II 
109TH CONGRESS 
2D SESSION 
H. R. 6407 
IN THE SENATE OF THE UNITED STATES 
DECEMBER 8, 2006 
Received 
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, 
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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. 
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. Clerical amendment. 
TITLE III—MODERN SERVICE STANDARDS 
Sec. 301. Establishment of modern service standards. 
Sec. 302. Postal service plan. 
TITLE IV—PROVISIONS RELATING TO FAIR COMPETITION 
Sec. 401. Postal Service Competitive Products Fund. 
Sec. 402. Assumed Federal income tax on competitive products income. 
Sec. 403. Unfair competition prohibited. 
Sec. 404. Suits by and against the Postal Service. 
Sec. 405. International postal arrangements. 
TITLE V—GENERAL PROVISIONS 
Sec. 501. Qualification and term requirements for Governors. 
Sec. 502. Obligations. 
Sec. 503. Private carriage of letters. 
Sec. 504. Rulemaking authority. 
Sec. 505. Noninterference with collective bargaining agreements. 
Sec. 506. Bonus authority. 
TITLE VI—ENHANCED REGULATORY COMMISSION 
Sec. 601. Reorganization and modification of certain provisions relating to the 
Postal Regulatory Commission. 
Sec. 602. Authority for Postal Regulatory Commission to issue subpoenas. 
Sec. 603. Authorization of appropriations from the Postal Service Fund. 
Sec. 604. Redesignation of the Postal Rate Commission. 
Sec. 605. Inspector General of the Postal Regulatory Commission. 
TITLE VII—EVALUATIONS 
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Sec. 701. Assessments of ratemaking, classification, and other provisions. 
Sec. 702. Report on universal postal service and the postal monopoly. 
Sec. 703. Study on equal application of laws to competitive products. 
Sec. 704. Report on postal workplace safety and workplace-related injuries. 
Sec. 705. Study on recycled paper. 
Sec. 706. Greater diversity in Postal Service executive and administrative 
schedule management positions. 
Sec. 707. Contracts with women, minorities, and small businesses. 
Sec. 708. Rates for periodicals. 
Sec. 709. Assessment of certain rate deficiencies. 
Sec. 710. Assessment of future business model of the Postal Service. 
Sec. 711. Provisions relating to cooperative mailings. 
Sec. 712. Definition. 
TITLE VIII—POSTAL SERVICE RETIREMENT AND HEALTH 
BENEFITS FUNDING 
Sec. 801. Short title. 
Sec. 802. Civil Service Retirement System. 
Sec. 803. Health insurance. 
Sec. 804. Repeal of disposition of savings provision. 
Sec. 805. Effective dates. 
TITLE IX—COMPENSATION FOR WORK INJURIES 
Sec. 901. Temporary disability; continuation of pay. 
TITLE X—MISCELLANEOUS 
Sec. 1001. Employment of postal police officers. 
Sec. 1002. Obsolete provisions. 
Sec. 1003. Reduced rates. 
Sec. 1004. Sense of Congress regarding Postal Service purchasing reform. 
Sec. 1005. Contracts for transportation of mail by air. 
Sec. 1006. Date of postmark to be treated as date of appeal in connection with 
the closing or consolidation of post offices. 
Sec. 1007. 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. 1008. Hazardous matter. 
Sec. 1009. ZIP codes and retail hours. 
Sec. 1010. Technical and conforming amendments. 
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 
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inserting a semicolon, and by adding at the end the fol-
lowing: 
‘‘(5) ‘postal service’ refers to the delivery of let-
ters, printed matter, or mailable packages, including 
acceptance, collection, sorting, transportation, or 
other functions 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; and 
‘‘(9) ‘competitive product’ or ‘product in the 
competitive category of mail’ means a product sub-
ject to subchapter II of chapter 36; and 
‘‘(10) ‘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 
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(2) by adding at the end the following: 
‘‘(c)(1) In this subsection, the term ‘‘nonpostal serv-
ice’’ means any service that is not a postal service defined 
under section 102(5). 
‘‘(2) Nothing in this section shall be considered to 
permit or require that the Postal Service provide any non-
postal service, except that the Postal Service may provide 
nonpostal services which were offered as of January 1, 
2006, as provided under this subsection. 
‘‘(3) Not later than 2 years after the date of enact-
ment of the Postal Accountability and Enhancement Act, 
the Postal Regulatory Commission shall review each non-
postal service offered by the Postal Service on the date 
of enactment of that Act and determine whether that non-
postal service shall continue, taking into account— 
‘‘(A) the public need for the service; and 
‘‘(B) the ability of the private sector to meet 
the public need for the service. 
‘‘(4) Any nonpostal service not determined to be con-
tinued by the Postal Regulatory Commission under para-
graph (3) shall terminate. 
‘‘(5) If the Postal Regulatory Commission authorizes 
the Postal Service to continue a nonpostal service under 
this subsection, the Postal Regulatory Commission shall 
designate whether the service shall be regulated under this 
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title as a market dominant product, a competitive product, 
or an experimental product.’’. 
(b) 
CONFORMING
AMENDMENTS.—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)’’. 
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) first-class mail letters and sealed parcels; 
‘‘(2) first-class mail cards; 
‘‘(3) periodicals; 
‘‘(4) standard mail; 
‘‘(5) single-piece parcel post; 
‘‘(6) media mail; 
‘‘(7) bound printed matter; 
‘‘(8) library mail; 
‘‘(9) special services; and 
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‘‘(10) single-piece international mail, 
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 18 months after the date 
of enactment of this section, by regulation establish (and 
may from time to time thereafter by regulation revise) a 
modern system for regulating rates and classes for mar-
ket-dominant products. 
‘‘(b) OBJECTIVES.—Such system shall be designed to 
achieve the following objectives, each of which shall be ap-
plied in conjunction with the others: 
‘‘(1) To maximize incentives to reduce costs 
and increase efficiency. 
‘‘(2) To create predictability and stability in 
rates. 
‘‘(3) To maintain high quality service standards 
established under section 3691. 
‘‘(4) To allow the Postal Service pricing flexi-
bility. 
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‘‘(5) To assure adequate revenues, including re-
tained earnings, to maintain financial stability. 
‘‘(6) To reduce the administrative burden and 
increase the transparency of the ratemaking process. 
‘‘(7) To enhance mail security and deter ter-
rorism. 
‘‘(8) To establish and maintain a just and rea-
sonable schedule for rates and classifications, how-
ever the objective under this paragraph shall not be 
construed to prohibit the Postal Service from mak-
ing changes of unequal magnitude within, between, 
or among classes of mail. 
‘‘(9) To allocate the total institutional costs of 
the Postal Service appropriately between market- 
dominant and competitive products. 
‘‘(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 requirement that each class of mail or 
type of mail service bear the direct and indirect 
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postal costs attributable to each class or type of mail 
service through reliably identified causal relation-
ships plus that portion of all other costs of the Post-
al Service reasonably 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 importance of pricing flexibility to en-
courage increased mail volume and operational effi-
ciency; 
‘‘(8) the relative value to the people of the 
kinds of mail matter entered into the postal system 
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and the desirability and justification for special clas-
sifications and services of mail; 
‘‘(9) 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; 
‘‘(10) the desirability of special classifications 
for both postal users and the Postal Service in ac-
cordance with the policies of this title, including 
agreements between the Postal Service and postal 
users, when available on public and reasonable terms 
to similarly situated mailers, that— 
‘‘(A) either— 
‘‘(i) improve the net financial position 
of the Postal Service through reducing 
Postal Service costs or increasing the over-
all contribution to the institutional costs of 
the Postal Service; or 
‘‘(ii) enhance the performance of mail 
preparation, processing, transportation, or 
other functions; and 
‘‘(B) do not cause unreasonable harm to 
the marketplace. 
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‘‘(11) the educational, cultural, scientific, and 
informational value to the recipient of mail matter; 
‘‘(12) the need for the Postal Service to in-
crease its efficiency and reduce its costs, including 
infrastructure costs, to help maintain high quality, 
affordable postal services; 
(13) the value to the Postal Service and postal 
users of promoting intelligent mail and of secure, 
sender-identified mail; and 
‘‘(14) the policies of this title as well as such 
other factors as the Commission determines appro-
priate. 
‘‘(d) REQUIREMENTS.— 
‘‘(1) IN GENERAL.—The system for regulating 
rates and classes for market-dominant products 
shall— 
‘‘(A) include an annual limitation on the 
percentage changes in rates to be set by the 
Postal Regulatory Commission that will be 
equal to the change in the Consumer Price 
Index for All Urban Consumers unadjusted for 
seasonal variation over the most recent avail-
able 12-month period preceding the date the 
Postal Service files notice of its intention to in-
crease rates; 
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‘‘(B) establish a schedule whereby rates, 
when necessary and appropriate, would change 
at regular intervals by predictable amounts; 
‘‘(C) not later than 45 days before the im-
plementation of any adjustment in rates under 
this section, including adjustments made under 
subsection (c)(10)— 
‘‘(i) require the Postal Service to pro-
vide public notice of the adjustment; 
‘‘(ii) provide an opportunity for review 
by the Postal Regulatory Commission; 
‘‘(iii) provide for the Postal Regu-
latory Commission to notify the Postal 
Service of any noncompliance of the ad-
justment with the limitation under sub-
paragraph (A); and 
‘‘(iv) require the Postal Service to re-
spond to the notice provided under clause 
(iii) and describe the actions to be taken to 
comply with the limitation under subpara-
graph (A); 
‘‘(D) establish procedures whereby the 
Postal Service may adjust rates not in excess of 
the annual limitations under subparagraph (A); 
and 
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‘‘(E) notwithstanding any limitation set 
under subparagraphs (A) and (C), and provided 
there is not sufficient unused rate authority 
under paragraph (2)(C), establish procedures 
whereby rates may be adjusted on an expedited 
basis due to either extraordinary or exceptional 
circumstances, provided that the Commission 
determines, after notice and opportunity for a 
public hearing and comment, and within 90 
days after any request by the Postal Service, 
that such adjustment is reasonable and equi-
table and necessary to enable the Postal Serv-
ice, under best practices of honest, efficient, 
and economical management, to maintain and 
continue the development of postal services of 
the kind and quality adapted to the needs of 
the United States. 
‘‘(2) LIMITATIONS.— 
‘‘(A) CLASSES OF MAIL.—Except as pro-
vided under subparagraph (C), the annual limi-
tations under paragraph (1)(A) shall apply to a 
class of mail, as defined in the Domestic Mail 
Classification Schedule as in effect on the date 
of enactment of the Postal Accountability and 
Enhancement Act. 
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‘‘(B) ROUNDING OF RATES AND FEES.— 
Nothing in this subsection shall preclude the 
Postal Service from rounding rates and fees to 
the nearest whole integer, if the effect of such 
rounding does not cause the overall rate in-
crease for any class to exceed the Consumer 
Price Index for All Urban Consumers. 
‘‘(C) USE OF UNUSED RATE AUTHORITY.— 
‘‘(i) DEFINITION.—In this subpara-
graph, the term ‘unused rate adjustment 
authority’ means the difference between— 
‘‘(I) the maximum amount of a 
rate adjustment that the Postal Serv-
ice is authorized to make in any year 
subject to the annual limitation under 
paragraph (1); and 
‘‘(II) the amount of the rate ad-
justment the Postal Service actually 
makes in that year. 
‘‘(ii) AUTHORITY.—Subject to clause 
(iii), the Postal Service may use any un-
used rate adjustment authority for any of 
the 5 years following the year such author-
ity occurred. 
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‘‘(iii) LIMITATIONS.—In exercising the 
authority under clause (ii) in any year, the 
Postal Service— 
‘‘(I) may use unused rate adjust-
ment authority from more than 1 
year; 
‘‘(II) may use any part of the un-
used rate adjustment authority from 
any year; 
‘‘(III) shall use the unused rate 
adjustment authority from the earliest 
year such authority first occurred and 
then each following year; and 
‘‘(IV) for any class or service, 
may not exceed the annual limitation 
under paragraph (1) by more than 2 
percentage points. 
‘‘(3) REVIEW.—Ten years after the date of en-
actment of the Postal Accountability and Enhance-
ment Act and as appropriate thereafter, the Com-
mission shall review the system for regulating rates 
and classes for market-dominant products estab-
lished under this section to determine if the system 
is achieving the objectives in subsection (b), taking 
into account the factors in subsection (c). If the 
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Commission determines, after notice and opportunity 
for public comment, that the system is not achieving 
the objectives in subsection (b), taking into account 
the factors in subsection (c), the Commission may, 
by regulation, make such modification or adopt such 
alternative system for regulating rates and classes 
for market-dominant products as necessary to 
achieve the objectives. 
‘‘(e) WORKSHARE DISCOUNTS.— 
‘‘(1) DEFINITION.—In this subsection, the term 
‘workshare discount’ refers to rate discounts pro-
vided to mailers for the presorting, prebarcoding, 
handling, or transportation of mail, as further de-
fined by the Postal Regulatory Commission under 
subsection (a). 
‘‘(2) SCOPE.—The Postal Regulatory Commis-
sion shall ensure that such discounts do not exceed 
the cost that the Postal Service avoids as a result 
of workshare activity, unless— 
‘‘(A) the discount is— 
‘‘(i) associated with a new postal serv-
ice, a change to an existing postal service, 
or with a new work share initiative related 
to an existing postal service; and 
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‘‘(ii) necessary to induce mailer behav-
ior that furthers the economically efficient 
operation of the Postal Service and the 
portion of the discount in excess of the 
cost that the Postal Service avoids as a re-
sult of the workshare activity will be 
phased out over a limited period of time; 
‘‘(B) the amount of the discount above 
costs avoided— 
‘‘(i) is necessary to mitigate rate 
shock; and 
‘‘(ii) will be phased out over time; 
‘‘(C) the discount is provided in connection 
with subclasses of mail consisting exclusively of 
mail matter of educational, cultural, scientific, 
or informational value; or 
‘‘(D) reduction or elimination of the dis-
count would impede the efficient operation of 
the Postal Service. 
‘‘(3) LIMITATION.—Nothing in this subsection 
shall require that a work share discount be reduced 
or eliminated if the reduction or elimination of the 
discount would— 
‘‘(A) lead to a loss of volume in the af-
fected category or subclass of mail and reduce 
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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 or eliminated; or 
‘‘(B) result in a further increase in the 
rates paid by mailers not able to take advan-
tage of the discount. 
‘‘(4) REPORT.—Whenever the Postal Service es-
tablishes a workshare discount rate, the Postal Serv-
ice shall, at the time it publishes the workshare dis-
count rate, submit to the Postal Regulatory Com-
mission a detailed report that— 
‘‘(A) explains the Postal Service’s rea-
sons for establishing the rate; 
‘‘(B) sets forth the data, economic 
analyses, and other information relied on 
by the Postal Service to justify the rate; 
and 
‘‘(C) certifies that the discount will 
not adversely affect rates or services pro-
vided to users of postal services who do not 
take advantage of the discount rate. 
‘‘(f) TRANSITION RULE.—For the 1-year period be-
ginning on the date of enactment of this section, rates and 
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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 enactment of this section. Pro-
ceedings initiated to consider a request for a recommended 
decision filed by the Postal Service during that 1-year pe-
riod shall be completed in accordance with subchapter II 
of chapter 36 of this title and implementing regulations, 
as in effect before the date of 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 601, but before the amendment made by section 
202) is amended by striking the heading for subchapter 
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: 
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‘‘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) bulk parcel post; 
‘‘(4) bulk international mail; and 
‘‘(5) mailgrams; 
subject to subsection (d) and any changes the Postal Reg-
ulatory 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 through reliably identified causal 
relationships. 
‘‘(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, with the concurrence of a majority 
of all of the Governors then holding office, shall establish 
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rates and classes for products in the competitive category 
of mail in accordance with the requirements of this sub-
chapter 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-
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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 enactment of this section. 
‘‘§ 3633. Provisions applicable to rates for competitive 
products 
‘‘(a) IN GENERAL.—The Postal Regulatory Commis-
sion shall, within 18 months after the date of enactment 
of this section, promulgate (and may from time to time 
thereafter revise) regulations to— 
‘‘(1) prohibit the subsidization of competitive 
products by market-dominant products; 
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‘‘(2) ensure that each competitive product cov-
ers its costs attributable; and 
‘‘(3) ensure that all competitive products collec-
tively cover what the Commission determines to be 
an appropriate share of the institutional costs of the 
Postal Service. 
‘‘(b) REVIEW
OF MINIMUM CONTRIBUTION.—Five 
years after the date of enactment of this section, and every 
5 years thereafter, the Postal Regulatory Commission 
shall conduct a review to determine whether the institu-
tional costs contribution requirement under subsection 
(a)(3) should be retained in its current form, modified, 
or eliminated. In making its determination, the Commis-
sion shall consider all relevant circumstances, including 
the prevailing competitive conditions in the market, and 
the degree to which any costs are uniquely or dispropor-
tionately associated with any competitive products.’’. 
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.— 
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‘‘(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-
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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 
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 
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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 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 
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$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 
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 
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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 
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 
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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 a significant level of business to other firms 
offering similar products. The competitive category 
of products shall consist of all other products. 
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‘‘(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 
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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 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 
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any previous lists (including the lists under sections 
3621 and 3631) are superseded, and shall be pub-
lished in the Federal Register. 
‘‘(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: 
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‘‘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: 
‘‘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 
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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); 
‘‘(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 
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(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 
the Commission shall by regulation prescribe, and in 
sufficient detail to demonstrate that all products 
during such year complied with all applicable re-
quirements of this title; and 
‘‘(2) which shall, for each market-dominant 
product provided in such year, provide— 
‘‘(A) product 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 level of service (described in 
terms of speed of delivery and reliability) 
provided; and 
‘‘(ii) the degree of customer satisfac-
tion with the service provided. 
The Inspector General shall regularly audit the data 
collection systems and procedures utilized in col-
lecting information and preparing such report (in-
cluding any annex thereto and the information re-
quired under subsection (b)). The results of any 
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such audit shall be submitted to the Postal Service 
and the Postal Regulatory Commission. 
‘‘(b) INFORMATION RELATING TO WORKSHARE DIS-
COUNTS.—The Postal Service shall include, in each report 
under subsection (a), the following information with re-
spect to each market-dominant product for which a 
workshare discount was in effect during the period covered 
by such report: 
‘‘(1) The per-item cost avoided by the Postal 
Service by virtue of such discount. 
‘‘(2) The percentage of such per-item cost 
avoided that the per-item workshare discount rep-
resents. 
‘‘(3) The per-item contribution made to institu-
tional costs. 
‘‘(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 shall— 
‘‘(1) report data on the costs, revenues, and 
quality of service by market test, which may be re-
ported in summary form; and 
‘‘(2) report such data as the Postal Regulatory 
Commission requires. 
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‘‘(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 to the 
report) to be provided by the Postal Service under 
this section. In carrying out this subsection, the 
Commission shall give due consideration to— 
‘‘(A) providing the public with timely, ade-
quate information 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 
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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) such 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 under subsection (d) contains information 
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 writing, and de-
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scribe with particularity the documents (or portions 
of documents) or other matter for which confiden-
tiality 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 the Postal Service is re-
quired to make under this section in a year, copies of its 
then most recent— 
‘‘(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 
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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); or 
‘‘(2) whether any service standards in effect 
during such year were not met. 
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) NONCOMPLIANCE WITH REGARD TO RATES OR 
SERVICES.—If, for a year, a timely written determination 
of noncompliance is made under subsection (b), the Postal 
Regulatory Commission shall take appropriate action in 
accordance with subsections (c) and (e) of section 3662 
(as if a complaint averring such noncompliance had been 
duly filed and found under such section to be justified). 
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‘‘(d) REVIEW OF PERFORMANCE GOALS.—The Postal 
Regulatory Commission shall also evaluate annually 
whether the Postal Service has met the goals established 
under sections 2803 and 2804, and may provide rec-
ommendations to the Postal Service related to the protec-
tion or promotion of public policy objectives set out in this 
title. 
‘‘(e) 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 
under paragraphs (1) and (2) 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 40 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-
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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 
Commission, 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 
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(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 2010. 
‘‘(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 obliga-
tions; 
‘‘(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; 
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‘‘(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) The Office of Personnel Management shall 
provide the data listed under paragraph (1) to the 
Postal Service not later than 30 days after the end 
of each fiscal year. 
‘‘(3)(A) Beginning with reports for the fiscal 
year 2010, 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 
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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 
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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.—Any interested person (including 
an officer of the Postal Regulatory Commission rep-
resenting the interests of the general public) who believes 
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the Postal Service is not operating in conformance with 
the requirements of the provisions of sections 101(d), 
401(2), 403(c), 404a, or 601, or this chapter (or regula-
tions promulgated under any of those provisions) may 
lodge a complaint with the Postal Regulatory Commission 
in such form and manner as the Commission may pre-
scribe. 
‘‘(b) PROMPT RESPONSE REQUIRED.— 
‘‘(1) IN
GENERAL.—The Postal Regulatory 
Commission shall, within 90 days after receiving a 
complaint under subsection (a)— 
‘‘(A) either— 
‘‘(i) upon a finding that such com-
plaint raises material issues of fact or law, 
begin proceedings on such complaint; or 
‘‘(ii) issue an order dismissing the 
complaint; and 
‘‘(B) with respect to any action taken 
under subparagraph (A) (i) or (ii), issue a writ-
ten statement setting forth the bases of its de-
termination. 
‘‘(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 
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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) 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 from the Com-
petitive Products Fund established in section 2011. All re-
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ceipts 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, including the Postal Service, adversely af-
fected or aggrieved by a final order or decision of the Post-
al 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 District of Columbia. The court 
shall review the order or decision in accordance with sec-
tion 706 of title 5, and chapter 158 and section 2112 of 
title 28, on the basis of the record before the Commission. 
‘‘§ 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. 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. 
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‘‘[3623. Repealed.] 
‘‘[3624. Repealed.] 
‘‘[3625. Repealed.] 
‘‘3626. Reduced Rates. 
‘‘3627. Adjusting free rates. 
‘‘[3628. Repealed.] 
‘‘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. 
‘‘SUBCHAPTER VII—MODERN SERVICE STANDARDS 
‘‘3691. Establishment of modern service standards.’’. 
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TITLE III—MODERN SERVICE 
STANDARDS 
SEC. 301. ESTABLISHMENT OF MODERN SERVICE STAND-
ARDS. 
Chapter 36 of title 39, United States Code, as 
amended by this Act, is further amended by adding at the 
end the following: 
‘‘SUBCHAPTER VII—MODERN SERVICE 
STANDARDS 
‘‘§ 3691. Establishment of modern service standards 
‘‘(a) AUTHORITY GENERALLY.—Not later than 12 
months after the date of enactment of this section, the 
Postal Service shall, in consultation with the Postal Regu-
latory Commission, by regulation establish (and may from 
time to time thereafter by regulation revise) a set of serv-
ice standards for market-dominant products. 
‘‘(b) OBJECTIVES.— 
‘‘(1) IN GENERAL.—Such standards shall be de-
signed to achieve the following objectives: 
‘‘(A) To enhance the value of postal serv-
ices to both senders and recipients. 
‘‘(B) To preserve regular and effective ac-
cess to postal services in all communities, in-
cluding those in rural areas or where post of-
fices are not self-sustaining. 
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‘‘(C) To reasonably assure Postal Service 
customers delivery reliability, speed and fre-
quency consistent with reasonable rates and 
best business practices. 
‘‘(D) To provide a system of objective ex-
ternal performance measurements for each mar-
ket-dominant product as a basis for measure-
ment of Postal Service performance. 
‘‘(2) 
IMPLEMENTATION
OF
PERFORMANCE 
MEASUREMENTS.—With 
respect 
to 
paragraph 
(1)(D), with the approval of the Postal Regulatory 
Commission an internal measurement system may be 
implemented instead of an external measurement 
system. 
‘‘(c) FACTORS.—In establishing or revising such 
standards, the Postal Service shall take into account— 
‘‘(1) the actual level of service that Postal Serv-
ice customers receive under any service guidelines 
previously established by the Postal Service or serv-
ice standards established under this section; 
‘‘(2) the degree of customer satisfaction with 
Postal Service performance in the acceptance, proc-
essing and delivery of mail; 
‘‘(3) the needs of Postal Service customers, in-
cluding those with physical impairments; 
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‘‘(4) mail volume and revenues projected for fu-
ture years; 
‘‘(5) the projected growth in the number of ad-
dresses the Postal Service will be required to serve 
in future years; 
‘‘(6) the current and projected future cost of 
serving Postal Service customers; 
‘‘(7) the effect of changes in technology, demo-
graphics, and population distribution on the efficient 
and reliable operation of the postal delivery system; 
and 
‘‘(8) the policies of this title and such other fac-
tors as the Postal Service determines appropriate. 
‘‘(d) REVIEW.—The regulations promulgated pursu-
ant to this section (and any revisions thereto), and any 
violations thereof, shall be subject to review upon com-
plaint under sections 3662 and 3663.’’. 
SEC. 302. POSTAL SERVICE PLAN. 
(a) IN GENERAL.—Within 6 months after the estab-
lishment of the service standards under section 3691 of 
title 39, United States Code, as added by this Act, the 
Postal Service shall, in consultation with the Postal Regu-
latory Commission, develop and submit to Congress a plan 
for meeting those standards. 
(b) CONTENTS.—The plan under this section shall— 
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