in 
subsection (b)(2)). 
‘‘(2) EXEMPTION
AUTHORITY.—The Postal 
Regulatory Commission may, upon written applica-
tion of the Postal Service, exempt the market test 
from the limit in paragraph (1) if the total revenues 
that are anticipated, or in fact received, by the Post-
al Service from such product do not exceed 
$50,000,000 in any year, subject to subsection (g). 
In reviewing an application under this paragraph, 
the Postal Regulatory Commission shall approve 
such application if it determines that—
‘‘(A) the product is likely to benefit the 
public and meet an expected demand; 
‘‘(B) the product is likely to contribute to 
the financial stability of the Postal Service; and 
‘‘(C) the product is not likely to result in 
unfair or otherwise inappropriate competition.
‘‘(f) CANCELLATION.—If the Postal Regulatory Com-
mission at any time determines that a market test under 
this section fails, with respect to any particular product, 
to meet one or more of the requirements of this section, 
it may order the cancellation of the test involved or take 
such other action as it considers appropriate. A determina-
tion under this subsection shall be made in accordance 
with such procedures as the Commission shall by regula-
tion prescribe. 
‘‘(g) ADJUSTMENT FOR INFLATION.—For purposes 
of each year following the year in which occurs the dead-
line for the Postal Service’s first report to the Postal Reg-
ulatory Commission under section 3652(a), each dollar 
amount contained in this section shall be adjusted by the 
change in the Consumer Price Index for such year (as de-
termined under regulations of the Commission). 
‘‘(h) DEFINITION
OF
A SMALL BUSINESS CON-
CERN.—The criteria used in defining small business con-
cerns or otherwise categorizing business concerns as small 
business concerns shall, for purposes of this section, be 
established by the Postal Regulatory Commission in con-
formance with the requirements of section 3 of the Small 
Business Act. 
‘‘(i) EFFECTIVE DATE.—Market tests under this 
subchapter may be conducted in any year beginning with
the first year in which occurs the deadline for the Postal 
Service’s first report to the Postal Regulatory Commission 
under section 3652(a). 
‘‘§ 3642. New products and transfers of products be-
tween the market-dominant and competi-
tive categories of mail 
‘‘(a) IN GENERAL.—Upon request of the Postal Serv-
ice or users of the mails, or upon its own initiative, the 
Postal Regulatory Commission may change the list of 
market-dominant products under section 3621 and the list 
of competitive products under section 3631 by adding new 
products to the lists, removing products from the lists, or 
transferring products between the lists. 
‘‘(b) CRITERIA.—All determinations by the Postal 
Regulatory Commission under subsection (a) shall be 
made in accordance with the following criteria: 
‘‘(1) The market-dominant category of products 
shall consist of each product in the sale of which the 
Postal Service exercises sufficient market power that 
it can effectively set the price of such product sub-
stantially above costs, raise prices significantly, de-
crease quality, or decrease output, without risk of 
losing business to other firms offering similar prod-
ucts. The competitive category of products shall con-
sist of all other products.
‘‘(2) EXCLUSION OF PRODUCTS COVERED BY 
POSTAL MONOPOLY.—A product covered by the post-
al monopoly shall not be subject to transfer under 
this section from the market-dominant category of 
mail. For purposes of the preceding sentence, the 
term ‘product covered by the postal monopoly’ 
means any product the conveyance or transmission 
of which is reserved to the United States under sec-
tion 1696 of title 18, subject to the same exception 
as set forth in the last sentence of section 409(e)(1). 
‘‘(3) ADDITIONAL CONSIDERATIONS.—In mak-
ing any decision under this section, due regard shall 
be given to—
‘‘(A) the availability and nature of enter-
prises in the private sector engaged in the deliv-
ery of the product involved; 
‘‘(B) the views of those who use the prod-
uct involved on the appropriateness of the pro-
posed action; and 
‘‘(C) the likely impact of the proposed ac-
tion on small business concerns (within the 
meaning of section 3641(h)). 
‘‘(c) TRANSFERS OF SUBCLASSES AND OTHER SUB-
ORDINATE UNITS ALLOWABLE.—Nothing in this title 
shall be considered to prevent transfers under this section
from being made by reason of the fact that they would 
involve only some (but not all) of the subclasses or other 
subordinate units of the class of mail or type of postal 
service involved (without regard to satisfaction of min-
imum quantity requirements standing alone). 
‘‘(d) NOTIFICATION
AND PUBLICATION REQUIRE-
MENTS.—
‘‘(1) NOTIFICATION REQUIREMENT.—The Post-
al Service shall, whenever it requests to add a prod-
uct or transfer a product to a different category, file 
with the Postal Regulatory Commission and publish 
in the Federal Register a notice setting out the basis 
for its determination that the product satisfies the 
criteria under subsection (b) and, in the case of a 
request to add a product or transfer a product to 
the competitive category of mail, that the product 
meets the regulations promulgated by the Postal 
Regulatory Commission pursuant to section 3633. 
The provisions of section 504(g) shall be available 
with respect to any information required to be filed. 
‘‘(2) PUBLICATION REQUIREMENT.—The Postal 
Regulatory Commission shall, whenever it changes 
the list of products in the market-dominant or com-
petitive category of mail, prescribe new lists of prod-
ucts. The revised lists shall indicate how and when
any previous lists (including the lists under sections 
3621 and 3631) are superseded, and shall be pub-
lished in the Federal Register. 
‘‘(e) NOTIFICATION
REQUIREMENT.—The Postal 
Regulatory Commission shall, whenever it reaches a con-
clusion that a product or products should be transferred 
between the list of market-dominant products under sec-
tion 3621 and the list of competitive products under sec-
tion 3631, immediately notify the appropriate committees 
of the Congress. No such transfer may take effect less 
than 12 months after such conclusion. 
‘‘(f) PROHIBITION.—Except as provided in section 
3641, no product that involves the carriage of letters, 
printed matter, or mailable packages may be offered by 
the Postal Service unless it has been assigned to the mar-
ket-dominant or competitive category of mail (as appro-
priate) either—
‘‘(1) under this subchapter; or 
‘‘(2) by or under any other provision of law.’’. 
SEC. 204. REPORTING REQUIREMENTS AND RELATED PRO-
VISIONS. 
(a) REDESIGNATION.—Chapter 36 of title 39, United 
States Code (as in effect before the amendment made by 
subsection (b)) is amended by striking the heading for 
subchapter IV and inserting the following:
‘‘SUBCHAPTER V—POSTAL SERVICES, 
COMPLAINTS, AND JUDICIAL REVIEW’’. 
(b) REPORTS AND COMPLIANCE.—Chapter 36 of title 
39, United States Code, is amended by inserting after sub-
chapter III the following: 
‘‘SUBCHAPTER IV—REPORTING 
REQUIREMENTS AND RELATED PROVISIONS 
‘‘§ 3651. Annual reports by the Commission 
‘‘(a) IN GENERAL.—The Postal Regulatory Commis-
sion shall submit an annual report to the President and 
the Congress concerning the operations of the Commission 
under this title, including the extent to which regulations 
are achieving the objectives under sections 3622 and 3633, 
respectively. 
‘‘(b) ADDITIONAL INFORMATION.—In addition to the 
information required under subsection (a), each report 
under this section shall also include, with respect to the 
period covered by such report, an estimate of the costs 
incurred by the Postal Service in providing—
‘‘(1) postal services to areas of the Nation 
where, in the judgment of the Postal Regulatory 
Commission, the Postal Service either would not 
provide services at all or would not provide such 
services in accordance with the requirements of this 
title if the Postal Service were not required to pro-
vide prompt, reliable, and efficient services to pa-
trons in all areas and all communities, including as 
required under the first sentence of section 101(b); 
‘‘(2) free or reduced rates for postal services as 
required by this title; and 
‘‘(3) other public services or activities which, in 
the judgment of the Postal Regulatory Commission, 
would not otherwise have been provided by the Post-
al Service but for the requirements of law. 
The Commission shall detail the bases for its estimates 
and the statutory requirements giving rise to the costs 
identified in each report under this section. 
‘‘(c) INFORMATION FROM POSTAL SERVICE.—The 
Postal Service shall provide the Postal Regulatory Com-
mission with such information as may, in the judgment 
of the Commission, be necessary in order for the Commis-
sion to prepare its reports under this section. 
‘‘§ 3652. Annual reports to the Commission 
‘‘(a) COSTS, REVENUES, AND RATES.—Except as 
provided in subsection (c), the Postal Service shall, no 
later than 90 days after the end of each year, prepare and 
submit to the Postal Regulatory Commission a report (to-
gether with such nonpublic annex thereto as the Commis-
sion may require under subsection (e))—
‘‘(1) which shall analyze costs, revenues, and 
rates, using such methodologies as the Commission 
shall by regulation prescribe, and in sufficient detail 
to demonstrate that the rates in effect for all prod-
ucts during such year complied with all applicable 
requirements of this title; and 
‘‘(2) which shall, for each market-dominant 
product provided in such year, provide—
‘‘(A) market information, including mail 
volumes; and 
‘‘(B) measures of the quality of service af-
forded by the Postal Service in connection with 
such product, including—
‘‘(i) the service standard applicable to 
such product; 
‘‘(ii) the level of service (described in 
terms of speed of delivery and reliability) 
provided; and 
‘‘(iii) the degree of customer satisfac-
tion with the service provided. 
The Inspector General shall regularly audit the data col-
lection systems and procedures utilized in collecting infor-
mation and preparing such report (including any annex 
thereto and the information required under subsection
(b)). The results of any such audit shall be submitted to 
the Postal Service and the Postal Regulatory Commission. 
‘‘(b) INFORMATION RELATING TO WORKSHARE DIS-
COUNTS.—
‘‘(1) IN GENERAL.—The Postal Service shall in-
clude, in each report under subsection (a), the fol-
lowing information with respect to each market-dom-
inant product for which a workshare discount was in 
effect during the period covered by such report: 
‘‘(A) The per-item cost avoided by the 
Postal Service by virtue of such discount. 
‘‘(B) The percentage of such per-item cost 
avoided that the per-item workshare discount 
represents. 
‘‘(C) The per-item contribution made to in-
stitutional costs. 
‘‘(2) WORKSHARE
DISCOUNT
DEFINED.—For 
purposes of this subsection, the term ‘workshare dis-
count’ has the meaning given such term under sec-
tion 3687. 
‘‘(c) MARKET TESTS.—In carrying out subsections 
(a) and (b) with respect to experimental products offered 
through market tests under section 3641 in a year, the 
Postal Service—
‘‘(1) may report summary data on the costs, 
revenues, and quality of service by market test; and 
‘‘(2) shall report such data as the Postal Regu-
latory Commission requires. 
‘‘(d) SUPPORTING MATTER.—The Postal Regulatory 
Commission shall have access, in accordance with such 
regulations as the Commission shall prescribe, to the 
working papers and any other supporting matter of the 
Postal Service and the Inspector General in connection 
with any information submitted under this section. 
‘‘(e) CONTENT AND FORM OF REPORTS.—
‘‘(1) IN
GENERAL.—The Postal Regulatory 
Commission shall, by regulation, prescribe the con-
tent and form of the public reports (and any non-
public annex and supporting matter relating thereto) 
to be provided by the Postal Service under this sec-
tion. In carrying out this subsection, the Commis-
sion shall give due consideration to—
‘‘(A) providing the public with adequate in-
formation to assess the lawfulness of rates 
charged;
‘‘(B) avoiding unnecessary or unwarranted 
administrative effort and expense on the part of 
the Postal Service; and
‘‘(C) protecting the confidentiality of com-
mercially sensitive information. 
‘‘(2) REVISED REQUIREMENTS.—The Commis-
sion may, on its own motion or on request of an in-
terested party, initiate proceedings (to be conducted 
in accordance with regulations that the Commission 
shall prescribe) to improve the quality, accuracy, or 
completeness of Postal Service data required by the 
Commission under this subsection whenever it shall 
appear that—
‘‘(A) the attribution of costs or revenues to 
products has become significantly inaccurate or 
can be significantly improved; 
‘‘(B) the quality of service data has be-
come significantly inaccurate or can be signifi-
cantly improved; or 
‘‘(C) those revisions are, in the judgment 
of the Commission, otherwise necessitated by 
the public interest. 
‘‘(f) CONFIDENTIAL INFORMATION.—
‘‘(1) IN GENERAL.—If the Postal Service deter-
mines that any document or portion of a document, 
or other matter, which it provides to the Postal Reg-
ulatory Commission in a nonpublic annex under this 
section or pursuant to subsection (d) contains infor-
mation which is described in section 410(c) of this 
title, or exempt from public disclosure under section 
552(b) of title 5, the Postal Service shall, at the 
time of providing such matter to the Commission, 
notify the Commission of its determination, in writ-
ing, and describe with particularity the documents 
(or portions of documents) or other matter for which 
confidentiality is sought and the reasons therefor. 
‘‘(2) TREATMENT.—Any information or other 
matter described in paragraph (1) to which the 
Commission gains access under this section shall be 
subject to paragraphs (2) and (3) of section 504(g) 
in the same way as if the Commission had received 
notification with respect to such matter under sec-
tion 504(g)(1). 
‘‘(g) OTHER REPORTS.—The Postal Service shall 
submit to the Postal Regulatory Commission, together 
with any other submission that it is required to make 
under this section in a year, copies of its then most re-
cent—
‘‘(1) comprehensive statement under section 
2401(e); 
‘‘(2) performance plan under section 2803; and 
‘‘(3) program performance reports under sec-
tion 2804.
‘‘§ 3653. Annual determination of compliance 
‘‘(a) OPPORTUNITY FOR PUBLIC COMMENT.—After 
receiving the reports required under section 3652 for any 
year, the Postal Regulatory Commission shall promptly 
provide an opportunity for comment on such reports by 
users of the mails, affected parties, and an officer of the 
Commission who shall be required to represent the inter-
ests of the general public. 
‘‘(b) DETERMINATION
OF COMPLIANCE
OR NON-
COMPLIANCE.—Not later than 90 days after receiving the 
submissions required under section 3652 with respect to 
a year, the Postal Regulatory Commission shall make a 
written determination as to—
‘‘(1) whether any rates or fees in effect during 
such year (for products individually or collectively) 
were not in compliance with applicable provisions of 
this chapter (or regulations promulgated there-
under); 
‘‘(2) whether any performance goals established 
under section 2803 or 2804 for such year were not 
met; and 
‘‘(3) whether any market-dominant product 
failed to meet any service standard during such 
year.
If, with respect to a year, no instance of noncompliance 
is found under this subsection to have occurred in such 
year, the written determination shall be to that effect. 
‘‘(c) IF ANY NONCOMPLIANCE IS FOUND.—If, for a 
year, a timely written determination of noncompliance is 
made under subsection (b), the Postal Regulatory Com-
mission shall take appropriate action in accordance with 
subsections (c)–(e) of section 3662 (as if a complaint aver-
ring such noncompliance had been duly filed and found 
under such section to be justified). 
‘‘(d) REBUTTABLE PRESUMPTION.—A timely written 
determination described in the last sentence of subsection 
(b) shall, for purposes of any proceeding under section 
3662, create a rebuttable presumption of compliance by 
the Postal Service (with regard to the matters described 
in paragraphs (1) through (3) of subsection (b)) during 
the year to which such determination relates. 
‘‘§ 3654. Additional financial reporting 
‘‘(a) ADDITIONAL FINANCIAL REPORTING.—
‘‘(1) IN
GENERAL.—The Postal Service shall 
file with the Postal Regulatory Commission begin-
ning with the first full fiscal year following the effec-
tive date of this section—
‘‘(A) within 35 days after the end of each 
fiscal quarter, a quarterly report containing the
information required by the Securities and Ex-
change Commission to be included in quarterly 
reports under sections 13 and 15(d) of the Se-
curities Exchange Act of 1934 (15 U.S.C. 78m, 
78o(d)) on Form 10-Q, as such Form (or any 
successor form) may be revised from time to 
time; 
‘‘(B) within 60 days after the end of each 
fiscal year, an annual report containing the in-
formation required by the Securities and Ex-
change Commission to be included in annual re-
ports under such sections on Form 10-K, as 
such Form (or any successor form) may be re-
vised from time to time; and 
‘‘(C) periodic reports within the time frame 
and containing the information prescribed in 
Form 8-K of the Securities and Exchange Com-
mission, as such Form (or any successor form) 
may be revised from time to time. 
‘‘(2) REGISTRANT DEFINED.—For purposes of 
defining the reports required by paragraph (1), the 
Postal Service shall be deemed to be the ‘registrant’ 
described in the Securities and Exchange Commis-
sion Forms, and references contained in such Forms
to Securities and Exchange Commission regulations 
are incorporated herein by reference, as amended. 
‘‘(3) INTERNAL CONTROL REPORT.—For pur-
poses of defining the reports required by paragraph 
(1)(B), the Postal Service shall comply with the 
rules prescribed by the Securities and Exchange 
Commission implementing section 404 of the Sar-
banes-Oxley Act of 2002 (15 U.S.C. 7262), begin-
ning with the annual report for fiscal year 2007. 
‘‘(b) FINANCIAL REPORTING.—
‘‘(1) The reports required by subsection 
(a)(1)(B) shall include, with respect to the Postal 
Service’s pension and post-retirement health obliga-
tions—
‘‘(A) the funded status of the Postal Serv-
ice’s pension and ––postretirement health obli-
gations; 
‘‘(B) components of the net change in the 
fund balances and obligations and the nature 
and cause of any significant changes; 
‘‘(C) components of net periodic costs; 
‘‘(D) cost methods and assumptions under-
lying the relevant actuarial valuations; 
‘‘(E) the effect of a one-percentage point 
increase in the assumed health care cost trend
rate for each future year on the service and in-
terest costs components of net periodic post-
retirement health cost and the accumulated ob-
ligation; 
‘‘(F) actual contributions to and payments 
from the funds for the years presented and the 
estimated future contributions and payments 
for each of the following 5 years; 
‘‘(G) the composition of plan assets re-
flected in the fund balances; and 
‘‘(H) the assumed rate of return on fund 
balances and the actual rates of return for the 
years presented. 
‘‘(2)(A) Beginning with reports for the fiscal 
year 2007, for purposes of the reports required 
under subparagraphs (A) and (B) of subsection 
(a)(1), the Postal Service shall include segment re-
porting. 
‘‘(B) The Postal Service shall determine the ap-
propriate segment reporting under subparagraph (A) 
after consultation with the Postal Regulatory Com-
mission. 
‘‘(c) TREATMENT.—For purposes of the reports re-
quired by subsection (a)(1)(B), the Postal Service shall 
obtain an opinion from an independent auditor on whether
the information listed in subsection (b) is fairly stated in 
all material respects, either in relation to the basic finan-
cial statements as a whole or on a stand-alone basis. 
‘‘(d) SUPPORTING MATTER.—The Postal Regulatory 
Commission shall have access to the audit documentation 
and any other supporting matter of the Postal Service and 
its independent auditor in connection with any information 
submitted under this section. 
‘‘(e) REVISED REQUIREMENTS.—The Postal Regu-
latory Commission may, on its own motion or on request 
of an interested party, initiate proceedings (to be con-
ducted in accordance with regulations that the Commis-
sion shall prescribe) to improve the quality, accuracy, or 
completeness of Postal Service data required under this 
section whenever it shall appear that—
‘‘(1) the data have become significantly inac-
curate or can be significantly improved; or 
‘‘(2) those revisions are, in the judgment of the 
Commission, otherwise necessitated by the public in-
terest. 
‘‘(f) CONFIDENTIAL INFORMATION.— 
‘‘(1) IN GENERAL.—If the Postal Service deter-
mines that any document or portion of a document, 
or other matter, which it provides to the Postal Reg-
ulatory Commission in a nonpublic annex under this
section or pursuant to subsection (d) contains infor-
mation which is described in section 410(c) of this 
title, or exempt from public disclosure under section 
552(b) of title 5, the Postal Service shall, at the 
time of providing such matter to the Commission, 
notify the Commission of its determination, in writ-
ing, and describe with particularity the documents 
(or portions of documents) or other matter for which 
confidentiality is sought and the reasons therefor. 
‘‘(2) TREATMENT.—Any information or other 
matter described in paragraph (1) to which the 
Commission gains access under this section shall be 
subject to paragraphs (2) and (3) of section 504(g) 
in the same way as if the Commission had received 
notification with respect to such matter under sec-
tion 504(g)(1).’’. 
SEC. 205. COMPLAINTS; APPELLATE REVIEW AND EN-
FORCEMENT. 
Chapter 36 of title 39, United States Code, is amend-
ed by striking sections 3662 and 3663 and inserting the 
following: 
‘‘§ 3662. Rate and service complaints 
‘‘(a) IN GENERAL.—Interested persons (including an 
officer of the Postal Regulatory Commission representing 
the interests of the general public) who believe the Postal
Service is not operating in conformance with the require-
ments of chapter 1, 4, or 6, or this chapter (or regulations 
promulgated under any of those chapters) may lodge a 
complaint with the Postal Regulatory Commission in such 
form and manner as the Commission may prescribe. 
‘‘(b) PROMPT RESPONSE REQUIRED.—
‘‘(1) IN
GENERAL.—The Postal Regulatory 
Commission shall, within 90 days after receiving a 
complaint under subsection (a), either—
‘‘(A) begin proceedings on such complaint; 
or 
‘‘(B) issue an order dismissing the com-
plaint (together with a statement of the reasons 
therefor). 
‘‘(2) TREATMENT OF COMPLAINTS NOT TIMELY 
ACTED ON.—For purposes of section 3663, any com-
plaint under subsection (a) on which the Commis-
sion fails to act in the time and manner required by 
paragraph (1) shall be treated in the same way as 
if it had been dismissed pursuant to an order issued 
by the Commission on the last day allowable for the 
issuance of such order under paragraph (1).
‘‘(c) ACTION REQUIRED IF COMPLAINT FOUND TO 
BE JUSTIFIED.—If the Postal Regulatory Commission 
finds the complaint to be justified, it shall order that the
Postal Service take such action as the Commission con-
siders appropriate in order to achieve compliance with the 
applicable requirements and to remedy the effects of any 
noncompliance (such as ordering unlawful rates to be ad-
justed to lawful levels, ordering the cancellation of market 
tests, ordering the Postal Service to discontinue providing 
loss-making products, or requiring the Postal Service to 
make up for revenue shortfalls in competitive products). 
‘‘(d) SUSPENSION AUTHORITY.—The Postal Regu-
latory Commission may suspend implementation of rates 
or classifications under section 3632(b)(3) for a limited 
period of time pending expedited proceedings under this 
section. In evaluating whether circumstances warrant sus-
pension, the Commission shall consider factors such as (1) 
whether there is a substantial likelihood that such rate or 
classification will violate the requirements of chapter 1, 
4, or 6, or this chapter (or regulations promulgated under 
any of those chapters), (2) whether any persons would suf-
fer substantial injury, loss, or damage absent a suspen-
sion, (3) whether the Postal Service or any other persons 
would suffer substantial injury, loss, or damage under a 
suspension, and (4) the public interest. 
‘‘(e) AUTHORITY TO ORDER FINES IN CASES OF DE-
LIBERATE NONCOMPLIANCE.—In addition, in cases of de-
liberate noncompliance by the Postal Service with the re-
quirements of this title, the Postal Regulatory Commission 
may order, based on the nature, circumstances, extent, 
and seriousness of the noncompliance, a fine (in the 
amount specified by the Commission in its order) for each 
incidence of noncompliance. Fines resulting from the pro-
vision of competitive products shall be paid out of the 
Competitive Products Fund established in section 2011. 
All receipts from fines imposed under this subsection shall 
be deposited in the general fund of the Treasury of the 
United States. 
‘‘§ 3663. Appellate review 
‘‘A person adversely affected or aggrieved by a final 
order or decision of the Postal Regulatory Commission 
may, within 30 days after such order or decision becomes 
final, institute proceedings for review thereof by filing a 
petition in the United States Court of Appeals for the Dis-
trict of Columbia. The court shall review the order or deci-
sion in accordance with section 706 of title 5, and chapter 
158 and section 2112 of title 28, on the basis of the record 
before the Commission. For purposes of this section, the 
term ‘person’ includes the Postal Service. 
‘‘§ 3664. Enforcement of orders 
‘‘The several district courts have jurisdiction specifi-
cally to enforce, and to enjoin and restrain the Postal
Service from violating, any order issued by the Postal Reg-
ulatory Commission.’’.
SEC. 206. WORKSHARE DISCOUNTS. 
(a) IN GENERAL.—Title 39, United States Code, is 
amended by adding after section 3686 (as added by sec-
tion 406) the following:
‘‘§ 3687. Workshare discounts 
‘‘(a) IN GENERAL.—As part of the regulations estab-
lished under section 3622(a), the Postal Regulatory Com-
mission shall establish rules for workshare discounts that 
ensure that such discounts do not exceed the cost that the 
Postal Service avoids as the result of workshare activity, 
unless—
‘‘(1) the discount is—
‘‘(A) associated with a new postal service, 
a change to an existing postal service, or a new 
workshare initiative related to an existing postal 
service; and 
‘‘(B) necessary to induce mailer behavior 
that furthers the economically efficient oper-
ation of the Postal Service and the portion of 
the discount in excess of the cost that the Post-
al Service avoids as a result of the workshare 
activity will be phased out over a limited period 
of time;
‘‘(2) a reduction in the discount would—
‘‘(A) lead to a loss of volume in the af-
fected category or subclass of mail and reduce 
the aggregate contribution to the institutional 
costs of the Postal Service from the category or 
subclass subject to the discount below what it 
otherwise would have been if the discount had 
not been reduced to costs avoided; 
‘‘(B) result in a further increase in the 
rates paid by mailers not able to take advan-
tage of the discount; or 
‘‘(C) impede the efficient operation of the 
Postal Service; 
‘‘(3) the amount of the discount above costs 
avoided—
‘‘(A) is necessary to mitigate rate shock; 
and 
‘‘(B) will be phased out over time; or 
‘‘(4) the discount is provided in connection with 
subclasses of mail consisting exclusively of mail mat-
ter of educational, cultural, scientific, or informa-
tional value. 
‘‘(b) REPORT.—Whenever the Postal Service estab-
lishes or maintains a workshare discount, the Postal Serv-
ice shall, at the time it publishes the workshare discount
rate, submit to the Postal Regulatory Commission a de-
tailed report that—
‘‘(1) explains the Postal Service’s reasons for 
establishing or maintaining the rate; 
‘‘(2) sets forth the data, economic analyses, and 
other information relied on by the Postal Service to 
justify the rate; and 
‘‘(3) certifies that the discount will not ad-
versely affect rates or services provided to users of 
postal services who do not take advantage of the dis-
count rate. 
‘‘(c) DEFINITION.—For purposes of this section, the 
term ‘workshare discount’ refers to rate discounts pro-
vided to mailers for the presorting, prebarcoding, han-
dling, or transportation of mail, as further defined by the 
Postal Regulatory Commission under section 3622(a).’’. 
(b) CLERICAL AMENDMENT.—The analysis for chap-
ter 36 of title 39, United States Code (as amended by 
section 207) is amended by adding after the item relating 
to section 3686 the following:
‘‘3687. Workshare discounts.’’.
SEC. 207. CLERICAL AMENDMENT. 
Chapter 36 of title 39, United States Code, is amend-
ed by striking the heading and analysis for such chapter 
and inserting the following:
‘‘CHAPTER 36—POSTAL RATES, CLASSES 
AND SERVICES
‘‘SUBCHAPTER I—PROVISIONS RELATING TO MARKET-DOMINANT PRODUCTS 
‘‘Sec. 
‘‘3621. Applicability; definitions. 
‘‘3622. Modern rate regulation. 
‘‘3626. Reduced rates. 
‘‘3627. Adjusting free rates. 
‘‘3629. Reduced rates for voter registration purposes. 
‘‘SUBCHAPTER II—PROVISIONS RELATING TO COMPETITIVE PRODUCTS 
‘‘3631. Applicability; definitions and updates. 
‘‘3632. Action of the Governors. 
‘‘3633. Provisions applicable to rates for competitive products. 
‘‘3634. Assumed Federal income tax on competitive products. 
‘‘SUBCHAPTER III—PROVISIONS RELATING TO EXPERIMENTAL AND NEW 
PRODUCTS 
‘‘3641. Market tests of experimental products. 
‘‘3642. New products and transfers of products between the market-dominant 
and competitive categories of mail.
‘‘SUBCHAPTER IV—REPORTING REQUIREMENTS AND RELATED PROVISIONS 
‘‘3651. Annual reports by the Commission. 
‘‘3652. Annual reports to the Commission. 
‘‘3653. Annual determination of compliance. 
‘‘3654. Additional financial reporting. 
‘‘SUBCHAPTER V—POSTAL SERVICES, COMPLAINTS, AND JUDICIAL REVIEW 
‘‘3661. Postal services.
‘‘3662. Rate and service complaints. 
‘‘3663. Appellate review. 
‘‘3664. Enforcement of orders. 
‘‘SUBCHAPTER VI—GENERAL 
‘‘3681. Reimbursement. 
‘‘3682. Size and weight limits. 
‘‘3683. Uniform rates for books; films, other materials. 
‘‘3684. Limitations. 
‘‘3685. Filing of information relating to periodical publications. 
‘‘3686. Bonus authority.’’.
TITLE III—PROVISIONS RELAT-
ING TO FAIR COMPETITION 
SEC. 
301. 
POSTAL 
SERVICE 
COMPETITIVE 
PRODUCTS 
FUND. 
(a) PROVISIONS RELATING
TO POSTAL SERVICE 
COMPETITIVE PRODUCTS FUND
AND RELATED MAT-
TERS.—
(1) IN
GENERAL.—Chapter 20 of title 39, 
United States Code, is amended by adding at the 
end the following: 
‘‘§ 2011. Provisions relating to competitive products 
‘‘(a) There is established in the Treasury of the 
United States a revolving fund, to be called the Postal 
Service Competitive Products Fund, which shall be avail-
able to the Postal Service without fiscal year limitation 
for the payment of—
‘‘(1) costs attributable to competitive products; 
and 
‘‘(2) all other costs incurred by the Postal Serv-
ice, to the extent allocable to competitive products. 
For purposes of this subsection, the term ‘costs attrib-
utable’ has the meaning given such term by section 3631. 
‘‘(b) There shall be deposited in the Competitive 
Products Fund, subject to withdrawal by the Postal Serv-
ice—
‘‘(1) revenues from competitive products; 
‘‘(2) amounts received from obligations issued 
by the Postal Service under subsection (e); 
‘‘(3) interest and dividends earned on invest-
ments of the Competitive Products Fund; and 
‘‘(4) any other receipts of the Postal Service 
(including from the sale of assets), to the extent al-
locable to competitive products. 
‘‘(c) If the Postal Service determines that the moneys 
of the Competitive Products Fund are in excess of current 
needs, it may request the investment of such amounts as 
it deems advisable by the Secretary of the Treasury in ob-
ligations of, or obligations guaranteed by, the Government 
of the United States, and, with the approval of the Sec-
retary, in such other obligations or securities as it deems 
appropriate. 
‘‘(d) With the approval of the Secretary of the Treas-
ury, the Postal Service may deposit moneys of the Com-
petitive Products Fund in any Federal Reserve bank, any 
depository for public funds, or in such other places and 
in such manner as the Postal Service and the Secretary 
may mutually agree. 
‘‘(e)(1) Subject to the limitations specified in section 
2005(a), the Postal Service is authorized to borrow money 
and to issue and sell such obligations as it determines nec-
essary to provide for competitive products and deposit 
such amounts in the Competitive Products Fund. Any 
such borrowings by the Postal Service shall be supported 
and serviced by the revenues and receipts from competitive 
products and the assets related to the provision of com-
petitive products (as determined under subsection (h) or, 
for purposes of any period before accounting practices and 
principles under subsection (h) have been established and 
applied, the best information available from the Postal 
Service, including the audited statements required by sec-
tion 2008(e), but in either case subject to paragraph (5)). 
‘‘(2) The Postal Service may enter into binding cov-
enants with the holders of such obligations, and with the 
trustee, if any, under any agreement entered into in con-
nection with the issuance thereof with respect to—
‘‘(A) the establishment of reserve, sinking, and 
other funds; 
‘‘(B) application and use of revenues and re-
ceipts of the Competitive Products Fund; 
‘‘(C) stipulations concerning the subsequent 
issuance of obligations or the execution of leases or 
lease purchases relating to properties of the Postal 
Service; and
‘‘(D) such other matters as the Postal Service 
considers necessary or desirable to enhance the mar-
ketability of such obligations. 
‘‘(3) The obligations issued by the Postal Service 
under this section—
‘‘(A) shall be in such forms and denominations; 
‘‘(B) shall be sold at such times and in such 
amounts; 
‘‘(C) shall mature at such time or times; 
‘‘(D) shall be sold at such prices; 
‘‘(E) shall bear such rates of interest; 
‘‘(F) may be redeemable before maturity in 
such manner, at such times, and at such redemption 
premiums; 
‘‘(G) may be entitled to such relative priorities 
of claim on the assets of the Postal Service with re-
spect to principal and interest payments; and 
‘‘(H) shall be subject to such other terms and 
conditions; 
as the Postal Service determines. 
‘‘(4) Obligations issued by the Postal Service under 
this subsection—
‘‘(A) shall be negotiable or nonnegotiable and 
bearer or registered instruments, as specified therein 
and in any indenture or covenant relating thereto;
‘‘(B) shall contain a recital that they are issued 
under this section, and such recital shall be conclu-
sive evidence of the regularity of the issuance and 
sale of such obligations and of their validity; 
‘‘(C) shall be lawful investments and may be ac-
cepted as security for all fiduciary, trust, and public 
funds, the investment or deposit of which shall be 
under the authority or control of any officer or agen-
cy of the Government of the United States, and the 
Secretary of the Treasury or any other officer or 
agency having authority over or control of any such 
fiduciary, trust, or public funds, may at any time 
sell any of the obligations of the Postal Service ac-
quired under this section; 
‘‘(D) shall not be exempt either as to principal 
or interest from any taxation now or hereafter im-
posed by any State or local taxing authority; and 
‘‘(E) except as provided in section 2006(c) of 
this title, shall not be obligations of, nor shall pay-
ment of the principal thereof or interest thereon be 
guaranteed by, the Government of the United 
States, and the obligations shall so plainly state. 
‘‘(5) The Postal Service shall make payments of prin-
cipal, or interest, or both on obligations issued under this 
section out of revenues and receipts from competitive
products and assets related to the provision of competitive 
products (as determined under subsection (h) or, for pur-
poses of any period before accounting practices and prin-
ciples under subsection (h) have been established and ap-
plied, the best information available, including the audited 
statements required by section 2008(e)). For purposes of 
this subsection, the total assets of the Competitive Prod-
ucts Fund shall be the greater of—
‘‘(A) the assets related to the provision of com-
petitive products; or 
‘‘(B) the percentage of total Postal Service rev-
enues and receipts from competitive products times 
the total assets of the Postal Service. 
‘‘(f) The receipts and disbursements of the Competi-
tive Products Fund shall be accorded the same budgetary 
treatment as is accorded to receipts and disbursements of 
the Postal Service Fund under section 2009a. 
‘‘(g) A judgment against the Postal Service or the 
Government of the United States (or settlement of a 
claim) shall, to the extent that it arises out of activities 
of the Postal Service in the provision of competitive prod-
ucts, be paid out of the Competitive Products Fund. 
‘‘(h)(1) The Secretary of the Treasury, in consulta-
tion with the Postal Service and an independent, certified 
public accounting firm and such other advisors as the Sec-
retary considers appropriate, shall develop recommenda-
tions regarding—
‘‘(A) the accounting practices and principles 
that should be followed by the Postal Service with 
the objectives of (i) identifying and valuing the as-
sets and liabilities of the Postal Service associated 
with providing, and the capital and operating costs 
incurred by the Postal Service in providing, competi-
tive products, and (ii) subject to subsection (e)(5), 
preventing the subsidization of such products by 
market-dominant products; and 
‘‘(B) the substantive and procedural rules that 
should be followed in determining the Postal Serv-
ice’s assumed Federal income tax on competitive 
products income for any year (within the meaning of 
section 3634). 
Such recommendations shall be submitted to the Postal 
Regulatory Commission no earlier than 6 months, and no 
later than 12 months, after the effective date of this sec-
tion. 
‘‘(2)(A) Upon receiving the recommendations of the 
Secretary of the Treasury under paragraph (1), the Com-
mission shall give interested parties, including the Postal 
Service, users of the mails, and an officer of the Commis-
sion who shall be required to represent the interests of