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). Any test that solely affects products cur-
rently classified as competitive, or which provides 
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services ancillary to only competitive products, shall 
be presumed to be in the competitive product cat-
egory without regard to whether a similar ancillary 
product exists for market-dominant products. 
‘‘(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-
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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 only be 
tested under this section if the total revenues that 
are anticipated, or in fact received, by the Postal 
Service 
from 
such 
product 
do 
not 
exceed 
$10,000,000 in any year, subject to paragraph (2) 
and subsection (g). In carrying out the preceding 
sentence, the Postal Regulatory Commission may 
limit the amount of revenues the Postal Service may 
obtain from any particular geographic market as 
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necessary to prevent market disruption (as defined 
under 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 1 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 
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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). 
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‘‘§ 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 a significant level of business to other firms 
offering similar products. The competitive category 
of products shall consist 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 
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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 
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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 under 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. 
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‘‘(e) PROHIBITION.—Except as provided in section 
3641, no product that involves the physical delivery of let-
ters, printed matter, or packages may be offered by the 
Postal Service unless it has been assigned to the market- 
dominant or competitive category of mail (as appropriate) 
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— 
(1) by striking the heading for subchapter IV 
and inserting the following: 
‘‘SUBCHAPTER V—POSTAL SERVICES, 
COMPLAINTS, AND JUDICIAL REVIEW’’; and 
(2) by striking the heading for subchapter V 
and inserting the following: 
‘‘SUBCHAPTER VI—GENERAL’’. 
(b) REPORTS AND COMPLIANCE.—Chapter 36 of title 
39, United States Code, is amended by inserting after sub-
chapter III the following: 
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‘‘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.— 
‘‘(1) IN GENERAL.—In addition to the informa-
tion 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— 
‘‘(A) postal services to areas of the Nation 
where, in the judgment of the Postal Regu-
latory Commission, the Postal Service either 
would not provide services at all or would not 
provide such services in accordance with the re-
quirements of this title if the Postal Service 
were not required to provide prompt, reliable, 
and efficient services to patrons in all areas and 
all communities, including as required under 
the first sentence of section 101(b); 
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‘‘(B) free or reduced rates for postal serv-
ices as required by this title; and 
‘‘(C) other public services or activities 
which, in the judgment of the Postal Regulatory 
Commission, would not otherwise have been 
provided by the Postal Service but for the re-
quirements of law. 
‘‘(2) BASIS FOR ESTIMATES.—The Commission 
shall detail the basis for its estimates and the statu-
tory 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, RATES, AND SERVICE.—Ex-
cept 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 
(together with such nonpublic annex to the report as the 
Commission may require under subsection (e))— 
‘‘(1) which shall analyze costs, revenues, rates, 
and quality of service, using such methodologies as 
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