109TH CONGRESS 
2D SESSION 
H. R. 6407
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. 
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
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
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
(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
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
‘‘(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.
‘‘(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
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
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.
‘‘(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;
‘‘(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