39 U.S.C. § 3641 — Market tests of experimental products

Page 110 TITLE 39—POSTAL SERVICE § 3633 § 3633. Provisions applicable to rates for competi- tive products (a) IN GENERAL.—The Postal Regulatory Com- mission 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; (2) ensure that each competitive product covers its costs attributable; and (3) ensure that all competitive products col- lectively cover what the Commission deter- mines to be an appropriate share of the insti- tutional costs of the Postal Service. (b) REVIEW OF MINIMUM CONTRIBUTION.—Five years after the date of enactment of this sec- tion, and every 5 years thereafter, the Postal Regulatory Commission shall conduct a review to determine whether the institutional costs contribution requirement under subsection (a)(3) should be retained in its current form, modified, or eliminated. In making its determination, the Commission shall consider all relevant cir- cumstances, including the prevailing competi- tive conditions in the market, and the degree to which any costs are uniquely or disproportion- ately associated with any competitive products. (Added Pub. L. 109–435, title II, § 202, Dec. 20, 2006, 120 Stat. 3206.) Editorial Notes REFERENCES IN TEXT The date of enactment of this section, referred to in text, is the date of enactment of Pub. L. 109–435, which was approved Dec. 20, 2006. Statutory Notes and Related Subsidiaries REVIEW OF POSTAL SERVICE COST ATTRIBUTION GUIDELINES Pub. L. 117–108, title II, § 203, Apr. 6, 2022, 136 Stat. 1147, provided that: ‘‘Not later than the date that is one year after the date of the enactment of this Act [Apr. 6, 2022], the Postal Regulatory Commission shall ini- tiate a review of the regulations issued pursuant to sec- tions 3633(a) and 3652(a)(1) of title 39, United States Code, to determine whether revisions are appropriate to ensure that all direct and indirect costs attributable to competitive and market-dominant products are properly attributed to those products, including by considering the underlying methodologies in deter- mining cost attribution and considering options to re- vise such methodologies. If the Commission deter- mines, after notice and opportunity for public com- ment, that revisions are appropriate, the Commission shall make modifications or adopt alternative meth- odologies as necessary.’’ [For definitions of terms used in section 203 of Pub. L. 117–108, set out above, see section 2 of Pub. L. 117–108, set out as a note under section 501 of this title.] STUDY ON EQUAL APPLICATION OF LAWS TO COMPETITIVE PRODUCTS Pub. L. 109–435, title VII, § 703, Dec. 20, 2006, 120 Stat. 3244, required the Federal Trade Commission to prepare and submit to the President and Congress, and to the Postal Regulatory Commission, within 1 year after Dec. 20, 2006, a comprehensive report identifying Fed- eral and State laws that applied differently to the United States Postal Service with respect to the com- petitive category of mail (within the meaning of sec- tion 102 of this title) and to private companies pro- viding similar products. § 3634. Assumed Federal income tax on competi- tive products income (a) DEFINITIONS.—For purposes of this sec- tion— (1) the term ‘‘assumed Federal income tax on competitive products income’’ means the net income tax that would be imposed by chapter 1 of the Internal Revenue Code of 1986 on the Postal Service’s assumed taxable in- come from competitive products for the year; and (2) the term ‘‘assumed taxable income from competitive products’’, with respect to a year, refers to the amount representing what would be the taxable income of a corporation under the Internal Revenue Code of 1986 for the year, if— (A) the only activities of such corporation were the activities of the Postal Service al- locable under section 2011(h) to competitive products; and (B) the only assets held by such corpora- tion were the assets of the Postal Service al- locable under section 2011(h) to such activi- ties. (b) COMPUTATION AND TRANSFER REQUIRE- MENTS.—The Postal Service shall, for each year beginning with the year in which occurs the deadline for the Postal Service’s first report to the Postal Regulatory Commission under sec- tion 3652(a)— (1) compute its assumed Federal income tax on competitive products income for such year; and (2) transfer from the Competitive Products Fund to the Postal Service Fund the amount of that assumed tax. (c) DEADLINE FOR TRANSFERS.—Any transfer required to be made under this section for a year shall be due on or before the January 15th next occurring after the close of such year. (Added Pub. L. 109–435, title IV, § 402, Dec. 20, 2006, 120 Stat. 3226.) Editorial Notes REFERENCES IN TEXT The Internal Revenue Code of 1986, referred to in sub- sec. (a), is classified to Title 26, Internal Revenue Code. SUBCHAPTER III—PROVISIONS RELATING TO EXPERIMENTAL AND NEW PRODUCTS Editorial Notes AMENDMENTS 2006—Pub. L. 109–435, title II, § 203, Dec. 20, 2006, 120 Stat. 3207, substituted ‘‘PROVISIONS RELATING TO EXPERIMENTAL AND NEW PRODUCTS’’ for ‘‘TEM- PORARY RATES AND CLASSES’’ in subchapter head- ing. § 3641. Market tests of experimental products (a) AUTHORITY.— (1) IN GENERAL.—The Postal Service may conduct market tests of experimental prod- ucts in accordance with this section. Page 111 TITLE 39—POSTAL SERVICE § 3641 1 So in original. Probably should be section ‘‘3633(a)(3)’’. (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 cre- ate an unfair or otherwise inappropriate com- petitive advantage for the Postal Service or any mailer, particularly in regard to small business concerns (as defined 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 section 3642(b)(1). Costs and rev- enues attributable to a product identified as competitive shall be included in any deter- mination under section 3633(3) 1 (relating to provisions applicable to competitive products collectively). Any test that solely affects prod- ucts currently classified as competitive, or which provides services ancillary to only com- petitive products, shall be presumed to be in the competitive product category without re- gard 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 Regu- latory Commission and publish in the Federal Register a notice— (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 in- formation required to be filed under paragraph (1) to the same extent and in the same manner as in the case of any matter described in sec- tion 504(g)(1). Nothing in paragraph (1) shall be considered to permit or require the publica- tion of any information as to which confiden- tial treatment is accorded under the preceding 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 pe- riod of not to exceed 24 months. (2) EXTENSION AUTHORITY.—If necessary in order to determine the feasibility or desir- ability of a product being tested under this section, the Postal Regulatory Commission may, upon written application 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 test- ed under this section if the total revenues that are anticipated, or in fact received, by the Postal Service from such product do not ex- ceed $10,000,000 in any year, subject to para- graph (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 par- ticular geographic market as necessary to pre- vent market disruption (as defined under sub- section (b)(2)). (2) EXEMPTION AUTHORITY.—The Postal Regu- latory 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 re- ceived, by the Postal Service from such prod- uct do not exceed $50,000,000 in any year, sub- ject to subsection (g). In reviewing an applica- tion under this paragraph, the Postal Regu- latory Commission shall approve such applica- tion 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 competi- tion. (f) CANCELLATION.—If the Postal Regulatory Commission at any time determines that a mar- ket 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 de- termination under this subsection shall be made in accordance with such procedures as the Com- mission shall by regulation prescribe. (g) ADJUSTMENT FOR INFLATION.—For purposes of each year following the year in which occurs the deadline for the Postal Service’s first report to the Postal Regulatory Commission under sec- tion 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 busi- ness concerns or otherwise categorizing business concerns as small business concerns shall, for purposes of this section, be established by the Postal Regulatory Commission in conformance 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 begin- ning with the first year in which occurs the deadline for the Postal Service’s first report to the Postal Regulatory Commission under sec- tion 3652(a). Page 112 TITLE 39—POSTAL SERVICE § 3642 (Pub. L. 91–375, Aug. 12, 1970, 84 Stat. 763; Pub. L. 94–421, § 6(a), Sept. 24, 1976, 90 Stat. 1306; Pub. L. 109–435, title II, § 203, Dec. 20, 2006, 120 Stat. 3207.) Editorial Notes REFERENCES IN TEXT Section 3 of the Small Business Act, referred to in subsec. (h), is classified to section 632 of Title 15, Com- merce and Trade. AMENDMENTS 2006—Pub. L. 109–435 amended section generally. Prior to amendment, section consisted of subsecs. (a) to (f) relating to temporary changes in rates and classes. 1976—Subsec. (a). Pub. L. 94–421 added subsec. (a). Former subsec. (a) redesignated (e) and amended. Subsec. (b). Pub. L. 94–421 added subsec. (b). Former subsec. (b) redesignated (f). Subsec. (c). Pub. L. 94–421 substituted provision lim- iting the temporary rate increase to an amount no greater than the permanent fee requested for that class or service, for provision which limited a temporary in- crease to the lesser of either the rate or fee requested or an amount more than one-third greater than the permanent fee in effect for that class or service at the time a permanent change is requested. Subsec. (d). Pub. L. 94–421 added subsec. (d). Subsec. (e). Pub. L. 94–421 redesignated former subsec. (a) as (e) and struck out reference to requests for deci- sions on change in the rates of postage or fees for post- al service. Subsec. (f). Pub. L. 94–421 redesignated former subsec. (b) as (f). Statutory Notes and Related Subsidiaries EFFECTIVE DATE Section effective Jan. 20, 1971, pursuant to Resolution No. 71–10 of the Board of Governors. See section 15(a) of Pub. L. 91–375, set out as a note preceding section 101 of this title. RATE CHANGE REQUEST MADE ON SEPTEMBER 18, 1975, OR UNDER DOCKET NUMBER R76–1 Pub. L. 94–421, § 6(b)(1), Sept. 24, 1976, 90 Stat. 1307, provided that: ‘‘The amendment made by subsection (a) of this section [amending this section] shall not apply to any action or proceeding with respect to the rec- ommended decision of the Postal Rate Commission [now Postal Regulatory Commission] relating to pro- posed changes in rates of postage and in fees for postal services requested on September 18, 1975, by the United States Postal Service in a request which bears, or which at any time has been included under, Postal Rate Commission Docket Number R76–1.’’ APPLICABILITY OF FORMER PROVISIONS OF SECTION TO RATE CHANGE REQUEST MADE ON SEPTEMBER 18, 1975, UNDER DOCKET NUMBER R76–1 Pub. L. 94–421, § 6(b)(2), Sept. 24, 1976, 90 Stat. 1307, provided that: ‘‘The provisions of section 3641 of title 39, United States Code, as such provisions were in effect on the day before the date of the enactment of this Act [Sept. 24, 1976], shall apply to any temporary rate or fee established by the Postal Service pursuant to its re- quest to the Postal Rate Commission [now Postal Reg- ulatory Commission], dated September 18, 1975, for a recommended decision, bearing Docket Number R76–1.’’ § 3642. New products and transfers of products between the market-dominant and competi- tive categories of mail (a) IN GENERAL.—Upon request of the Postal Service or users of the mails, or upon its own initiative, the Postal Regulatory Commission may change the list of market-dominant prod- ucts under section 3621 and the list of competi- tive 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 Post- al Regulatory Commission under subsection (a) shall be made in accordance with the following criteria: (1) The market-dominant category of prod- ucts shall consist of each product in the sale of which the Postal Service exercises suffi- cient market power that it can effectively set the price of such product substantially above costs, raise prices significantly, decrease qual- ity, 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 POST- AL 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 pre- ceding sentence, the term ‘‘product covered by the postal monopoly’’ means any product the conveyance or transmission of which is re- served to the United States under section 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 making 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 delivery of the product involved; (B) the views of those who use the product 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 serv- ice involved (without regard to satisfaction of minimum quantity requirements standing alone). (d) NOTIFICATION AND PUBLICATION REQUIRE- MENTS.— (1) NOTIFICATION REQUIREMENT.—The Postal Service shall, whenever it requests to add a product or transfer a product to a different category, file with the Postal Regulatory Commission and publish in the Federal Reg- ister a notice setting out the basis for its de- termination that the product satisfies the cri- teria 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 sec- tion 3633. The provisions of section 504(g) shall be available with respect to any information required to be filed.