95–959 

108TH CONGRESS REPT. 108–672 " ! HOUSE OF REPRESENTATIVES 2d Session Part 2 

POSTAL ACCOUNTABILITY AND ENHANCEMENT ACT 

SEPTEMBER 23, 2004.—Committed to the Committee of the Whole House on the 

State of the Union and ordered to be printed 

Mr. SENSENBRENNER, from the Committee on the Judiciary, 

submitted the following 

R E P O R T 

[To accompany H.R. 4341] 

[Including cost estimate of the Congressional Budget Office] 

The Committee on the Judiciary, to whom was referred the bill 

(H.R. 4341) to reform the postal laws of the United States, having 

considered the same, reports favorably thereon with an amendment 

and recommends that the bill as amended do pass. 

CONTENTS 

Page 

The Amendment ...................................................................................................... 1 

Purpose and Summary ............................................................................................ 40 

Background and Need for the Legislation ............................................................. 40 

Hearings ................................................................................................................... 42 

Committee Consideration ........................................................................................ 42 

Vote of the Committee ............................................................................................. 42 

Committee Oversight Findings ............................................................................... 42 

New Budget Authority and Tax Expenditures ...................................................... 42 

Congressional Budget Office Cost Estimate .......................................................... 42 

Performance Goals and Objectives ......................................................................... 53 

Constitutional Authority Statement ...................................................................... 53 

Section-by-Section Analysis and Discussion .......................................................... 53 

Changes in Existing Law Made by the Bill, as Reported ..................................... 58 

Committee Jurisdiction Letter ................................................................................ 144 

Markup Transcript .................................................................................................. 147 

THE AMENDMENT

The amendment is as follows: 

Strike all after the enacting clause and insert the following: 

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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. 

Sec. 103. Financial transparency. 

TITLE II—MODERN RATE REGULATION 

Sec. 201. Provisions relating to market-dominant products. 

Sec. 202. Provisions relating to competitive products. 

Sec. 203. Provisions relating to experimental and new products. 

Sec. 204. Reporting requirements and related provisions. 

Sec. 205. Complaints; appellate review and enforcement. 

Sec. 206. Workshare discounts. 

Sec. 207. Clerical amendment. 

TITLE III—PROVISIONS RELATING TO FAIR COMPETITION 

Sec. 301. Postal Service Competitive Products Fund. 

Sec. 302. Assumed Federal income tax on competitive products income. 

Sec. 303. Unfair competition prohibited. 

Sec. 304. Suits by and against the Postal Service. 

Sec. 305. International postal arrangements. 

Sec. 306. Redesignation. 

Sec. 307. Clarification. 

TITLE IV—GENERAL PROVISIONS 

Sec. 401. Qualification requirements for Governors. 

Sec. 402. Obligations. 

Sec. 403. Private carriage of letters. 

Sec. 404. Rulemaking authority. 

Sec. 405. Noninterference with collective bargaining agreements, etc. 

Sec. 406. Bonus authority. 

Sec. 407. Mediation in collective-bargaining disputes. 

TITLE V—ENHANCED REGULATORY COMMISSION 

Sec. 501. Reorganization and modification of certain provisions relating to the Postal Regulatory Commission. 

Sec. 502. Authority for Postal Regulatory Commission to issue subpoenas. 

Sec. 503. Appropriations for the Postal Regulatory Commission. 

Sec. 504. Redesignation of the Postal Rate Commission. 

Sec. 505. Officer of the Postal Regulatory Commission representing the general public. 

TITLE VI—INSPECTORS GENERAL 

Sec. 601. Inspector General of the Postal Regulatory Commission. 

Sec. 602. Inspector General of the United States Postal Service to be appointed by the President. 

TITLE VII—EVALUATIONS 

Sec. 701. Universal postal service study. 

Sec. 702. Assessments of ratemaking, classification, and other provisions. 

Sec. 703. Study on equal application of laws to competitive products. 

Sec. 704. Greater diversity in Postal Service Executive and administrative schedule management positions. 

Sec. 705. Plan for assisting displaced workers. 

Sec. 706. Contracts with women, minorities, and small businesses. 

Sec. 707. Rates for periodicals. 

Sec. 708. Assessment of certain rate deficiencies. 

Sec. 709. Postal processing and distribution network study. 

Sec. 710. Definition. 

TITLE VIII—MISCELLANEOUS; TECHNICAL AND CONFORMING AMENDMENTS 

Sec. 801. Employment of postal police officers. 

Sec. 802. Date of postmark to be treated as date of appeal in connection with the closing or consolidation of 

post offices. 

Sec. 803. Provisions relating to benefits under chapter 81 of title 5, United States Code, for officers and employees of the former Post Office Department. 

Sec. 804. Obsolete provisions. 

Sec. 805. Expanded contracting authority. 

Sec. 806. Investments. 

Sec. 807. Repeal of section 5403. 

Sec. 808. Reduced rates. 

Sec. 809. Hazardous matter. 

Sec. 810. Provisions relating to cooperative mailings. 

Sec. 811. Technical and conforming amendments. 

TITLE IX—POSTAL PENSION FUNDING REFORM AMENDMENTS 

Sec. 901. Civil Service Retirement System. 

Sec. 902. Health insurance. 

Sec. 903. Repealer. 

Sec. 904. Ensuring appropriate use of escrow and military savings. 

Sec. 905. Effective dates.

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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 following: 

‘‘(5) ‘postal service’ means the carriage of letters, printed matter, or mailable packages, including acceptance, collection, processing, delivery, or other 

services supportive or ancillary thereto; 

‘‘(6) ‘product’ means a postal service with a distinct cost or market characteristic for which a rate or rates are, or may reasonably be, applied; 

‘‘(7) ‘rates’, as used with respect to products, includes fees for postal services; 

‘‘(8) ‘market-dominant product’ or ‘product in the market-dominant category 

of mail’ means a product subject to subchapter I of chapter 36; 

‘‘(9) ‘competitive product’ or ‘product in the competitive category of mail’ 

means a product subject to subchapter II of chapter 36; 

‘‘(10) ‘Consumer Price Index’ means the Consumer Price Index for All 

Urban Consumers published monthly by the Bureau of Labor Statistics of the 

Department of Labor; and 

‘‘(11) ‘year’, as used in chapter 36 (other than subchapters I and VI thereof), 

means a fiscal year.’’. 

SEC. 102. POSTAL SERVICES. 

(a) IN GENERAL.—Section 404 of title 39, United States Code, is amended—

(1) in subsection (a), by striking paragraph (6) and by redesignating paragraphs (7) through (9) as paragraphs (6) through (8), respectively; and 

(2) by adding at the end the following: 

‘‘(c) Nothing in this title shall be considered to permit or require that the Postal 

Service provide any special nonpostal or similar services, except that nothing in this 

subsection shall prevent the Postal Service from providing any special nonpostal or 

similar services provided by the Postal Service as of May 12, 2004.’’. 

(b) CONFORMING AMENDMENT.—Section 1402(b)(1)(B)(ii) of the Victims of Crime 

Act of 1984 (98 Stat. 2170; 42 U.S.C. 10601(b)(1)(B)(ii)) is amended by striking 

‘‘404(a)(8)’’ and inserting ‘‘404(a)(7)’’. 

SEC. 103. FINANCIAL TRANSPARENCY. 

(a) IN GENERAL.—Section 101 of title 39, United States Code, is amended by redesignating subsections (d) through (g) as subsections (e) through (h), respectively, 

and by inserting after subsection (c) the following: 

‘‘(d) As an establishment that provides both market-dominant and competitive 

products, the Postal Service shall be subject to a high degree of transparency, including in its finances and operations, to ensure fair treatment of customers of the 

Postal Service’s market-dominant products and companies competing with the Postal Service’s competitive products.’’. 

(b) CONFORMING AMENDMENT.—Section 5001 of title 39, United States Code, is 

amended by striking ‘‘101(e) and (f)’’ and inserting ‘‘101(f) and (g)’’. 

TITLE II—MODERN RATE REGULATION 

SEC. 201. PROVISIONS RELATING TO MARKET-DOMINANT PRODUCTS. 

(a) IN GENERAL.—Chapter 36 of title 39, United States Code, is amended by 

striking sections 3621 and 3622 and inserting the following: 

‘‘§ 3621. Applicability; definitions 

‘‘(a) APPLICABILITY.—This subchapter shall apply with respect to—

‘‘(1)(A) single piece first-class letters (both domestic and international); 

‘‘(B) single piece first-class cards (both domestic and international); and 

‘‘(C) special services; 

‘‘(2) all first-class mail not included under paragraph (1); 

‘‘(3) periodicals; 

‘‘(4) standard mail; 

‘‘(5) media mail; 

‘‘(6) library mail; and 

‘‘(7) bound printed matter, 

subject to any changes the Postal Regulatory Commission may make under section 

3642. 

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‘‘(b) RULE OF CONSTRUCTION.—Mail matter referred to in subsection (a) shall, 

for purposes of this subchapter, 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 Regulatory Commission shall, within 

24 months after the date of the enactment of this section, by regulation establish 

(and may from time to time thereafter by regulation revise) a modern system for 

regulating rates and classes for market-dominant products. 

‘‘(b) OBJECTIVES.—Such system shall be designed to achieve the following objectives: 

‘‘(1) To maximize incentives to reduce costs and increase efficiency. 

‘‘(2) To create predictability and stability in rates. 

‘‘(3) To maintain high quality service standards. 

‘‘(4) To allow the Postal Service pricing flexibility. 

‘‘(5) To assure adequate revenues, including retained earnings, to maintain 

financial stability. 

‘‘(6) To reduce the administrative burden of the ratemaking process. 

‘‘(c) FACTORS.—In establishing or revising such system, the Postal Regulatory 

Commission shall take into account—

‘‘(1) the establishment and maintenance of a fair and equitable schedule for 

rates and classification system; 

‘‘(2) the value of the mail service actually provided 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; 

‘‘(3) the direct and indirect postal costs attributable to each class or type 

of mail service plus that portion of all other costs of the Postal Service reasonably assignable to such class or type; 

‘‘(4) the effect of rate increases upon the general public, business mail 

users, and enterprises in the private sector of the economy engaged in the delivery of mail matter other than letters; 

‘‘(5) the available alternative means of sending and receiving letters and 

other mail matter at reasonable costs; 

‘‘(6) the degree of preparation of mail for delivery into the postal system 

performed by the mailer and its effect upon reducing costs to the Postal Service; 

‘‘(7) simplicity of structure for the entire schedule and simple, identifiable 

relationships between the rates or fees charged the various classes of mail for 

postal services; 

‘‘(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 classifications 

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 require 

high degrees of reliability and speed of delivery; 

‘‘(10) the desirability of special classifications from the point of view of both 

the user and of the Postal Service;

‘‘(11) the educational, cultural, scientific, and informational value to the recipient of mail matter; and 

‘‘(12) the policies of this title as well as such other factors as the Commission deems appropriate. 

‘‘(d) ALLOWABLE PROVISIONS.—The system for regulating rates and classes for 

market-dominant products may include one or more of the following: 

‘‘(1) Price caps, revenue targets, or other form of incentive regulation. 

‘‘(2) Cost-of-service regulation. 

‘‘(3) Such other form of regulation as the Commission considers appropriate 

to achieve, consistent with subsection (c), the objectives of subsection (b). 

‘‘(e) LIMITATION.—In the administration of this section, the Commission shall 

not permit the average rate in any subclass of mail to increase at an annual rate 

greater than the comparable increase in the Consumer Price Index, unless it has, 

after notice and opportunity for a public hearing and comment, determined that 

such increase is reasonable and equitable and necessary to enable the Postal Service, 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. 

‘‘(f) TRANSITION RULE.—Until regulations under this section first take effect, 

rates and classes for market-dominant products shall remain subject to modification 

in accordance with the provisions of this chapter and section 407, as such provisions 

were last in effect before the date of the enactment of this section.’’. 

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(b) REPEALED SECTIONS.—Sections 3623, 3624, 3625, and 3628 of title 39, 

United States Code, are repealed. 

(c) REDESIGNATION.—Chapter 36 of title 39, United States Code (as in effect 

after the amendment made by section 501(a)(2), but before the amendment made 

by 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 PRODUCTS. 

Chapter 36 of title 39, United States Code, is amended by inserting after section 

3629 the following: 

‘‘SUBCHAPTER II—PROVISIONS RELATING TO COMPETITIVE PRODUCTS 

‘‘§ 3631. Applicability; definitions and updates 

‘‘(a) APPLICABILITY.—This subchapter shall apply with respect to—

‘‘(1) priority mail; 

‘‘(2) expedited mail; 

‘‘(3) mailgrams; 

‘‘(4) international mail; and 

‘‘(5) parcel post, 

subject to any changes the Postal Regulatory Commission may make under section 

3642. 

‘‘(b) DEFINITION.—For purposes of this subchapter, the term ‘costs attributable’, 

as used with respect to a product, means the direct and indirect postal costs attributable to such product. 

‘‘(c) RULE OF CONSTRUCTION.—Mail matter referred to in subsection (a) shall, 

for purposes of this subchapter, 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 CLASSES.—The Governors shall establish rates and classes for products in the competitive category of mail in accordance 

with the requirements of this subchapter and regulations promulgated under section 

3633. 

‘‘(b) PROCEDURES.—

‘‘(1) IN GENERAL.—Rates and classes shall be established in writing, complete with a statement of explanation and justification, and the date as of which 

each such rate or class takes effect. 

‘‘(2) RATES OR CLASSES OF GENERAL APPLICABILITY.—In the case of rates or 

classes 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 Governors’ proceedings in connection 

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 APPLICABILITY.—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 connection with 

such decision to be filed with the Postal Regulatory Commission by such date 

before the effective date of any new rates or classes as the Governors consider 

appropriate, but in no case less than 15 days. 

‘‘(4) CRITERIA.—As part of the regulations required under section 3633, the 

Postal Regulatory Commission shall establish criteria for determining when a 

rate or class established under this subchapter 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 competitive products shall remain subject to modification in accordance with the provisions of this chapter and section 407, as such provisions 

were as last in effect before the date of the enactment of this section. 

‘‘§ 3633. Provisions applicable to rates for competitive products 

‘‘The Postal Regulatory Commission shall, within 18 months after the date of 

the enactment of this section, promulgate (and may from time to time thereafter revise) regulations—

‘‘(1) to prohibit the subsidization of competitive products by market-dominant products; 

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‘‘(2) to ensure that each competitive product covers its costs attributable; 

and 

‘‘(3) to ensure that all competitive products collectively make a reasonable 

contribution to the institutional costs of the Postal Service.’’.

SEC. 203. PROVISIONS RELATING TO EXPERIMENTAL AND NEW PRODUCTS. 

Subchapter III of chapter 36 of title 39, United States Code, is amended to read 

as follows: 

‘‘SUBCHAPTER III—PROVISIONS RELATING TO EXPERIMENTAL AND NEW 

PRODUCTS 

‘‘§ 3641. Market tests of experimental products 

‘‘(a) AUTHORITY.— ‘‘(1) IN GENERAL.—The Postal Service may conduct market tests of experimental products in accordance 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 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 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 collectively). 

‘‘(c) NOTICE.— ‘‘(1) IN GENERAL.—At least 30 days before initiating a market test under 

this section, the Postal Service shall file with the Postal Regulatory 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 experimental product, the provisions 

of section 504(g) shall be available with respect to any information 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 section 504(g)(1). Nothing in paragraph 

(1) shall be considered to permit or require the publication of any information 

as to which confidential 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 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 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 be tested under this section only if the 

total revenues that are anticipated, or in fact received, by the Postal Service 

from such product do not exceed $10,000,000 nationwide 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 in subsection (b)(2)). 

‘‘(2) EXEMPTION AUTHORITY.—The Postal Regulatory Commission may, upon 

written application 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 Postal 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 

7

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 Commission at any time determines that a market test under this section fails, with respect to any particular 

product, to meet one or more of the requirements of this section, it may order the 

cancellation of the test involved or take such other action as it considers appropriate. A determination under this subsection shall be made in accordance with such 

procedures as the Commission 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 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 

determined under regulations of the Commission). 

‘‘(h) DEFINITION OF A SMALL BUSINESS CONCERN.—The criteria used in defining 

small business 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 beginning with the first year in which occurs the deadline for the Postal 

Service’s first report to the Postal Regulatory Commission under section 3652(a). 

‘‘§ 3642. New products and transfers of products between the market-dominant and competitive 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 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 substantially above costs, raise 

prices significantly, decrease quality, or decrease output, without risk of losing 

business to other firms offering similar products. The competitive category of 

products shall consist of all other products. 

‘‘(2) EXCLUSION OF PRODUCTS COVERED BY POSTAL MONOPOLY.—A product 

covered by the postal 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 

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 enterprises 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 proposed action; and 

‘‘(C) the likely impact of the proposed action on small business concerns 

(within the meaning of section 3641(h)). 

‘‘(c) TRANSFERS OF SUBCLASSES AND OTHER SUBORDINATE UNITS ALLOWABLE.—

Nothing in this title shall be considered to prevent transfers under this section from 

being made by reason of the fact that they would involve only some (but not all) 

of the subclasses or other subordinate units of the class of mail or type of postal 

service involved (without regard to satisfaction of minimum quantity requirements 

standing alone). 

‘‘(d) NOTIFICATION AND PUBLICATION REQUIREMENTS.—

‘‘(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 Register a notice 

setting out the basis for its determination that the product satisfies the criteria 

8

under subsection (b) and, in the case of a request to add a product or transfer 

a product to the competitive category of mail, that the product meets the regulations promulgated by the Postal Regulatory Commission pursuant to section 

3633. The provisions of section 504(g) shall be available with respect to any information required to be filed. 

‘‘(2) PUBLICATION REQUIREMENT.—The Postal Regulatory Commission shall, 

whenever it changes the list of products in the market-dominant or competitive 

category of mail, prescribe new lists of products. The revised lists shall indicate 

how and when any previous lists (including the lists under sections 3621 and 

3631) are superseded, and shall be published in the Federal Register. 

‘‘(e) NOTIFICATION REQUIREMENT.—The Postal Regulatory Commission shall, 

whenever it reaches a conclusion that a product or products should be transferred 

between the list of market-dominant products under section 3621 and the list of 

competitive products under section 3631, immediately notify the appropriate committees of the Congress. No such transfer may take effect less than 12 months after 

such conclusion. 

‘‘(f) PROHIBITION.—Except as provided in section 3641, no product that involves 

the carriage of letters, printed matter, or mailable packages may be offered by the 

Postal Service unless it has been assigned to the 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 PROVISIONS. 

(a) REDESIGNATION.—Chapter 36 of title 39, United States Code (as in effect before the amendment made by subsection (b)) is amended by striking the heading for 

subchapter IV and inserting the following:

‘‘SUBCHAPTER V—POSTAL SERVICES, COMPLAINTS, AND JUDICIAL 

REVIEW’’. 

(b) REPORTS AND COMPLIANCE.—Chapter 36 of title 39, United States Code, is 

amended by inserting after subchapter III the following: 

‘‘SUBCHAPTER IV—REPORTING REQUIREMENTS AND RELATED 

PROVISIONS 

‘‘§ 3651. Annual reports by the Commission 

‘‘(a) IN GENERAL.—The Postal Regulatory Commission shall submit an annual 

report to the President and the Congress concerning the operations of the Commission under this title, including the extent to which regulations are achieving the objectives under sections 3622 and 3633, respectively. 

‘‘(b) ADDITIONAL INFORMATION.—In addition to the information required under 

subsection (a), each report under this section shall also include, with respect to the 

period covered by such report, an estimate of the costs incurred by the Postal Service in providing—

‘‘(1) postal services to areas of the Nation where, in the judgment of the 

Postal Regulatory Commission, the Postal Service either would not provide 

services at all or would not provide such services in accordance with the requirements of this title if the Postal Service were not required to 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); 

‘‘(2) free or reduced rates for postal services as required by this title; and 

‘‘(3) other public services or activities which, in the judgment of the Postal 

Regulatory Commission, would not otherwise have been provided by the Postal 

Service but for the requirements of law. 

The Commission shall detail the bases for its estimates and the statutory requirements giving rise to the costs identified in each report under this section. 

‘‘(c) INFORMATION FROM POSTAL SERVICE.—The Postal Service shall provide the 

Postal Regulatory Commission with such information as may, in the judgment of the 

Commission, be necessary in order for the Commission to prepare its reports under 

this section. 

‘‘§ 3652. Annual reports to the Commission 

‘‘(a) COSTS, REVENUES, AND RATES.—Except as provided in subsection (c), the 

Postal Service shall, no later than 90 days after the end of each year, prepare and 

submit to the Postal Regulatory Commission a report (together with such nonpublic 

annex thereto as the Commission may require under subsection (e))—

‘‘(1) which shall analyze costs, revenues, and rates, using such methodologies as the Commission shall by regulation prescribe, and in sufficient detail to 

9

demonstrate that the rates in effect for all products during such year complied 

with all applicable requirements of this title; and 

‘‘(2) which shall, for each market-dominant product provided in such year, 

provide—

‘‘(A) market information, including mail volumes; and 

‘‘(B) measures of the quality of service afforded by the Postal Service 

in connection with such product, including—

‘‘(i) the service standard applicable to such product; 

‘‘(ii) the level of service (described in terms of speed of delivery and 

reliability) provided; and 

‘‘(iii) the degree of customer satisfaction with the service provided. 

Before submitting a report under this subsection (including any annex thereto and 

the information required under subsection (b)), the Postal Service shall have the information contained in such report (and annex) audited by the Inspector General. 

The results of any such audit shall be submitted along with the report to which it 

pertains. 

‘‘(b) INFORMATION RELATING TO WORKSHARE DISCOUNTS.— ‘‘(1) IN GENERAL.—The Postal Service shall include, in each report under 

subsection (a), the following information with respect to each market-dominant 

product for which a workshare discount was in effect during the period covered 

by such report: 

‘‘(A) The per-item cost avoided by the Postal Service by virtue of such 

discount. 

‘‘(B) The percentage of such per-item cost avoided that the per-item 

workshare discount represents. 

‘‘(C) The per-item contribution made to institutional costs. 

‘‘(2) WORKSHARE DISCOUNT DEFINED.—For purposes of this subsection, the 

term ‘workshare discount’ refers to presorting, barcoding, dropshipping, and 

other similar discounts, as further defined under regulations which the Postal 

Regulatory Commission shall prescribe. 

‘‘(c) MARKET TESTS.—In carrying out subsections (a) and (b) with respect to experimental products offered through market tests under section 3641 in a year, the 

Postal Service—

‘‘(1) may report summary data on the costs, revenues, and quality of service 

by market test; and 

‘‘(2) shall report such data as the Postal Regulatory Commission requires. 

‘‘(d) SUPPORTING MATTER.—The Postal Regulatory Commission shall have access, in accordance with such regulations as the Commission shall prescribe, to the 

working papers and any other supporting matter of the Postal Service and the Inspector General in connection with any information submitted under this section. 

‘‘(e) CONTENT AND FORM OF REPORTS.—

‘‘(1) IN GENERAL.—The Postal Regulatory Commission shall, by regulation, 

prescribe the content and form of the public reports (and any nonpublic annex 

and supporting matter relating thereto) 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 adequate 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 commercially sensitive information. 

‘‘(2) REVISED REQUIREMENTS.—The Commission may, on its own motion or 

on request of an interested party, initiate proceedings (to be conducted in accordance with regulations that the Commission shall prescribe) to improve the 

quality, accuracy, or completeness of Postal Service data required by the Commission under this subsection whenever it shall appear that—

‘‘(A) the attribution of costs or revenues to products has become significantly inaccurate or can be significantly improved; 

‘‘(B) the quality of service data has become significantly inaccurate or 

can be significantly 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 determines that any document or 

portion of a document, or other matter, which it provides to the Postal Regulatory Commission in a nonpublic annex under this section or pursuant to 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 ServVerDate jul 14 2003 22:09 Sep 23, 2004 Jkt 029006 PO 00000 Frm 00009 Fmt 6659 Sfmt 6621 E:\HR\OC\HR672P2.XXX HR672P2
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ice shall, at the time of providing such matter to the Commission, notify the 

Commission of its determination, in writing, 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 section 504(g)(1). 

‘‘(g) OTHER REPORTS.—The Postal Service shall submit to the Postal Regulatory 

Commission, together with any other submission that it is required to make under 

this section in a year, copies of its then most recent—

‘‘(1) comprehensive statement under section 2401(e); 

‘‘(2) performance plan under section 2803; and 

‘‘(3) program performance reports under section 2804. 

‘‘§ 3653. Annual determination of compliance 

‘‘(a) OPPORTUNITY FOR PUBLIC COMMENT.—After receiving the reports required 

under section 3652 for any year, the Postal Regulatory Commission shall promptly 

provide an opportunity for comment on such reports by users of the mails, affected 

parties, and an officer of the Commission who shall be required to represent the interests of the general public. 

‘‘(b) DETERMINATION OF COMPLIANCE OR NONCOMPLIANCE.—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 thereunder); 

‘‘(2) whether any performance goals established under section 2803 or 2804 

for such year were not met; and 

‘‘(3) whether any market-dominant product failed to meet any service standard during such year. 

If, with respect to a year, no instance of noncompliance is found under this subsection to have occurred in such year, the written determination shall be to that effect. 

‘‘(c) IF ANY NONCOMPLIANCE IS FOUND.—If, for a year, a timely written determination of noncompliance is made under subsection (b), the Postal Regulatory 

Commission shall take appropriate action in accordance with subsections (c)–(e) of 

section 3662 (as if a complaint averring such noncompliance had been duly filed and 

found under such section to be justified). 

‘‘(d) REBUTTABLE PRESUMPTION.—A timely written determination described in 

the last sentence of subsection (b) shall, for purposes of any proceeding under section 3662, create a rebuttable presumption of compliance by the Postal Service (with 

regard to the matters described in paragraphs (1) through (3) of subsection (b)) during the year to which such determination relates.’’. 

SEC. 205. COMPLAINTS; APPELLATE REVIEW AND ENFORCEMENT. 

Chapter 36 of title 39, United States Code, is amended by striking sections 3662 

and 3663 and inserting the following: 

‘‘§ 3662. Rate and service complaints 

‘‘(a) IN GENERAL.—Interested persons (including an officer of the Postal Regulatory Commission representing the interests of the general public) who believe the 

Postal Service is not operating in conformance with the requirements of chapter 1, 

4, or 6, or this chapter (or regulations promulgated under any of those chapters) 

may lodge a complaint with the Postal Regulatory Commission in such form and 

manner as the Commission may prescribe. 

‘‘(b) PROMPT RESPONSE REQUIRED.—

‘‘(1) IN GENERAL.—The Postal Regulatory Commission shall, within 90 days 

after receiving a complaint under subsection (a), either—

‘‘(A) begin proceedings on such complaint; or 

‘‘(B) issue an order dismissing the complaint (together with a statement 

of the reasons therefor). 

‘‘(2) TREATMENT OF COMPLAINTS NOT TIMELY ACTED ON.—For purposes of 

section 3663, any complaint under subsection (a) on which the Commission fails 

to act in the time and manner required by paragraph (1) shall be treated in 

the same way as if it had been dismissed pursuant to an order issued by the 

Commission on the last day allowable for the issuance of such order under paragraph (1).

‘‘(c) ACTION REQUIRED IF COMPLAINT FOUND TO BE JUSTIFIED.—If the Postal 

Regulatory Commission finds the complaint to be justified, it shall order that the 

11

Postal Service take such action as the Commission considers 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 adjusted to lawful levels, ordering the cancellation of market tests, ordering the Postal Service to discontinue providing loss-making products, or requiring the Postal Service to make up 

for revenue shortfalls in competitive products). 

‘‘(d) SUSPENSION AUTHORITY.—The Postal Regulatory Commission may suspend 

implementation of rates or classifications under section 3632(b)(3) for a limited period of time pending expedited proceedings under this section. In evaluating whether circumstances warrant suspension, the Commission shall consider factors such as 

(1) whether there is a substantial likelihood that such rate or classification will violate the requirements of chapter 1, 4, or 6, or this chapter (or regulations promulgated under any of those chapters), (2) whether any persons would suffer substantial injury, loss, or damage absent a suspension, (3) whether the Postal Service or 

any other persons would suffer substantial injury, loss, or damage under a suspension, and (4) the public interest. 

‘‘(e) AUTHORITY TO ORDER FINES IN CASES OF DELIBERATE NONCOMPLIANCE.—

In addition, in cases of deliberate noncompliance by the Postal Service with the requirements 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 provision of competitive products shall be paid out 

of the Competitive Products Fund established in section 2011. All receipts from fines 

imposed under this subsection shall be deposited in the general fund of the Treasury 

of the United States. 

‘‘§ 3663. Appellate review 

‘‘A person adversely affected or aggrieved by a final order or decision of the 

Postal Regulatory Commission may, within 30 days after such order or decision becomes final, institute proceedings for review thereof by filing a petition in the 

United States Court of Appeals for the District of Columbia. The court shall review 

the order or decision in accordance with section 706 of title 5, and chapter 158 and 

section 2112 of title 28, on the basis of the record before the Commission. For purposes of this section, the term ‘person’ includes the Postal Service. 

‘‘§ 3664. Enforcement of orders 

‘‘The several district courts have jurisdiction specifically to enforce, and to enjoin and restrain the Postal Service from violating, any order issued by the Postal 

Regulatory Commission.’’.

SEC. 206. WORKSHARE DISCOUNTS. 

(a) IN GENERAL.—Title 39, United States Code, is amended by adding after section 3686 (as added by section 406) the following:

‘‘§ 3687. Workshare discounts 

‘‘(a) IN GENERAL.—As part of the regulations established under section 3622(a), 

the Postal Regulatory Commission shall establish rules for workshare discounts that 

ensure that workshare discounts do not exceed the cost that the Postal Service 

avoids as the result of private sector workshare activity, except—

‘‘(1) where the discount is associated with a new product or service or with 

a change to an existing product or service and is necessary, over a period of 

time not to exceed 4 years, to induce mailer behavior that will enable the new 

or changed product or service in furtherance of the overall economically efficient 

operation of the Postal Service; 

‘‘(2) to the extent that a reduction in the discount would lead to a loss of 

volume in the affected category and reduce the aggregate contribution to institutional costs of the Postal Service, from the mail matter subject to the discount, below what it otherwise would have been if the discount had not been 

reduced to costs avoided; would result in a further increase in the rates paid 

by mailers not able to take advantage of the discount; or would impede the efficient operation of the Postal Service; 

‘‘(3) where the amount of the discount above costs avoided is necessary to 

mitigate rate shock and will be phased out over time; or 

‘‘(4) where the workshare discount is provided in connection with subclasses 

of mail consisting exclusively of mail matter of educational, cultural, or scientific value. 

‘‘(b) REPORTING REQUIREMENT.—Whenever the Postal Service establishes or 

maintains a workshare discount, the Postal Service shall, at the time it publishes 

the workshare discount rate, file with the Postal Regulatory Commission a detailed 

report and explanation of its reasons for establishing or maintaining the rate, setVerDate jul 14 2003 22:09 Sep 23, 2004 Jkt 029006 PO 00000 Frm 00011 Fmt 6659 Sfmt 6621 E:\HR\OC\HR672P2.XXX HR672P2
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ting forth the data, economic analyses, and other information relied on by the Postal 

Service to justify the rate. 

‘‘(c) DEFINITION.—For purposes of this section, the term ‘workshare discount’ refers to rate discounts provided to mailers for presorting, prebarcoding, handling, or 

transportation, as further defined by the Postal Regulatory Commission as part of 

regulations established under section 3622(a).’’. 

(b) CLERICAL AMENDMENT.—The analysis for chapter 36 of title 39, United 

States Code (as amended by section 207) is amended by adding after the item relating to section 3686 the following:

‘‘3687. Workshare discounts.’’.

SEC. 207. CLERICAL AMENDMENT. 

Chapter 36 of title 39, United States Code, is amended 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. 

‘‘[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. 

‘‘SUBCHAPTER V—POSTAL SERVICES, COMPLAINTS, AND JUDICIAL REVIEW

‘‘3661. Postal services. 

‘‘3662. Rate and service complaints. 

‘‘3663. Appellate review. 

‘‘3664. Enforcement of orders. 

‘‘SUBCHAPTER VI—GENERAL

‘‘3681. Reimbursement. 

‘‘3682. Size and weight limits. 

‘‘3683. Uniform rates for books; films, other materials. 

‘‘3684. Limitations. 

‘‘3685. Filing of information relating to periodical publications. 

‘‘3686. Bonus authority.’’.

TITLE III—PROVISIONS RELATING TO FAIR 

COMPETITION 

SEC. 301. POSTAL SERVICE COMPETITIVE PRODUCTS FUND. 

(a) PROVISIONS RELATING TO POSTAL SERVICE COMPETITIVE PRODUCTS FUND

AND RELATED MATTERS.—

(1) IN GENERAL.—Chapter 20 of title 39, United States Code, is amended 

by adding at the end the following: 

‘‘§ 2011. Provisions relating to competitive products 

‘‘(a) There is established in the Treasury of the United States a revolving fund, 

to be called the Postal Service Competitive Products Fund, which shall be available 

to the Postal Service without fiscal year limitation for the payment of—

‘‘(1) costs attributable to competitive products; and 

‘‘(2) all other costs incurred by the Postal Service, to the extent allocable 

to competitive products. 

For purposes of this subsection, the term ‘costs attributable’ has the meaning given 

such term by section 3631. 

13

‘‘(b) There shall be deposited in the Competitive Products Fund, subject to withdrawal by the Postal Service—

‘‘(1) revenues from competitive products; 

‘‘(2) amounts received from obligations issued by the Postal Service under 

subsection (e); 

‘‘(3) interest and dividends earned on investments of the Competitive Products Fund; and 

‘‘(4) any other receipts of the Postal Service (including from the sale of assets), to the extent allocable to competitive products. 

‘‘(c) If the Postal Service determines that the moneys of the Competitive Products Fund are in excess of current needs, it may invest such amounts as it considers 

appropriate in—

‘‘(1) obligations of, or obligations guaranteed by, the Government of the 

United States; and 

‘‘(2) in accordance with regulations which the Secretary of the Treasury 

shall prescribe (by not later than 18 months after the date of the enactment 

of the Postal Accountability and Enhancement Act), such other obligations or 

securities as it deems appropriate. 

‘‘(d) The Postal Service may, in its sole discretion, provide that moneys of the 

Competitive Products Fund be deposited in a Federal Reserve bank or a depository 

for public funds. 

‘‘(e)(1) Subject to the limitations specified in section 2005(a), the Postal Service 

is authorized to borrow money and to issue and sell such obligations as it determines necessary to provide for competitive products and deposit such amounts in 

the Competitive Products Fund, except that the Postal Service may pledge only assets related to the provision of competitive products (as determined under subsection (h) or, for purposes of any period before accounting practices and principles 

under subsection (h) have been established and applied, the best information available from the Postal Service, including the audited statements required by section 

2008(e)), and the revenues and receipts from such products, for the payment of the 

principal of or interest on such obligations, for the purchase or redemption thereof, 

and for other purposes incidental thereto, including creation of reserve, sinking, and 

other funds which may be similarly pledged and used, to such extent and in such 

manner as it deems necessary or desirable. 

‘‘(2) The Postal Service may enter into binding covenants with the holders of 

such obligations, and with the trustee, if any, under any agreement entered into in 

connection with the issuance thereof with respect to—

‘‘(A) the establishment of reserve, sinking, and other funds; 

‘‘(B) application and use of revenues and receipts of the Competitive Products Fund; 

‘‘(C) stipulations concerning the subsequent issuance of obligations or the 

execution of leases or lease purchases relating to properties of the Postal Service; and 

‘‘(D) such other matters as the Postal Service considers necessary or desirable to enhance the marketability of such obligations. 

‘‘(3) Obligations issued by the Postal Service under this subsection—

‘‘(A) may not be purchased by the Secretary of the Treasury; 

‘‘(B) shall not be exempt either as to principal or interest from any taxation 

now or hereafter imposed by any State or local taxing authority; 

‘‘(C) shall not be obligations of, nor shall payment of the principal thereof 

or interest thereon be guaranteed by, the Government of the United States, and 

the obligations shall so plainly state; and 

‘‘(D) notwithstanding the provisions of the Federal Financing Bank Act of 

1973 or any other provision of law (except as specifically provided by reference 

to this subparagraph in a law enacted after this subparagraph takes effect), 

shall not be eligible for purchase by, commitment to purchase by, or sale or 

issuance to, the Federal Financing Bank. 

‘‘(4)(A) This paragraph applies with respect to the period beginning on the date 

of the enactment of this paragraph and ending at the close of the 5-year period 

which begins on the date on which the Postal Service makes its submission under 

subsection (h)(1). 

‘‘(B) During the period described in subparagraph (A), nothing in subparagraph 

(A) or (D) of paragraph (3) or the last sentence of section 2006(b) shall, with respect 

to any obligations sought to be issued by the Postal Service under this subsection, 

be considered to affect such obligations’ eligibility for purchase by, commitment to 

purchase by, or sale or issuance to, the Federal Financing Bank.

‘‘(C) The Federal Financing Bank may elect to purchase such obligations under 

such terms, including rates of interest, as the Bank and the Postal Service may 

agree, but at a rate of yield no less than the prevailing yield on outstanding marketVerDate jul 14 2003 22:09 Sep 23, 2004 Jkt 029006 PO 00000 Frm 00013 Fmt 6659 Sfmt 6621 E:\HR\OC\HR672P2.XXX HR672P2
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able securities of comparable maturity issued by entities with the same credit rating 

as the rating then most recently obtained by the Postal Service under subparagraph 

(D), as determined by the Bank. 

‘‘(D) In order to be eligible to borrow under this paragraph, the Postal Service 

shall first obtain a credit rating from a nationally recognized credit rating organization. Such rating—

‘‘(i) shall be determined taking into account only those assets and activities 

of the Postal Service which are described in section 3634(a)(2) (relating to the 

Postal Service’s assumed taxable income from competitive products); and 

‘‘(ii) may, before final rules of the Postal Regulatory Commission under subsection (h) are issued (or deemed to have been issued), be based on the best information available from the Postal Service, including the audited statements 

required by section 2008(e). 

‘‘(f) The receipts and disbursements of the Competitive Products Fund shall be 

accorded the same budgetary treatment as is accorded to receipts and disbursements of the Postal Service Fund under section 2009a. 

‘‘(g) A judgment against the Postal Service or the Government of the United 

States (or settlement of a claim) shall, to the extent that it arises out of activities 

of the Postal Service in the provision of competitive products, be paid out of the 

Competitive Products Fund.

‘‘(h)(1) The Secretary of the Treasury, in consultation with the Postal Service 

and an independent, certified public accounting firm and such other advisors as the 

Secretary considers appropriate, shall develop recommendations regarding—

‘‘(A) the accounting practices and principles that should be followed by the 

Postal Service with the objectives of (i) identifying and valuing the assets and 

liabilities of the Postal Service associated with providing, and the capital and 

operating costs incurred by the Postal Service in providing, competitive products, and (ii) preventing the subsidization of such products by market-dominant 

products; and 

‘‘(B) the substantive and procedural rules that should be followed in determining the Postal Service’s assumed Federal income tax on competitive products income for any year (within the meaning of section 3634). 

Such recommendations shall be submitted to the Postal Regulatory Commission no 

earlier than 6 months, and no later than 12 months, after the effective date of this 

section. 

‘‘(2)(A) Upon receiving the recommendations of the Secretary of the Treasury 

under paragraph (1), the Commission shall give interested parties, including the 

Postal Service, users of the mails, and an officer of the Commission who shall be 

required to represent the interests of the general public, an opportunity to present 

their views on those recommendations through submission of written data, views, 

or arguments with or without opportunity for oral presentation, or in such other 

manner as the Commission considers appropriate. 

‘‘(B) After due consideration of the views and other information received under 

subparagraph (A), the Commission shall by rule—

‘‘(i) provide for the establishment and application of the accounting practices and principles which shall be followed by the Postal Service; 

‘‘(ii) provide for the establishment and application of the substantive and 

procedural rules described in paragraph (1)(B); and 

‘‘(iii) provide for the submission by the Postal Service to the Postal Regulatory Commission of annual and other periodic reports setting forth such information as the Commission may require. 

Final rules under this subparagraph shall be issued not later than 12 months after 

the date on which the Secretary of the Treasury makes his submission to the Commission under paragraph (1) (or by such later date as the Commission and the Postal Service may agree to). The Commission is authorized to promulgate regulations 

revising such rules. 

‘‘(C) Reports described in subparagraph (B)(iii) shall be submitted at such time 

and in such form, and shall include such information, as the Commission by rule 

requires. The Commission may, on its own motion or on request of an interested 

party, initiate proceedings (to be conducted in accordance with such rules as the 

Commission shall prescribe) to improve the quality, accuracy, or completeness of 

Postal Service data under such subparagraph whenever it shall appear that—

‘‘(i) the quality of the information furnished in those reports has become significantly inaccurate or can be significantly improved; or 

‘‘(ii) such revisions are, in the judgment of the Commission, otherwise necessitated by the public interest. 

‘‘(D) A copy of each report described in subparagraph (B)(iii) shall also be transmitted by the Postal Service to the Secretary of the Treasury and the Inspector General of the United States Postal Service. 

15

‘‘(i) The Postal Service shall render an annual report to the Secretary of the 

Treasury concerning the operation of the Competitive Products Fund, in which it 

shall address such matters as risk limitations, reserve balances, allocation or distribution of moneys, liquidity requirements, and measures to safeguard against 

losses. A copy of its then most recent report under this subsection shall be included 

with any other submission that it is required to make to the Postal Regulatory Commission under section 3652(g).’’. 

(2) CLERICAL AMENDMENT.—The analysis for chapter 20 of title 39, United 

States Code, is amended by adding after the item relating to section 2010 the 

following:

‘‘2011. Provisions relating to competitive products.’’.

(b) TECHNICAL AND CONFORMING AMENDMENTS.—

(1) DEFINITION.—Section 2001 of title 39, United States Code, is amended 

by striking ‘‘and’’ at the end of paragraph (1), by redesignating paragraph (2) 

as paragraph (3), and by inserting after paragraph (1) the following:

‘‘(2) ‘Competitive Products Fund’ means the Postal Service Competitive 

Products Fund established by section 2011; and’’. 

(2) CAPITAL OF THE POSTAL SERVICE.—Section 2002(b) of title 39, United 

States Code, is amended by striking ‘‘Fund,’’ and inserting ‘‘Fund and the balance in the Competitive Products Fund,’’. 

(3) POSTAL SERVICE FUND.—

(A) PURPOSES FOR WHICH AVAILABLE.—Section 2003(a) of title 39, 

United States Code, is amended by striking ‘‘title.’’ and inserting ‘‘title 

(other than any of the purposes, functions, or powers for which the Competitive Products Fund is available).’’. 

(B) DEPOSITS.—Section 2003(b) of title 39, United States Code, is 

amended by striking ‘‘There’’ and inserting ‘‘Except as otherwise provided 

in section 2011, there’’. 

(4) RELATIONSHIP BETWEEN THE TREASURY AND THE POSTAL SERVICE.—Section 2006 of title 39, United States Code, is amended—

(A) in subsection (b), by adding at the end the following: ‘‘Nothing in 

this chapter shall be considered to permit or require the Secretary of the 

Treasury to purchase any obligations of the Postal Service other than those 

issued under section 2005.’’; and 

(B) in subsection (c), by inserting ‘‘under section 2005’’ before ‘‘shall be 

obligations’’. 

SEC. 302. ASSUMED FEDERAL INCOME TAX ON COMPETITIVE PRODUCTS INCOME. 

Subchapter II of chapter 36 of title 39, United States Code, as amended by section 202, is amended by adding at the end the following: 

‘‘§ 3634. Assumed Federal income tax on competitive products income 

‘‘(a) DEFINITIONS.—For purposes of this section—

‘‘(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 income 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 allocable under section 2011(h) to competitive products; and 

‘‘(B) the only assets held by such corporation were the assets of the 

Postal Service allocable under section 2011(h) to such activities. 

‘‘(b) COMPUTATION AND TRANSFER REQUIREMENTS.—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 section 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.’’. 

SEC. 303. UNFAIR COMPETITION PROHIBITED. 

(a) SPECIFIC LIMITATIONS.—Chapter 4 of title 39, United States Code, is amended by adding after section 404 the following: 

16

‘‘§ 404a. Specific Limitations 

‘‘(a) Except as specifically authorized by law, the Postal Service may not—

‘‘(1) establish any rule or regulation (including any standard) the effect of 

which is to preclude competition or establish the terms of competition unless 

the Postal Service demonstrates that the regulation does not create an unfair 

competitive advantage for itself or any entity funded (in whole or in part) by 

the Postal Service; 

‘‘(2) compel the disclosure, transfer, or licensing of intellectual property to 

any third party (such as patents, copyrights, trademarks, trade secrets, and proprietary information); or 

‘‘(3) obtain information from a person that provides (or seeks to provide) 

any product, and then offer any product or service that uses or is based in 

whole or in part on such information, without the consent of the person providing that information, unless substantially the same information is obtained 

(or obtainable) from an independent source or is otherwise obtained (or obtainable). 

‘‘(b) The Postal Regulatory Commission shall prescribe regulations to carry out 

this section. 

‘‘(c) Any party (including an officer of the Commission representing the interests 

of the general public) who believes that the Postal Service has violated this section 

may bring a complaint in accordance with section 3662.’’. 

(b) CONFORMING AMENDMENTS.— (1) GENERAL POWERS.—Section 401 of title 39, United States Code, is 

amended by striking ‘‘The’’ and inserting ‘‘Subject to the provisions of section 

404a, the’’. 

(2) SPECIFIC POWERS.—Section 404(a) of title 39, United States Code, is 

amended by striking ‘‘Without’’ and inserting ‘‘Subject to the provisions of section 404a, but otherwise without’’. 

(c) CLERICAL AMENDMENT.—The analysis for chapter 4 of title 39, United States 

Code, is amended by inserting after the item relating to section 404 the following:

‘‘404a. Specific limitations.’’.

SEC. 304. SUITS BY AND AGAINST THE POSTAL SERVICE. 

(a) IN GENERAL.—Section 409 of title 39, United States Code, is amended by 

striking subsections (d) and (e) and inserting the following: 

‘‘(d)(1) For purposes of the provisions of law cited in paragraphs (2)(A) and 

(2)(B), respectively, the Postal Service—

‘‘(A) shall be considered to be a ‘person’, as used in the provisions of law 

involved; and 

‘‘(B) shall not be immune under any other doctrine of sovereign immunity 

from suit in Federal court by any person for any violation of any of those provisions of law by any officer or employee of the Postal Service. 

‘‘(2) This subsection applies with respect to—

‘‘(A) the Act of July 5, 1946 (commonly referred to as the ‘Trademark Act 

of 1946’ (15 U.S.C. 1051 and following)); and 

‘‘(B) the provisions of section 5 of the Federal Trade Commission Act to the 

extent that such section 5 applies to unfair or deceptive acts or practices. 

‘‘(e)(1) To the extent that the Postal Service, or other Federal agency acting on 

behalf of or in concert with the Postal Service, engages in conduct with respect to 

any competitive product, the Postal Service or other Federal agency (as the case 

may be)—

‘‘(A) shall not be immune under any doctrine of sovereign immunity from 

suit in Federal court by any person for any violation of Federal law by such 

agency or any officer or employee thereof; and 

‘‘(B) shall be considered to be a person (as defined in subsection (a) of the 

first section of the Clayton Act) for purposes of—

‘‘(i) the antitrust laws (as defined in such subsection); and 

‘‘(ii) section 5 of the Federal Trade Commission Act to the extent that 

such section 5 applies to unfair methods of competition. 

‘‘(2) No damages, interest on damages, costs or attorney’s fees may be recovered, 

and no criminal liability may be imposed, under the antitrust laws (as so defined) 

from any officer or employee of the Postal Service, or other Federal agency acting 

on behalf of or in concert with the Postal Service, acting in an official capacity. 

‘‘(3) This subsection shall not apply with respect to conduct occurring before the 

date of the enactment of this subsection. 

‘‘(f)(1) Each building constructed or altered by the Postal Service shall be constructed or altered, to the maximum extent feasible as determined by the Postal 

Service, in compliance with one of the nationally recognized model building codes 

and with other applicable nationally recognized codes. 

17

‘‘(2) Each building constructed or altered by the Postal Service shall be constructed or altered only after consideration of all requirements (other than procedural requirements) of zoning laws, land use laws, and applicable environmental 

laws of a State or subdivision of a State which would apply to the building if it were 

not a building constructed or altered by an establishment of the Government of the 

United States. 

‘‘(3) For purposes of meeting the requirements of paragraphs (1) and (2) with 

respect to a building, the Postal Service shall—

‘‘(A) in preparing plans for the building, consult with appropriate officials 

of the State or political subdivision, or both, in which the building will be located; 

‘‘(B) upon request, submit such plans in a timely manner to such officials 

for review by such officials for a reasonable period of time not exceeding 30 

days; and 

‘‘(C) permit inspection by such officials during construction or alteration of 

the building, in accordance with the customary schedule of inspections for construction or alteration of buildings in the locality, if such officials provide to the 

Postal Service—

‘‘(i) a copy of such schedule before construction of the building is begun; 

and 

‘‘(ii) reasonable notice of their intention to conduct any inspection before conducting such inspection. 

Nothing in this subsection shall impose an obligation on any State or political subdivision to take any action under the preceding sentence, nor shall anything in this 

subsection require the Postal Service or any of its contractors to pay for any action 

taken by a State or political subdivision to carry out this subsection (including reviewing plans, carrying out on-site inspections, issuing building permits, and making recommendations). 

‘‘(4) Appropriate officials of a State or a political subdivision of a State may 

make recommendations to the Postal Service concerning measures necessary to 

meet the requirements of paragraphs (1) and (2). Such officials may also make recommendations to the Postal Service concerning measures which should be taken in 

the construction or alteration of the building to take into account local conditions. 

The Postal Service shall give due consideration to any such recommendations. 

‘‘(5) In addition to consulting with local and State officials under paragraph (3), 

the Postal Service shall establish procedures for soliciting, assessing, and incorporating local community input on real property and land use decisions. 

‘‘(6) For purposes of this subsection, the term ‘State’ includes the District of Columbia, the Commonwealth of Puerto Rico, and a territory or possession of the 

United States. 

‘‘(g)(1) Notwithstanding any other provision of law, legal representation may not 

be furnished by the Department of Justice to the Postal Service in any action, suit, 

or proceeding arising, in whole or in part, under any of the following: 

‘‘(A) Subsection (d) or (e) of this section. 

‘‘(B) Subsection (f) or (g) of section 504 (relating to administrative subpoenas by the Postal Regulatory Commission). 

‘‘(C) Section 3663 (relating to appellate review). 

The Postal Service may, by contract or otherwise, employ attorneys to obtain any 

legal representation that it is precluded from obtaining from the Department of Justice under this paragraph. 

‘‘(2) In any circumstance not covered by paragraph (1), the Department of Justice shall, under section 411, furnish the Postal Service such legal representation 

as it may require, except that, with the prior consent of the Attorney General, the 

Postal Service may, in any such circumstance, employ attorneys by contract or otherwise to conduct litigation brought by or against the Postal Service or its officers 

or employees in matters affecting the Postal Service. 

‘‘(3)(A) In any action, suit, or proceeding in a court of the United States arising 

in whole or in part under any of the provisions of law referred to in subparagraph 

(B) or (C) of paragraph (1), and to which the Commission is not otherwise a party, 

the Commission shall be permitted to appear as a party on its own motion and as 

of right. 

‘‘(B) The Department of Justice shall, under such terms and conditions as the 

Commission and the Attorney General shall consider appropriate, furnish the Commission such legal representation as it may require in connection with any such action, suit, or proceeding, except that, with the prior consent of the Attorney General, 

the Commission may employ attorneys by contract or otherwise for that purpose. 

‘‘(h) A judgment against the Government of the United States arising out of activities of the Postal Service shall be paid by the Postal Service out of any funds 

18

available to the Postal Service, subject to the restriction specified in section 

2011(g).’’. 

(b) TECHNICAL AMENDMENT.—Section 409(a) of title 39, United States Code, is 

amended by striking ‘‘Except as provided in section 3628 of this title,’’ and inserting 

‘‘Except as otherwise provided in this title,’’. 

SEC. 305. INTERNATIONAL POSTAL ARRANGEMENTS. 

(a) IN GENERAL.—Section 407 of title 39, United States Code, is amended to 

read as follows: 

‘‘§ 407. International postal arrangements 

‘‘(a) It is the policy of the United States—

‘‘(1) to promote and encourage communications between peoples by efficient 

operation of international postal services and other international delivery services for cultural, social, and economic purposes; 

‘‘(2) to promote and encourage unrestricted and undistorted competition in 

the provision of international postal services and other international delivery 

services, except where provision of such services by private companies may be 

prohibited by law of the United States; 

‘‘(3) to promote and encourage a clear distinction between governmental 

and operational responsibilities with respect to the provision of international 

postal services and other international delivery services by the Government of 

the United States and by intergovernmental organizations of which the United 

States is a member; and 

‘‘(4) to participate in multilateral and bilateral agreements with other countries to accomplish these objectives. 

‘‘(b)(1) The Secretary of State shall be responsible for formulation, coordination, 

and oversight of foreign policy related to international postal services and other 

international delivery services, and shall have the power to conclude treaties, conventions and amendments related to international postal services and other international delivery services, except that the Secretary may not conclude any treaty, 

convention, or other international agreement (including those regulating international postal services) if such treaty, convention, or agreement would, with respect to any competitive product, grant an undue or unreasonable preference to the 

Postal Service, a private provider of international postal or delivery services, or any 

other person. 

‘‘(2) In carrying out the responsibilities specified in paragraph (1), the Secretary 

of State shall exercise primary authority for the conduct of foreign policy with respect to international postal services and international delivery services, including 

the determination of United States positions and the conduct of United States participation in negotiations with foreign governments and international bodies. In exercising this authority, the Secretary—

‘‘(A) shall coordinate with other agencies as appropriate, and in particular, 

shall give full consideration to the authority vested by law or Executive order 

in the Postal Regulatory Commission, the Department of Commerce, the Department of Transportation, and the Office of the United States Trade Representative in this area; 

‘‘(B) shall maintain continuing liaison with other executive branch agencies 

concerned with postal and delivery services; 

‘‘(C) shall maintain continuing liaison with the Committee on Government 

Reform of the House of Representatives and the Committee on Governmental 

Affairs of the Senate; 

‘‘(D) shall maintain appropriate liaison with both representatives of the 

Postal Service and representatives of users and private providers of international postal services and other international delivery services to keep informed of their interests and problems, and to provide such assistance as may 

be needed to ensure that matters of concern are promptly considered by the Department of State or (if applicable, and to the extent practicable) other executive branch agencies; and 

‘‘(E) shall assist in arranging meetings of such public sector advisory groups 

as may be established to advise the Department of State and other executive 

branch agencies in connection with international postal services and international delivery services. 

‘‘(3) The Secretary of State shall establish an advisory committee (within the 

meaning of the Federal Advisory Committee Act) to perform such functions as the 

Secretary considers appropriate in connection with carrying out subparagraphs (A) 

through (D) of paragraph (2). 

‘‘(c)(1) Before concluding any treaty, convention, or amendment that establishes 

a rate or classification for a product subject to subchapter I of chapter 36, the Secretary of State shall request the Postal Regulatory Commission to submit a decision 

19

on whether such rate or classification is consistent with the standards and criteria 

established by the Commission under section 3622. 

‘‘(2) The Secretary shall ensure that each treaty, convention, or amendment concluded under subsection (b) is consistent with a decision of the Commission adopted 

under paragraph (1), except if, or to the extent, the Secretary determines, by written 

order, that considerations of foreign policy or national security require modification 

of the Commission’s decision. 

‘‘(d) Nothing in this section shall be considered to prevent the Postal Service 

from entering into such commercial or operational contracts related to providing 

international postal services and other international delivery services as it deems 

appropriate, except that—

‘‘(1) any such contract made with an agency of a foreign government 

(whether under authority of this subsection or otherwise) shall be solely contractual in nature and may not purport to be international law; and 

‘‘(2) a copy of each such contract between the Postal Service and an agency 

of a foreign government shall be transmitted to the Secretary of State and the 

Postal Regulatory Commission not later than the effective date of such contract. 

‘‘(e)(1) With respect to shipments of international mail that are competitive 

products within the meaning of section 3631 that are exported or imported by the 

Postal Service, the Bureau of Customs and Border Protection of the Department of 

Homeland Security and other appropriate Federal agencies shall apply the customs 

laws of the United States and all other laws relating to the importation or exportation of such shipments in the same manner to both shipments by the Postal Service and similar shipments by private companies. 

‘‘(2) For purposes of this subsection, the term ‘private company’ means a private 

company substantially owned or controlled by persons who are citizens of the United 

States. 

‘‘(3) In exercising the authority pursuant to subsection (b) to conclude new treaties, conventions and amendments related to international postal services and to renegotiate such treaties, conventions and amendments, the Secretary of State shall, 

to the maximum extent practicable, take such measures as are within the Secretary’s control to encourage the governments of other countries to make available 

to the Postal Service and private companies a range of nondiscriminatory customs 

procedures that will fully meet the needs of all types of American shippers. The Secretary of State shall consult with the United States Trade Representative and the 

Commissioner of Customs, Department of Homeland Security in carrying out this 

paragraph. 

‘‘(4) The provisions of this subsection shall take effect 6 months after the date 

of the enactment of this subsection or such earlier date as the Bureau of Customs 

and Border Protection of the Department of Homeland Security may determine in 

writing.’’. 

(b) EFFECTIVE DATE.—Notwithstanding any provision of the amendment made 

by subsection (a), the authority of the United States Postal Service to establish the 

rates of postage or other charges on mail matter conveyed between the United 

States and other countries shall remain available to the Postal Service until—

(1) with respect to market-dominant products, the date as of which the regulations promulgated under section 3622 of title 39, United States Code (as 

amended by section 201(a)) take effect; and 

(2) with respect to competitive products, the date as of which the regulations promulgated under section 3633 of title 39, United States Code (as amended by section 202) take effect. 

SEC. 306. REDESIGNATION. 

Chapter 36 of title 39, United States Code (as in effect before the amendment 

made by section 204(a)) is amended by striking the heading for subchapter V and 

inserting the following: 

‘‘SUBCHAPTER VI—GENERAL’’. 

SEC. 307. CLARIFICATION. 

Section 403(c) of title 39, United States Code, is amended by adding after 

‘‘user.’’ the following: ‘‘The prohibition in this subsection shall not be construed to 

prevent the establishment of rates that vary with volume if such rates will be made 

available to similarly situated persons and will increase the aggregate contribution 

to the institutional costs of the Postal Service.’’. 

20

TITLE IV—GENERAL PROVISIONS 

SEC. 401. QUALIFICATION REQUIREMENTS FOR GOVERNORS. 

(a) IN GENERAL.—Section 202(a) of title 39, United States Code, is amended by 

striking ‘‘(a)’’ and inserting ‘‘(a)(1)’’ and by striking the fourth sentence and inserting 

the following: ‘‘The Governors shall represent the public interest generally, and at 

least 4 of the Governors shall be chosen solely on the basis of their demonstrated 

ability in managing organizations or corporations (in either the public or private 

sector) of substantial size; for purposes of this sentence, an organization or corporation shall be considered to be of substantial size if it employs at least 50,000 employees. The Governors shall not be representatives of specific interests using the 

Postal Service, and may be removed only for cause.’’. 

(b) CONSULTATION REQUIREMENT.—Section 202(a) of title 39, United States 

Code, is amended by adding at the end the following: 

‘‘(2) In selecting the individuals described in paragraph (1) for nomination for 

appointment to the position of Governor, the President should consult with the 

Speaker of the House of Representatives, the minority leader of the House of Representatives, the majority leader of the Senate, and the minority leader of the Senate.’’. 

(c) RESTRICTION.—Section 202(b) of title 39, United States Code, is amended by 

striking ‘‘(b)’’ and inserting ‘‘(b)(1)’’, and by adding at the end the following: 

‘‘(2)(A) Notwithstanding any other provision of this section, in the case of the 

office of the Governor the term of which is the first one scheduled to expire at least 

4 months after the date of the enactment of this paragraph—

‘‘(i) such office may not, in the case of any person commencing service after 

that expiration date, be filled by any person other than an individual chosen 

from among persons nominated for such office with the unanimous concurrence 

of all labor organizations described in section 206(a)(1); and 

‘‘(ii) instead of the term that would otherwise apply under the first sentence 

of paragraph (1), the term of any person so appointed to such office shall be 

3 years. 

‘‘(B) Except as provided in subparagraph (A), an appointment under this paragraph shall be made in conformance with all provisions of this section that would 

otherwise apply.’’. 

(d) APPLICABILITY.—The amendment made by subsection (a) shall not affect the 

appointment or tenure of any person serving as a Governor of the Board of Governors of the United States Postal Service pursuant to an appointment made before 

the date of the enactment of this Act, or, except as provided in the amendment 

made by subsection (c), any nomination made before that date; however, when any 

such office becomes vacant, the appointment of any person to fill that office shall 

be made in accordance with such amendment. The requirement set forth in the 

fourth sentence of section 202(a)(1) of title 39, United States Code (as amended by 

subsection (a)) shall be met beginning not later than 9 years after the date of the 

enactment of this Act. 

SEC. 402. OBLIGATIONS. 

(a) PURPOSES FOR WHICH OBLIGATIONS MAY BE ISSUED.—The first sentence of 

section 2005(a)(1) of title 39, United States Code, is amended by striking ‘‘title.’’ and 

inserting ‘‘title, other than any of the purposes for which the corresponding authority is available to the Postal Service under section 2011.’’. 

(b) LIMITATION ON NET ANNUAL INCREASE IN OBLIGATIONS ISSUED FOR CERTAIN

PURPOSES.—The third sentence of section 2005(a)(1) of title 39, United States Code, 

is amended to read as follows: ‘‘In any one fiscal year, the net increase in the 

amount of obligations outstanding issued for the purpose of capital improvements 

and the net increase in the amount of obligations outstanding issued for the purpose 

of defraying operating expenses of the Postal Service shall not exceed a combined 

total of $3,000,000,000.’’ . 

(c) LIMITATIONS ON OBLIGATIONS OUTSTANDING.—

(1) IN GENERAL.—Subsection (a) of section 2005 of title 39, United States 

Code, is amended by adding at the end the following: 

‘‘(3) For purposes of applying the respective limitations under this subsection, 

the aggregate amount of obligations issued by the Postal Service which are outstanding as of any one time, and the net increase in the amount of obligations outstanding issued by the Postal Service for the purpose of capital improvements or for 

the purpose of defraying operating expenses of the Postal Service in any fiscal year, 

shall be determined by aggregating the relevant obligations issued by the Postal 

Service under this section with the relevant obligations issued by the Postal Service 

under section 2011.’’. 

21

(2) CONFORMING AMENDMENT.—The second sentence of section 2005(a)(1) of 

title 39, United States Code, is amended by striking ‘‘any such obligations’’ and 

inserting ‘‘obligations issued by the Postal Service which may be’’. 

(d) AMOUNTS WHICH MAY BE PLEDGED, ETC.— (1) OBLIGATIONS TO WHICH PROVISIONS APPLY.—The first sentence of section 

2005(b) of title 39, United States Code, is amended by striking ‘‘such obligations,’’ and inserting ‘‘obligations issued by the Postal Service under this section,’’. 

(2) ASSETS, REVENUES, AND RECEIPTS TO WHICH PROVISIONS APPLY.—Subsection (b) of section 2005 of title 39, United States Code, is amended by striking ‘‘(b)’’ and inserting ‘‘(b)(1)’’, and by adding at the end the following: 

‘‘(2) Notwithstanding any other provision of this section—

‘‘(A) the authority to pledge assets of the Postal Service under this subsection shall be available only to the extent that such assets are not related to 

the provision of competitive products (as determined under section 2011(h) or, 

for purposes of any period before accounting practices and principles under section 2011(h) have been established and applied, the best information available 

from the Postal Service, including the audited statements required by section 

2008(e)); and 

‘‘(B) any authority under this subsection relating to the pledging or other 

use of revenues or receipts of the Postal Service shall be available only to the 

extent that they are not revenues or receipts of the Competitive Products 

Fund.’’. 

SEC. 403. PRIVATE CARRIAGE OF LETTERS. 

(a) IN GENERAL.—Section 601 of title 39, United States Code, is amended by 

striking subsection (b) and inserting the following: 

‘‘(b) A letter may also be carried out of the mails when—

‘‘(1) the amount paid for the private carriage of the letter is at least the 

amount equal to 6 times the rate then currently charged for the 1st ounce of 

a single-piece first class letter; 

‘‘(2) the letter weighs at least 121⁄2 ounces; or 

‘‘(3) such carriage is within the scope of services described by regulations 

of the Postal Service (including, in particular, sections 310.1 and 320.2–320.8 

of title 39 of the Code of Federal Regulations, as in effect on July 1, 2003) that 

purport to permit private carriage by suspension of the operation of this section 

(as then in effect).

‘‘(c) Any regulations necessary to carry out this section shall be promulgated by 

the Postal Regulatory Commission.’’. 

(b) EFFECTIVE DATE.—This section shall take effect on the date as of which the 

regulations promulgated under section 3633 of title 39, United States Code (as 

amended by section 202) take effect. 

SEC. 404. RULEMAKING AUTHORITY. 

Paragraph (2) of section 401 of title 39, United States Code, is amended to read 

as follows: 

‘‘(2) to adopt, amend, and repeal such rules and regulations, not inconsistent with this title, as may be necessary in the execution of its functions 

under this title and such other functions as may be assigned to the Postal Service under any provisions of law outside of this title;’’. 

SEC. 405. NONINTERFERENCE WITH COLLECTIVE BARGAINING AGREEMENTS, ETC. 

(a) NONINTERFERENCE WITH COLLECTIVE BARGAINING AGREEMENTS.—Except as 

provided in section 407, nothing in this Act or any amendment made by this Act 

shall restrict, expand, or otherwise affect any of the rights, privileges, or benefits 

of either employees of or labor organizations representing employees of the United 

States Postal Service under chapter 12 of title 39, United States Code, the National 

Labor Relations Act, any handbook or manual affecting employee labor relations 

within the United States Postal Service, or any collective bargaining agreement. 

(b) FREE MAILING PRIVILEGES CONTINUE UNCHANGED.—Nothing in this Act or 

any amendment made by this Act shall affect any free mailing privileges accorded 

under section 3217 or sections 3403 through 3406 of title 39, United States Code. 

SEC. 406. BONUS AUTHORITY. 

Subchapter VI of chapter 36 of title 39, United States Code (as so redesignated 

by section 306) is amended by adding at the end the following: 

‘‘§ 3686. Bonus authority 

‘‘(a) IN GENERAL.—The Postal Service may establish one or more programs to 

provide bonuses or other rewards to officers and employees of the Postal Service to 

achieve the objectives of this chapter. 

22

‘‘(b) WAIVER OF LIMITATION ON COMPENSATION.—

‘‘(1) IN GENERAL.—Under any such program, the Postal Service may award 

a bonus or other reward in excess of the limitation set forth in the last sentence 

of section 1003(a), if such program has been approved under paragraph (2). 

‘‘(2) APPROVAL PROCESS.—If the Postal Service wishes to have the authority, 

under any program described in subsection (a), to award bonuses or other rewards in excess of the limitation referred to in paragraph (1)—

‘‘(A) the Postal Service shall make an appropriate request to the Postal 

Regulatory Commission, in such form and manner as the Commission requires; and 

‘‘(B) the Postal Regulatory Commission shall approve any such request 

if it finds that the program is likely to achieve the objectives of this chapter. 

‘‘(3) REVOCATION AUTHORITY.—If the Postal Regulatory Commission finds 

that a program previously approved under paragraph (2) is not achieving the 

objectives of this chapter, the Commission may revoke or suspend the authority 

of the Postal Service to continue such program until such time as appropriate 

corrective measures have, in the judgment of the Commission, been taken. 

‘‘(c) REPORTING REQUIREMENT RELATING TO BONUSES OR OTHER REWARDS.—Included in its comprehensive statement under section 2401(e) for any period shall 

be—

‘‘(1) the name of each person receiving a bonus or other reward during such 

period which would not have been allowable but for the provisions of subsection 

(b); 

‘‘(2) the amount of the bonus or other reward; and 

‘‘(3) the amount by which the limitation referred to in subsection (b)(1) was 

exceeded as a result of such bonus or other reward.’’. 

SEC. 407. MEDIATION IN COLLECTIVE-BARGAINING DISPUTES. 

(a) IN GENERAL.—Section 1207(b) of title 39, United States Code, is amended 

by striking all that follows ‘‘the Director of the Federal Mediation and Conciliation 

Service shall’’ and inserting ‘‘, within 10 days appoint a mediator of nationwide reputation and professional stature, and who is also a member of the National Academy of Arbitrators. The parties shall cooperate with the mediator in an effort to 

reach an agreement and shall meet and negotiate in good faith at such times and 

places that the mediator, in consultation with the parties, shall direct.’’. 

(b) PROVISIONS RELATING TO ARBITRATION BOARDS.—Section 1207(c) of title 39, 

United States Code, is amended—

(1) in paragraph (1)—

(A) by striking ‘‘90’’ and inserting ‘‘60’’; 

(B) by striking ‘‘not members of the factfinding panel,’’; and 

(C) by striking all that follows ‘‘shall be made’’ and inserting ‘‘from a 

list of names provided by the Director. This list shall consist of not less 

than 9 names of arbitrators of nationwide reputation and professional stature, who are also members of the National Academy of Arbitrators, and 

whom the Director has determined are available and willing to serve.’’; and 

(2) in paragraph (3), by striking ‘‘factfinding panel’’ and inserting ‘‘mediation’’. 

(c) CONFORMING AMENDMENT.—Section 1207(d) of title 39, United States Code, 

is amended by striking ‘‘factfinding panel will be established’’ and inserting ‘‘mediator shall be appointed’’. 

TITLE V—ENHANCED REGULATORY 

COMMISSION 

SEC. 501. REORGANIZATION AND MODIFICATION OF CERTAIN PROVISIONS RELATING TO THE 

POSTAL REGULATORY COMMISSION. 

(a) TRANSFER AND REDESIGNATION.—Title 39, United States Code, is amended—

(1) by inserting after chapter 4 the following: 

‘‘CHAPTER 5—POSTAL REGULATORY COMMISSION

‘‘Sec. 

‘‘501. Establishment. 

‘‘502. Commissioners. 

‘‘503. Rules; regulations; procedures. 

‘‘504. Administration.

23

‘‘§ 501. Establishment 

‘‘The Postal Regulatory Commission is an independent establishment of the executive branch of the Government of the United States. 

‘‘§ 502. Commissioners 

‘‘(a) The Postal Regulatory Commission is composed of 5 Commissioners, appointed by the President, by and with the advice and consent of the Senate. The 

Commissioners shall be chosen solely on the basis of their technical qualifications, 

professional standing, and demonstrated expertise in economics, accounting, law, or 

public administration, and may be removed by the President only for cause. Each 

individual appointed to the Commission shall have the qualifications and expertise 

necessary to carry out the responsibilities accorded Commissioners under the Postal 

Accountability and Enhancement Act. Not more than 3 of the Commissioners may 

be adherents of the same political party. 

‘‘(b) A Commissioner may continue to serve after the expiration of his term until 

his successor has qualified, except that a Commissioner may not so continue to 

serve for more than 1 year after the date upon which his term otherwise would expire under subsection (e). 

‘‘(c) One of the Commissioners shall be designated as Chairman by, and shall 

serve in the position of Chairman at the pleasure of, the President. 

‘‘(d) The Commissioners shall by majority vote designate a Vice Chairman of the 

Commission. The Vice Chairman shall act as Chairman of the Commission in the 

absence of the Chairman. 

‘‘(e) The Commissioners shall serve for terms of 6 years.’’; 

(2) by striking, in subchapter I of chapter 36 (as in effect before the amendment made by section 201(c)), the heading for such subchapter I and all that 

follows through section 3602; and 

(3) by redesignating sections 3603 and 3604 as sections 503 and 504, respectively, and transferring such sections to the end of chapter 5 (as inserted 

by paragraph (1)). 

(b) DETERMINATIONS.—Section 503 of title 39, United States Code, as so redesignated by subsection (a)(3), is amended by adding at the end the following: ‘‘Such 

rules shall include procedures which balance, inter alia, the need for protecting due 

process rights and ensuring expeditious decision-making.’’. 

(c) APPLICABILITY.—The amendment made by subsection (a)(1) shall not affect 

the appointment or tenure of any person serving as a Commissioner on the Postal 

Regulatory Commission (as so redesignated by section 504) pursuant to an appointment made before the date of the enactment of this Act or any nomination made 

before that date, but, when any such office becomes vacant, the appointment of any 

person to fill that office shall be made in accordance with such amendment. 

(d) CLERICAL AMENDMENT.—The analysis for part I of title 39, United States 

Code, is amended by inserting after the item relating to chapter 4 the following:

‘‘5. Postal Regulatory Commission ................................................................................................................ 501’’.

SEC. 502. AUTHORITY FOR POSTAL REGULATORY COMMISSION TO ISSUE SUBPOENAS. 

Section 504 of title 39, United States Code (as so redesignated by section 501) 

is amended by adding at the end the following: 

‘‘(f)(1) Any Commissioner of the Postal Regulatory Commission, any administrative law judge appointed by the Commission under section 3105 of title 5, and any 

employee of the Commission designated by the Commission may administer oaths, 

examine witnesses, take depositions, and receive evidence. 

‘‘(2) The Chairman of the Commission, any Commissioner designated by the 

Chairman, and any administrative law judge appointed by the Commission under 

section 3105 of title 5 may, with respect to any proceeding conducted by the Commission under this title—

‘‘(A) issue subpoenas requiring the attendance and presentation of testimony by, or the production of documentary or other evidence in the possession 

of, any covered person; and 

‘‘(B) order the taking of depositions and responses to written interrogatories 

by a covered person. 

The written concurrence of a majority of the Commissioners then holding office 

shall, with respect to each subpoena under subparagraph (A), be required in advance of its issuance. 

‘‘(3) In the case of contumacy or failure to obey a subpoena issued under this 

subsection, upon application by the Commission, the district court of the United 

States for the district in which the person to whom the subpoena is addressed resides or is served may issue an order requiring such person to appear at any designated place to testify or produce documentary or other evidence. Any failure to 

obey the order of the court may be punished by the court as a contempt thereof. 

24

‘‘(4) For purposes of this subsection, the term ‘covered person’ means an officer, 

employee, agent, or contractor of the Postal Service. 

‘‘(g)(1) If the Postal Service determines that any document or other matter it 

provides to the Postal Regulatory Commission pursuant to a subpoena issued under 

subsection (f), or otherwise at the request of the Commission in connection with any 

proceeding or other purpose under this title, 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, in writing, of its determination (and the reasons 

therefor). 

‘‘(2) No officer or employee of the Commission may, with respect to any information as to which the Commission has been notified under paragraph (1)—

‘‘(A) use such information for purposes other than the purposes for which 

it is supplied; or 

‘‘(B) permit anyone who is not an officer or employee of the Commission to 

have access to any such information.

‘‘(3) Paragraph (2) shall not prevent information from being furnished under 

any process of discovery established under this title in connection with a proceeding 

under this title. The Commission shall, by regulations based on rule 26(c) of the 

Federal Rules of Civil Procedure, establish procedures for ensuring appropriate confidentiality for any information furnished under the preceding sentence.’’. 

SEC. 503. APPROPRIATIONS FOR THE POSTAL REGULATORY COMMISSION. 

(a) AUTHORIZATION OF APPROPRIATIONS.—Subsection (d) of section 504 of title 

39, United States Code (as so redesignated by section 501) is amended to read as 

follows: 

‘‘(d) There are authorized to be appropriated, out of the Postal Service Fund, 

such sums as may be necessary for the Postal Regulatory Commission. In requesting 

an appropriation under this subsection for a fiscal year, the Commission shall prepare and submit to the Congress under section 2009 a budget of the Commission’s 

expenses, including expenses for facilities, supplies, compensation, and employee 

benefits.’’. 

(b) BUDGET PROGRAM.— (1) IN GENERAL.—The next to last sentence of section 2009 of title 39, 

United States Code, is amended to read as follows: ‘‘The budget program shall 

also include separate statements of the amounts which (1) the Postal Service 

requests to be appropriated under subsections (b) and (c) of section 2401, (2) the 

Office of Inspector General of the United States Postal Service requests to be 

appropriated, out of the Postal Service Fund, under section 8J(e) of the Inspector General Act of 1978, and (3) the Postal Regulatory Commission requests to 

be appropriated, out of the Postal Service Fund, under section 504(d) of this 

title.’’. 

(2) CONFORMING AMENDMENT.—Section 2003(e)(1) of title 39, United States 

Code, is amended by striking the first sentence and inserting the following: 

‘‘The Fund shall be available for the payment of (A) all expenses incurred by 

the Postal Service in carrying out its functions as provided by law, subject to 

the same limitation as set forth in the parenthetical matter under subsection 

(a); (B) all expenses of the Postal Regulatory Commission, subject to the availability of amounts appropriated pursuant to section 504(d); and (C) all expenses 

of the Office of Inspector General, subject to the availability of amounts appropriated pursuant to section 8J(e) of the Inspector General Act of 1978.’’. 

(c) EFFECTIVE DATE.—

(1) IN GENERAL.—The amendments made by this section shall apply with 

respect to fiscal years beginning on or after October 1, 2004. 

(2) SAVINGS PROVISION.—The provisions of title 39, United States Code, that 

are amended by this section shall, for purposes of any fiscal year before the first 

fiscal year to which the amendments made by this section apply, continue to 

apply in the same way as if this section had never been enacted. 

SEC. 504. REDESIGNATION OF THE POSTAL RATE COMMISSION. 

(a) AMENDMENTS TO TITLE 39, UNITED STATES CODE.—Title 39, United States 

Code, is amended in sections 404, 503–504 (as so redesignated by section 501), 1001, 

and 1002 by striking ‘‘Postal Rate Commission’’ each place it appears and inserting 

‘‘Postal Regulatory Commission’’. 

(b) AMENDMENTS TO TITLE 5, UNITED STATES CODE.—Title 5, United States 

Code, is amended in sections 104(1), 306(f), 2104(b), 3371(3), 5314 (in the item relating to Chairman, Postal Rate Commission), 5315 (in the item relating to Members, 

Postal Rate Commission), 5514(a)(5)(B), 7342(a)(1)(A), 7511(a)(1)(B)(ii), 8402(c)(1), 

8423(b)(1)(B), and 8474(c)(4) by striking ‘‘Postal Rate Commission’’ and inserting 

‘‘Postal Regulatory Commission’’. 

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(c) AMENDMENT TO THE ETHICS IN GOVERNMENT ACT OF 1978.—Section 101(f)(6) 

of the Ethics in Government Act of 1978 (5 U.S.C. App.) is amended by striking 

‘‘Postal Rate Commission’’ and inserting ‘‘Postal Regulatory Commission’’. 

(d) AMENDMENT TO THE REHABILITATION ACT OF 1973.—Section 501(b) of the 

Rehabilitation Act of 1973 (29 U.S.C. 791(b)) is amended by striking ‘‘Postal Rate 

Office’’ and inserting ‘‘Postal Regulatory Commission’’. 

(e) AMENDMENT TO TITLE 44, UNITED STATES CODE.—Section 3502(5) of title 44, 

United States Code, is amended by striking ‘‘Postal Rate Commission’’ and inserting 

‘‘Postal Regulatory Commission’’. 

(f) OTHER REFERENCES.—Whenever a reference is made in any provision of law 

(other than this Act or a provision of law amended by this Act), regulation, rule, 

document, or other record of the United States to the Postal Rate Commission, such 

reference shall be considered a reference to the Postal Regulatory Commission. 

SEC. 505. OFFICER OF THE POSTAL REGULATORY COMMISSION REPRESENTING THE GENERAL PUBLIC. 

(a) IN GENERAL.—Chapter 5 of title 39, United States Code (as added by this 

Act) is amended by adding after section 504 the following: 

‘‘§ 505. Officer of the Postal Regulatory Commission representing the general public 

‘‘The Postal Regulatory Commission shall designate an officer of the Postal Regulatory Commission in all public proceedings (such as developing rules, regulations, 

and procedures) who shall represent the interests of the general public.’’. 

(b) CLERICAL AMENDMENT.—The analysis for chapter 5 of title 39, United States 

Code (as amended by section 501(a)(1)) is amended by adding after the item relating 

to section 504 the following:

‘‘505. Officer of the Postal Regulatory Commission representing the general public.’’.

TITLE VI—INSPECTORS GENERAL 

SEC. 601. INSPECTOR GENERAL OF THE POSTAL REGULATORY COMMISSION. 

(a) IN GENERAL.—Paragraph (2) of section 8G(a) of the Inspector General Act 

of 1978 is amended by inserting ‘‘the Postal Regulatory Commission,’’ after ‘‘the 

United States International Trade Commission,’’.

(b) ADMINISTRATION.—Section 504 of title 39, United States Code (as so redesignated by section 501) is amended by adding after subsection (g) (as added by section 

502) the following: 

‘‘(h)(1) Notwithstanding any other provision of this title or of the Inspector General Act of 1978, the authority to select, appoint, and employ officers and employees 

of the Office of Inspector General of the Postal Regulatory Commission, and to obtain any temporary or intermittent services of experts or consultants (or an organization of experts or consultants) for such Office, shall reside with the Inspector General of the Postal Regulatory Commission. 

‘‘(2) Except as provided in paragraph (1), any exercise of authority under this 

subsection shall, to the extent practicable, be in conformance with the applicable 

laws and regulations that govern selections, appointments and employment, and the 

obtaining of any such temporary or intermittent services, within the Postal Regulatory Commission.’’. 

(c) DEADLINE.—No later than 180 days after the date of the enactment of this 

Act—

(1) the first Inspector General of the Postal Regulatory Commission shall 

be appointed; and 

(2) the Office of Inspector General of the Postal Regulatory Commission 

shall be established. 

SEC. 602. INSPECTOR GENERAL OF THE UNITED STATES POSTAL SERVICE TO BE APPOINTED 

BY THE PRESIDENT. 

(a) DEFINITIONAL AMENDMENTS TO THE INSPECTOR GENERAL ACT OF 1978.—Section 11 of the Inspector General Act of 1978 is amended—

(1) in paragraph (1)—

(A) by striking ‘‘or’’ before ‘‘the President of the Export-Import Bank;’’ 

and 

(B) by inserting ‘‘or the Governors of the United States Postal Service 

(within the meaning of section 102(3) of title 39, United States Code);’’ after 

‘‘the President of the Export-Import Bank;’’; and 

(2) in paragraph (2)—

(A) by striking ‘‘or’’ before ‘‘the Export-Import Bank,’’; and 

26

(B) by inserting ‘‘or the United States Postal Service,’’ after ‘‘the Export-Import Bank,’’. 

(b) SPECIAL PROVISIONS CONCERNING THE UNITED STATES POSTAL SERVICE.—

(1) IN GENERAL.—The Inspector General Act of 1978 is amended—

(A) by redesignating section 8J as section 8K; and 

(B) by inserting after section 8I the following: 

‘‘SPECIAL PROVISIONS CONCERNING THE UNITED STATES POSTAL SERVICE

‘‘SEC. 8J. (a) In carrying out the duties and responsibilities specified in this Act, 

the Inspector General of the United States Postal Service shall have oversight responsibility for all activities of the Postal Inspection Service, including any internal 

investigation performed by the Postal Inspection Service. The Chief Postal Inspector 

shall promptly report any significant activities being carried out by the Postal Inspection Service to such Inspector General. The Postmaster General shall promptly 

report to such Inspector General all allegations of theft, fraud, or misconduct by 

Postal Service officers or employees, and entities or individuals doing business with 

the Postal Service. 

‘‘(b) In the case of any report that the Governors of the United States Postal 

Service (within the meaning of section 102(3) of title 39, United States Code) are 

required to transmit under the second sentence of section 5(d), such sentence shall 

be applied by deeming the term ‘appropriate committees of Congress’ to mean the 

Committee on Government Reform of the House of Representatives, the Committee 

on Governmental Affairs of the Senate, and such other committees or subcommittees of Congress as may be appropriate. 

‘‘(c) Notwithstanding any provision of paragraph (7) or (8) of section 6(a), the 

Inspector General of the United States Postal Service may select, appoint, and employ such officers and employees as may be necessary for carrying out the functions, 

powers, and duties of the Office of Inspector General and to obtain the temporary 

or intermittent services of experts or consultants or an organization of experts or 

consultants, subject to the applicable laws and regulations that govern such selections, appointments, and employment, and the obtaining of such services, within the 

United States Postal Service. 

‘‘(d) Nothing in this Act shall restrict, eliminate, or otherwise adversely affect 

any of the rights, privileges, or benefits of employees of the United States Postal 

Service, or labor organizations representing employees of the United States Postal 

Service, under chapter 12 of title 39, United States Code, the National Labor Relations Act, any handbook or manual affecting employee labor relations with the 

United States Postal Service, or any collective bargaining agreement. 

‘‘(e) There are authorized to be appropriated, out of the Postal Service Fund, 

such sums as may be necessary for the Office of Inspector General of the United 

States Postal Service.’’. 

(2) RELATED PROVISIONS.—For certain related provisions, see section 503(b). 

(c) EXERCISE OF CERTAIN POWERS.—Section 6(e)(3) of the Inspector General Act 

of 1978 is amended—

(1) by striking ‘‘and the’’ before ‘‘Tennessee Valley Authority’’; and 

(2) by inserting ‘‘, and United States Postal Service’’ after ‘‘Tennessee Valley 

Authority’’. 

(d) PUBLIC CONTRACTS.—

(1) ADDITIONAL PROVISIONS APPLICABLE.—Section 410(b)(5) of title 39, 

United States Code, is amended—

(A) in subparagraph (A), by striking ‘‘and’’ after the semicolon; and 

(B) by adding after subparagraph (B) the following: 

‘‘(C) the Anti-Kickback Act of 1986 (41 U.S.C. 51 and following), other 

than subsections (a) and (b) of 7 and section 8 of that Act; and

‘‘(D) section 315 of the Federal Property and Administrative Services 

Act of 1949 (41 U.S.C. 265) (relating to protecting contractor employees 

from reprisal for disclosure of certain information);’’. 

(2) REGULATIONS ON ALLOWABLE COSTS.—Section 410 of title 39, United 

States Code, is amended by adding at the end the following: 

‘‘(e) The Postal Service shall develop and issue purchasing regulations that prohibit contract costs not allowable under section 5.2.5 of the United States Postal 

Service Procurement Manual (Publication 41), as in effect on July 12, 1995.’’. 

(e) AUDITS OF THE POSTAL SERVICE.—

(1) AUDITS.—Subsection (e) of section 2008 of title 39, United States Code, 

is amended to read as follows: 

‘‘(e)(1) At least once each year beginning with the fiscal year commencing after 

the date of the enactment of the Postal Accountability and Enhancement Act, the 

financial statements of the Postal Service (including those used in determining and 

27

establishing postal rates) shall be audited by the Inspector General or by an independent external auditor selected by the Inspector General. 

‘‘(2) Audits under this section shall be conducted in accordance with applicable 

generally accepted government auditing standards. 

‘‘(3) Upon completion of the audit required by this subsection, the person who 

audits the statement shall submit a report on the audit to the Postmaster General.’’. 

(2) RESULTS OF INSPECTOR GENERAL’S AUDIT TO BE INCLUDED IN ANNUAL RE- PORT.—Section 2402 of title 39, United States Code, is amended by inserting 

after the first sentence the following: ‘‘Each report under this section shall include a copy of the report most recently received by the Postmaster General 

under section 2008(e)(3).’’. 

(3) COORDINATION PROVISIONS.—Section 2008(d) of title 39, United States 

Code, is amended—

(A) by striking ‘‘(d) Nothing’’ and inserting ‘‘(d)(1) Except as provided 

in paragraph (2), nothing’’; and 

(B) by adding at the end the following: 

‘‘(2) An audit or report under paragraph (1) may not be obtained without the 

prior written approval of the Inspector General.’’. 

(4) TRANSITION PROVISION.—For purposes of any fiscal year preceding the 

first fiscal year commencing after the date of the enactment of this Act, the provisions of title 39, United States Code, shall be applied as if the amendments 

made by this subsection had never been enacted. 

(f) REPORTS.—Section 3013 of title 39, United States Code, is amended by striking ‘‘Postmaster General’’ each place it appears and inserting ‘‘Chief Postal Inspector’’. 

(g) TECHNICAL AND CONFORMING AMENDMENTS.—

(1) RELATING TO THE INSPECTOR GENERAL ACT OF 1978.—(A) Subsection (a) 

of section 8G of the Inspector General Act of 1978 (as amended by section 

601(a)) is further amended—

(i) in paragraph (2), by striking ‘‘the Postal Regulatory Commission, 

and the United States Postal Service;’’ and inserting ‘‘and the Postal Regulatory Commission;’’ and 

(ii) in paragraph (4), by striking ‘‘except that’’ and all that follows 

through ‘‘Code);’’ and inserting ‘‘except that, with respect to the National 

Science Foundation, such term means the National Science Board;’’. 

(B)(i) Subsection (f) of section 8G of such Act is repealed. 

(ii) Subsection (c) of section 8G of such Act is amended by striking ‘‘Except 

as provided under subsection (f) of this section, the’’ and inserting ‘‘The’’. 

(C) Section 8K of such Act (as so redesignated by subsection (b)(1)(A)) is 

amended by striking the matter after ‘‘8D,’’ and before ‘‘of this Act’’ and inserting ‘‘8E, 8F, 8H, or 8J’’. 

(2) RELATING TO TITLE 39, UNITED STATES CODE.—(A) Subsection (e) of section 202 of title 39, United States Code, is repealed. 

(B) Paragraph (4) of section 102 of such title 39 (as amended by section 101) 

is amended to read as follows: 

‘‘(4) ‘Inspector General’ means the Inspector General of the United States 

Postal Service, appointed under section 3(a) of the Inspector General Act of 

1978;’’. 

(C) The first sentence of section 1003(a) of such title 39 is amended by 

striking ‘‘chapters 2 and 12 of this title, section 8G of the Inspector General Act 

of 1978, or other provision of law,’’ and inserting ‘‘chapter 2 or 12 of this title, 

subsection (b) or (c) of this section, or any other provision of law,’’. 

(D) Section 1003(b) of such title 39 is amended by striking ‘‘respective’’ and 

inserting ‘‘other’’. 

(E) Section 1003(c) of such title 39 is amended by striking ‘‘included’’ and 

inserting ‘‘includes’’. 

(3) RELATING TO THE ENERGY POLICY ACT OF 1992.—Section 160(a) of the Energy Policy Act of 1992 (42 U.S.C. 8262f(a)) is amended (in the matter before 

paragraph (1)) by striking all that follows ‘‘(5 U.S.C. App.)’’ and before ‘‘shall—

’’. 

(h) EFFECTIVE DATE; TRANSITION PROVISIONS.—

(1) EFFECTIVE DATE.—Except as provided in paragraph (2) or subsection (c), 

this section and the amendments made by this section shall take effect on the 

date of the enactment of this Act. 

(2) TRANSITION PROVISIONS.—

(A) PRESIDENTIAL APPOINTMENT AUTHORITY AVAILABLE IMMEDIATELY.—

The authority to appoint an Inspector General of the United States Postal 

Service in accordance with the amendments made by this section shall be 

available as of the effective date of this section. 

28

(B) CONTINUATION IN OFFICE.—Pending the appointment of an Inspector General of the United States Postal Service in accordance with the 

amendments made by this section, the individual serving as the Inspector 

General of the United States Postal Service on the day before the effective 

date of this section may continue to serve—

(i) in accordance with applicable provisions of the Inspector General Act of 1978 and (except as provided in clause (ii)) of title 39, 

United States Code, as last in effect before the effective date of this 

Act; but 

(ii) subject to the provisions of such title 39 as amended by subsections (e) and (f) of this section (deeming any reference to the ‘‘Inspector General’’ in such provisions, as so amended, to refer to the individual continuing to serve under authority of this subparagraph) and 

subparagraph (C). 

(C) AUTHORIZATION OF APPROPRIATIONS.—

(i) IN GENERAL.—Notwithstanding any other provision of this subsection, section 8J(e) of the Inspector General Act of 1978 (as amended 

by this section) shall be effective for purposes of fiscal years beginning 

on or after October 1, 2004. 

(ii) SAVINGS PROVISION.—For purposes of the fiscal year ending on 

September 30, 2004, funding for the Office of Inspector General of the 

United States Postal Service shall be made available in the same manner as if this Act had never been enacted. 

(D) ELIGIBILITY OF PRIOR INSPECTOR GENERAL.—Nothing in this Act 

shall prevent any individual who has served as Inspector General of the 

United States Postal Service at any time before the date of the enactment 

of this Act from being appointed to that position pursuant to the amendments made by this section. 

TITLE VII—EVALUATIONS 

SEC. 701. UNIVERSAL POSTAL SERVICE STUDY. 

(a) REPORT BY THE POSTAL SERVICE.—The United States Postal Service shall, 

within 12 months after the date of the enactment of this Act, submit to the President, the Congress, and the Postal Regulatory Commission, a written report on universal postal service in the United States (hereinafter in this section referred to as 

‘‘universal service’’). Such report shall include at least the following: 

(1) A comprehensive review of the history and development of universal 

service, including how the scope and standards of universal service have evolved 

over time. 

(2) The scope and standards of universal service provided under current law 

(including sections 101 and 403 of title 39, United States Code) and current 

rules, regulations, policy statements, and practices of the Postal Service. 

(3) A description of any geographic areas, populations, communities, organizations, or other groups or entities not currently covered by universal service 

or that are covered but that are receiving services deficient in scope or quality 

or both. 

(4) The scope and standards of universal service likely to be required in the 

future in order to meet the needs and expectations of the American public, including all types of mail users, based on such assumptions or alternative sets 

of assumptions as the Postal Service considers plausible. 

(5) Such recommendations as the Postal Service considers appropriate. 

(b) REPORT BY THE POSTAL REGULATORY COMMISSION.—The Postal Regulatory 

Commission shall, within 12 months after receiving the report of the Postal Service 

under subsection (a), submit to the President and the Congress a written report 

evaluating the report of the Postal Service. The report of the Commission shall include at least the following: 

(1) Such comments and observations relating to the matters addressed in 

the Postal Service’s report as the Commission considers appropriate. 

(2) An estimate of the cost attributable to the obligation to provide universal service under prior and current law, respectively. 

(3) An estimate of the likely cost of fulfilling the obligation to provide universal service under—

(A) the assumptions or respective sets of assumptions of the Postal 

Service described in subsection (a)(4); and 

(B) such other assumptions or sets of assumptions as the Commission 

considers plausible. 

29

(4) Such additional topics and recommendations as the Commission considers appropriate. 

(c) CONSULTATION.—In preparing the reports required by this section, the Postal 

Service and the Postal Regulatory Commission—

(1) shall consult with each other, other Federal agencies, users of the mails, 

enterprises in the private sector engaged in the delivery of mail, and the general public; and 

(2) shall address in their respective reports any written comments received 

under this section. 

(d) CLARIFYING PROVISION.—Nothing in this section shall be considered to relate 

to any services that are not postal services (within the meaning of section 102 of 

title 39, United States Code, as amended by section 101). 

SEC. 702. ASSESSMENTS OF RATEMAKING, CLASSIFICATION, AND OTHER PROVISIONS. 

(a) IN GENERAL.—The Postal Regulatory Commission shall, at least every 5 

years, submit a report to the President and the Congress concerning—

(1) the operation of the amendments made by the Postal Accountability and 

Enhancement Act; and 

(2) recommendations for any legislation or other measures necessary to improve the effectiveness or efficiency of the postal laws of the United States. 

(b) POSTAL SERVICE VIEWS.—A report under this section shall be submitted only 

after reasonable opportunity has been afforded to the Postal Service to review such 

report and to submit written comments thereon. Any comments timely received from 

the Postal Service under the preceding sentence shall be attached to the report submitted under subsection (a). 

(c) SPECIFIC INFORMATION REQUIRED.—The Postal Regulatory Commission shall 

include, as part of at least its first report under subsection (a), the following: 

(1) COST-COVERAGE REQUIREMENT RELATING TO COMPETITIVE PRODUCTS COL- LECTIVELY.—With respect to section 3633 of title 39, United States Code (as 

amended by this Act)—

(A) a description of how such section has operated; and 

(B) recommendations as to whether or not such section should remain 

in effect and, if so, any suggestions as to how it might be improved. 

(2) COMPETITIVE PRODUCTS FUND.—With respect to the Postal Service Competitive Products Fund (under section 2011 of title 39, United States Code, as 

amended by section 301), in consultation with the Secretary of the Treasury—

(A) a description of how such Fund has operated; 

(B) any suggestions as to how the operation of such Fund might be improved; and 

(C) a description and assessment of alternative accounting or financing 

mechanisms that might be used to achieve the objectives of such Fund. 

(3) ASSUMED FEDERAL INCOME TAX ON COMPETITIVE PRODUCTS FUND.—With 

respect to section 3634 of title 39, United States Code (as amended by this Act), 

in consultation with the Secretary of the Treasury—

(A) a description of how such section has operated; and 

(B) recommendations as to whether or not such section should remain 

in effect and, if so, any suggestions as to how it might be improved. 

SEC. 703. STUDY ON EQUAL APPLICATION OF LAWS TO COMPETITIVE PRODUCTS.

(a) IN GENERAL.—The Federal Trade Commission shall prepare and submit to 

the President, the Congress, and the Postal Regulatory Commission, within 1 year 

after the date of the enactment of this Act, a comprehensive report identifying Federal and State laws that apply differently to the United States Postal Service with 

respect to the competitive category of mail (within the meaning of section 102 of 

title 39, United States Code, as amended by section 101) and private companies providing similar products. 

(b) RECOMMENDATIONS; ADJUSTMENTS.—The Federal Trade Commission shall 

include such recommendations as it considers appropriate for bringing such legal 

differences to an end and, in the interim, to account under section 3633, for the net 

economic effects provided by those laws. 

(c) CONSULTATION.—In preparing its report, the Federal Trade Commission 

shall consult with the United States Postal Service, the Postal Regulatory Commission, other Federal agencies, mailers, private companies that provide delivery services, and the general public, and shall append to such report any written comments 

received under this subsection. 

(d) COMPETITIVE PRODUCT RATE REGULATION.—The Postal Regulatory Commission shall take into account the recommendations of the Federal Trade Commission, 

and subsequent events that affect the continuing validity of the estimate of the net 

economic effect, in promulgating or revising the regulations required by section 3633 

of title 39, United States Code. 

30

SEC. 704. GREATER DIVERSITY IN POSTAL SERVICE EXECUTIVE AND ADMINISTRATIVE 

SCHEDULE MANAGEMENT POSITIONS. 

(a) STUDY.—The Board of Governors shall study and, within 1 year after the 

date of the enactment of this Act, submit to the President and Congress a report 

concerning the extent to which women and minorities are represented in supervisory and management positions within the United States Postal Service. Any data 

included in the report shall be presented in the aggregate and by pay level. 

(b) PERFORMANCE EVALUATIONS.—The United States Postal Service shall, as 

soon as practicable, take such measures as may be necessary to ensure that, for purposes of conducting performance appraisals of supervisory or managerial employees, 

appropriate consideration shall be given to meeting affirmative action goals, achieving equal employment opportunity requirements, and implementation of plans designed to achieve greater diversity in the workforce. 

SEC. 705. PLAN FOR ASSISTING DISPLACED WORKERS. 

(a) PLAN.—The United States Postal Service shall, before the deadline specified 

in subsection (b), develop and be prepared to implement, whenever necessary, a 

comprehensive plan under which reemployment assistance shall be afforded to employees displaced as a result of the automation or privatization of any of its functions. 

(b) REPORT.—Not later than 1 year after the date of the enactment of this Act, 

the United States Postal Service shall submit to its Board of Governors and Congress a written report describing its plan under this section. 

SEC. 706. CONTRACTS WITH WOMEN, MINORITIES, AND SMALL BUSINESSES. 

The Board of Governors shall study and, within 1 year after the date of the enactment of this Act, submit to the President and the Congress a report concerning 

the number and value of contracts and subcontracts the Postal Service has entered 

into with women, minorities, and small businesses. 

SEC. 707. RATES FOR PERIODICALS. 

(a) IN GENERAL.—The United States Postal Service, acting jointly with the Postal Regulatory Commission and the General Accounting Office, shall study and submit to the President and Congress a report concerning—

(1) the quality, accuracy, and completeness of the information used by the 

Postal Service in determining the direct and indirect postal costs attributable 

to periodicals; and 

(2) any opportunities that might exist for improving efficiencies in the collection, handling, transportation, or delivery of periodicals by the Postal Service, 

including any pricing incentives for mailers that might be appropriate.

(b) RECOMMENDATIONS.—The report shall include recommendations for any administrative action or legislation that might be appropriate. 

SEC. 708. ASSESSMENT OF CERTAIN RATE DEFICIENCIES. 

(a) IN GENERAL.—Within 12 months after the date of the enactment of this Act, 

the Office of Inspector General of the United States Postal Service shall study and 

submit to the President, the Congress, and the United States Postal Service, a report concerning the administration of section 3626(k) of title 39, United States Code. 

(b) SPECIFIC REQUIREMENTS.—The study and report shall specifically address 

the adequacy and fairness of the process by which assessments under section 

3626(k) of title 39, United States Code, are determined and appealable, including—

(1) whether the Postal Regulatory Commission or any other body outside 

the Postal Service should be assigned a role; and 

(2) whether a statute of limitations should be established for the commencement of proceedings by the Postal Service thereunder.

SEC. 709. POSTAL PROCESSING AND DISTRIBUTION NETWORK STUDY. 

The United States Postal Service shall, within 16 months after the date of the 

enactment of this Act, submit to the President, the Congress, and the Board of Governors of the United States Postal Service a written report on the postal processing 

and distribution network. Such report shall include at least the following: 

(1) Recommendations to improve the efficiency and effectiveness of the processing and distribution network while preserving the timely delivery of postal 

services. 

(2) Identification of excess capacity (if any) within the processing and distribution network and opportunities for savings through realignment or consolidation of facilities. 

(3) Report of the Postal Service’s plans for dealing with the recommendations and findings identified in paragraphs (1) and (2). 

(4) Statutory or regulatory obstacles preventing the Postal Service from taking action to realign or consolidate facilities identified in paragraph (2). 

31

(5) Such additional topics and recommendations as the Postal Service considers appropriate. 

SEC. 710. DEFINITION. 

For purposes of this title, the term ‘‘Board of Governors’’ has the meaning given 

such term by section 102 of title 39, United States Code. 

TITLE VIII—MISCELLANEOUS; TECHNICAL 

AND CONFORMING AMENDMENTS 

SEC. 801. EMPLOYMENT OF POSTAL POLICE OFFICERS. 

Section 3061 of title 18, United States Code, is amended by adding at the end 

the following: 

‘‘(c)(1) The Postal Service may employ police officers for duty in connection with 

the protection of property owned or occupied by the Postal Service or under the 

charge and control of the Postal Service, and persons on the property, including 

duty in areas outside the property to the extent necessary to protect the property 

and persons on the property. 

‘‘(2) With respect to such property, such officers shall have the power to—

‘‘(A) enforce Federal laws and regulations for the protection of persons and 

property; 

‘‘(B) carry firearms; and 

‘‘(C) make arrests without a warrant for any offense against the United 

States committed in the presence of the officer or for any felony cognizable 

under the laws of the United States if the officer has reasonable grounds to believe that the person to be arrested has committed or is committing a felony. 

‘‘(3) With respect to such property, such officers may have, to such extent as 

the Postal Service may by regulations prescribe, the power to—

‘‘(A) serve warrants and subpoenas issued under the authority of the United 

States; and 

‘‘(B) conduct investigations, on and off the property in question, of offenses 

that may have been committed against property owned or occupied by the Postal Service or persons on the property. 

‘‘(4)(A) As to such property, the Postmaster General may prescribe regulations 

necessary for the protection and administration of property owned or occupied by 

the Postal Service and persons on the property. The regulations may include reasonable penalties, within the limits prescribed in subparagraph (B), for violations of the 

regulations. The regulations shall be posted and remain posted in a conspicuous 

place on the property. 

‘‘(B) A person violating a regulation prescribed under this subsection shall be 

fined under this title, imprisoned for not more than 30 days, or both.’’. 

SEC. 802. DATE OF POSTMARK TO BE TREATED AS DATE OF APPEAL IN CONNECTION WITH 

THE CLOSING OR CONSOLIDATION OF POST OFFICES. 

(a) IN GENERAL.—Section 404(b) of title 39, United States Code, is amended by 

adding at the end the following: 

‘‘(6) For purposes of paragraph (5), any appeal received by the Commission 

shall—

‘‘(A) if sent to the Commission through the mails, be considered to have 

been received on the date of the Postal Service postmark on the envelope or 

other cover in which such appeal is mailed; or 

‘‘(B) if otherwise lawfully delivered to the Commission, be considered to 

have been received on the date determined based on any appropriate documentation or other indicia (as determined under regulations of the Commission).’’. 

(b) EFFECTIVE DATE.—This section and the amendments made by this section 

shall apply with respect to any determination to close or consolidate a post office 

which is first made available, in accordance with paragraph (3) of section 404(b) of 

title 39, United States Code, after the end of the 3-month period beginning on the 

date of the enactment of this Act. 

SEC. 803. PROVISIONS RELATING TO BENEFITS UNDER CHAPTER 81 OF TITLE 5, UNITED 

STATES CODE, FOR OFFICERS AND EMPLOYEES OF THE FORMER POST OFFICE DEPARTMENT. 

(a) IN GENERAL.—Section 8 of the Postal Reorganization Act (39 U.S.C. 1001 

note) is amended by inserting ‘‘(a)’’ after ‘‘8.’’ and by adding at the end the following: 

‘‘(b) For purposes of chapter 81 of title 5, United States Code, the Postal Service 

shall, with respect to any individual receiving benefits under such chapter as an officer or employee of the former Post Office Department, have the same authorities 

32

and responsibilities as it has with respect to an officer or employee of the Postal 

Service receiving such benefits.’’. 

(b) EFFECTIVE DATE.—This section and the amendments made by this section 

shall be effective as of the first day of the fiscal year in which this Act is enacted. 

SEC. 804. OBSOLETE PROVISIONS. 

(a) REPEAL.— (1) IN GENERAL.—Chapter 52 of title 39, United States Code, is repealed. 

(2) CONFORMING AMENDMENTS.—(A) Section 5005(a) of title 39, United 

States Code, is amended—

(i) by striking paragraph (1), and by redesignating paragraphs (2) 

through (4) as paragraphs (1) through (3), respectively; and 

(ii) in paragraph (3) (as so designated by clause (i)), by striking ‘‘(as defined in section 5201(6) of this title)’’. 

(B) Section 5005(b) of such title 39 is amended by striking ‘‘(a)(4)’’ each 

place it appears and inserting ‘‘(a)(3)’’. 

(C) Section 5005(c) of such title 39 is amended by striking ‘‘by carrier or 

person under subsection (a)(1) of this section, by contract under subsection 

(a)(4) of this section, or’’ and inserting ‘‘by contract under subsection (a)(3) of 

this section or’’. 

(b) ELIMINATING RESTRICTION ON LENGTH OF CONTRACTS.—(1) Section 

5005(b)(1) of title 39, United States Code, is amended by striking ‘‘(or where the 

Postal Service determines that special conditions or the use of special equipment 

warrants, not in excess of 6 years)’’ and inserting ‘‘(or such longer period of time 

as may be determined by the Postal Service to be advisable or appropriate)’’. 

(2) Section 5402(d) of such title 39 is amended by striking ‘‘for a period of not 

more than 4 years’’. 

(3) Section 5605 of such title 39 is amended by striking ‘‘for periods of not in 

excess of 4 years’’. 

(c) CLERICAL AMENDMENT.—The analysis for part V of title 39, United States 

Code, is amended by repealing the item relating to chapter 52. 

SEC. 805. EXPANDED CONTRACTING AUTHORITY. 

(a) AMENDMENT TO TITLE 39, UNITED STATES CODE.— (1) CONTRACTS WITH AIR CARRIERS.—Subsection (d) of section 5402 of title 

39, United States Code, is amended to read as follows: 

‘‘(d)(1) The Postal Service may contract with any air carrier for the transportation of mail by aircraft in interstate air transportation, including the rates therefor, either through negotiations or competitive bidding. 

‘‘(2) Notwithstanding subsections (a) through (c), the Postal Service may contract with any air carrier or foreign air carrier for the transportation of mail by aircraft in foreign air transportation, including the rates therefor, either through negotiations or competitive bidding, except that—

‘‘(A) any such contract may be awarded only to (i) an air carrier holding 

a certificate required by section 41101 of title 49 or an exemption therefrom 

issued by the Secretary of Transportation, (ii) a foreign air carrier holding a 

permit required by section 41301 of title 49 or an exemption therefrom issued 

by the Secretary of Transportation, or (iii) a combination of such air carriers 

or foreign air carriers (or both); 

‘‘(B) mail transported under any such contract shall not be subject to any 

duty-to-carry requirement imposed by any provision of subtitle VII of title 49 

or by any certificate, permit, or corresponding exemption authority issued by 

the Secretary of Transportation under that subtitle; 

‘‘(C) every contract that the Postal Service awards to a foreign air carrier 

under this paragraph shall be subject to the continuing requirement that air 

carriers shall be afforded the same opportunity to carry the mail of the country 

to and from which the mail is transported and the flag country of the foreign 

air carrier, if different, as the Postal Service has afforded the foreign air carrier; 

and 

‘‘(D) the Postmaster General shall consult with the Secretary of Defense 

concerning actions that affect the carriage of military mail transported in foreign air transportation. 

‘‘(3) Paragraph (2) shall not be interpreted as suspending or otherwise diminishing the authority of the Secretary of Transportation under section 41310 of title 

49.’’. 

(2) DEFINITIONS.—Subsection (e) of section 5402 of title 39, United States 

Code, is amended to read as follows: 

‘‘(e) For purposes of this section, the terms ‘air carrier’, ‘air transportation’, ‘foreign air carrier’, ‘foreign air transportation’, ‘interstate air transportation’, and ‘mail’ 

shall have the meanings given such terms in section 40102 of title 49.’’. 

33

(b) AMENDMENTS TO TITLE 49, UNITED STATES CODE.—

(1) AUTHORITY OF POSTAL SERVICE TO PROVIDE FOR INTERSTATE AIR TRANSPORTATION OF MAIL.—Section 41901(a) of title 49, United States Code, is amended to read as follows: 

‘‘(a) TITLE 39.—The United States Postal Service may provide for the transportation of mail by aircraft in air transportation under this chapter and under chapter 

54 of title 39.’’. 

(2) SCHEDULES FOR CERTAIN TRANSPORTATION OF MAIL.—Section 41902(b)(1) 

of title 49, United States Code, is amended by inserting before the semicolon 

at the end the following: ‘‘(other than foreign air transportation of mail)’’. 

(3) PRICES FOR FOREIGN TRANSPORTATION OF MAIL.—Section 41907 of title 

49, United States Code, is amended—

(A) by striking ‘‘(a) LIMITATIONS.—’’; and 

(B) by striking subsection (b). 

(4) CONFORMING AMENDMENTS.—Sections 41107, 41901(b)(1), 41902(a), 

41903(a), and 41903(b) of title 49, United States Code, are amended by striking 

‘‘in foreign air transportation or’’. 

SEC. 806. INVESTMENTS. 

Subsection (c) of section 2003 of title 39, United States Code, is amended—

(1) by striking ‘‘(c) If’’ and inserting ‘‘(c)(1) Except as provided in paragraph 

(2), if’’; and 

(2) by adding at the end the following: 

‘‘(2)(A) Nothing in this section shall be considered to authorize any investment 

in any obligations or securities of a commercial entity. 

‘‘(B) For purposes of this paragraph, the term ‘commercial entity’ means any 

corporation, company, association, partnership, joint stock company, firm, society, or

other similar entity, as further defined under regulations prescribed by the Postal 

Regulatory Commission.’’. 

SEC. 807. REPEAL OF SECTION 5403. 

(a) IN GENERAL.—Section 5403 of title 39, United States Code, is repealed. 

(b) CLERICAL AMENDMENT.—The analysis for chapter 54 of title 39, United 

States Code, is amended by repealing the item relating to section 5403. 

SEC. 808. REDUCED RATES. 

Section 3626 of title 39, United States Code, is amended—

(1) in subsection (a)—

(A) by striking all before paragraph (4) and inserting the following: 

‘‘(a)(1) Except as otherwise provided in this section, rates of postage for a class 

of mail or kind of mailer under former section 4358, 4452(b), 4452(c), 4554(b), or 

4554(c) of this title shall be established in accordance with section 3622. 

‘‘(2) For the purpose of this subsection, the term ‘regular-rate category’ means 

any class of mail or kind of mailer, other than a class or kind referred to in section 

2401(c).’’; and 

(B) by redesignating paragraphs (4) through (7) as paragraphs (3) 

through (6), respectively; 

(2) in subsection (g), by adding at the end the following: 

‘‘(3) For purposes of this section and former section 4358(a) through (c) of this 

title, those copies of an issue of a publication entered within the county in which 

it is published, but distributed outside such county on postal carrier routes originating in the county of publication, shall be treated as if they were distributed within the county of publication. 

‘‘(4)(A) In the case of an issue of a publication, any number of copies of which 

are mailed at the rates of postage for a class of mail or kind of mailer under former 

section 4358(a) through (c) of this title, any copies of such issue which are distributed outside the county of publication (excluding any copies subject to paragraph 

(3)) shall be subject to rates of postage provided for under this paragraph. 

‘‘(B) The rates of postage applicable to mail under this paragraph shall be established in accordance with section 3622. 

‘‘(C) This paragraph shall not apply with respect to an issue of a publication 

unless the total paid circulation of such issue outside the county of publication (not 

counting recipients of copies subject to paragraph (3)) is less than 5,000.’’; and 

(3) by adding at the end the following: 

‘‘(n) In the administration of this section, matter that satisfies the circulation 

standards for requester publications shall not be excluded from being mailed at the 

rates for mail under former section 4358 solely because such matter is designed primarily for free circulation or for circulation at nominal rates, or fails to meet the 

requirements of former section 4354(a)(5).’’. 

34

SEC. 809. HAZARDOUS MATTER. 

(a) NONMAILABILITY GENERALLY.—Section 3001 of title 39, United States Code, 

is amended—

(1) by redesignating subsection (n) as subsection (o); and 

(2) by inserting after subsection (m) the following: 

‘‘(o)(1) Except as otherwise authorized by law or regulations of the Postal Service, hazardous material is nonmailable. 

‘‘(2) In this subsection, the term ‘hazardous material’ means a substance or material designated by the Secretary of Transportation under section 5103(a) of title 

49.’’. 

(b) MAILABILITY.—Chapter 30 of title 39, United States Code, is amended by 

adding at the end the following: 

‘‘§ 3018. Hazardous material 

‘‘(a) IN GENERAL.—The Postal Service shall prescribe regulations for the safe 

transportation of hazardous material in the mail. 

‘‘(b) PROHIBITIONS.—No person may—

‘‘(1) mail or cause to be mailed hazardous material that has been declared 

by statute or Postal Service regulation to be nonmailable; 

‘‘(2) mail or cause to be mailed hazardous material in violation of any statute or Postal Service regulation restricting the time, place, or manner in which 

hazardous material may be mailed; or 

‘‘(3) manufacture, distribute, or sell any container, packaging kit, or similar 

device that—

‘‘(A) is represented, marked, certified, or sold by such person for use in 

the mailing of hazardous material; and 

‘‘(B) fails to conform with any statute or Postal Service regulation setting forth standards for a container, packaging kit, or similar device used 

for the mailing of hazardous material. 

‘‘(c) CIVIL PENALTY; CLEAN-UP COSTS AND DAMAGES.—

‘‘(1) IN GENERAL.—A person who knowingly violates this section or a regulation prescribed under this section shall be liable for—

‘‘(A) a civil penalty of at least $250, but not more than $100,000, for 

each violation; 

‘‘(B) the costs of any clean-up associated with each violation; and 

‘‘(C) damages. 

‘‘(2) KNOWING ACTION.—A person acts knowingly for purposes of paragraph 

(1) when—

‘‘(A) the person has actual knowledge of the facts giving rise to the violation; or 

‘‘(B) a reasonable person acting in the circumstances and exercising 

reasonable care would have had that knowledge. 

‘‘(3) SEPARATE VIOLATIONS.—

‘‘(A) VIOLATIONS OVER TIME.—A separate violation under this subsection occurs for each day hazardous material, mailed or caused to be 

mailed in noncompliance with this section, is in the mail. 

‘‘(B) SEPARATE ITEMS.—A separate violation under this subsection occurs for each item containing hazardous material that is mailed or caused 

to be mailed in noncompliance with this section. 

‘‘(d) HEARINGS.—The Postal Service may determine that a person has violated 

this section or a regulation prescribed under this section only after notice and an 

opportunity for a hearing. Proceedings under this section shall be conducted in accordance with section 3001(m). 

‘‘(e) PENALTY CONSIDERATIONS.—In determining the amount of a civil penalty 

for a violation of this section, the Postal Service shall consider—

‘‘(1) the nature, circumstances, extent, and gravity of the violation; 

‘‘(2) with respect to the person who committed the violation, the degree of 

culpability, any history of prior violations, the ability to pay, and any effect on 

the ability to continue in business; 

‘‘(3) the impact on Postal Service operations; and 

‘‘(4) any other matters that justice requires. 

‘‘(f) CIVIL ACTIONS TO COLLECT.—

‘‘(1) IN GENERAL.—In accordance with section 409(d), a civil action may be 

commenced in an appropriate district court of the United States to collect a civil 

penalty, clean-up costs, and damages assessed under subsection (c). 

‘‘(2) COMPROMISE.—The Postal Service may compromise the amount of a 

civil penalty, clean-up costs, and damages assessed under subsection (c) before 

commencing a civil action with respect to such civil penalty, clean-up costs, and 

damages under paragraph (1). 

35

‘‘(g) CIVIL JUDICIAL PENALTIES.—

‘‘(1) IN GENERAL.—At the request of the Postal Service, the Attorney General may bring a civil action in an appropriate district court of the United 

States to enforce this section or a regulation prescribed under this section. 

‘‘(2) RELIEF.—The court in a civil action under paragraph (1) may award appropriate relief, including a temporary or permanent injunction, civil penalties 

as determined in accordance with this section, or punitive damages. 

‘‘(3) CONSTRUCTION.—A civil action under this subsection shall be in lieu of 

civil penalties for the same violation under subsection (c)(1)(A). 

‘‘(h) DEPOSIT OF AMOUNTS COLLECTED.—

‘‘(1) POSTAL SERVICE FUND.—Except as provided under paragraph (2), 

amounts collected under subsection (c)(1)(B) and (C) shall be deposited into the 

Postal Service Fund under section 2003. 

‘‘(2) TREASURY.—Amounts collected under subsection (c)(1)(A) and any punitive damages collected under subsection (c)(1)(C) shall be deposited into the 

Treasury of the United States.’’. 

(c) CONFORMING AMENDMENTS.—(1) Section 2003(b) of title 39, United States 

Code, is amended—

(A) in paragraph (7), by striking ‘‘and’’ after the semicolon; 

(B) in paragraph (8), by striking ‘‘purposes.’’ and inserting ‘‘purposes; and’’; 

and 

(C) by adding at the end the following: 

‘‘(9) any amounts collected under section 3018.’’. 

(2) The analysis for chapter 30 of title 39, United States Code, is amended by 

adding at the end the following:

‘‘3018. Hazardous material.’’.

(d) INJURIOUS ARTICLES AS NONMAILABLE.—Section 1716(a) of title 18, United 

States Code, is amended by inserting after ‘‘explosives,’’ the following: ‘‘hazardous 

materials,’’.

SEC. 810. PROVISIONS RELATING TO COOPERATIVE MAILINGS. 

(a) DETERMINATION.—The Postal Regulatory Commission shall examine section 

E670.5.3 of the Domestic Mail Manual to determine whether it contains adequate 

safeguards to protect against (1) abuses of rates for nonprofit mail and (2) deception 

of consumers. 

(b) REGULATIONS.—If the Postal Regulatory Commission determines that section 

E670.5.3 of the Domestic Mail Manual does not contain adequate safeguards as described in the preceding subsection, the Commission shall promulgate such regulations as may be necessary to ensure such safeguards. 

(c) TIMING.—The Postal Regulatory Commission shall complete the examination 

required by subsection (a) and the promulgation of any necessary regulations required by subsection (b) within one year after the date of the enactment of this section.

SEC. 811. TECHNICAL AND CONFORMING AMENDMENTS. 

(a) REIMBURSEMENT.—Section 3681 of title 39, United States Code, is amended 

by striking ‘‘section 3628’’ and inserting ‘‘sections 3662 through 3664’’. 

(b) SIZE AND WEIGHT LIMITS.—Section 3682 of title 39, United States Code, is 

amended to read as follows: 

‘‘§ 3682. Size and weight limits 

‘‘The Postal Service may establish size and weight limitations for mail matter 

in the market-dominant category of mail consistent with regulations the Postal Regulatory Commission may prescribe under section 3622. The Postal Service may establish size and weight limitations for mail matter in the competitive category of 

mail consistent with its authority under section 3632.’’. 

(c) REVENUE FOREGONE, ETC.—Title 39, United States Code, is amended—

(1) in section 503 (as so redesignated by section 501), by striking ‘‘this chapter.’’ and inserting ‘‘this title.’’; and 

(2) in section 2401(d), by inserting ‘‘(as last in effect before enactment of 

the Postal Accountability and Enhancement Act)’’ after ‘‘3626(a)’’ and after 

‘‘3626(a)(3)(B)(ii)’’. 

(d) APPROPRIATIONS AND REPORTING REQUIREMENTS.—

(1) APPROPRIATIONS.—Subsection (e) of section 2401 of title 39, United 

States Code, is amended—

(A) by striking ‘‘Committee on Post Office and Civil Service’’ each place 

it appears and inserting ‘‘Committee on Government Reform’’; and 

(B) by striking ‘‘Not later than March 15 of each year,’’ and inserting 

‘‘Each year,’’. 

36

(2) REPORTING REQUIREMENTS.—Sections 2803(a) and 2804(a) of title 39, 

United States Code, are amended by striking ‘‘2401(g)’’ and inserting ‘‘2401(e)’’.

(e) AUTHORITY TO FIX RATES AND CLASSES GENERALLY; REQUIREMENT RELATING

TO LETTERS SEALED AGAINST INSPECTION.—Section 404 of title 39, United States 

Code (as amended by section 102) is further amended by redesignating subsections 

(b) and (c) as subsections (d) and (e), respectively, and by inserting after subsection 

(a) the following: 

‘‘(b) Except as otherwise provided, the Governors are authorized to establish 

reasonable and equitable classes of mail and reasonable and equitable rates of postage and fees for postal services in accordance with the provisions of chapter 36. 

Postal rates and fees shall be reasonable and equitable and sufficient to enable the 

Postal Service, 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. 

‘‘(c) The Postal Service shall maintain one or more classes of mail for the transmission of letters sealed against inspection. The rate for each such class shall be 

uniform throughout the United States, its territories, and possessions. One such 

class shall provide for the most expeditious handling and transportation afforded 

mail matter by the Postal Service. No letter of such a class of domestic origin shall 

be opened except under authority of a search warrant authorized by law, or by an 

officer or employee of the Postal Service for the sole purpose of determining an address at which the letter can be delivered, or pursuant to the authorization of the 

addressee.’’. 

(f) LIMITATIONS.—Section 3684 of title 39, United States Code, is amended by 

striking all that follows ‘‘any provision’’ and inserting ‘‘of this title.’’. 

(g) MISCELLANEOUS.—Title 39, United States Code, is amended—

(1) in section 1005(d)(2)—

(A) by striking ‘‘subsection (g) of section 5532,’’; and 

(B) by striking ‘‘8344,’’ and inserting ‘‘8344’’; 

(2) in the analysis for part III, by striking the item relating to chapter 28 

and inserting the following:

‘‘28. Strategic Planning and Performance Management .................................................................................... 2801’’;

(3) in section 3005(a)—

(A) in the matter before paragraph (1), by striking all that follows ‘‘nonmailable’’ and precedes ‘‘(h),’’ and inserting ‘‘under section 3001(d),’’; and 

(B) in the sentence following paragraph (3), by striking all that follows 

‘‘nonmailable’’ and precedes ‘‘(h),’’ and inserting ‘‘under such section 

3001(d),’’; 

(4) in section 3210(a)(6)(C), by striking the matter after ‘‘if such mass mailing’’ and before ‘‘than 60 days’’ and inserting ‘‘is postmarked fewer’’; and 

(5) by striking the heading for section 3627 and inserting the following: 

‘‘§ 3627. Adjusting free rates’’.

TITLE IX—POSTAL PENSION FUNDING 

REFORM AMENDMENTS 

SEC. 901. CIVIL SERVICE RETIREMENT SYSTEM. 

(a) TERMINATION OF OBLIGATION TO PAY GOVERNMENT CONTRIBUTIONS.—Section 

8334(a)(1)(B)(ii) of title 5, United States Code, is amended by striking all that follows ‘‘be equal to’’ and inserting ‘‘zero’’. 

(b) DETERMINATION AND DISPOSITION OF POSTAL SURPLUS OR SUPPLEMENTAL LIABILITY.—Section 8348(h) of title 5, United States Code, is amended to read as follows: 

‘‘(h)(1) For purposes of this subsection, the ‘Postal surplus or supplemental liability’ means the estimated difference, as determined by the Office, between—

‘‘(A) the actuarial present value of all future benefits which are payable 

from the Fund under this subchapter to current or former employees of the 

United States Postal Service, or their survivors, and attributable to civilian employment with the Postal Service, and 

‘‘(B) the sum of—

‘‘(i) the actuarial present value of deductions to be withheld from the 

future basic pay of employees of the Postal Service currently subject to this 

subchapter pursuant to section 8334; 

‘‘(ii) that portion of the Fund balance, as of the date the Postal surplus 

or supplemental liability is determined, attributable to payments to the 

37

Fund by the Postal Service and its employees, plus the earnings on such 

amounts while in the Fund; and 

‘‘(iii) any other appropriate amount, as determined by the Office in accordance with generally accepted actuarial practices and principles. 

‘‘(2)(A)(i) Not later than June 15, 2006, the Office shall determine the Postal 

surplus or supplemental liability as of September 30, 2005. 

‘‘(ii) If a supplemental liability is determined under this subparagraph for fiscal 

year 2005, the Office shall establish an amortization schedule, including a series of 

equal annual installments commencing September 30, 2006, which provides for the 

liquidation of such liability by September 30, 2043. 

‘‘(iii) If a surplus is determined under this subparagraph for fiscal year 2005, 

the amount of the surplus shall be transferred to the Postal Service Retiree Health 

Benefits Fund by June 30, 2006. 

‘‘(B)(i) For each of fiscal years 2006 through 2038, the Office shall determine 

the Postal surplus or supplemental liability as of the close of such fiscal year, with 

each such determination to be made by June 15th of the following fiscal year. 

‘‘(ii) If a supplemental liability is determined under this subparagraph for a fiscal year, the Office shall establish an amortization schedule, including a series of 

equal annual installments commencing on September 30 of the following fiscal year, 

which provides for the liquidation of such liability by September 30, 2043. 

‘‘(iii)(I) If a surplus of $500,000,000 or more is determined under this subparagraph for a fiscal year, the amount of the surplus shall be transferred to the Postal 

Service Retiree Health Benefits Fund by June 30th of the following fiscal year. 

‘‘(II) If a surplus of less than $500,000,000 is determined under this subparagraph for a fiscal year, the surplus shall remain in the Fund, subject to transfer 

in a subsequent fiscal year under subclause (I) or subparagraph (C)(iii). 

‘‘(C)(i) Not later than June 15, 2040, the Office shall determine the Postal surplus or supplemental liability as of September 30, 2039. 

‘‘(ii) If a supplemental liability is determined under this subparagraph for fiscal 

year 2039, the Office shall establish an amortization schedule, including a series of 

equal annual installments commencing September 30, 2040, which provides for the 

liquidation of such liability by September 30, 2043. 

‘‘(iii) If a surplus is determined under this subparagraph for fiscal year 2039, 

the amount of the surplus—

‘‘(I) shall be applied first toward reducing the amount of any supplemental 

liability described in section 8423(b)(1)(B); and 

‘‘(II) to the extent that any portion of such surplus remains after the application of subclause (I), shall, not later than June 30, 2040, be transferred to the 

Postal Service Retiree Health Benefits Fund. 

‘‘(D) An amortization schedule under this paragraph—

‘‘(i) shall be established in accordance with generally accepted actuarial 

practices and principles, with interest computed at the rate used in the most 

recent valuation of the Civil Service Retirement System; 

‘‘(ii) shall supersede any amortization schedule previously established under 

this paragraph; and 

‘‘(iii) shall not be taken into account, for purposes of any determination of 

Postal surplus or supplemental liability, except to the extent of any amounts 

under such schedule actually paid. 

‘‘(E) The Postal Service shall pay to the Office the amounts due under any amortization schedule established under this paragraph that has not been superseded. 

‘‘(3) Notwithstanding any other provision of law, in computing the amount of 

any payment under any other subsection of this section that is based on the amount 

of the unfunded liability, such payment shall be computed disregarding that portion 

of the unfunded liability that the Office determines will be liquidated by payments 

under this subsection. 

‘‘(4) As used in this subsection, ‘Postal Service Retiree Health Benefits Fund’ 

refers to the Postal Service Retiree Health Benefits Fund, as established by section 

8909a.’’. 

(c) PROVISIONS RELATING TO AMOUNTS FOR MILITARY SERVICE.—In the application of paragraph (2) of section 8348(g) of title 5, United States Code, for fiscal year 

2006, the Office of Personnel Management shall include, in addition to the amount 

otherwise computed under that paragraph, the amounts that would have been included for fiscal years 2003 through 2005 with respect to credit for military service 

of former employees of the United States Postal Service if Public Law 108-18 had 

not been enacted (including earnings thereon) and the Secretary of the Treasury 

shall make the required transfer to the Civil Service Retirement and Disability 

Fund based on that amount. 

(d) REVIEW.—

38

(1) IN GENERAL.—Notwithstanding any other provision of this section, any 

determination or redetermination made by the Office of Personnel Management 

under this section shall, upon request of the United States Postal Service, be 

subject to review by the Postal Regulatory Commission. The Commission shall 

submit a report containing the results of any such review to the Postal Service, 

the Office of Personnel Management, and the Congress. 

(2) RESPONSE.—Upon receiving the report of the Postal Regulatory Commission, the Office of Personnel Management shall reconsider its determination or 

redetermination in light of such report, and shall make any appropriate adjustments. The Office shall submit a report containing the results of its reconsideration to the Commission, the Postal Service, and the Congress. 

SEC. 902. HEALTH INSURANCE. 

(a) IN GENERAL.—Chapter 89 of title 5, United States Code, is amended—

(1) in section 8906(g)(2)(A), by striking ‘‘by the United States Postal Service.’’ and inserting ‘‘first from the Postal Service Retiree Health Benefits Fund 

up to the amount contained therein, with any remaining amount paid by the 

United States Postal Service.’’; 

(2) by inserting after section 8909 the following: 

‘‘§ 8909a. Postal Service Retiree Health Benefits Fund 

‘‘(a) There is in the Treasury of the United States a Postal Service Retiree 

Health Benefits Fund (hereinafter in this section referred to as the ‘Fund’) which 

is administered by the Office of Personnel Management. Any amounts transferred 

to the Fund under section 8348(h)(2) shall yield interest at a rate equal to the 

weighted average yield of all the investments in the Civil Service Retirement and 

Disability Fund as of the date of transfer. All other investments of amounts in the 

Fund shall be made in accordance with subsections (c)–(e) of section 8348. 

‘‘(b) The Fund is available without fiscal year limitation for payments required 

by section 8906(g)(2). 

‘‘(c)(1) Not later than June 30, 2006, and by June 30 of each succeeding year, 

the Office of Personnel Management shall compute the net present value of the excess of future payments required by section 8906(g)(2)(A) for current and future 

United States Postal Service annuitants over the value of the assets of the Fund 

as of the end of the fiscal year ending on September 30 of that year. The actuarial 

costing method to be used by the Office and all actuarial assumptions shall be established by the Office after consultation with the United States Postal Service and 

must be in accordance with generally accepted actuarial practices and principles. 

‘‘(2) Not later than September 30, 2006, and by September 30 of each succeeding 

year, the Office shall compute and the United States Postal Service shall pay into 

such Fund—

‘‘(A) the portion of the net present value described in paragraph (1) attributable to the current year’s service of Postal Service employees; and 

‘‘(B) interest on the net present value described in paragraph (1) for that 

fiscal year, at the interest rate used in computing that net present value. 

‘‘(3)(A) Any computation or other determination of the Office under this subsection shall, upon request of the Postal Service, be subject to review by the Postal 

Regulatory Commission. The Commission shall submit a report containing the results of any such review to the Postal Service, the Office of Personnel Management, 

and the Congress. 

‘‘(B) Upon receiving the report of the Postal Regulatory Commission, the Office 

of Personnel Management shall reconsider its computation or other determination 

in light of such report, and shall make any appropriate adjustments. The Office 

shall submit a report containing the results of its reconsideration to the Commission, the Postal Service, and the Congress. 

‘‘(4) The Office shall promulgate, after consultation with the United States Postal Service, any regulations it deems necessary under this subsection.’’; and 

(3) in the analysis by inserting after the item relating to section 8909 the 

following:

‘‘8909a. Postal Service Retiree Health Benefits Fund.’’.

(b) REVIEW.—

(1) IN GENERAL.—Any regulation established under section 8909a(c)(4) of 

title 5, United States Code (as amended by subsection (a)) shall, upon request 

of the Postal Service, be subject to review by the Postal Regulatory Commission. 

The Commission shall submit a report containing the results of any such review 

to the Postal Service, the Office of Personnel Management, and the Congress. 

(2) RESPONSE.—Upon receiving the report of the Postal Regulatory Commission, the Office of Personnel Management shall reconsider its regulation in light 

of such report, and shall take such action as it considers appropriate. The Office 

39

shall submit a report containing the results of its reconsideration to the Commission, the Postal Service, and the Congress. 

SEC. 903. REPEALER. 

Section 3 of Public Law 108–18 is repealed. 

SEC. 904. ENSURING APPROPRIATE USE OF ESCROW AND MILITARY SAVINGS. 

(a) DEFINITION.—For purposes of this section, the term ‘‘total savings’’ means, 

for any fiscal year, the amount equal to—

(1) the amount of contributions that the Postal Service would otherwise 

have been required to make to the Civil Service Retirement and Disability Fund 

under subchapter III of chapter 83 of title 5, United States Code, for such fiscal 

year if Public Law 108-18 and this Act had not been enacted, minus 

(2) the amount of amortization payments (if any) required under section 

8348(h)(2) of title 5, United States Code, for such fiscal year. 

(b) CALCULATIONS.—The following calculations shall be made for each of fiscal 

years 2006 through 2015: 

(1) Not later than January 31 of the fiscal year following the fiscal year involved, the Office of Personnel Management (in consultation with the Postal 

Service) shall determine the total savings for the fiscal year. 

(2) On the date of making its determination under paragraph (1), the Office 

shall also determine (in consultation with the Postal Service) the amount by 

which—

(A) the amount the Postal Service paid for that fiscal year into the 

Postal Service Retiree Health Benefits Fund in accordance with 8909a(c)(2) 

of title 5, United States Code, exceeds (if at all) 

(B) the amount of payments made by the Postal Service for that fiscal 

year from such Fund in order to satisfy the requirements of section 

8906(g)(2) of such title 5. 

(c) REQUIREMENTS.—

(1) IF THRESHOLD IS MET.—If the amount calculated under subsection (b)(2) 

for a fiscal year is greater than or equal to two-thirds of the total savings in 

such fiscal year, no further action under this section is necessary with respect 

to such fiscal year. 

(2) IF THRESHOLD IS NOT MET.—

(A) IN GENERAL.—If the amount calculated under subsection (b)(2) for 

a fiscal year is less than two-thirds of the total savings in such fiscal year, 

the Postal Service shall pay into the Postal Service Retiree Health Benefits 

Fund, by June 30 of the following fiscal year, an amount equal to the difference. 

(B) ALLOWABLE ALTERNATIVE.—

(i) IN GENERAL.—Notwithstanding subparagraph (A), and subject to 

clause (ii), the Postal Service may instead use the amount that it would 

otherwise be required to pay into the Postal Service Retiree Health 

Benefits Fund for a year (or any portion thereof) to reduce the postal 

debt. 

(ii) LIMITATION.—Amounts used to reduce the postal debt under 

this subparagraph may not exceed a total of $3,000,000,000. 

(3) AGGREGATION ALLOWED.—Notwithstanding paragraph (2), if the amount 

calculated under subsection (b)(2) for a fiscal year is less than two-thirds of the 

total savings in such fiscal year, but the sum of the amounts calculated under 

subsection (b)(2) for all fiscal years from 2006 to the fiscal year involved is 

greater than or equal to two-thirds of the sum of the total savings for such 

years, no further action under this section is necessary with respect to such fiscal year. 

(d) REPORTING REQUIREMENT.—The Office of Personnel Management shall submit a report containing the results of its calculations under subsection (b) to the 

Postal Service, the Postal Regulatory Commission, and the Congress. 

(e) WAIVER AUTHORITY.—The requirements of subsection (c)(2)(A) may, upon application of the Postal Service, be waived by the Postal Regulatory Commission, to 

the extent that the Commission determines that such waiver is reasonable and equitable and necessary to enable the Postal Service, 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. 

SEC. 905. EFFECTIVE DATES. 

(a) IN GENERAL.—Except as otherwise provided, this title shall take effect on 

October 1, 2005. 

(b) GOVERNMENT CONTRIBUTIONS.—Section 901(a)(1) shall take effect on the 

first day of the first pay period beginning on or after October 1, 2005.

40

PURPOSE AND SUMMARY

H.R. 4341, the ‘‘Postal Accountability and Enhancement Act’’ represents the most sweeping structural reform of the United States 

Postal Service (‘‘Postal Service’’) in over three decades. A central 

objective of this legislation is to ensure that the Postal Service operates in a more business-like manner. The legislation creates a 

modern system of rate regulation, expands the purview of ‘‘competitive activities’’ in which the Postal Service may operate, addresses 

the Postal Service’s universal service obligation and the scope of 

the mail monopoly, and protects private firms from unfair competition. 

BACKGROUND AND NEED FOR THE LEGISLATION

POSTAL SERVICE—SCOPE OF ACTIVITIES AND NEED FOR REFORM

The United States Postal Service processes and delivers 208 billion pieces of mail to more than 130 million households and businesses in the United States each year. The Postal Service is the 

center of a $900 billion industry employing nine million workers in 

the United States. The Postal Service has lost over $2 billion over 

the last three years, mail volume has shown a consistent decline 

over the same period, and the Postal Service will be required to file 

a rate increase of 5.4% this year. 

The mission of the Postal Service, outlined in the Postal Reorganization Act of 1970, is to provide postal access in all communities, 

and to offer prompt, reliable postal services at uniform prices. The 

law was designed to transform the Postal Service from a bureaucracy subsidized by tax revenue to a self-supporting, businesslike 

entity supported by the fees (e.g., stamp revenue) paid by its users. 

The ability of the Postal Service to advance these objectives is 

being challenged by a variety of factors including decreasing mail 

volume, insufficient revenue, mounting debt, and electronic communications alternatives such as Internet advertising, electronic bill 

payments, e-mails, and faxes. 

PRESIDENT’S COMMISSION

On July 31, 2003, the President’s Commission on the Postal 

Service (hereinafter ‘‘Commission’’) released its recommendations 

for maintaining the viability of the Postal Service. Roughly half of 

the recommendations require legislative change. Most of these concerns have been addressed in earlier postal reform proposals, although some specific recommendations differ. New issues raised by 

the Commission include reform of the collective bargaining process 

and legislative changes making it easier to close post offices and 

processing centers. 

ADMINISTRATION’S PRINCIPLES FOR POSTAL REFORM

On December 8, 2003, the Department of the Treasury released 

a set of five principles, based on the recommendations of the President’s Commission, that should guide Congress’s effort to reform 

the Postal Service. The principles are: ensuring that the Postal 

Service’s governing body is equipped to meet the responsibilities 

and objectives of an enterprise of its size and scope; ensuring that 

important factual information on the Postal Service’s product costs 

41

1 H.R. Rep. No. 108–672. 

and performance is accurately measured and made available to the 

public in a timely manner; ensuring that the Postal Service’s governing body and management have the authority to reduce costs, 

set rates, and adjust key aspects of its business in order to meet 

its obligations to customers in a dynamic marketplace; promoting 

accountability by ensuring that the Postal Service has appropriate 

independent oversight to protect consumer welfare and universal 

mail service; and ensuring that the Postal Service operates with 

greater flexibility and is financially self-sufficient, covering all of its 

obligations. 

H.R. 4341, THE ‘‘POSTAL ACCOUNTABILITY AND ENHANCEMENT ACT’’

The ‘‘Postal Accountability and Enhancement Act’’ reflects the 

Administration’s principles for postal reform, and incorporates 

nearly all of the seventeen legislative recommendations made by 

the Commission. The legislation mandates transparency in the 

Postal Service’s finances, costs, and operations. The legislation creates a modern system of rate regulation, establishes fair competition rules and a powerful new regulator, addresses the Postal Service’s universal service obligation and the scope of the mail monopoly, and improves the collective bargaining process. However, unlike the unlimited and unfettered pricing flexibility recommended 

for the Postal Service by the Commission for competitive product 

offerings, the bill imposes important controls to protect the public 

interest from unfair competition. 

PROVISIONS WITHIN THE JURISDICTION OF

THE COMMITTEE ON THE JUDICIARY

The Committee on Government Reform and Oversight reported 

H.R. 4341 by unanimous consent on May 12, 2004.1 The Committee 

on the Judiciary received a sequential referral to consider provisions within the Committee’s subject matter jurisdiction. 

First, Section 205 revises the complaint and appellate review 

process of the Postal Regulatory Commission—which is charged 

with setting postage rates and helping define activities in which 

the Postal Service may compete with private industry. Section 301 

establishes an off-budget fund within the Treasury Department for 

revenues and expenditures associated with services offered by the 

Postal Service on a competitive basis. Section 303 prohibits the 

Postal Service from issuing regulations that preclude competition 

or compel the disclosure of protected intellectual property. Section 

304 ensures that laws regulating the conduct of private commercial 

activities also apply to competitive activities undertaken by the 

Postal Service, including the antitrust laws, bankruptcy laws, the 

Federal Trade Commission Act, and laws pertaining to sovereign 

immunity. The Committee reported an amendment offered by 

Chairman Sensenbrenner and Ranking Member Conyers to strike 

language that would have defined the Postal Service, to the extent 

that it engages in competitive activity, as a ‘‘person’’ for purposes 

of the bankruptcy laws. 

Section 502 provides authority for the Postal Regulatory Commission to issue subpoenas to compel disclosure of evidence in its 

proceedings and to refer failures to adhere to Commission direcVerDate jul 14 2003 22:09 Sep 23, 2004 Jkt 029006 PO 00000 Frm 00041 Fmt 6659 Sfmt 6601 E:\HR\OC\HR672P2.XXX HR672P2
42

tives to Federal district court. Section 703 requires the Federal 

Trade Commission to prepare a report detailing how Federal and 

state laws apply differently to competitive activities of the Postal 

Service and private companies. 

Section 801 provides permanent authority for the Postal Service 

to employ postal police to protect property and persons on Postal 

Service property and gives the Attorney General authority to collect penalties and clean up costs associated with the unlawful mailing of hazardous materials. Finally, section 809 prohibits the mailing of hazardous materials and clarifies penalties for their shipment. The Committee reported an amendment offered by Crime, 

Terrorism, and Homeland Security Subcommittee Chairman Coble 

to place these changes to existing law in Title 18 of the United 

States Code and to add ‘‘hazardous materials’’ to the list of nonmailable offenses for which criminal penalties may be imposed 

thereby establishing a criminal offense for mailing hazardous materials. 

HEARINGS

The Committee on the Judiciary held no hearings on H.R. 4341. 

COMMITTEE CONSIDERATION

On September 15, 2004, the Committee met in open session and 

ordered favorably reported the bill H.R. 4341, with an amendment, 

by voice vote, a quorum being present. 

VOTE OF THE COMMITTEE

In compliance with clause 3(b) of rule XIII of the Rules of the 

House of Representatives, the Committee notes that there were no 

recorded votes during the committee consideration of H.R. 4341. 

COMMITTEE OVERSIGHT FINDINGS

In compliance with clause 3(c)(1) of rule XIII of the Rules of the 

House of Representatives, the Committee reports that the findings 

and recommendations of the Committee, based on oversight activities under clause 2(b)(1) of rule X of the Rules of the House of Representatives, are incorporated in the descriptive portions of this report. 

NEW BUDGET AUTHORITY AND TAX EXPENDITURES

Clause 3(c)(2) of rule XIII of the Rules of the House of Representatives is inapplicable because this legislation does not provide new 

budgetary authority or increased tax expenditures. 

CONGRESSIONAL BUDGET OFFICE COST ESTIMATE

In compliance with clause 3(c)(3) of rule XIII of the Rules of the 

House of Representatives, the Committee sets forth, with respect to 

the bill, H.R. 4341, the following estimate and comparison prepared 

by the Director of the Congressional Budget Office under section 

402 of the Congressional Budget Act of 1974:

43

U.S. CONGRESS, CONGRESSIONAL BUDGET OFFICE, Washington, DC, September 23, 2004. 

Hon. F. JAMES SENSENBRENNER, Jr., Chairman, 

Committee on the Judiciary, 

House of Representatives, Washington, DC. 

DEAR MR. CHAIRMAN: The Congressional Budget Office has prepared the enclosed cost estimate for H.R. 4341, the Postal Accountability and Enhancement Act. 

If you wish further details on this estimate, we will be pleased 

to provide them. The CBO staff contacts are Mark Grabowicz (for 

Postal Service costs), who can be reached at 226–2860, Geoffrey 

Gerhardt (for retirement costs), who can be reached at 226–2820, 

and Julia Christensen (for health care costs), who can be reached 

at 226–9010. 

Sincerely, 

DOUGLAS HOLTZ-EAKIN.

Enclosure

cc: Honorable John Conyers, Jr. 

Ranking Member 

H.R. 4341—Postal Accountability and Enhancement Act. 

SUMMARY

H.R. 4341 would change the laws that govern the operation of 

the United States Postal Service (USPS), particularly those regarding the cost of pensions and health care benefits of retired workers 

and the requirement to hold certain funds in escrow. CBO estimates that enacting this legislation would result in on-budget savings of $24.1 billion and off-budget costs of $34.5 billion over the 

2005–2014 period. (The net expenditures of the USPS are classified 

as ‘‘off-budget.’’) Thus, CBO estimates the net cost to the unified 

budget would be $10.4 billion over the 2005–2014 period. In addition, we estimate that implementing H.R. 4341 would cost about 

$1.5 billion over the 2005–2014 period, assuming appropriation of 

the necessary amounts. 

Enacting H.R. 4341 would not affect how much the federal government spends on pension or health care benefits for USPS retirees. By increasing how much the Postal Service pays to finance 

those benefits and by eliminating the current-law escrow account 

requirements, however, the bill would increase future budget deficits as measured by the unified federal budget. Eliminating the escrow account requirement for the USPS would allow that agency 

to increase spending for capital improvements or other projects, 

pay down its outstanding debt, postpone or diminish future rate increases, or some combination of these options. Enacting the bill 

also would reduce direct spending by making the costs of the Postal 

Rate Commission and the USPS Office of the Inspector General 

subject to appropriation. 

H.R. 4341 contains no intergovernmental or private-sector mandates as defined in the Unfunded Mandates Reform Act (UMRA) 

and would impose no costs on State, local, or tribal governments. 

Major provisions of H.R. 4341 would:

44

• Eliminate a requirement in Public Law 108–18 (P.L. 108–

18), the Postal Civil Service Retirement Funding Reform Act 

of 2003, that the Postal Service place savings from reduced 

pension contributions in escrow.

• Transfer from the Postal Service to the Department of the 

Treasury responsibility for paying pension costs associated 

with military service credits.

• Replace direct payments the Postal Service is making for retiree health care costs with payments designed to prefund 

some of the health care costs of current employees when they 

retire.

• Revise the procedure for raising postal rates.

• Strengthen the USPS Board of Governors and the Postal 

Rate Commission, which would be redesignated the Postal 

Regulatory Commission (PRC).

• Make other changes designed to increase the Postal Service’s 

competitiveness with private industry. 

ESTIMATED COST TO THE FEDERAL GOVERNMENT

The estimated budgetary impact of H.R. 4341 is shown in Table 

1. The costs of this legislation fall within budget functions 370 

(commerce and housing credit), 550 (health), 900 (net interest), and 

950 (undistributed offsetting receipts).

BASIS OF ESTIMATE

For this estimate, CBO assumes that H.R. 4341 will be enacted 

near the start of fiscal year 2005. CBO estimates that enacting the 


41CBO1.eps
45

1P.L. 108–18 increased the contribution rate the Postal Service pays for its CSRS employees 

from 7 percent to 17.4 percent. That legislation also eliminated a series of amortization payments the Postal Service was required to make for unfunded CSRS liabilities. For more details, 

see CBO’s cost estimates of the Postal Civil Service Retirement System Funding Reform Act of 

2003 (S. 380 and H.R. 735 from the 108th Congress). These estimates are posted on 

www.cbo.gov. 

bill would result in on-budget savings of $24.1 billion and off-budget costs of $34.5 billion over the 2005–2014 period, for a net cost 

to the unified budget of $10.4 billion over the 10-year period. In addition, we estimate that implementing H.R. 4341 would cost about 

$1.5 billion over the 2005–2014 period, assuming appropriation of 

the necessary amounts, mostly to fund the USPS Office of the Inspector General. 

Background 

The following paragraphs present background information relating to the major provisions of H.R. 4341, mostly for postal finances 

affected by the bill. 

Budgetary Treatment of USPS. Although the Postal Service is 

a federal agency, its financial operations are classified as off-budget. Despite this treatment, federal budget documents present the 

net income (gross income minus expenses) of the agency in the unified budgetary totals for the federal government. The Postal Service is required by law to set postage rates to cover its full costs, 

although from year to year its net income may be positive or negative. In fiscal year 2003, the Postal Service generated $69.5 billion 

in collections, mostly from postage and user fees, and had $64.2 billion in expenses, for a net cash surplus of $5.3 billion in that year. 

USPS and Federal Retirement Plans. Postal Service employees participate in the federal government’s two main defined benefit pension programs. Those workers initially hired prior to 1984 

are covered by the Civil Service Retirement System (CSRS) while 

those initially hired after 1983, as well as former CSRS workers 

who elected to change federal retirement plans in 1987 or 1998, 

participate in the Federal Employees’ Retirement System (FERS). 

In 2003, about 30 percent of the USPS workforce was covered by 

CSRS, and the rest were under FERS. 

The Postal Service and its employees each make payroll contributions toward the civilian retirement system (CSRS and FERS). Unlike other agencies, the agency contribution rate for most CSRS 

employees is 17.4 percent of basic pay (most other agencies contribute 7 percent), while the employee contribution rate is 7 percent.1 For FERS employees, the agency contribution rate for most 

employees is 10.7 percent, while the employee rate is 0.8 percent, 

plus Social Security payroll taxes on both employers and employees. Workers in CSRS receive generally higher benefits than those 

in FERS, but unlike FERS, those in CSRS do not participate in Social Security and do not receive agency contributions toward the 

Thrift Savings Plan. In addition to its payroll contributions, the 

Postal Service also makes annual amortization payments toward 

an unfunded liability within CSRS. In 2003, that payment was 

about $300 million. 

USPS and Federal Health Benefits. The Postal Service also 

pays a portion of health care premiums for currently retired USPS 

employees who are eligible to participate in the Federal Employees 

Health Benefits (FEHB) program. Currently, there are over 

46

400,000 Postal Service retirees who participate in the FEHB program. On average, the Postal Service currently pays about 45 percent of the health care premiums for its retirees. Retirees pay 

about 30 percent of their FEHB premiums with general revenues 

accounting for the remaining amount, roughly 25 percent. In 2003, 

the Postal Service paid $1.1 billion to FEHB for premiums for current retirees. 

USPS Escrow Fund. Starting in October 2006, the Postal Service will be required under current law to begin holding funds in an 

escrow account equal to the difference between what the Postal 

Service currently pays toward CSRS and what it would have paid 

for CSRS benefits prior to the enactment P.L. 108–18. Under current law, CBO estimates the Postal Service will need to hold in escrow nearly $3 billion in 2006 and $36 billion over the 2006–2014 

period. H.R. 4341 would eliminate the requirement that USPS collect and hold these funds in escrow. 

Effects on the Unified Budget 

H.R. 4341 would not affect how much the federal government 

spends on pension or health benefits for USPS retirees. However, 

by increasing how much the Postal Service pays to finance those 

benefits and by eliminating the current-law escrow requirements, 

the bill would increase future budget deficits as measured by the 

unified federal budget. 

Off-budget payments made by the Postal Service for CSRS and 

FEHB are transfers to on-budget federal accounts, and are counted 

as offsetting receipts (a credit against direct spending). Eliminating 

the USPS transfer to CSRS would reduce on-budget offsetting receipts by $13.5 billion over the 2006–2014 period. Under the bill, 

that reduction would be offset by a $37.6 billion net increase in onbudget offsetting receipts paid by the Postal Service for the new 

health benefits fund. Thus, the bill would increase on-budget offsetting receipts by $24.1 billion over the 2006–2014 period. 

The collection of funds to be held in escrow by the Postal Service 

is recorded as an off-budget offsetting receipt. Eliminating the requirement to fund the escrow account would allow the USPS to pay 

down debt, increase spending for capital improvements or other 

projects, postpone or diminish future rate increases, or some combination of these activities. CBO estimates that this provision 

would increase net off-budget spending by $36 billion over the 

2006–2014 period. (Much of that spending would be to fund the 

new health benefits payments mentioned above as on-budget offsetting receipts.) Making the costs of the PRC and the USPS Office 

of the Inspector General subject to appropriation would reduce direct spending by the Postal Service by $1.5 billion over the next 10 

years. 

The combined effect of the $24.1 billion increase in on-budget receipts, the $36 billion reduction in off-budget offsetting receipts, 

and a $1.5 billion reduction in USPS direct spending would produce 

a $10.4 billion cost to the unified budget deficit over the 2006–2014 

period. Those effects are presented in Table 2 and explained in 

more detail below.

47

On-Budget Effects (Direct Spending) 

CBO estimates the total on-budget effect of the pension and 

health care provisions in H.R. 4341 would be an increase in offsetting receipts of $3.1 billion in 2006, $9.7 billion over the 2006–2009 

period, and $24.1 billion over the 2006–2014 period. That increase 

in on-budget collections would come from increased transfers (offbudget outlays) coming from the USPS. (The off-budget effects are 

discussed in the following section.) 

Civil Service Retirement Contributions. H.R. 4341 would 

change the way the Postal Service finances retirement benefits for 

current and retired employees. Starting in October 2005, the bill 

would transfer financial responsibility for military service credits 


41CBO2.eps
48

2This overfunding, which is calculated on a net-present-value basis, represents an estimate 

of the total amount of money the Postal Service will have contributed toward CSRS from 1971 

through September 30, 2005, minus the agency’s CSRS liabilities if USPS bears no financial responsibility for the pension costs associated with military service credits. The projected overfunding is due primarily to larger-than-expected returns on assets held in the CSRDF. 

earned by Postal Service employees and retirees participating in 

CSRS from the Postal Service to the Department of the Treasury. 

Military service credits represent time served in the U.S. military 

that is credited toward benefits under the civilian retirement system. Most federal agencies are not responsible for the cost to the 

pension system of the military service credits incurred by their 

CSRS employees, but P.L. 108–18 transferred responsibility for 

military service credits from the Treasury to the Postal Service beginning in June 2004. 

The Office of Personnel Management (OPM) estimates that 

transferring responsibility for military service credits from the 

Postal Service back to the Treasury would cause the Postal Service 

to have overfunded its obligation to CSRS by about $19.4 billion 

through September 2005.2 Consequently, under H.R. 4341 the Postal Service would no longer be obligated to make either agency contributions or any further annual amortization payments for CSRS. 

(Employee contributions would continue at 7 percent of basic pay 

and retirement benefits under CSRS would not change.) 

Spending by the Postal Service—including amounts paid into 

other federal accounts—is considered off-budget spending. However, the Civil Service Retirement and Disability Fund (CSRDF) is 

an on-budget account, so the amounts the CSRDF collects from the 

Postal Service are on-budget offsetting receipts. Reducing payments 

the Postal Service makes to the CSRDF would result in a reduction 

in off-budget spending and a reduction in on-budget offsetting receipts. CBO estimates transferring responsibility for military service credits, and the attendant reduction in CSRS contributions such 

a change would bring, would reduce on-budget receipts by $2 billion in 2006 and $13.5 billion over the 2006–2014 period. Although 

the Treasury Department would then be responsible for the costs 

associated with those pension liabilities under the bill, the Treasury payment and receipt by CSRDF are both on-budget 

intragovernmental transactions. That is, the bill would replace one 

intragovernmental transfer with another. Instead of a transfer 

from the off-budget Postal Service to the on-budget CSRDF, there 

would be a transfer from the Treasury to the CSRDF. 

Postal Service Retiree Health Benefits Fund. H.R. 4341 also 

would change the way the Postal Service finances its share of the 

cost of providing health care to retirees. Instead of directly paying 

a portion of the health premiums incurred by current retirees each 

year, the USPS would begin paying for estimated costs of retiree 

health care as such costs are accrued by current workers. Starting 

in 2006, H.R. 4341 would require the USPS to make payments 

equal to the annual increase in retiree health care liabilities accrued by current employees. These payments would be deposited 

into a new on-budget account, the Postal Service Retiree Health 

Benefits Fund (PSRHBF), which would earn interest at the same 

rate as the CSRDF. The Postal Service’s share of health care premiums for current retirees would be paid out of the PSRHBF as 

soon as adequate funds are available in the account to do so. 

49

Under H.R. 4341, any overfunding toward CSRS liabilities (after 

financial responsibility for military service credits reverts to the 

Treasury) would be transferred from the CSRDF to the PSRHBF 

by June 30, 2006. Based on information provided by OPM, CBO anticipates that the transfer to the new fund would total $20.2 billion 

and would occur in June 2006. This amount reflects the $19.4 billion in estimated CSRS overfunding plus interest that would accrue 

between the end of the valuation period in September 2005 and 

when CBO assumes the asset transfer would take place in June 

2006. 

Under the bill, the Postal Service also would pay annual interest 

costs on the unfunded liabilities for health care costs of both current and future retirees. The unfunded liability would be the difference between the assets held in the PSRHBF and the net 

present value of accrued liabilities projected for retiree health care. 

The bill would direct OPM to compute the required prefunding and 

interest payments after consultation with the Postal Service, subject to review by the PRC. The bill specifies that payments would 

be made at the end of each fiscal year. Based on information provided by OPM, CBO anticipates the net present value of the unfunded liability for the health care costs of retirees would amount 

to $37.7 billion at the end of 2006 and would shrink to $35.8 billion 

by the end of 2014. CBO estimates that payments by the Postal 

Service for prefunding health care costs of retirees and interest on 

the remaining unfunded liability would be $5.5 billion in 2006, 

$23.3 billion over the 2006–2009 period, and $58.1 billion over the 

2006–2014 period. 

CBO expects that the transfer of $20.2 billion from the CSRDF 

to the PSRHBF resulting from the shift in responsibility for military service credits would occur in June 2006. Therefore, the Postal 

Service would cease making payments under current law for its 

share of FEHB premiums for annuitants beginning in July 2006; 

with those premium payments instead being drawn from the 

PSRHBF. CBO estimates that change in the funding mechanism 

for retiree health benefits would reduce off-budget payments by the 

Postal Service for FEHB premiums by $0.4 billion in 2006 (which 

reflects premium payments, under current law, for the last three 

months of 2006), $6.3 billion over the 2006–2009 period, and $20.5 

billion over the 2006–2014 period. On-budget payments for those 

amounts would then be transferred from the PSRHBF to the FEHB 

program to pay the Postal Service’s share of health care costs for 

retirees. 

The bill would require a minimum level of prefunding by the 

Postal Service through 2015, after accounting for disbursements for 

health premiums from the PSRHBF. To achieve the annual or cumulative prefunding target, payments from the Postal Service to 

the PSRHBF—net of premiums paid by the PSRHBF—must total 

at least two-thirds of the amount the Postal Service would have 

paid toward CSRS prior to the enactment of 

P.L. 108–18. If the threshold is not met, additional prefunding 

payments would be required to make up the shortfall. Those payments also could be used to reduce postal debt (up to $3 billion) 

in lieu of contributions to the fund. The requirement could be 

waived completely by the PRC under certain conditions. CBO anVerDate jul 14 2003 22:09 Sep 23, 2004 Jkt 029006 PO 00000 Frm 00049 Fmt 6659 Sfmt 6601 E:\HR\OC\HR672P2.XXX HR672P2
50

ticipates that the threshold established under the bill would be met 

and no additional payments would be required through 2014. 

Health premiums paid by the Postal Service for FEHB and any 

payments that would be made into the new PSRHBF would be considered on-budget offsetting receipts. CBO estimates the increase 

in on-budget receipts as a result of changes in how the Postal Service finances its health care obligations would be $5.1 billion in 

2006, $17.0 billion over the 2006–2009 period, and $37.6 billion 

over the 2006–2014 period. 

Off-Budget Effects (Direct Spending) 

CBO estimates that enacting H.R. 4341 would result in net off- budget costs of $2.8 billion in fiscal year 2006, $12.7 billion over 

the 2005–2009 period, and $34.5 billion over the 2005–2014 period 

because it would eliminate the requirement to fund the escrow account, allowing the Postal Service to increase other spending, reduce postal rates, or some combination of these actions. The bill 

also would make the costs of the PRC and the USPS Office of the 

Inspector General subject to appropriation, thus reducing direct 

spending by $1.6 billion over the next 10 years. The bill contains 

many other provisions that could affect USPS cash flows in each 

year, but we estimate they would not have a significant net effect 

on the USPS over the long term. 

Elimination of Escrow Fund. P.L. 108–18 permanently reduced payments by the USPS to the CSRDF. As a result of that 

act, USPS payments to the CSRDF declined by $2.5 billion to $5 

billion annually, beginning in 2003. For fiscal years starting in 

2006, P.L. 108–18 requires that savings resulting from reduced 

payments to the CSRDF be considered an operating expense of the 

Postal Service and held in escrow, remaining unavailable for obligation unless authorized by subsequent legislation. 

H.R. 4341 would amend P.L. 108–18 to eliminate the escrow 

fund requirement. As a result of this provision, the Postal Service 

could lower rates and thus reduce its revenues, or maintain rates 

and increase spending, or some combination of these actions. The 

net outlays of the Postal Service would increase because collections 

would not be deposited in escrow. CBO estimates that eliminating 

the escrow requirement would increase net spending by about $2.9 

billion in 2006, $13.3 billion over the 2006–2009 period, and $36 

billion over the 2006–2014 period. Much of the spending would go 

toward making new payments to the on-budget account for health 

care costs. 

Make Cost of PRC and USPS IG Subject to Appropriation.

Under current law, the PRC and the Inspector General of the Postal Service are funded from the Postal Service Fund without annual 

Congressional appropriation. In total, these offices spent about 

$140 million in 2003. H.R. 4341 would authorize the appropriation 

of such sums as may be necessary from the Postal Service Fund for 

these offices. Thus, enacting this legislation would reduce direct 

spending—and therefore, increase spending subject to appropriation—by about $140 million annually beginning in fiscal year 2005. 

Changes to USPS Rate-Setting Procedures. Under the bill 

the Postal Service would be directed to define the cost basis for the 

different products and services it supplies. These products and 

services would broadly be categorized as market-dominant products 

51

and competitive products. Different rate-setting procedures would 

apply to these different categories of products and services. 

Market-Dominant Products. Under H.R. 4341, market-dominant 

products would include: first-class mail, special services, periodicals, standard mail, media mail, library mail, and bound printed 

matter. 

H.R. 4341 would require the PRC to establish, within two years 

of enactment, a new system for regulating postage rates for market-dominant products. The bill would permit the new system to involve price caps, revenue targets, or other forms of incentive or 

cost-of-service regulation. However, the legislation would mandate 

that the average rate for any market-dominant product could not 

rise more than the annual increase in the Consumer Price Index 

(CPI), unless a larger increase would be necessary to ensure the viability of the Postal Service. 

Later this year we expect the Postal Service to begin preparations for a rate case in 2006. Assuming the PRC would need the 

two years that the bill would provide to establish the new system 

for regulating rates for market dominant products, we assume that 

the new rate setting system would not be effective until after 2006. 

Since 1970, increases in postage rates have largely tracked the 

rate of inflation. Over the past 10 years, rates were increased in 

1995, 1999, 2001, and 2002 as a result of rate cases. After 2006, 

we expect that the Postal Service would increase rates for marketdominant mail services more frequently than under current law, 

but by smaller increments (as limited by the CPI). Over the long 

term, CBO does not expect that enacting H.R. 4341 would significantly change the revenues from market-dominant products that 

the Postal Service would be expected to receive under current law. 

Competitive Products. Under H.R. 4341, competitive products 

would include the following: priority mail, express mail, mailgrams, 

international mail, and parcel post. Currently, the competitive 

products contribute less than 15 percent of total postal revenues. 

H.R. 4341 would direct the PRC to prohibit subsidizing competitive products by market-dominant products, ensure that each competitive product covers its attributable costs, and ensure that all 

competitive products collectively make a reasonable contribution to 

the institutional costs of the Postal Service. After these requirements have been implemented, the USPS could change rates for 

competitive products without consulting the PRC, as long as the 

cost coverage requirements are met. The Postal Service, however, 

would have to provide public notice and justification of changes in 

rates. 

In addition, H.R. 4341 would require the Postal Service to establish a new off-budget fund, the Competitive Products Fund, solely 

for revenues and expenditures associated with competitive products. We expect that it could be difficult to differentiate postal expenses related only to competitive products, as USPS uses the 

same employees and facilities to handle both market dominant and 

competitive products. 

CBO cannot predict the bill’s effect on Postal Service revenues 

from competitive products because the agency could set and change 

prices with few restrictions, although we would expect that yearly 

cash flows under the bill would differ from those estimated under 

current law. CBO also cannot predict how successfully the Postal 

52

Service might compete in the open market. However, the highly 

competitive nature of the mailing industry would tend to keep 

prices and revenues down, while the labor-intensive cost structure 

of the USPS would maintain upward pressure on expenses. Thus, 

over the long term under this legislation, CBO expects the Postal 

Service to attempt to recover its costs and break even as it did before the enactment of P.L 108–18. 

Other Off-Budget Effects. H.R. 4341 would make many other 

changes to the laws governing the Postal Service, the PRC, and the 

delivery of mail and other postal products. Some of these provisions, such as the expansion of USPS contracting authority for the 

interstate air transportation of mail, would yield savings. Other 

provisions, including the requirement for additional USPS reports 

and the establishment of an inspector general for the PRC, would 

increase costs. In total, CBO does not expect the net effects of these 

provisions to be significant. 

Spending Subject to Appropriation 

H.R. 4341 would authorize the appropriation of such sums as 

may be necessary, out of the Postal Service Fund, for the PRC and 

the Inspector General of the Postal Service. (Currently, these offices are funded out the Postal Service Fund without Congressional 

action.) Beginning in 2005, this provision would entail about $140 

million a year in spending, subject to appropriation of the necessary amounts. Enacting the bill would reduce direct spending by 

the same amount. Spending on these activities would likely still be 

considered off-budget, since funds would come from the Postal 

Service Fund. 

In addition, H.R. 4341 would require OPM to make actuarial 

computations related to the CSRS and PSRHBF trust funds and 

would increase OPM’s administrative workload to comply with the 

requirements under the bill. CBO estimates that such activities 

would cost less than $500,000 annually, assuming the availability 

of appropriated funds. 

INTERGOVERNMENTAL AND PRIVATE-SECTOR IMPACT

H.R. 4341 contains no intergovernmental or private-sector mandates as defined in UMRA and would impose no costs on State, 

local, or tribal governments. 

PREVIOUS CBO ESTIMATES

On July 13, 2004, CBO transmitted a cost estimate for H.R. 

4341, the Postal Accountability and Enhancement Act, as ordered 

reported by the House Committee on Government Reform on May 

12, 2004. The two Committees’ versions of this bill are very similar, 

and the CBO cost estimates are identical. 

On June 24, 2004, CBO transmitted a cost estimate for S. 2468, 

the Postal Accountability and Enhancement Act, as ordered reported by the Senate Committee on Governmental Affairs on June 

2, 2004. S. 2468 also would make changes to the operation of the 

Postal Service. However, the bills present different approaches to 

some of the changes—especially with regard to financing the cost 

of health care benefits of USPS retirees. Our estimates reflect 

those differences. CBO estimates that enacting S. 2468 would result in on-budget savings of $20.2 billion and off-budget costs of 

53

$35.8 billion over the 2005–2014 period, for a net cost to the unified budget of $15.7 billion over that period. 

ESTIMATE PREPARED BY: 

Federal Costs: Mark Grabowicz for USPS costs (226–2860) 

Geoffrey Gerhardt for retirement costs (226–2820) 

Julia Christensen for health care costs (226–9010) 

Impact on State, Local, and Tribal Governments: Sarah Puro (225–

3220) 

Impact on the Private Sector: Paige Piper/Bach (226–2960) 

ESTIMATE APPROVED BY: 

Peter H. Fontaine 

Deputy Assistant Director for Budget Analysis 

PERFORMANCE GOALS AND OBJECTIVES

The Committee states that pursuant to clause 3(c)(4) of rule XIII 

of the Rules of the House of Representatives, H.R. 4341, the ‘‘Postal 

Accountability and Enhancement Act’’ represents the most sweeping structural reform of the United States Postal Service (‘‘Postal 

Service’’) in over three decades. A central objective of this legislation is to ensure that the Postal Service operates in a more business-like manner. The legislation creates a modern system of rate 

regulation, expands the purview of ‘‘competitive activities’’ in which 

the Postal Service may operate, addresses the Postal Service’s universal service obligation and the scope of the mail monopoly, and 

protects private firms from unfair competition. 

CONSTITUTIONAL AUTHORITY STATEMENT

Pursuant to clause 3(d)(1) of rule XIII of the Rules of the House 

of Representatives, the Committee finds the authority for this legislation in article I, § 8 of the Constitution. 

SECTION-BY-SECTION ANALYSIS AND DISCUSSION

The following is a discussion of sections under jurisdiction of the 

Committee on the Judiciary. The other sections are described in 

the report of the Committee on Government Reform and Oversight 

H.R. Rep. No. 108–672. 

Sec. 205. Complaints; appellate review and enforcement. 

Section 205 of the bill revises the complaint and appellate review 

provisions set out in subchapter V of chapter 36, Title 39 (as redesignated by the bill). In general, the bill strengthens the authority of the Postal Regulatory Commission to act on complaints. The 

Postal Regulatory Commission has authority over rate-making and 

other activities of the Postal Service. Section 205 repeals current 

§§ 3662 (rate and service complaints) and 3663 (annual report on 

international services) and adds three sections in Title 39 as follows. 

First, § 3662 provides the Postal Regulatory Commission with enhanced authority to respond to complaints of pricing, service, or 

other actions by the Postal Service in violation of law. As revised, 

this section would require the Commission to begin proceedings on 

54

or dismiss complaints within 90 days and if not acted on, the complaint 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). In subsection 3662(c), the amendment gives the Commission broad authority to correct violations by ordering the Postal Service to take 

whatever steps the Commission considers appropriate. For instance, the Commission may order the Postal Service to adjust the 

rates of competitive products to lawful levels if they are set below 

attributable costs (the Commission has no such authority under 

current law). The Commission is authorized to suspend rates or 

classifications that are not of general applicability in the Nation as 

a whole or in any substantial region of the Nation. The suspension 

is permitted for only a limited period of time pending expedited 

proceedings under § 3662, and four key factors are outlined in subsection (d) that the Commission must consider in evaluating 

whether this authority may be exercised. In cases of deliberate 

noncompliance with law, the Commission is authorized to levy fines 

based on the seriousness, nature, circumstances, and extent of the 

noncompliance. Fines resulting from provision of Competitive products must be paid out of the Competitive Products Fund, and all 

fines are paid into the general Treasury fund. 

Second, § 3663 provides for appeals of any order or decision of the 

Postal Regulatory Commission to the United States Court of Appeals for the District of Columbia Circuit in accordance with chapter 706 of Title 5 and chapter 158 of Title 28. Third, § 3664 gives 

any United States District Court jurisdiction to enforce orders of 

the Postal Regulatory Commission and issue injunctions or restraining orders. 

Sec. 301. Postal Service Competitive Products Fund. 

Section 301 of the bill adds a new § 2011 to title 39. Section 2011 

establishes an off-budget fund within the Treasury for revenues 

and expenditures associated with competitive products. The ‘‘Competitive Products Fund’’ is in addition to the current Postal Service 

Fund. The intent of this section is to level the playing field for the 

Postal Service and its competitors in the competitive product market by requiring the Postal Service to keep separate financial accounts for market dominant and competitive products. Separation 

of accounts also protects the interests of postal consumers in the 

market dominant category and taxpayers. Subsection 2011 essentially permits the Postal Service to manage the Competitive Products Fund in its discretion but prohibits the Postal Service from 

borrowing funds from Treasury or borrowing from private capital 

markets by pledging the full faith and credit of the United States. 

The new fund can borrow money to support competitive products 

by pledging the assets of the fund and its revenues and receipts. 

The Postal Service may invest money from the new fund in accordance with rules which the Secretary of Treasury shall prescribe (by 

not later than 18 months after the date of enactment)—in such 

other obligations or securities as the Postal Service deems appropriate. 

Subsection 2011(g) provides that claims against the Postal Service arising out of its competitive activities shall be paid out of the 

Competitive Products Fund. 

55

Subsection 2011(h) requires that the Secretary of the Treasury, 

in consultation with the Postal Service, an independent accountant, 

and other appropriate advisors, develop recommendations for rules 

such as accounting practices and principles that will identify and 

value the assets, liabilities, capital, and operating costs, associated 

with competitive products. Treasury’s recommendations must be 

submitted to the Postal Regulatory Commission, which must then 

provide an opportunity for all other interested parties to present 

their views. 

The Postal Service, among others, will therefore be able to 

present its own recommendations and counterarguments. While 

Treasury will have the first opportunity to make recommendations, 

the Committee expects the Commission to give consideration to all 

input from interested parties, without a presumption that the 

Treasury recommendations are correct. After taking into account 

all views and information presented, the Commission must issue 

rules providing for the establishment and application of accounting 

practices and principles, certain substantive and procedural rules, 

and submission by the Postal Service of annual and periodic reports. The Commission is authorized to update the rules as necessary. The Postal Service must report to the Postal Regulatory 

Commission on the Competitive Products Fund periodically, as may 

be required by the Commission. In addition, the Postal Service 

must prepare an annual report for the Secretary of the Treasury 

concerning the operation of this Fund. This report shall address 

such matters as risk limitations, reserve balances, allocation or distribution of moneys, liquidity requirements, and measures to safeguard against losses. A copy of the report must also be provided to 

the Commission as part of the required annual reports. 

Sec. 303. Unfair competition prohibited. 

Section 303 of the bill adds a new § 404a to Title 39. Section 404a 

prohibits the Postal Service from: (1) establishing rules or regulations which preclude competition or give the Postal Service an unfair competitive advantage; (2) compelling disclosure, transfer, or licensing of intellectual property to any third party; or (3) offering 

any product or service that makes use of information obtained from 

a person that provides or seeks to provide a product to the Postal 

Service (unless the person has consented to such use or substantially the same information is otherwise obtainable). The Postal 

Regulatory Commission is required to prescribe regulations to 

carry out the purposes of this section, and the prohibitions are enforced through the Commission’s strengthened complaint process 

and remedies, which include ordering rescission of any regulation. 

Sec. 304. Suits by and against the Postal Service. 

Section 304 of the bill amends § 409 of Title 39, to make the Postal Service more amenable to other laws regulating the conduct of 

commercial activities. First, the amendment subjects all Postal 

Service activities to Federal laws prohibiting the conduct of business in a fraudulent manner (the Lanham Act and certain parts of 

the Federal Trade Commission Act). Second, the amendment subjects Postal Service conduct with respect to competitive products to 

Federal antitrust laws and unfair competition prohibitions and 

eliminates sovereign immunity protection from suits in Federal 

56

2Section 109 of the Bankruptcy Code provides, in relevant part, that only a person may be 

a debtor. 11 U.S.C. § 109 (2002). The Code, in turn, specifically excludes a governmental unit 

from its definition of a ‘‘person.’’ 11 U.S.C. § 101(41) (2002). 3See 11 U.S.C. § 365 (2002). 4See 11 U.S.C. §§ 547, 548 (2002). 5See 11 U.S.C. §§ 1113–14 (2002). 6 Bankruptcy Code § 541, which specifies what assets comprise a bankruptcy estate, has been 

broadly construed. Section 541 provides that the bankruptcy estate is comprised of property, 

wherever located and by whomever held, including all legal and equitable interests in such property. 11 U.S.C. § 541 (2002). 

court for violations of Federal law. The amended § 409 allows injunctive relief against officers and employees of the Postal Service 

in case of violation of the antitrust laws, while the Postal Service 

itself would be subject to all available remedies. To the extent that 

private entities contract with the Postal Service for services in 

which the Postal Service is market dominant, the Committee does 

not believe these private entities should be subject to antitrust liability for the provision of these particular services. 

In addition, the bill as introduced would have made the Postal 

Service, to the extent it engages in conduct with respect to the provision of competitive products, a ‘‘person’’ for purposes of the Federal bankruptcy laws. Under current bankruptcy law, a governmental unit such as the Postal Service, is not eligible to be a bankruptcy debtor.2 The intent of this provision was to ensure that the 

Postal Service—to the extent it engages in competitive enterprises—has the same options and remedies available to its private 

sector counterparts. 

This bankruptcy provision had several practical difficulties associated with its implementation. First, the provision might have 

been impossible to implement under the Bankruptcy Code as it 

would only permit ‘‘that portion of the Postal Service’’ that engages 

in certain activities to be eligible for bankruptcy relief. The bankruptcy law lacks any means to bifurcate a debtor based on eligibility, i.e., the entire entity must be eligible for relief. Second, the 

provision may give the Postal Service an anti-competitive advantage with respect to its private sector counterparts by allowing it 

to use various protections and equitable remedies available to 

bankruptcy debtors. These bankruptcy-specific protections include 

the ability to avoid certain contracts and leases,3 avoid certain payments made to creditors prior to the bankruptcy filing,4 and set 

aside collective bargaining agreements and modify retiree benefits, 

under certain conditions.5 Third, the parameters of what assets 

and liabilities would comprise the bankruptcy estate 6 may be illdefined as only part of the Post Service would be authorized to be 

a bankruptcy debtor. For these reasons, an amendment offered by 

Chairman Sensenbrenner and Ranking Member Conyers to strike 

this provision was adopted the Committee by voice vote. 

Section 304 would also require the Postal Service to consider 

local zoning, planning, or land use regulations and building codes 

when constructing or altering buildings. This section further requires the Postal Service to represent itself in most legal proceedings permitted by the amendment as well as in cases involving 

administrative subpoenas issued by the Postal Regulatory Commission and appeals of decisions by the Commission or the Governors. 

The amendment requires that judgments arising out of activities of 

the Postal Service must be paid by the Postal Service, and judgVerDate jul 14 2003 22:09 Sep 23, 2004 Jkt 029006 PO 00000 Frm 00056 Fmt 6659 Sfmt 6601 E:\HR\OC\HR672P2.XXX HR672P2
57

ments arising out of violations of law involving competitive products must be paid from revenues from competitive products. 

Sec. 502. Authority for Postal Regulatory Commission to issue subpoenas. 

Section 502 of the bill amends § 504 of Title 39 (i.e., § 3604 of current law as redesignated by § 501 of the bill). As amended, § 504 

provides that Commissioners, any administrative law judge appointed by the Commission, and any designated employee of the 

Commission may administer oaths, examine witnesses, take depositions, and receive evidence. In addition, the Chairman of the Commission, any Commissioner designated by the Chairman, and any 

administrative law judge appointed by the Commission may issue 

subpoenas requiring the attendance and presentation of testimony 

by, or production of, documentary or other evidence in the possession of, officers, employees, agents, or contractors of the Postal 

Service, and to order the taking of depositions of, and responses to, 

written interrogatories by such persons. Such subpoena or order is 

allowed with respect to any proceeding conducted by the Commission under this title. Any subpoena requires the written concurrence of a majority of Commissioners then holding office in advance 

of its issuance. A failure to obey a subpoena may be referred to the 

appropriate United States district court and a failure to obey a 

court order is punishable as a contempt of court. 

The amendment also provides for the handling of information the 

Postal Service views as proprietary that is requested from the Postal Service by the Commission. Section 504 provides that, if the 

Postal Service determines requested information is proprietary and 

so notifies the Commission in writing, the Commission may use the 

information only for the purpose supplied and must restrict access 

to the information to Commission officers and employees. It further 

provides for the possibility of discovery of such information by interested parties and requires the Commission to adopt rules to protect the confidentiality of such information similar to the rules that 

govern protective orders issued by the Federal courts under the 

Federal Rules of Civil Procedure. This section creates new subsections (f) and (g) of § 504 of Title 39. These new subsections provide administrative subpoena power to the Postal Regulatory Commission and provide for the enforcement of such subpoenas in district court. 

Sec. 703. Study on equal application of laws to competitive products. 

Section 703 of the bill requires the Federal Trade Commission to 

prepare a report detailing how Federal and state laws apply differently to the Postal Service with respect to competitive products 

and private companies providing similar products. The Commission 

is directed to report within one year after enactment and to include 

recommendations for resolving any identified disparities in legal 

treatment. The Federal Trade Commission is to consult in preparing its report with the Postal Service, the Postal Regulatory 

Commission, other Federal agencies, mailers, private companies 

that provide delivery services, and the general public, and shall append to such report any written comments received. This section 

provides for a Federal Trade Commission study of laws that apply 

58

differently to the Postal Service and its private sector competitors. 

Such a study may include sovereign immunity, antitrust, and intellectual property laws. When preparing this Report, the Committee 

expects the Federal Trade Commission to closely consult with the 

United States Patent and Trademark Office, the Copyright Office, 

and the Department of Justice’s Antitrust Division. 

Sec. 801. Employment of Postal Police Officers. 

The Postal Service currently employs more than one thousand 

uniformed Postal Police officers who are assigned to critical postal 

facilities throughout the country. These officers provide vital protective and security functions, escort high-value mail functions, and 

provide other essential functions. Each year the authority for these 

officers has been provided in appropriations bills. As introduced, 

H.R. 4341 sought to make this authority permanent in Title 40 of 

the United States Code. An amendment offered by Crime, Terrorism, and Homeland Security Subcommittee Chairman Coble to 

establish this authority in Title 18 of the United States Code, consistent with other police authorities of the Postal Service and Federal Government agencies, was reported from the Committee by 

voice vote. 

Sec. 809. Hazardous Matter. 

Section 809 provides for penalties regarding illegal use of mail to 

transport hazardous matter. As introduced, H.R. 4341 would have 

added a new § 3018 to Title 39 of the United States Code to prohibit the mailing of hazardous material, the causing of hazardous 

material to be mailed, and the manufacture, distribution, or sale of 

containers, packaging kits or other devices (for use in mailing hazardous materials) that fail to conform with relevant standards. 

An amendment offered by Crime, Terrorism, and Homeland Security Subcommittee Chairman Coble to add ‘‘hazardous materials’’ 

to the list of nonmailable materials for which criminal penalties 

may be applied was reported from the Committee by voice vote. 

Under Title 18, the Postal Service may continue to permit the 

transmission of these items under such rules and regulations as 

they may prescribe. This amendment makes the civil and criminal 

penalties consistent for all nonmailable items and continues to 

allow the Postal Service to make any exceptions they deem necessary. 

CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

In compliance with clause 3(e) of rule XIII of the Rules of the 

House of Representatives, changes in existing law made by the bill, 

as reported, are shown as follows (existing law proposed to be omitted is enclosed in black brackets, new matter is printed in italics, 

existing law in which no change is proposed is shown in roman):

TITLE 39, UNITED STATES CODE

* * * * * * *

59

PART I—GENERAL 

Chap. Sec. 

1. Postal Policy and Definitions ..................................................................... 101

* * * * * * *

5. Postal Regulatory Commission ................................................................... 501

CHAPTER 1—POSTAL POLICY AND DEFINITIONS 

* * * * * * *

§ 101. Postal policy 

(a) * * *

* * * * * * *

(d) As an establishment that provides both market-dominant 

and competitive products, the Postal Service shall be subject to a 

high degree of transparency, including in its finances and operations, to ensure fair treatment of customers of the Postal Service’s 

market-dominant products and companies competing with the Postal Service’s competitive products.

ø(d)¿ (e) Postal rates shall be established to apportion the costs 

of all postal operations to all users of the mail on a fair and equitable basis. 

ø(e)¿ (f) In determining all policies for postal services, the Postal Service shall give the highest consideration to the requirement 

for the most expeditious collection, transportation, and delivery of 

important letter mail. 

ø(f)¿ (g) In selecting modes of transportation, the Postal Service shall give highest consideration to the prompt and economical 

delivery of all mail and shall make a fair and equitable distribution 

of mail business to carriers providing similar modes of transportation services to the Postal Service. Modern methods of transporting mail by containerization and programs designed to achieve 

overnight transportation to the destination of important letter mail 

to all parts of the Nation shall be a primary goal of postal operations. 

ø(g)¿ (h) In planning and building new postal facilities, the 

Postal Service shall emphasize the need for facilities and equipment designed to create desirable working conditions for its officers 

and employees, a maximum degree of convenience for efficient postal services, proper access to existing and future air and surface 

transportation facilities, and control of costs to the Postal Service. 

§ 102. Definitions 

As used in this title—

(1) * * *

* * * * * * *

(3) ‘‘Governors’’ means the 9 members of the Board of Governors appointed by the President, by and with the advice and 

consent of the Senate, under section 202(a) of this title; øand¿

ø(4) ‘‘Inspector General’’ means the Inspector General appointed under section 202(e) of this title;¿

(4) ‘‘Inspector General’’ means the Inspector General of the 

United States Postal Service, appointed under section 3(a) of 

the Inspector General Act of 1978; 

60

(5) ‘‘postal service’’ means the carriage of letters, printed 

matter, or mailable packages, including acceptance, collection, 

processing, delivery, or other services supportive or ancillary 

thereto; 

(6) ‘‘product’’ means a postal service with a distinct cost or 

market characteristic for which a rate or rates are, or may reasonably be, applied; 

(7) ‘‘rates’’, as used with respect to products, includes fees 

for postal services; 

(8) ‘‘market-dominant product’’ or ‘‘product in the marketdominant category of mail’’ means a product subject to subchapter I of chapter 36; 

(9) ‘‘competitive product’’ or ‘‘product in the competitive category of mail’’ means a product subject to subchapter II of chapter 36; 

(10) ‘‘Consumer Price Index’’ means the Consumer Price 

Index for All Urban Consumers published monthly by the Bureau of Labor Statistics of the Department of Labor; and 

(11) ‘‘year’’, as used in chapter 36 (other than subchapters 

I and VI thereof), means a fiscal year.

CHAPTER 2—ORGANIZATION 

* * * * * * *

§ 202. Board of Governors 

(a)(1) The exercise of the power of the Postal Service shall be 

directed by a Board of Governors composed of 11 members appointed in accordance with this section. Nine of the members, to be 

known as Governors, shall be appointed by the President, by and 

with the advice and consent of the Senate, not more than 5 of 

whom may be adherents of the same political party. The Governors 

shall elect a Chairman from among the members of the Board. 

øThe Governors shall be chosen to represent the public interest 

generally, and shall not be representatives of specific interests 

using the Postal Service, and may be removed only for cause.¿ The 

Governors shall represent the public interest generally, and at least 

4 of the Governors shall be chosen solely on the basis of their demonstrated ability in managing organizations or corporations (in either the public or private sector) of substantial size; for purposes of 

this sentence, an organization or corporation shall be considered to 

be of substantial size if it employs at least 50,000 employees. The 

Governors shall not be representatives of specific interests using the 

Postal Service, and may be removed only for cause. Each Governor 

shall receive a salary of $30,000 a year plus $300 a day for not 

more than 42 days of meetings each year and shall be reimbursed 

for travel and reasonable expenses incurred in attending meetings 

of the Board. Nothing in the preceding sentence shall be construed 

to limit the number of days of meetings each year to 42 days. 

(2) In selecting the individuals described in paragraph (1) for 

nomination for appointment to the position of Governor, the President should consult with the Speaker of the House of Representatives, the minority leader of the House of Representatives, the majority leader of the Senate, and the minority leader of the Senate.

(b)(1) The terms of the 9 Governors shall be 9 years, except 

that the terms of the 9 Governors first taking office shall expire as 

61

designated by the President at the time of appointment, 1 at the 

end of 1 year, 1 at the end of 2 years, 1 at the end of 3 years, 1 

at the end of 4 years, 1 at the end of 5 years, 1 at the end of 6 

years, 1 at the end of 7 years, 1 at the end of 8 years, and 1 at 

the end of 9 years, following the appointment of the first of them. 

Any Governor appointed to fill a vacancy before the expiration of 

the term for which his predecessor was appointed shall serve for 

the remainder of such term. A Governor may continue to serve 

after the expiration of his term until his successor has qualified, 

but not to exceed one year.

(2)(A) Notwithstanding any other provision of this section, in 

the case of the office of the Governor the term of which is the first 

one scheduled to expire at least 4 months after the date of the enactment of this paragraph—

(i) such office may not, in the case of any person commencing service after that expiration date, be filled by any person other than an individual chosen from among persons nominated for such office with the unanimous concurrence of all 

labor organizations described in section 206(a)(1); and 

(ii) instead of the term that would otherwise apply under 

the first sentence of paragraph (1), the term of any person so appointed to such office shall be 3 years. 

(B) Except as provided in subparagraph (A), an appointment 

under this paragraph shall be made in conformance with all provisions of this section that would otherwise apply.

* * * * * * *

ø(e)(1) The Governors shall appoint and shall have the power 

to remove the Inspector General. 

ø(2) The Inspector General shall be appointed—

ø(A) for a term of 7 years; 

ø(B) without regard to political affiliation; and 

ø(C) solely on the basis of integrity and demonstrated ability in accounting, auditing, financial analysis, law, management analysis, public administration, or investigations. 

ø(3) The Inspector General may at any time be removed upon 

the written concurrence of at least 7 Governors, but only for cause. 

Nothing in this subsection shall be considered to exempt the Governors from the requirements of section 8G(e) of the Inspector General Act of 1978.¿

* * * * * * *

CHAPTER 4—GENERAL AUTHORITY

Sec. 

401. General powers of the Postal Service. 

* * * * * * *

404a. Specific limitations.

* * * * * * *

§ 401. General powers of the Postal Service 

øThe¿ Subject to the provisions of section 404a, the Postal Service shall have the following general powers: 

(1) * * *

62

ø(2) to adopt, amend, and repeal such rules and regulations as it deems necessary to accomplish the objectives of this 

title;¿

(2) to adopt, amend, and repeal such rules and regulations, 

not inconsistent with this title, as may be necessary in the execution of its functions under this title and such other functions 

as may be assigned to the Postal Service under any provisions 

of law outside of this title;

* * * * * * *

§ 403. General duties 

(a) * * *

* * * * * * *

(c) In providing services and in establishing classifications, 

rates, and fees under this title, the Postal Service shall not, except 

as specifically authorized in this title, make any undue or unreasonable discrimination among users of the mails, nor shall it grant 

any undue or unreasonable preferences to any such user. The prohibition in this subsection shall not be construed to prevent the establishment of rates that vary with volume if such rates will be 

made available to similarly situated persons and will increase the 

aggregate contribution to the institutional costs of the Postal Service.

§ 404. Specific powers 

(a) øWithout¿ Subject to the provisions of section 404a, but otherwise without limitation of the generality of its powers, the Postal 

Service shall have the following specific powers, among others: 

(1) to provide for the collection, handling, transportation, 

delivery, forwarding, returning, and holding of mail, and for 

the disposition of undeliverable mail; 

(2) to prescribe, in accordance with this title, the amount 

of postage and the manner in which it is to be paid; 

(3) to determine the need for post offices, postal and training facilities and equipment, and to provide such offices, facilities, and equipment as it determines are needed; 

(4) to provide and sell postage stamps and other stamped 

paper, cards, and envelopes and to provide such other evidences of payment of postage and fees as may be necessary or 

desirable; 

(5) to provide philatelic services; 

ø(6) to provide, establish, change, or abolish special nonpostal or similar services;¿

ø(7)¿ (6) to investigate postal offenses and civil matters relating to the Postal Service; 

ø(8)¿ (7) to offer and pay rewards for information and services in connection with violation of the postal laws, and, unless 

a different disposal is expressly prescribed, to pay one-half of 

all penalties and forfeitures imposed for violations of law affecting the Postal Service, its revenues, or property, to the person informing for the same, and to pay the other one-half into 

the Postal Service Fund; and 

ø(9)¿ (8) to authorize the issuance of a substitute check for 

a lost, stolen, or destroyed check of the Postal Service.

63

(b) Except as otherwise provided, the Governors are authorized 

to establish reasonable and equitable classes of mail and reasonable 

and equitable rates of postage and fees for postal services in accordance with the provisions of chapter 36. Postal rates and fees shall 

be reasonable and equitable and sufficient to enable the Postal Service, 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. 

(c) The Postal Service shall maintain one or more classes of 

mail for the transmission of letters sealed against inspection. The 

rate for each such class shall be uniform throughout the United 

States, its territories, and possessions. One such class shall provide 

for the most expeditious handling and transportation afforded mail 

matter by the Postal Service. No letter of such a class of domestic 

origin shall be opened except under authority of a search warrant 

authorized by law, or by an officer or employee of the Postal Service 

for the sole purpose of determining an address at which the letter 

can be delivered, or pursuant to the authorization of the addressee.

ø(b)¿ (d)(1) * * *

* * * * * * *

(5) A determination of the Postal Service to close or consolidate 

any post office may be appealed by any person served by such office 

to the øPostal Rate¿ Postal Regulatory Commission within 30 days 

after such determination is made available to such person under 

paragraph (3). The Commission shall review such determination on 

the basis of the record before the Postal Service in the making of 

such determination. The Commission shall make a determination 

based upon such review no later than 120 days after receiving any 

appeal under this paragraph. The Commission shall set aside any 

determination, findings, and conclusions found to be—

(A) * * *

* * * * * * *

(6) For purposes of paragraph (5), any appeal received by the 

Commission shall—

(A) if sent to the Commission through the mails, be considered to have been received on the date of the Postal Service postmark on the envelope or other cover in which such appeal is 

mailed; or 

(B) if otherwise lawfully delivered to the Commission, be 

considered to have been received on the date determined based 

on any appropriate documentation or other indicia (as determined under regulations of the Commission). 

(e) Nothing in this title shall be considered to permit or require 

that the Postal Service provide any special nonpostal or similar 

services, except that nothing in this subsection shall prevent the 

Postal Service from providing any special nonpostal or similar services provided by the Postal Service as of May 12, 2004. 

§ 404a. Specific Limitations 

(a) Except as specifically authorized by law, the Postal Service 

may not—

(1) establish any rule or regulation (including any standard) the effect of which is to preclude competition or establish 

64

the terms of competition unless the Postal Service demonstrates 

that the regulation does not create an unfair competitive advantage for itself or any entity funded (in whole or in part) by the 

Postal Service; 

(2) compel the disclosure, transfer, or licensing of intellectual property to any third party (such as patents, copyrights, 

trademarks, trade secrets, and proprietary information); or 

(3) obtain information from a person that provides (or seeks 

to provide) any product, and then offer any product or service 

that uses or is based in whole or in part on such information, 

without the consent of the person providing that information, 

unless substantially the same information is obtained (or obtainable) from an independent source or is otherwise obtained 

(or obtainable). 

(b) The Postal Regulatory Commission shall prescribe regulations to carry out this section. 

(c) Any party (including an officer of the Commission representing the interests of the general public) who believes that the 

Postal Service has violated this section may bring a complaint in 

accordance with section 3662.

* * * * * * *

ø§ 407. International Postal Arrangements. 

ø(a)(1) The Secretary of State shall have primary responsibility 

for formulation, coordination and oversight of policy with respect to 

United States participation in the Universal Postal Union, including the Universal Postal Convention and other Acts of the Universal Postal Union, amendments thereto, and all postal treaties 

and conventions concluded within the framework of the Convention 

and such Acts. 

ø(2) Subject to subsection (d), the Secretary may, with the consent of the President, negotiate and conclude treaties, conventions 

and amendments referred to in paragraph (1). 

ø(b)(1) Subject to subsections (a), (c), and (d), the Postal Service may, with the consent of the President, negotiate and conclude 

postal treaties and conventions. 

ø(2) The Postal Service may, with the consent of the President, 

establish rates of postage or other charges on mail matter conveyed 

between the United States and other countries. 

ø(3) The Postal Service shall transmit a copy of each postal 

treaty or convention concluded with other governments under the 

authority of this subsection to the Secretary of State, who shall furnish a copy to the Public Printer for publication. 

ø(c) The Postal Service shall not conclude any treaty or convention under the authority of this section or any other arrangement 

related to the delivery of international postal services that is inconsistent with any policy developed pursuant to subsection (a). 

ø(d) In carrying out their responsibilities under this section, 

the Secretary and the Postal Service shall consult with such federal 

agencies as the Secretary or the Postal Service considers appropriate, private providers of international postal services, users of 

international postal services, the general public, and such other 

persons as the Secretary or the Postal Service considers appropriate.¿

65

§ 407. International postal arrangements 

(a) It is the policy of the United States—

(1) to promote and encourage communications between peoples by efficient operation of international postal services and 

other international delivery services for cultural, social, and 

economic purposes; 

(2) to promote and encourage unrestricted and undistorted 

competition in the provision of international postal services and 

other international delivery services, except where provision of 

such services by private companies may be prohibited by law of 

the United States; 

(3) to promote and encourage a clear distinction between 

governmental and operational responsibilities with respect to 

the provision of international postal services and other international delivery services by the Government of the United 

States and by intergovernmental organizations of which the 

United States is a member; and 

(4) to participate in multilateral and bilateral agreements 

with other countries to accomplish these objectives. 

(b)(1) The Secretary of State shall be responsible for formulation, coordination, and oversight of foreign policy related to international postal services and other international delivery services, 

and shall have the power to conclude treaties, conventions and 

amendments related to international postal services and other international delivery services, except that the Secretary may not conclude any treaty, convention, or other international agreement (including those regulating international postal services) if such treaty, 

convention, or agreement would, with respect to any competitive 

product, grant an undue or unreasonable preference to the Postal 

Service, a private provider of international postal or delivery services, or any other person. 

(2) In carrying out the responsibilities specified in paragraph 

(1), the Secretary of State shall exercise primary authority for the 

conduct of foreign policy with respect to international postal services 

and international delivery services, including the determination of 

United States positions and the conduct of United States participation in negotiations with foreign governments and international 

bodies. In exercising this authority, the Secretary—

(A) shall coordinate with other agencies as appropriate, 

and in particular, shall give full consideration to the authority 

vested by law or Executive order in the Postal Regulatory Commission, the Department of Commerce, the Department of 

Transportation, and the Office of the United States Trade Representative in this area; 

(B) shall maintain continuing liaison with other executive 

branch agencies concerned with postal and delivery services; 

(C) shall maintain continuing liaison with the Committee 

on Government Reform of the House of Representatives and the 

Committee on Governmental Affairs of the Senate; 

(D) shall maintain appropriate liaison with both representatives of the Postal Service and representatives of users and private providers of international postal services and other international delivery services to keep informed of their interests and 

problems, and to provide such assistance as may be needed to 

ensure that matters of concern are promptly considered by the 

66

Department of State or (if applicable, and to the extent practicable) other executive branch agencies; and 

(E) shall assist in arranging meetings of such public sector 

advisory groups as may be established to advise the Department 

of State and other executive branch agencies in connection with 

international postal services and international delivery services. 

(3) The Secretary of State shall establish an advisory committee 

(within the meaning of the Federal Advisory Committee Act) to perform such functions as the Secretary considers appropriate in connection with carrying out subparagraphs (A) through (D) of paragraph (2). 

(c)(1) Before concluding any treaty, convention, or amendment 

that establishes a rate or classification for a product subject to subchapter I of chapter 36, the Secretary of State shall request the Postal Regulatory Commission to submit a decision on whether such 

rate or classification is consistent with the standards and criteria 

established by the Commission under section 3622. 

(2) The Secretary shall ensure that each treaty, convention, or 

amendment concluded under subsection (b) is consistent with a decision of the Commission adopted under paragraph (1), except if, or 

to the extent, the Secretary determines, by written order, that considerations of foreign policy or national security require modification of the Commission’s decision. 

(d) Nothing in this section shall be considered to prevent the 

Postal Service from entering into such commercial or operational 

contracts related to providing international postal services and 

other international delivery services as it deems appropriate, except 

that—

(1) any such contract made with an agency of a foreign government (whether under authority of this subsection or otherwise) shall be solely contractual in nature and may not purport 

to be international law; and 

(2) a copy of each such contract between the Postal Service 

and an agency of a foreign government shall be transmitted to 

the Secretary of State and the Postal Regulatory Commission 

not later than the effective date of such contract. 

(e)(1) With respect to shipments of international mail that are 

competitive products within the meaning of section 3631 that are exported or imported by the Postal Service, the Bureau of Customs 

and Border Protection of the Department of Homeland Security and 

other appropriate Federal agencies shall apply the customs laws of 

the United States and all other laws relating to the importation or 

exportation of such shipments in the same manner to both shipments by the Postal Service and similar shipments by private companies. 

(2) For purposes of this subsection, the term ‘‘private company’’ 

means a private company substantially owned or controlled by persons who are citizens of the United States. 

(3) In exercising the authority pursuant to subsection (b) to conclude new treaties, conventions and amendments related to international postal services and to renegotiate such treaties, conventions 

and amendments, the Secretary of State shall, to the maximum extent practicable, take such measures as are within the Secretary’s 

control to encourage the governments of other countries to make 

available to the Postal Service and private companies a range of 

67

nondiscriminatory customs procedures that will fully meet the needs 

of all types of American shippers. The Secretary of State shall consult with the United States Trade Representative and the Commissioner of Customs, Department of Homeland Security in carrying 

out this paragraph. 

(4) The provisions of this subsection shall take effect 6 months 

after the date of the enactment of this subsection or such earlier 

date as the Bureau of Customs and Border Protection of the Department of Homeland Security may determine in writing.

* * * * * * *

§ 409. Suits by and against the Postal Service 

(a) øExcept as provided in section 3628 of this title,¿ Except as 

otherwise provided in this title, the United States district courts 

shall have original but not exclusive jurisdiction over all actions 

brought by or against the Postal Service. Any action brought in a 

State court to which the Postal Service is a party may be removed 

to the appropriate United States district court under the provisions 

of chapter 89 of title 28. 

* * * * * * *

ø(d) The Department of Justice shall furnish, under section 

411 of this title, the Postal Service such legal representation as it 

may require, but with the prior consent of the Attorney General 

the Postal Service may employ attorneys by contract or otherwise 

to conduct litigation brought by or against the Postal Service or its 

officers or employees in matters affecting the Postal Service. 

ø(e) A judgment against the Government of the United States 

arising out of activities of the Postal Service shall be paid by the 

Postal Service out of any funds available to the Postal Service.¿

(d)(1) For purposes of the provisions of law cited in paragraphs 

(2)(A) and (2)(B), respectively, the Postal Service—

(A) shall be considered to be a ‘‘person’’, as used in the provisions of law involved; and 

(B) shall not be immune under any other doctrine of sovereign immunity from suit in Federal court by any person for 

any violation of any of those provisions of law by any officer or 

employee of the Postal Service. 

(2) This subsection applies with respect to—

(A) the Act of July 5, 1946 (commonly referred to as the 

‘‘Trademark Act of 1946’’ (15 U.S.C. 1051 and following)); and 

(B) the provisions of section 5 of the Federal Trade Commission Act to the extent that such section 5 applies to unfair 

or deceptive acts or practices. 

(e)(1) To the extent that the Postal Service, or other Federal 

agency acting on behalf of or in concert with the Postal Service, engages in conduct with respect to any competitive product, the Postal 

Service or other Federal agency (as the case may be)—

(A) shall not be immune under any doctrine of sovereign 

immunity from suit in Federal court by any person for any violation of Federal law by such agency or any officer or employee 

thereof; and 

(B) shall be considered to be a person (as defined in subsection (a) of the first section of the Clayton Act) for purposes 

of—

68

(i) the antitrust laws (as defined in such subsection); 

and 

(ii) section 5 of the Federal Trade Commission Act to 

the extent that such section 5 applies to unfair methods of 

competition. 

(2) No damages, interest on damages, costs or attorney’s fees 

may be recovered, and no criminal liability may be imposed, under 

the antitrust laws (as so defined) from any officer or employee of the 

Postal Service, or other Federal agency acting on behalf of or in concert with the Postal Service, acting in an official capacity. 

(3) This subsection shall not apply with respect to conduct occurring before the date of the enactment of this subsection. 

(f)(1) Each building constructed or altered by the Postal Service 

shall be constructed or altered, to the maximum extent feasible as 

determined by the Postal Service, in compliance with one of the nationally recognized model building codes and with other applicable 

nationally recognized codes. 

(2) Each building constructed or altered by the Postal Service 

shall be constructed or altered only after consideration of all requirements (other than procedural requirements) of zoning laws, 

land use laws, and applicable environmental laws of a State or subdivision of a State which would apply to the building if it were not 

a building constructed or altered by an establishment of the Government of the United States. 

(3) For purposes of meeting the requirements of paragraphs (1) 

and (2) with respect to a building, the Postal Service shall—

(A) in preparing plans for the building, consult with appropriate officials of the State or political subdivision, or both, in 

which the building will be located; 

(B) upon request, submit such plans in a timely manner to 

such officials for review by such officials for a reasonable period 

of time not exceeding 30 days; and 

(C) permit inspection by such officials during construction 

or alteration of the building, in accordance with the customary 

schedule of inspections for construction or alteration of buildings in the locality, if such officials provide to the Postal Service—

(i) a copy of such schedule before construction of the 

building is begun; and 

(ii) reasonable notice of their intention to conduct any 

inspection before conducting such inspection. 

Nothing in this subsection shall impose an obligation on any State 

or political subdivision to take any action under the preceding sentence, nor shall anything in this subsection require the Postal Service or any of its contractors to pay for any action taken by a State 

or political subdivision to carry out this subsection (including reviewing plans, carrying out on-site inspections, issuing building permits, and making recommendations). 

(4) Appropriate officials of a State or a political subdivision of 

a State may make recommendations to the Postal Service concerning measures necessary to meet the requirements of paragraphs 

(1) and (2). Such officials may also make recommendations to the 

Postal Service concerning measures which should be taken in the 

construction or alteration of the building to take into account local 

69

conditions. The Postal Service shall give due consideration to any 

such recommendations. 

(5) In addition to consulting with local and State officials 

under paragraph (3), the Postal Service shall establish procedures 

for soliciting, assessing, and incorporating local community input 

on real property and land use decisions. 

(6) For purposes of this subsection, the term ‘‘State’’ includes the 

District of Columbia, the Commonwealth of Puerto Rico, and a territory or possession of the United States. 

(g)(1) Notwithstanding any other provision of law, legal representation may not be furnished by the Department of Justice to 

the Postal Service in any action, suit, or proceeding arising, in 

whole or in part, under any of the following: 

(A) Subsection (d) or (e) of this section. 

(B) Subsection (f) or (g) of section 504 (relating to administrative subpoenas by the Postal Regulatory Commission). 

(C) Section 3663 (relating to appellate review). 

The Postal Service may, by contract or otherwise, employ attorneys 

to obtain any legal representation that it is precluded from obtaining from the Department of Justice under this paragraph. 

(2) In any circumstance not covered by paragraph (1), the Department of Justice shall, under section 411, furnish the Postal 

Service such legal representation as it may require, except that, with 

the prior consent of the Attorney General, the Postal Service may, 

in any such circumstance, employ attorneys by contract or otherwise 

to conduct litigation brought by or against the Postal Service or its 

officers or employees in matters affecting the Postal Service. 

(3)(A) In any action, suit, or proceeding in a court of the United 

States arising in whole or in part under any of the provisions of law 

referred to in subparagraph (B) or (C) of paragraph (1), and to 

which the Commission is not otherwise a party, the Commission 

shall be permitted to appear as a party on its own motion and as 

of right. 

(B) The Department of Justice shall, under such terms and conditions as the Commission and the Attorney General shall consider 

appropriate, furnish the Commission such legal representation as it 

may require in connection with any such action, suit, or proceeding, 

except that, with the prior consent of the Attorney General, the Commission may employ attorneys by contract or otherwise for that purpose. 

(h) A judgment against the Government of the United States 

arising out of activities of the Postal Service shall be paid by the 

Postal Service out of any funds available to the Postal Service, subject to the restriction specified in section 2011(g).

* * * * * * *

§ 410. Application of other laws 

(a) * * *

(b) The following provisions shall apply to the Postal Service: 

(1) * * *

* * * * * * *

(5) the following provisions of title 41: 

(A) sections 35–45 (known as the Walsh-Healey Act, 

relating to wages and hours); øand¿

70

(B) chapter 6 (the Service Contract Act of 1965);

(C) the Anti-Kickback Act of 1986 (41 U.S.C. 51 and 

following), other than subsections (a) and (b) of 7 and section 8 of that Act; and 

(D) section 315 of the Federal Property and Administrative Services Act of 1949 (41 U.S.C. 265) (relating to protecting contractor employees from reprisal for disclosure of 

certain information); 

* * * * * * *

(e) The Postal Service shall develop and issue purchasing regulations that prohibit contract costs not allowable under section 5.2.5 

of the United States Postal Service Procurement Manual (Publication 41), as in effect on July 12, 1995. 

* * * * * * *

CHAPTER 5—POSTAL REGULATORY COMMISSION

Sec. 

501. Establishment. 

502. Commissioners. 

503. Rules; regulations; procedures. 

504. Administration. 

505. Officer of the Postal Regulatory Commission representing the general public.

§ 501. Establishment 

The Postal Regulatory Commission is an independent establishment of the executive branch of the Government of the United 

States. 

§ 502. Commissioners 

(a) The Postal Regulatory Commission is composed of 5 Commissioners, appointed by the President, by and with the advice and 

consent of the Senate. The Commissioners shall be chosen solely on 

the basis of their technical qualifications, professional standing, 

and demonstrated expertise in economics, accounting, law, or public 

administration, and may be removed by the President only for 

cause. Each individual appointed to the Commission shall have the 

qualifications and expertise necessary to carry out the responsibilities accorded Commissioners under the Postal Accountability and 

Enhancement Act. Not more than 3 of the Commissioners may be 

adherents of the same political party. 

(b) A Commissioner may continue to serve after the expiration 

of his term until his successor has qualified, except that a Commissioner may not so continue to serve for more than 1 year after the 

date upon which his term otherwise would expire under subsection 

(e). 

(c) One of the Commissioners shall be designated as Chairman 

by, and shall serve in the position of Chairman at the pleasure of, 

the President. 

(d) The Commissioners shall by majority vote designate a Vice 

Chairman of the Commission. The Vice Chairman shall act as 

Chairman of the Commission in the absence of the Chairman. 

(e) The Commissioners shall serve for terms of 6 years.

71

ø§ 3603.¿ § 503. Rules; regulations; procedures 

The øPostal Rate¿ Postal Regulatory Commission shall promulgate rules and regulations and establish procedures, subject to 

chapters 5 and 7 of title 5, and take any other action they deem 

necessary and proper to carry out their functions and obligations 

to the Government of the United States and the people as prescribed under this øchapter¿ title. Such rules, regulations, procedures, and actions shall not be subject to any change or supervision 

by the Postal Service. Such rules shall include procedures which 

balance, inter alia, the need for protecting due process rights and 

ensuring expeditious decision-making.

ø§ 3604.¿ § 504. Administration 

(a) The Chairman of the øPostal Rate¿ Postal Regulatory Commission shall be the principal executive officer of the Commission. 

The Chairman shall exercise or direct the exercise of all the executive and administrative functions of the Commission, including 

functions of the Commission with respect to (1) the appointment of 

personnel employed under the Commission, except that the appointment of heads of major administrative units under the Commission shall require the approval of a majority of the members of 

the Commission, (2) the supervision of the personnel employed 

under the Commission and the distribution of business among 

them and among the Commissioners, and (3) the use and expenditure of funds. 

* * * * * * *

ø(d)(1) The Commission shall periodically prepare and submit 

to the Postal Service a budget of the Commission’s expenses, including, but not limited to, expenses for facilities, supplies, compensation, and employee benefits. The budget shall be considered 

approved—

ø(A) as submitted if the Governors fail to act in accordance 

with subparagraph (B) of this paragraph; or 

ø(B) as adjusted if the Governors holding office, by unanimous written decision, adjust the total amount of money requested in the budget. 

Subparagraph (B) shall not be construed to authorize the Governors to adjust any item included within the budget. 

ø(2) Expenses incurred under any budget approved under paragraph (1) of this subsection shall be paid out of the Postal Service 

fund established under section 2003 of this title.¿

(d) There are authorized to be appropriated, out of the Postal 

Service Fund, such sums as may be necessary for the Postal Regulatory Commission. In requesting an appropriation under this subsection for a fiscal year, the Commission shall prepare and submit 

to the Congress under section 2009 a budget of the Commission’s expenses, including expenses for facilities, supplies, compensation, and 

employee benefits. 

* * * * * * *

(f)(1) Any Commissioner of the Postal Regulatory Commission, 

any administrative law judge appointed by the Commission under 

section 3105 of title 5, and any employee of the Commission designated by the Commission may administer oaths, examine witnesses, take depositions, and receive evidence. 

72

(2) The Chairman of the Commission, any Commissioner designated by the Chairman, and any administrative law judge appointed by the Commission under section 3105 of title 5 may, with 

respect to any proceeding conducted by the Commission under this 

title—

(A) issue subpoenas requiring the attendance and presentation of testimony by, or the production of documentary or 

other evidence in the possession of, any covered person; and 

(B) order the taking of depositions and responses to written 

interrogatories by a covered person. 

The written concurrence of a majority of the Commissioners then 

holding office shall, with respect to each subpoena under subparagraph (A), be required in advance of its issuance. 

(3) In the case of contumacy or failure to obey a subpoena 

issued under this subsection, upon application by the Commission, 

the district court of the United States for the district in which the 

person to whom the subpoena is addressed resides or is served may 

issue an order requiring such person to appear at any designated 

place to testify or produce documentary or other evidence. Any failure to obey the order of the court may be punished by the court as 

a contempt thereof. 

(4) For purposes of this subsection, the term ‘‘covered person’’ 

means an officer, employee, agent, or contractor of the Postal Service. 

(g)(1) If the Postal Service determines that any document or 

other matter it provides to the Postal Regulatory Commission pursuant to a subpoena issued under subsection (f), or otherwise at the 

request of the Commission in connection with any proceeding or 

other purpose under this title, 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, in writing, of its determination (and the reasons therefor). 

(2) No officer or employee of the Commission may, with respect 

to any information as to which the Commission has been notified 

under paragraph (1)—

(A) use such information for purposes other than the purposes for which it is supplied; or 

(B) permit anyone who is not an officer or employee of the 

Commission to have access to any such information. 

(3) Paragraph (2) shall not prevent information from being furnished under any process of discovery established under this title in 

connection with a proceeding under this title. The Commission 

shall, by regulations based on rule 26(c) of the Federal Rules of 

Civil Procedure, establish procedures for ensuring appropriate confidentiality for any information furnished under the preceding sentence. 

(h)(1) Notwithstanding any other provision of this title or of the 

Inspector General Act of 1978, the authority to select, appoint, and 

employ officers and employees of the Office of Inspector General of 

the Postal Regulatory Commission, and to obtain any temporary or 

intermittent services of experts or consultants (or an organization of 

experts or consultants) for such Office, shall reside with the Inspector General of the Postal Regulatory Commission. 

73

(2) Except as provided in paragraph (1), any exercise of authority under this subsection shall, to the extent practicable, be in conformance with the applicable laws and regulations that govern selections, appointments and employment, and the obtaining of any 

such temporary or intermittent services, within the Postal Regulatory Commission. 

§ 505. Officer of the Postal Regulatory Commission representing the general public 

The Postal Regulatory Commission shall designate an officer of 

the Postal Regulatory Commission in all public proceedings (such 

as developing rules, regulations, and procedures) who shall represent the interests of the general public.

CHAPTER 6—PRIVATE CARRIAGE OF LETTERS 

* * * * * * *

§ 601. Letters carried out of the mail 

(a) * * *

ø(b) The Postal Service may suspend the operation of any part 

of this section upon any mail route where the public interest requires the suspension.¿

(b) A letter may also be carried out of the mails when—

(1) the amount paid for the private carriage of the letter is 

at least the amount equal to 6 times the rate then currently 

charged for the 1st ounce of a single-piece first class letter; 

(2) the letter weighs at least 121⁄2 ounces; or 

(3) such carriage is within the scope of services described 

by regulations of the Postal Service (including, in particular, 

sections 310.1 and 320.2–320.8 of title 39 of the Code of Federal 

Regulations, as in effect on July 1, 2003) that purport to permit 

private carriage by suspension of the operation of this section 

(as then in effect). 

(c) Any regulations necessary to carry out this section shall be 

promulgated by the Postal Regulatory Commission.

* * * * * * *

PART II—PERSONNEL 

* * * * * * *

CHAPTER 10—EMPLOYMENT WITHIN THE POSTAL 

SERVICE 

* * * * * * *

§ 1001. Appointment and status 

(a) * * *

* * * * * * *

(d) Notwithstanding section 5533, 5535, or 5536 of title 5, or 

any other provision of law, any officer or employee of the Government of the United States is eligible to serve and receive pay concurrently as an officer or employee of the Postal Service (other than 

as a member of the Board or of the øPostal Rate¿ Postal Regulatory

74

Commission) and as an officer or employee of any other department, agency, or establishment of the Government of the United 

States. 

* * * * * * *

§ 1002. Political recommendations 

(a) Except as provided in subsection (e) of this section, each appointment, promotion, assignment, transfer, or designation, interim 

or otherwise, of an officer or employee in the Postal Service (except 

a Governor or member of the øPostal Rate¿ Postal Regulatory Commission) shall be made without regard to any recommendation or 

statement, oral or written, with respect to any person who requests 

or is under consideration for such appointment, promotion, assignment, transfer, or designation, made by—

(1) * * *

* * * * * * *

§ 1003. Employment policy 

(a) Except as provided under øchapters 2 and 12 of this title, 

section 8G of the Inspector General Act of 1978, or other provision 

of law,¿ chapter 2 or 12 of this title, subsection (b) or (c) of this section, or any other provision of law, the Postal Service shall classify 

and fix the compensation and benefits of all officers and employees 

in the Postal Service. It shall be the policy of the Postal Service to 

maintain compensation and benefits for all officers and employees 

on a standard of comparability to the compensation and benefits 

paid for comparable levels of work in the private sector of the economy. No officer or employee shall be paid compensation at a rate 

in excess of the rate for level I of the Executive Schedule under section 5312 of title 5. 

(b) Compensation and benefits for all officers and employees 

serving in or under the Office of Inspector General of the United 

States Postal Service shall be maintained on a standard of comparability to the compensation and benefits paid for comparable 

levels of work in the ørespective¿ other Offices of Inspector General 

of the various establishments named in section 11(2) of the Inspector General Act of 1978. 

(c) Compensation and benefits for all Postal Inspectors shall 

be maintained on a standard of comparability to the compensation 

and benefits paid for comparable levels of work in the executive 

branch of the Government outside of the Postal Service. As used 

in this subsection, the term ‘‘Postal Inspector’’ øincluded¿ includes

any agent to whom any investigative powers are granted under section 3061 of title 18. 

* * * * * * *

§ 1005. Applicability of laws relating to Federal employees 

(a) * * *

* * * * * * *

(d)(1)***

(2) The provisions of øsubsection (g) of section 5532,¿ subsections (i) and (l)(2) of section 8344ø,¿ and subsections (f) and 

75

(i)(2) of section 8468 of title 5 shall apply with respect to the Postal 

Service. For purposes of so applying such provisions—

(A) * * *

* * * * * * *

CHAPTER 12—EMPLOYEE-MANAGEMENT AGREEMENTS 

* * * * * * *

§ 1207. Labor disputes 

(a) * * *

(b) If the parties fail to reach agreement or to adopt a procedure providing for a binding resolution of a dispute by the expiration date of the agreement in effect, or the date of the proposed termination or modification, the Director of the Federal Mediation and 

Conciliation Service shall ødirect the establishment of a factfinding 

panel consisting of 3 persons. For this purpose, he shall submit to 

the parties a list of not less than 15 names, from which list each 

party, within 10 days, shall select 1 person. The 2 so selected shall 

then choose from the list a third person who shall serve as chairman of the factfinding panel. If either of the parties fails to select 

a person or if the 2 members are unable to agree on the third person within 3 days, the selection shall be made by the Director. The 

factfinding panel shall issue after due investigation a report of its 

findings, with or without recommendations, to the parties no later 

than 45 days from the date the list of names is submitted.¿, within 

10 days appoint a mediator of nationwide reputation and professional stature, and who is also a member of the National Academy 

of Arbitrators. The parties shall cooperate with the mediator in an 

effort to reach an agreement and shall meet and negotiate in good 

faith at such times and places that the mediator, in consultation 

with the parties, shall direct.

(c)(1) If no agreement is reached within ø90¿ 60 days after the 

expiration or termination of the agreement or the date on which 

the agreement became subject to modification under subsection (a) 

of this section, or if the parties decide upon arbitration but do not 

agree upon the procedures therefor, an arbitration board shall be 

established consisting of 3 members, ønot members of the factfinding panel,¿ 1 of whom shall be selected by the Postal Service, 

1 by the bargaining representative of the employees, and the third 

by the 2 thus selected. If either of the parties fails to select a member, or if the members chosen by the parties fail to agree on the 

third person within 5 days after their first meeting, the selection 

shall be made øby the Director. If the parties do not agree on the 

framing of the issues to be submitted, the factfinding panel shall 

frame the issues and submit them to the arbitration board.¿ from 

a list of names provided by the Director. This list shall consist of 

not less than 9 names of arbitrators of nationwide reputation and 

professional stature, who are also members of the National Academy of Arbitrators, and whom the Director has determined are 

available and willing to serve.

* * * * * * *

(3) Costs of the arbitration board and øfactfinding panel¿ mediation shall be shared equally by the Postal Service and the bargaining representative. 

76

(d) In the case of a bargaining unit whose recognized collectivebargaining representative does not have an agreement with the 

Postal Service, if the parties fail to reach agreement within 90 days 

of the commencement of collective bargaining, a øfactfinding panel 

will be established¿ mediator shall be appointed in accordance with 

the terms of subsection (b) of this section, unless the parties have 

previously agreed to another procedure for a binding resolution of 

their differences. If the parties fail to reach agreement within 180 

days of the commencement of collective bargaining, and if they 

have not agreed to another procedure for binding resolution, an arbitration board shall be established to provide conclusive and binding arbitration in accordance with the terms of subsection (c) of 

this section. 

* * * * * * *

PART III—MODERNIZATION AND FISCAL 

ADMINISTRATION

Chap. Sec. 

20. Finance .......................................................................................................... 2001

* * * * * * *

ø28. Strategic planning and performance management .......................... 2801¿

28. Strategic Planning and Performance Management ...................................... 2801

* * * * * * *

CHAPTER 20—FINANCE

Sec. 

2001. Definitions. 

* * * * * * *

2011. Provisions relating to competitive products.

§ 2001. Definitions 

As used in this chapter—

(1) ‘‘Fund’’ means the Postal Service Fund established by 

section 2003 of this chapter; øand¿

(2) ‘‘Competitive Products Fund’’ means the Postal Service 

Competitive Products Fund established by section 2011; and

ø(2)¿ (3) ‘‘obligations’’, when referring to debt instruments 

issued by the Postal Service, means notes, bonds, debentures, 

mortgages, and any other evidence of indebtedness. 

§ 2002. Capital of the Postal Service 

(a) * * *

(b) The capital of the Postal Service at any time shall consist 

of its assets, including the balance in the øFund,¿ Fund and the 

balance in the Competitive Products Fund, less its liabilities. 

* * * * * * *

§ 2003. The Postal Service Fund 

(a) There is established in the Treasury of the United States 

a revolving fund to be called the Postal Service Fund which shall 

be available to the Postal Service without fiscal-year limitation to 

carry out the purposes, functions, and powers authorized by this 

77

øtitle.¿ title (other than any of the purposes, functions, or powers for 

which the Competitive Products Fund is available).

(b) øThere¿ Except as otherwise provided in section 2011, there

shall be deposited in the Fund, subject to withdrawal by check by 

the Postal Service—

(1) * * *

* * * * * * *

(7) amounts (including proceeds from the sale of forfeited 

items) from any civil forfeiture conducted by the Postal Service; 

øand¿

(8) any transfers from the Secretary of the Treasury from 

the Department of the Treasury Forfeiture Fund which shall 

be available to the Postmaster General only for Federal law enforcement related purposesø.¿; and

(9) any amounts collected under section 3018.

ø(c) If¿ (c)(1) Except as provided in paragraph (2), if the Postal 

Service determines that the moneys of the Fund are in excess of 

current needs, it may request the investment of such amounts as 

it deems advisable by the Secretary of the Treasury in obligations 

of, or obligations guaranteed by, the Government of the United 

States, and, with the approval of the Secretary, in such other obligations or securities as it deems appropriate.

(2)(A) Nothing in this section shall be considered to authorize 

any investment in any obligations or securities of a commercial entity. 

(B) For purposes of this paragraph, the term ‘‘commercial entity’’ means any corporation, company, association, partnership, joint 

stock company, firm, society, or other similar entity, as further defined under regulations prescribed by the Postal Regulatory Commission.

* * * * * * *

(e)(1) øThe Fund shall be available for the payment of all expenses incurred by the Postal Service in carrying out its functions 

as provided by law and, subject to the provisions of section 3604 

of this title, all of the expenses of the Postal Rate Commission.¿

The Fund shall be available for the payment of (A) all expenses incurred by the Postal Service in carrying out its functions as provided by law, subject to the same limitation as set forth in the parenthetical matter under subsection (a); (B) all expenses of the Postal 

Regulatory Commission, subject to the availability of amounts appropriated pursuant to section 504(d); and (C) all expenses of the 

Office of Inspector General, subject to the availability of amounts 

appropriated pursuant to section 8J(e) of the Inspector General Act 

of 1978. The Postmaster General shall transfer from the Fund to 

the Secretary of the Treasury for deposit in the Department of the 

Treasury Forfeiture Fund amounts appropriate to reflect the degree of participation of Department of the Treasury law enforcement organizations (described in section 9703(p) of title 31) in the 

law enforcement effort resulting in the forfeiture pursuant to laws 

enforced or administered by the Postal Service. Neither the Fund 

nor any of the funds credited to it shall be subject to apportionment 

under the provisions of subchapter II of chapter 15 of title 31. 

* * * * * * *

78

§ 2005. Obligations 

(a)(1) The Postal Service is authorized to borrow money and to 

issue and sell such obligations as it determines necessary to carry 

out the purposes of this øtitle.¿ title, other than any of the purposes 

for which the corresponding authority is available to the Postal 

Service under section 2011. The aggregate amount of øany such obligations¿ obligations issued by the Postal Service which may be

outstanding at any one time shall not exceed the maximum amount 

then allowable under paragraph (2) of this subsection. øIn any one 

fiscal year the net increase in the amount of obligations outstanding issued for the purpose of capital improvements shall not 

exceed $2,000,000,000, and the net increase in the amount of obligations outstanding issued for the purpose of defraying operating 

expenses of the Postal Service shall not exceed $1,000,000,000.¿ In 

any one fiscal year, the net increase in the amount of obligations 

outstanding issued for the purpose of capital improvements and the 

net increase in the amount of obligations outstanding issued for the 

purpose of defraying operating expenses of the Postal Service shall 

not exceed a combined total of $3,000,000,000.

* * * * * * *

(3) For purposes of applying the respective limitations under 

this subsection, the aggregate amount of obligations issued by the 

Postal Service which are outstanding as of any one time, and the 

net increase in the amount of obligations outstanding issued by the 

Postal Service for the purpose of capital improvements or for the 

purpose of defraying operating expenses of the Postal Service in any 

fiscal year, shall be determined by aggregating the relevant obligations issued by the Postal Service under this section with the relevant obligations issued by the Postal Service under section 2011.

(b)(1) The Postal Service may pledge the assets of the Postal 

Service and pledge and use its revenues and receipts for the payment of the principal of or interest on øsuch obligations,¿ obligations issued by the Postal Service under this section, for the purchase or redemption thereof, and for other purposes incidental 

thereto, including creation of reserve, sinking, and other funds 

which may be similarly pledged and used, to such extent and in 

such manner as it deems necessary or desirable. The Postal Service 

is authorized to enter into binding covenants with the holders of 

such obligations, and with the trustee, if any, under any agreement 

entered into in connection with the issuance thereof with respect 

to the establishment of reserve, sinking, and other funds, application and use of revenues and receipts of the Postal Service, stipulations concerning the subsequent issuance of obligations or the execution of leases or lease purchases relating to properties of the 

Postal Service and such other matters as the Postal Service deems 

necessary or desirable to enhance the marketability of such obligations.

(2) Notwithstanding any other provision of this section—

(A) the authority to pledge assets of the Postal Service 

under this subsection shall be available only to the extent that 

such assets are not related to the provision of competitive products (as determined under section 2011(h) or, for purposes of 

any period before accounting practices and principles under section 2011(h) have been established and applied, the best inforVerDate jul 14 2003 22:09 Sep 23, 2004 Jkt 029006 PO 00000 Frm 00078 Fmt 6659 Sfmt 6603 E:\HR\OC\HR672P2.XXX HR672P2
79

mation available from the Postal Service, including the audited 

statements required by section 2008(e)); and 

(B) any authority under this subsection relating to the 

pledging or other use of revenues or receipts of the Postal Service shall be available only to the extent that they are not revenues or receipts of the Competitive Products Fund.

* * * * * * *

§ 2006. Relationship between the Treasury and the Postal 

Service 

(a) * * *

(b) Subject to the conditions of subsection (a) of this section, 

the Postal Service may require the Secretary of the Treasury to 

purchase obligations of the Postal Service in such amounts as will 

not cause the holding by the Secretary of the Treasury resulting 

from such required purchases to exceed $2,000,000,000 at any one 

time. This subsection shall not be construed as limiting the authority of the Secretary to purchase obligations of the Postal Service in 

excess of such amount. Nothing in this chapter shall be considered 

to permit or require the Secretary of the Treasury to purchase any 

obligations of the Postal Service other than those issued under section 2005.

(c) Notwithstanding section 2005(d)(5) of this title, obligations 

issued by the Postal Service under section 2005 shall be obligations 

of the Government of the United States, and payment of principal 

and interest thereon shall be fully guaranteed by the Government 

of the United States, such guaranty being expressed on the face 

thereof, if and to the extent that—

(1) * * *

* * * * * * *

§ 2008. Audit and expenditures 

(a) * * *

* * * * * * *

ø(d) Nothing¿ (d)(1) Except as provided in paragraph (2), nothing in this section shall be construed as denying to the Postal Service the power to obtain audits of the accounts of the Postal Service 

and reports concerning its financial condition and operations by 

certified public accounting firms. Such audits and reports shall be 

in addition to those required by this section. 

(2) An audit or report under paragraph (1) may not be obtained 

without the prior written approval of the Inspector General.

ø(e) At least once each year beginning with the fiscal year commencing after June 30, 1971, the Postal Service shall obtain a certification from an independent, certified public accounting firm of 

the accuracy of any financial statements of the Postal Service used 

in determining and establishing postal rates.¿

(e)(1) At least once each year beginning with the fiscal year 

commencing after the date of the enactment of the Postal Accountability and Enhancement Act, the financial statements of the Postal 

Service (including those used in determining and establishing postal rates) shall be audited by the Inspector General or by an independent external auditor selected by the Inspector General. 

80

(2) Audits under this section shall be conducted in accordance 

with applicable generally accepted government auditing standards. 

(3) Upon completion of the audit required by this subsection, 

the person who audits the statement shall submit a report on the 

audit to the Postmaster General.

§ 2009. Annual budget 

The Postal Service shall cause to be prepared annually a budget program which shall be submitted to the Office of Management 

and Budget, under such rules and regulations as the President may 

establish as to the date of submission, the form and content, the 

classifications of data, and the manner in which such budget program shall be prepared and presented. The budget program shall 

be a business-type budget, or plan of operations, with due allowance given to the need for flexibility, including provision for emergencies and contingencies, in order that the Postal Service may 

properly carry out its activities as authorized by law. The budget 

program shall contain estimates of the financial condition and operations of the Postal Service for the current and ensuing fiscal years 

and the actual condition and results of operation for the last completed fiscal year. Such budget program shall include a statement 

of financial condition, a statement of income and expense, an analysis of surplus or deficit, a statement of sources and application of 

funds, and such other supplementary statements and information 

as are necessary or desirable to make known the financial condition and operations of the Postal Service. Such statements shall include estimates of operations by major types of activities, together 

with estimates of administrative expenses and estimates of borrowings. øThe budget program shall also include separate statements of the amounts which the Postal Service requests to be appropriated under subsections (b) and (c) of section 2401 of this 

title.¿ The budget program shall also include separate statements of 

the amounts which (1) the Postal Service requests to be appropriated under subsections (b) and (c) of section 2401, (2) the Office 

of Inspector General of the United States Postal Service requests to 

be appropriated, out of the Postal Service Fund, under section 8J(e) 

of the Inspector General Act of 1978, and (3) the Postal Regulatory 

Commission requests to be appropriated, out of the Postal Service 

Fund, under section 504(d) of this title. The President shall include 

these amounts, with his recommendations but without revision, in 

the budget transmitted to Congress under section 1105 of title 31. 

* * * * * * *

§ 2011. Provisions relating to competitive products 

(a) There is established in the Treasury of the United States a 

revolving fund, to be called the Postal Service Competitive Products 

Fund, which shall be available to the Postal Service without fiscal 

year limitation for the payment of—

(1) costs attributable to competitive products; and 

(2) all other costs incurred by the Postal Service, to the extent allocable to competitive products. 

For purposes of this subsection, the term ‘‘costs attributable’’ has the 

meaning given such term by section 3631. 

81

(b) There shall be deposited in the Competitive Products Fund, 

subject to withdrawal by the Postal Service—

(1) revenues from competitive products; 

(2) amounts received from obligations issued by the Postal 

Service under subsection (e); 

(3) interest and dividends earned on investments of the 

Competitive Products Fund; and 

(4) any other receipts of the Postal Service (including from 

the sale of assets), to the extent allocable to competitive products. 

(c) If the Postal Service determines that the moneys of the Competitive Products Fund are in excess of current needs, it may invest 

such amounts as it considers appropriate in—

(1) obligations of, or obligations guaranteed by, the Government of the United States; and 

(2) in accordance with regulations which the Secretary of 

the Treasury shall prescribe (by not later than 18 months after 

the date of the enactment of the Postal Accountability and Enhancement Act), such other obligations or securities as it deems 

appropriate. 

(d) The Postal Service may, in its sole discretion, provide that 

moneys of the Competitive Products Fund be deposited in a Federal 

Reserve bank or a depository for public funds. 

(e)(1) Subject to the limitations specified in section 2005(a), the 

Postal Service is authorized to borrow money and to issue and sell 

such obligations as it determines necessary to provide for competitive products and deposit such amounts in the Competitive Products 

Fund, except that the Postal Service may pledge only assets related 

to the provision of competitive products (as determined under subsection (h) or, for purposes of any period before accounting practices 

and principles under subsection (h) have been established and applied, the best information available from the Postal Service, including the audited statements required by section 2008(e)), and the revenues and receipts from such products, for the payment of the principal of or interest on such obligations, for the purchase or redemption thereof, and for other purposes incidental thereto, including creation of reserve, sinking, and other funds which may be similarly 

pledged and used, to such extent and in such manner as it deems 

necessary or desirable. 

(2) The Postal Service may enter into binding covenants with 

the holders of such obligations, and with the trustee, if any, under 

any agreement entered into in connection with the issuance thereof 

with respect to—

(A) the establishment of reserve, sinking, and other funds; 

(B) application and use of revenues and receipts of the 

Competitive Products Fund; 

(C) stipulations concerning the subsequent issuance of obligations or the execution of leases or lease purchases relating to 

properties of the Postal Service; and 

(D) such other matters as the Postal Service considers necessary or desirable to enhance the marketability of such obligations. 

(3) Obligations issued by the Postal Service under this subsection—

(A) may not be purchased by the Secretary of the Treasury; 

82

(B) shall not be exempt either as to principal or interest 

from any taxation now or hereafter imposed by any State or 

local taxing authority; 

(C) shall not be obligations of, nor shall payment of the 

principal thereof or interest thereon be guaranteed by, the Government of the United States, and the obligations shall so 

plainly state; and 

(D) notwithstanding the provisions of the Federal Financing Bank Act of 1973 or any other provision of law (except as 

specifically provided by reference to this subparagraph in a law 

enacted after this subparagraph takes effect), shall not be eligible for purchase by, commitment to purchase by, or sale or 

issuance to, the Federal Financing Bank. 

(4)(A) This paragraph applies with respect to the period beginning on the date of the enactment of this paragraph and ending at 

the close of the 5-year period which begins on the date on which the 

Postal Service makes its submission under subsection (h)(1). 

(B) During the period described in subparagraph (A), nothing 

in subparagraph (A) or (D) of paragraph (3) or the last sentence of 

section 2006(b) shall, with respect to any obligations sought to be 

issued by the Postal Service under this subsection, be considered to 

affect such obligations’ eligibility for purchase by, commitment to 

purchase by, or sale or issuance to, the Federal Financing Bank. 

(C) The Federal Financing Bank may elect to purchase such obligations under such terms, including rates of interest, as the Bank 

and the Postal Service may agree, but at a rate of yield no less than 

the prevailing yield on outstanding marketable securities of comparable maturity issued by entities with the same credit rating as 

the rating then most recently obtained by the Postal Service under 

subparagraph (D), as determined by the Bank. 

(D) In order to be eligible to borrow under this paragraph, the 

Postal Service shall first obtain a credit rating from a nationally 

recognized credit rating organization. Such rating—

(i) shall be determined taking into account only those assets 

and activities of the Postal Service which are described in section 3634(a)(2) (relating to the Postal Service’s assumed taxable 

income from competitive products); and 

(ii) may, before final rules of the Postal Regulatory Commission under subsection (h) are issued (or deemed to have been 

issued), be based on the best information available from the 

Postal Service, including the audited statements required by 

section 2008(e). 

(f) The receipts and disbursements of the Competitive Products 

Fund shall be accorded the same budgetary treatment as is accorded to receipts and disbursements of the Postal Service Fund 

under section 2009a. 

(g) A judgment against the Postal Service or the Government of 

the United States (or settlement of a claim) shall, to the extent that 

it arises out of activities of the Postal Service in the provision of 

competitive products, be paid out of the Competitive Products Fund. 

(h)(1) The Secretary of the Treasury, in consultation with the 

Postal Service and an independent, certified public accounting firm 

and such other advisors as the Secretary considers appropriate, 

shall develop recommendations regarding—

83

(A) the accounting practices and principles that should be 

followed by the Postal Service with the objectives of (i) identifying and valuing the assets and liabilities of the Postal Service 

associated with providing, and the capital and operating costs 

incurred by the Postal Service in providing, competitive products, and (ii) preventing the subsidization of such products by 

market-dominant products; and 

(B) the substantive and procedural rules that should be followed in determining the Postal Service’s assumed Federal income tax on competitive products income for any year (within 

the meaning of section 3634). 

Such recommendations shall be submitted to the Postal Regulatory 

Commission no earlier than 6 months, and no later than 12 

months, after the effective date of this section. 

(2)(A) Upon receiving the recommendations of the Secretary of 

the Treasury under paragraph (1), the Commission shall give interested parties, including the Postal Service, users of the mails, and 

an officer of the Commission who shall be required to represent the 

interests of the general public, an opportunity to present their views 

on those recommendations through submission of written data, 

views, or arguments with or without opportunity for oral presentation, or in such other manner as the Commission considers appropriate. 

(B) After due consideration of the views and other information 

received under subparagraph (A), the Commission shall by rule—

(i) provide for the establishment and application of the accounting practices and principles which shall be followed by the 

Postal Service; 

(ii) provide for the establishment and application of the 

substantive and procedural rules described in paragraph (1)(B); 

and 

(iii) provide for the submission by the Postal Service to the 

Postal Regulatory Commission of annual and other periodic reports setting forth such information as the Commission may require. 

Final rules under this subparagraph shall be issued not later than 

12 months after the date on which the Secretary of the Treasury 

makes his submission to the Commission under paragraph (1) (or 

by such later date as the Commission and the Postal Service may 

agree to). The Commission is authorized to promulgate regulations 

revising such rules. 

(C) Reports described in subparagraph (B)(iii) shall be submitted at such time and in such form, and shall include such information, as the Commission by rule requires. The Commission may, 

on its own motion or on request of an interested party, initiate proceedings (to be conducted in accordance with such rules as the Commission shall prescribe) to improve the quality, accuracy, or completeness of Postal Service data under such subparagraph whenever 

it shall appear that—

(i) the quality of the information furnished in those reports 

has become significantly inaccurate or can be significantly improved; or 

(ii) such revisions are, in the judgment of the Commission, 

otherwise necessitated by the public interest. 

84

(D) A copy of each report described in subparagraph (B)(iii) 

shall also be transmitted by the Postal Service to the Secretary of 

the Treasury and the Inspector General of the United States Postal 

Service. 

(i) The Postal Service shall render an annual report to the Secretary of the Treasury concerning the operation of the Competitive 

Products Fund, in which it shall address such matters as risk limitations, reserve balances, allocation or distribution of moneys, liquidity requirements, and measures to safeguard against losses. A 

copy of its then most recent report under this subsection shall be included with any other submission that it is required to make to the 

Postal Regulatory Commission under section 3652(g).

* * * * * * *

CHAPTER 24—APPROPRIATIONS AND ANNUAL REPORT 

* * * * * * *

§ 2401. Appropriations 

(a) * * *

* * * * * * *

(d) As reimbursement to the Postal Service for losses which it 

incurred as a result of insufficient amounts appropriated under section 2401(c) for fiscal years 1991 through 1993, and to compensate 

for the additional revenues it is estimated the Postal Service would 

have received under the provisions of section 3626(a) (as last in effect before enactment of the Postal Accountability and Enhancement 

Act), for the period beginning on October 1, 1993, and ending on 

September 30, 1998, if the fraction specified in subclause (VI) of 

section 3626(a)(3)(B)(ii) (as last in effect before enactment of the 

Postal Accountability and Enhancement Act) were applied with respect to such period (instead of the respective fractions specified in 

subclauses (I) through (V) thereof), there are authorized to be appropriated to the Postal Service $29,000,000 for each of fiscal years 

1994 through 2035. 

(e) The Postal Service shall present to the Committee on Governmental Affairs of the Senate and the øCommittee on Post Office 

and Civil Service¿ Committee on Government Reform of the House 

of Representatives and the Committees on Appropriations of the 

Senate and the House of Representatives, at the same time it submits its annual budget under section 2009 of this title, sufficient 

copies of the budget of the Postal Service for the fiscal year for 

which funds are requested to be appropriated, and a comprehensive 

statement relating to the following matters: 

(1) * * *

* * * * * * *

øNot later than March 15 of each year,¿ Each year, the Postal 

Service shall appear before the Committee on Governmental Affairs of the Senate and the øCommittee on Post Office and Civil 

Service¿ Committee on Government Reform of the House of Representatives to submit information which any such committee considers necessary to determine the amount of funds to be appropriated for the operation of the Postal Service, and to present testimony and respond to questions with respect to such budget and 

85

statement. Each such committee shall take such action as it considers appropriate and shall advise the Postal Service of such action. 

* * * * * * *

§ 2402. Annual report 

The Postmaster General shall render an annual report to the 

Board concerning the operations of the Postal Service under this 

title. Each report under this section shall include a copy of the report most recently received by the Postmaster General under section 

2008(e)(3). Upon approval thereof, or after making such changes as 

it considers appropriate, the Board shall transmit such reports to 

the President and the Congress. 

* * * * * * *

CHAPTER 28—STRATEGIC PLANNING AND 

PERFORMANCE MANAGEMENT 

* * * * * * *

§ 2803. Performance plans 

(a) The Postal Service shall prepare an annual performance 

plan covering each program activity set forth in the Postal Service 

budget, which shall be included in the comprehensive statement 

presented under section ø2401(g)¿ 2401(e) of this title. Such plan 

shall—

(1) * * *

* * * * * * *

§ 2804. Program performance reports 

(a) The Postal Service shall prepare a report on program performance for each fiscal year, which shall be included in the annual 

comprehensive statement presented under section ø2401(g)¿

2401(e) of this title. 

* * * * * * *

PART IV—MAIL MATTER 

* * * * * * *

CHAPTER 30—NONMAILABLE MATTER

Sec. 

3001. Nonmailable matter. 

* * * * * * *

3018. Hazardous material.

§ 3001. Nonmailable matter 

(a) * * *

* * * * * * *

(o)(1) Except as otherwise authorized by law or regulations of 

the Postal Service, hazardous material is nonmailable. 

86

(2) In this subsection, the term ‘‘hazardous material’’ means a 

substance or material designated by the Secretary of Transportation 

under section 5103(a) of title 49.

ø(n)¿ (o) The district courts, together with the District Court 

of the Virgin Islands and the District Court of Guam, shall have 

jurisdiction, upon cause shown, to enjoin violations of section 1716 

of title 18. 

* * * * * * *

§ 3005. False representations; lotteries 

(a) Upon evidence satisfactory to the Postal Service that any 

person is engaged in conducting a scheme or device for obtaining 

money or property through the mail by means of false representations, including the mailing of matter which is nonmailable øunder 

3001(d),¿ under section 3001(d), (h), (i), (j), or (k) of this title, or 

is engaged in conducting a lottery, gift enterprise, or scheme for 

the distribution of money or of real or personal property, by lottery, 

chance, or drawing of any kind, the Postal Service may issue an 

order which—

(1) * * *

* * * * * * *

(3) requires the person or his representative to cease and 

desist from engaging in any such scheme, device, lottery, or 

gift enterprise. 

For purposes of the preceding sentence, the mailing of matter 

which is nonmailable øunder such 3001(d),¿ under such section 

3001(d), (h), (i), (j), or (k) by any person shall constitute prima facie 

evidence that such person is engaged in conducting a scheme or device for obtaining money or property through the mail by false representations. 

* * * * * * *

§ 3013. Semiannual reports on investigative activities of the 

Postal Service 

The øPostmaster General¿ Chief Postal Inspector shall submit 

semiannual reports to the Inspector General summarizing the investigative activities of the Postal Service. One semiannual report 

shall be submitted for the reporting period beginning on October 1 

and ending on March 31, and the other semiannual report shall be 

submitted for the reporting period beginning on April 1 and ending 

on September 30. Each such report shall be submitted within 1 

month (or such shorter length of time as the Inspector General 

may specify) after the close of the reporting period involved and 

shall include with respect to such reporting period—

(1) * * *

* * * * * * *

The information in a report submitted under this section to the Inspector General with respect to a reporting period shall be included 

as part of the semiannual report prepared by the Inspector General 

under section 5 of the Inspector General Act of 1978 for the same 

reporting period. Nothing in this section shall be considered to permit or require that any report by the øPostmaster General¿ Chief 

87

Postal Inspector under this section include any information relating 

to activities of the Inspector General. 

* * * * * * *

§ 3018. Hazardous material 

(a) IN GENERAL.—The Postal Service shall prescribe regulations 

for the safe transportation of hazardous material in the mail. 

(b) PROHIBITIONS.—No person may—

(1) mail or cause to be mailed hazardous material that has 

been declared by statute or Postal Service regulation to be nonmailable; 

(2) mail or cause to be mailed hazardous material in violation of any statute or Postal Service regulation restricting the 

time, place, or manner in which hazardous material may be 

mailed; or 

(3) manufacture, distribute, or sell any container, packaging kit, or similar device that—

(A) is represented, marked, certified, or sold by such 

person for use in the mailing of hazardous material; and 

(B) fails to conform with any statute or Postal Service 

regulation setting forth standards for a container, packaging kit, or similar device used for the mailing of hazardous material. 

(c) CIVIL PENALTY; CLEAN-UP COSTS AND DAMAGES.—

(1) IN GENERAL.—A person who knowingly violates this section or a regulation prescribed under this section shall be liable 

for—

(A) a civil penalty of at least $250, but not more than 

$100,000, for each violation; 

(B) the costs of any clean-up associated with each violation; and 

(C) damages. 

(2) KNOWING ACTION.—A person acts knowingly for purposes of paragraph (1) when—

(A) the person has actual knowledge of the facts giving 

rise to the violation; or 

(B) a reasonable person acting in the circumstances 

and exercising reasonable care would have had that knowledge. 

(3) SEPARATE VIOLATIONS.—

(A) VIOLATIONS OVER TIME.—A separate violation 

under this subsection occurs for each day hazardous material, mailed or caused to be mailed in noncompliance with 

this section, is in the mail. 

(B) SEPARATE ITEMS.—A separate violation under this 

subsection occurs for each item containing hazardous material that is mailed or caused to be mailed in noncompliance 

with this section. 

(d) HEARINGS.—The Postal Service may determine that a person has violated this section or a regulation prescribed under this 

section only after notice and an opportunity for a hearing. Proceedings under this section shall be conducted in accordance with 

section 3001(m). 

88

(e) PENALTY CONSIDERATIONS.—In determining the amount of a 

civil penalty for a violation of this section, the Postal Service shall 

consider—

(1) the nature, circumstances, extent, and gravity of the violation; 

(2) with respect to the person who committed the violation, 

the degree of culpability, any history of prior violations, the 

ability to pay, and any effect on the ability to continue in business; 

(3) the impact on Postal Service operations; and 

(4) any other matters that justice requires. 

(f) CIVIL ACTIONS TO COLLECT.— (1) IN GENERAL.—In accordance with section 409(d), a civil 

action may be commenced in an appropriate district court of the 

United States to collect a civil penalty, clean-up costs, and damages assessed under subsection (c). 

(2) COMPROMISE.—The Postal Service may compromise the 

amount of a civil penalty, clean-up costs, and damages assessed 

under subsection (c) before commencing a civil action with respect to such civil penalty, clean-up costs, and damages under 

paragraph (1). 

(g) CIVIL JUDICIAL PENALTIES.— (1) IN GENERAL.—At the request of the Postal Service, the 

Attorney General may bring a civil action in an appropriate 

district court of the United States to enforce this section or a 

regulation prescribed under this section. 

(2) RELIEF.—The court in a civil action under paragraph 

(1) may award appropriate relief, including a temporary or permanent injunction, civil penalties as determined in accordance 

with this section, or punitive damages. 

(3) CONSTRUCTION.—A civil action under this subsection 

shall be in lieu of civil penalties for the same violation under 

subsection (c)(1)(A). 

(h) DEPOSIT OF AMOUNTS COLLECTED.— (1) POSTAL SERVICE FUND.—Except as provided under 

paragraph (2), amounts collected under subsection (c)(1)(B) and 

(C) shall be deposited into the Postal Service Fund under section 2003. 

(2) TREASURY.—Amounts collected under subsection 

(c)(1)(A) and any punitive damages collected under subsection 

(c)(1)(C) shall be deposited into the Treasury of the United 

States.

CHAPTER 32—PENALTY AND FRANKED MAIL 

* * * * * * *

§ 3210. Franked mail transmitted by the Vice President, 

Members of Congress, and congressional officials 

(a)(1)***

* * * * * * *

(6)(A)***

* * * * * * *

(C) No Member of the Senate may mail any mass mailing as 

franked mail if such mass mailing øis mailed fewer¿ is postmarked 

89

fewer than 60 days immediately before the date of any primary 

election or general election (whether regular, special, or runoff) for 

any national, State or local office in which such Member is a candidate for election. 

* * * * * * *

øCHAPTER 36—POSTAL RATES, CLASSES, AND SERVICES

øSUBCHAPTER I—POSTAL RATE COMMISSION 

øSec. 

ø3601. Establishment. 

ø3602. Terms of office. 

ø3603. Rules; regulations; procedures. 

ø3604. Administration. 

øSUBCHAPTER II—PERMANENT RATES AND CLASSES OF MAIL 

ø3621. Authority to fix rates and classes. 

ø3622. Rates and fees. 

ø3623. Mail classification. 

ø3624. Recommended decisions of Commission. 

ø3625. Action of the Governors. 

ø3626. Reduced rates. 

ø3627. Adjusting free rates. 

ø3628. Appellate review. 

ø3629. Reduced rates for voter registration purposes. 

øSUBCHAPTER III—TEMPORARY RATES AND CLASSES 

ø3641. Temporary changes in rates and classes. 

ø3642. Special authority relating to reduced-rate categories of mail. 

øSUBCHAPTER IV—POSTAL SERVICES AND COMPLAINTS 

ø3661. Postal services. 

ø3662. Rate and service complaints. 

ø3663. Annual report on international services. 

øSUBCHAPTER V—GENERAL 

ø3681. Reimbursement. 

ø3682. Size and weight limits. 

ø3683. Uniform rates for books; films; other materials. 

ø3684. Limitations. 

ø3685. Filing of information relating to periodical publications.

øSUBCHAPTER I—POSTAL RATE COMMISSION 

ø§ 3601. Establishment 

ø(a) The Postal Rate Commission is an independent establishment of the executive branch of the Government of the United 

States. The Commission is composed of 5 Commissioners, appointed by the President, by and with the advice and consent of the 

Senate. The Commissioners shall be chosen on the basis of their 

professional qualifications and may be removed by the President 

only for cause. Not more than 3 of the Commissioners may be adherents of the same political party. 

ø(b) A Commissioner may continue to serve after the expiration of his term until his successor has qualified, except that a 

Commissioner may not so continue to serve for more than 1 year 

after the date upon which his term otherwise would expire under 

section 3602 of this title. 

ø(c) One of the Commissioners shall be designated as Chairman by, and shall serve in the position of Chairman at the pleasure of, the President. 

90

ø(d) The Commissioners shall by majority vote designate a Vice 

Chairman of the Commission. The Vice Chairman shall act as 

Chairman of the Commission in the absence of the Chairman. 

ø§ 3602. Terms of office 

øThe Commissioners of the Postal Rate Commission shall serve 

for terms of 6 years except that—

ø(1) the terms of the Commissioners first taking office 

shall expire as designated by the President at the time of appointment, 1 at the end of 2 years, 2 at the end of 4 years, and 

2 at the end of 6 years, following the appointment of the first 

of them; and 

ø(2) any Commissioner appointed to fill a vacancy occurring before the expiration of the term for which his predecessor 

was appointed shall serve for the remainder of such term. 

øSUBCHAPTER II—PERMANENT RATES AND CLASSES OF 

MAIL 

ø§ 3621. Authority to fix rates and classes 

øExcept as otherwise provided, the Governors are authorized 

to establish reasonable and equitable classes of mail and reasonable and equitable rates of postage and fees for postal services in 

accordance with the provisions of this chapter. Postal rates and 

fees shall be reasonable and equitable and sufficient to enable the 

Postal Service under 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. Postal 

rates and fees shall provide sufficient revenues so that the total estimated income and appropriations to the Postal Service will equal 

as nearly as practicable total estimated costs of the Postal Service. 

For purposes of this section, ‘‘total estimated costs’’ shall include 

(without limitation) operating expenses, depreciation on capital facilities and equipment, debt service (including interest, amortization of debt discount and expense, and provision for sinking funds 

or other retirements of obligations to the extent that such provision 

exceeds applicable depreciation charges), and a reasonable provision for contingencies. 

ø§ 3622. Rates and fees 

ø(a) From time to time the Postal Service shall request the 

Postal Rate Commission to submit a recommended decision on 

changes in a rate or rates of postage or in a fee or fees for postal 

services if the Postal Service determines that such changes would 

be in the public interest and in accordance with the policies of this 

title. The Postal Service may submit such suggestions for rate adjustments as it deems suitable. 

ø(b) Upon receiving a request, the Commission shall make a 

recommended decision on the request for changes in rates or fees 

in each class of mail or type of service in accordance with the policies of this title and the following factors: 

ø(1) the establishment and maintenance of a fair and equitable schedule; 

ø(2) the value of the mail service actually provided each 

class or type of mail service to both the sender and the recipiVerDate jul 14 2003 22:09 Sep 23, 2004 Jkt 029006 PO 00000 Frm 00090 Fmt 6659 Sfmt 9001 E:\HR\OC\HR672P2.XXX HR672P2
91

ent, including but not limited to the collection, mode of transportation, and priority of delivery; 

ø(3) the requirement that each class of mail or type of mail 

service bear the direct and indirect postal costs attributable to 

that class or type plus that portion of all other costs of the 

Postal Service reasonably assignable to such class or type; 

ø(4) the effect of rate increases upon the general public, 

business mail users, and enterprises in the private sector of 

the economy engaged in the delivery of mail matter other than 

letters; 

ø(5) the available alternative means of sending and receiving letters and other mail matter at reasonable costs; 

ø(6) the degree of preparation of mail for delivery into the 

postal system performed by the mailer and its effect upon reducing costs to the Postal Service; 

ø(7) simplicity of structure for the entire schedule and simple, identifiable relationships between the rates or fees charged 

the various classes of mail for postal services; 

ø(8) the educational, cultural, scientific, and informational 

value to the recipient of mail matter; and 

ø(9) such other factors as the Commission deems appropriate. 

ø(c) Regular rates for each class or subclass of mail that includes 1 or more special rate categories for mail under former section 4358 (d) or (e), 4452 (b) or (c), or 4554 (b) or (c) of this title 

shall be established by applying the policies of this title, including 

the factors of section 3622(b) of this title, to the costs attributable 

to the regular rate mail in each class or subclass combined with the 

mail in the corresponding special rate categories authorized by 

former section 4358 (d) or (e), 4452 (b) or (c), or 4554 (b) or (c) of 

this title. 

ø(d) Compliance with any provision of the Occupational Safety 

and Health Act of 1970 (29 U.S.C. 651 et seq.) shall not be considered by the Commission in determining whether to increase rates 

and shall not otherwise affect the service of the Postal Service. 

ø§ 3623. Mail classification 

ø(a) Within 2 years after the effective date of this subchapter, 

the Postal Service shall request the Postal Rate Commission to 

make a recommended decision on establishing a mail classification 

schedule in accordance with the provisions of this section. 

ø(b) Following the establishment of the mail classification 

schedule requested under subsection (a) of this section, the Postal 

Service may from time to time request that the Commission submit, or the Commission may submit to the Governors on its own 

initiative, a recommended decision on changes in the mail classification schedule. 

ø(c) The Commission shall make a recommended decision on 

establishing or changing the schedule in accordance with the policies of this title and the following factors: 

ø(1) the establishment and maintenance of a fair and equitable classification system for all mail; 

ø(2) the relative value to the people of the kinds of mail 

matter entered into the postal system and the desirability and 

justification for special classifications and services of mail; 

92

ø(3) the importance of providing classifications with extremely high degrees of reliability and speed of delivery; 

ø(4) the importance of providing classifications which do 

not require an extremely high degree of reliability and speed 

of delivery; 

ø(5) the desirability of special classifications from the point 

of view of both the user and of the Postal Service; and 

ø(6) such other factors as the Commission may deem appropriate. 

ø(d) The Postal Service shall maintain one or more classes of 

mail for the transmission of letters sealed against inspection. The 

rate for each such class shall be uniform throughout the United 

States, its territories, and possessions. One such class shall provide 

for the most expeditious handling and transportation afforded mail 

matter by the Postal Service. No letter of such a class of domestic 

origin shall be opened except under authority of a search warrant 

authorized by law, or by an officer or employee of the Postal Service for the sole purpose of determining an address at which the letter can be delivered, or pursuant to the authorization of the addressee. 

ø§ 3624. Recommended decisions of Commission 

ø(a) The Postal Rate Commission shall promptly consider a request made under section 3622 or 3623 of this title, except that the 

Commission shall not recommend a decision until the opportunity 

for a hearing on the record under sections 556 and 557 of title 5 

has been accorded to the Postal Service, users of the mails, and an 

officer of the Commission who shall be required to represent the interests of the general public. 

ø(b) In order to conduct its proceedings with utmost expedition 

consistent with procedural fairness to the parties, the Commission 

may (without limitation) adopt rules which provide for—

ø(1) the advance submission of written direct testimony; 

ø(2) the conduct of prehearing conferences to define issues, 

and for other purposes to insure orderly and expeditious proceedings; 

ø(3) discovery both from the Postal Service and the parties 

to the proceedings; 

ø(4) limitation of testimony; and 

ø(5) the conduct of the entire proceedings off the record 

with the consent of the parties. 

ø(c)(1) Except as provided by paragraph (2) of this subsection, 

in any case in which the Postal Service makes a request under section 3622 of this title for a recommended decision by the Commission on changes in a rate or rates of postage or in a fee or fees for 

postal services the Commission shall transmit its recommended decision to the Governors under subsection (d) of this section no later 

than 10 months after receiving any such request from the Postal 

Service. 

ø(2) In any case in which the Commission determines that the 

Postal Service has unreasonably delayed consideration of a request 

made by the Postal Service under section 3622 by failing to respond within a reasonable time to any lawful order of the Commission, the Commission may extend the 10-month period described in 

93

paragraph (1) of this subsection by one day for each day of such 

delay. 

ø(d) The Commission shall transmit its recommended decision 

in a rate, fee, or classification matter to the Governors. The recommended decision shall include a statement specifically responsive to the criteria established under section 3622 or 3623, as the 

case may be. 

ø§ 3625. Action of the Governors 

ø(a) Upon receiving a recommended decision from the Postal 

Rate Commission, the Governors may approve, allow under protest, 

reject, or modify that decision in accordance with the provisions of 

this section. 

ø(b) The Governors may approve the recommended decision 

and order the decision placed in effect. 

ø(c) The Governors may, under protest, allow a recommended 

decision of the Commission to take effect and (1) seek judicial review thereof under section 3628 of this title, or (2) return the recommended decision to the Commission for reconsideration and a 

further recommended decision, which shall be acted upon under 

this section and subject to review in accordance with section 3628 

of this title. 

ø(d) The Governors may reject the recommended decision of 

the Commission and the Postal Service may resubmit its request 

to the Commission for reconsideration. Upon resubmission, the request shall be reconsidered, and a further recommended decision of 

the Commission shall be acted upon under this section and subject 

to review in accordance with section 3628 of this title. However, 

with the unanimous written concurrence of all of the Governors 

then holding office, the Governors may modify any such further 

recommended decision of the Commission under this subsection if 

the Governors expressly find that (1) such modification is in accord 

with the record and the policies of this chapter, and (2) the rates 

recommended by the Commission are not adequate to provide sufficient total revenues so that total estimated income and appropriations will equal as nearly as practicable estimated total costs. 

ø(e) The decision of the Governors to approve, allow under protest, reject, or modify a recommended decision of the Commission 

shall be in writing and shall include an estimate of anticipated revenue and a statement of explanation and justification. The decision, the record of the Commission’s hearings, and the Commission’s recommended decision shall be made generally available at 

the time the decision is issued and shall be printed and made 

available for sale by the Public Printer within 10 days following the 

day the decision is issued. 

ø(f) The Board shall determine the date on which the new 

rates, fees, the mail classification schedule, and changes in such 

schedule under this subchapter shall become effective.¿

CHAPTER 36—POSTAL RATES, CLASSES AND SERVICES

SUBCHAPTER I—PROVISIONS RELATING TO MARKET-DOMINANT PRODUCTS

Sec. 

3621. Applicability; definitions. 

3622. Modern rate regulation. 

[3623. Repealed]. 

[3624. Repealed]. 

94

[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. 

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. 

3687. Workshare discounts.

SUBCHAPTER I—PROVISIONS RELATING TO MARKETDOMINANT PRODUCTS 

§ 3621. Applicability; definitions 

(a) APPLICABILITY.—This subchapter shall apply with respect 

to—

(1)(A) single piece first-class letters (both domestic and 

international); 

(B) single piece first-class cards (both domestic and international); and 

(C) special services; 

(2) all first-class mail not included under paragraph (1); 

(3) periodicals; 

(4) standard mail; 

(5) media mail; 

(6) library mail; and 

(7) bound printed matter, 

subject to any changes the Postal Regulatory Commission may make 

under section 3642. 

(b) RULE OF CONSTRUCTION.—Mail matter referred to in subsection (a) shall, for purposes of this subchapter, be considered to 

have the meaning given to such mail matter under the mail classification schedule. 

95

§ 3622. Modern rate regulation 

(a) AUTHORITY GENERALLY.—The Postal Regulatory Commission shall, within 24 months after the date of the enactment of this 

section, by regulation establish (and may from time to time thereafter by regulation revise) a modern system for regulating rates and 

classes for market-dominant products. 

(b) OBJECTIVES.—Such system shall be designed to achieve the 

following objectives: 

(1) To maximize incentives to reduce costs and increase efficiency. 

(2) To create predictability and stability in rates. 

(3) To maintain high quality service standards. 

(4) To allow the Postal Service pricing flexibility. 

(5) To assure adequate revenues, including retained earnings, to maintain financial stability. 

(6) To reduce the administrative burden of the ratemaking 

process. 

(c) FACTORS.—In establishing or revising such system, the Postal Regulatory Commission shall take into account—

(1) the establishment and maintenance of a fair and equitable schedule for rates and classification system; 

(2) the value of the mail service actually provided 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; 

(3) the direct and indirect postal costs attributable to each 

class or type of mail service plus that portion of all other costs 

of the Postal Service reasonably assignable to such class or 

type; 

(4) the effect of rate increases upon the general public, business mail users, and enterprises in the private sector of the 

economy engaged in the delivery of mail matter other than letters; 

(5) the available alternative means of sending and receiving 

letters and other mail matter at reasonable costs; 

(6) the degree of preparation of mail for delivery into the 

postal system performed by the mailer and its effect upon reducing costs to the Postal Service; 

(7) simplicity of structure for the entire schedule and simple, identifiable relationships between the rates or fees charged 

the various classes of mail for postal services; 

(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 classifications 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 require high degrees of reliability 

and speed of delivery; 

(10) the desirability of special classifications from the point 

of view of both the user and of the Postal Service; 

(11) the educational, cultural, scientific, and informational 

value to the recipient of mail matter; and 

(12) the policies of this title as well as such other factors 

as the Commission deems appropriate. 

96

(d) ALLOWABLE PROVISIONS.—The system for regulating rates 

and classes for market-dominant products may include one or more 

of the following: 

(1) Price caps, revenue targets, or other form of incentive 

regulation. 

(2) Cost-of-service regulation. 

(3) Such other form of regulation as the Commission considers appropriate to achieve, consistent with subsection (c), the 

objectives of subsection (b). 

(e) LIMITATION.—In the administration of this section, the Commission shall not permit the average rate in any subclass of mail 

to increase at an annual rate greater than the comparable increase 

in the Consumer Price Index, unless it has, after notice and opportunity for a public hearing and comment, determined that such increase is reasonable and equitable and necessary to enable the Postal Service, 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. 

(f) TRANSITION RULE.—Until regulations under this section first 

take effect, rates and classes for market-dominant products shall remain subject to modification in accordance with the provisions of 

this chapter and section 407, as such provisions were last in effect 

before the date of the enactment of this section.

§ 3626. Reduced rates 

ø(a)(1) Except as otherwise provided in this section, rates of 

postage for a class of mail or kind of mailer under former section 

4358, 4452(b), 4452(c), 4554(b), or 4554(c) of this title shall be established in accordance with the applicable provisions of this chapter. 

ø(2) For the purpose of this subsection—

ø(A) the term ‘‘costs attributable’’, as used with respect to 

a class of mail or kind of mailer, means the direct and indirect 

postal costs attributable to such class of mail or kind of mailer 

(excluding any other costs of the Postal Service); 

ø(B) the term ‘‘regular-rate category’’ means any class of 

mail or kind of mailer, other than a class or kind referred to 

in paragraph (3)(A) or section 2401(c); and 

ø(C) the term ‘‘institutional-costs contribution’’, as used 

with respect to a class of mail or kind of mailer, means that 

portion of the estimated revenues to the Postal Service from 

such class of mail or kind of mailer which remains after subtracting an amount equal to the estimated costs attributable to 

such class of mail or kind of mailer. 

ø(3)(A) Except as provided in paragraph (4) or (5), rates of 

postage for a class of mail or kind of mailer under former section 4358 of this title shall be established in a manner such 

that the estimated revenues to be received by the Postal Service from such class of mail or kind of mailer shall be equal to 

the sum of—

ø(i) the estimated costs attributable to such class of 

mail or kind of mailer; and 

97

ø(ii) the product derived by multiplying the estimated 

costs referred to in clause (i) by the applicable percentage 

under subparagraph (B). 

ø(B) The applicable percentage for any class of mail or kind of 

mailer referred to in subparagraph (A) shall be the product derived 

by multiplying—

ø(i) the percentage which, for the most closely corresponding regular-rate category, the institutional-costs contribution for such category represents relative to the estimated 

costs attributable to such category of mail, times 

ø(ii)(I) one-twelfth, for fiscal year 1994; 

ø(II) one-sixth, for fiscal year 1995; 

ø(III) one-fourth, for fiscal year 1996; 

ø(IV) one-third, for fiscal year 1997; 

ø(V) five-twelfths, for fiscal year 1998; and 

ø(VI) one-half, for any fiscal year after fiscal year 1998. 

ø(C) Temporary special authority to permit the timely implementation of the preceding provisions of this paragraph is provided 

under section 3642. 

ø(D) For purposes of establishing rates of postage under this 

subchapter for any of the classes of mail or kinds of mailers referred to in subparagraph (A), subclauses (I) through (V) of subparagraph (B)(ii) shall be deemed amended by striking the fraction 

specified in each such subclause and inserting ‘‘one-half’’.¿

(a)(1) Except as otherwise provided in this section, rates of postage for a class of mail or kind of mailer under former section 4358, 

4452(b), 4452(c), 4554(b), or 4554(c) of this title shall be established 

in accordance with section 3622. 

(2) For the purpose of this subsection, the term ‘‘regular-rate 

category’’ means any class of mail or kind of mailer, other than a 

class or kind referred to in section 2401(c).

ø(4)(A)¿ (3)(A) Except as specified in subparagraph (B), 

rates of postage for a class of mail or kind of mailer under 

former section 4358 (d) or (e) of this title shall be established 

so that postage on each mailing of such mail shall be as nearly 

as practicable 5 percent lower than the postage for a corresponding regular-rate category mailing. 

* * * * * * *

ø(5)¿ (4) The rates for any advertising under former section 

4358(f) of this title shall be equal to 75 percent of the rates for advertising contained in the most closely corresponding regular-rate 

category of mail. 

ø(6)¿ (5) The rates for mail matter under former sections 

4452 (b) and (c) of this title shall be established as follows: 

(A) * * *

* * * * * * *

ø(7)¿ (6) The rates for mail matter under former sections 

4554 (b) and (c) of this title shall be established so that postage 

on each mailing of such mail shall be as nearly as practicable 

5 percent lower than the postage for a corresponding regularrate mailing. 

* * * * * * *

98

(g)(1)***

* * * * * * *

(3) For purposes of this section and former section 4358(a) 

through (c) of this title, those copies of an issue of a publication entered within the county in which it is published, but distributed outside such county on postal carrier routes originating in the county 

of publication, shall be treated as if they were distributed within the 

county of publication. 

(4)(A) In the case of an issue of a publication, any number of 

copies of which are mailed at the rates of postage for a class of mail 

or kind of mailer under former section 4358(a) through (c) of this 

title, any copies of such issue which are distributed outside the 

county of publication (excluding any copies subject to paragraph (3)) 

shall be subject to rates of postage provided for under this paragraph. 

(B) The rates of postage applicable to mail under this paragraph shall be established in accordance with section 3622. 

(C) This paragraph shall not apply with respect to an issue of 

a publication unless the total paid circulation of such issue outside 

the county of publication (not counting recipients of copies subject 

to paragraph (3)) is less than 5,000.

* * * * * * *

(n) In the administration of this section, matter that satisfies 

the circulation standards for requester publications shall not be excluded from being mailed at the rates for mail under former section 

4358 solely because such matter is designed primarily for free circulation or for circulation at nominal rates, or fails to meet the requirements of former section 4354(a)(5).

ø§ 3627. Adjusting free and reduced rates¿

§ 3627. Adjusting free rates

If Congress fails to appropriate an amount authorized under 

section 2401(c) of this title for any class of mail sent free of postage 

under section 3217 or 3403–3406 the rate for that class may be adjusted in accordance with the provisions of this subchapter so that 

the increased revenues received from the users of such class will 

equal the amount for that class that the Congress was to appropriate. 

ø§ 3628. Appellate review 

øA decision of the Governors to approve, allow under protest, 

or modify the recommended decision of the Postal Rate Commission 

may be appealed to any court of appeals of the United States, within 15 days after its publication by the Public Printer, by an aggrieved party who appeared in the proceedings under section 

3624(a) of this title. The court shall review the decision, in accordance with section 706 of title 5, and chapter 158 and section 2112 

of title 28, except as otherwise provided in this section, on the basis 

of the record before the Commission and the Governors. The court 

may affirm the decision or order that the entire matter be returned 

for further consideration, but the court may not modify the decision. The court may not suspend the effectiveness of the changes, 

or otherwise prevent them from taking effect until final disposition 

99

of the suit by the court. No court shall have jurisdiction to review 

a decision made by the Commission or Governors under this chapter except as provided in this section.¿

* * * * * * *

SUBCHAPTER II—PROVISIONS RELATING TO COMPETITIVE 

PRODUCTS 

§ 3631. Applicability; definitions and updates 

(a) APPLICABILITY.—This subchapter shall apply with respect 

to—

(1) priority mail; 

(2) expedited mail; 

(3) mailgrams; 

(4) international mail; and 

(5) parcel post, 

subject to any changes the Postal Regulatory Commission may make 

under section 3642. 

(b) DEFINITION.—For purposes of this subchapter, the term 

‘‘costs attributable’’, as used with respect to a product, means the direct and indirect postal costs attributable to such product. 

(c) RULE OF CONSTRUCTION.—Mail matter referred to in subsection (a) shall, for purposes of this subchapter, 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 CLASSES.—The Governors shall establish rates and classes for products in the competitive category of mail in accordance with the requirements of this 

subchapter and regulations promulgated under section 3633. 

(b) PROCEDURES.— (1) IN GENERAL.—Rates and classes shall be established in 

writing, complete with a statement of explanation and justification, and the date as of which each such rate or class takes effect. 

(2) RATES OR CLASSES OF GENERAL APPLICABILITY.—In the 

case of rates or classes 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 Governors’ proceedings in connection 

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 APPLICABILITY.—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 connection with 

such decision to be filed with the Postal Regulatory Commission 

by such date before the effective date of any new rates or classes 

as the Governors consider appropriate, but in no case less than 

15 days. 

(4) CRITERIA.—As part of the regulations required under 

section 3633, the Postal Regulatory Commission shall establish 

100

criteria for determining when a rate or class established under 

this subchapter 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 competitive products shall remain subject to modification in accordance with the provisions of 

this chapter and section 407, as such provisions were as last in effect before the date of the enactment of this section. 

§ 3633. Provisions applicable to rates for competitive products 

The Postal Regulatory Commission shall, within 18 months 

after the date of the enactment of this section, promulgate (and may 

from time to time thereafter revise) regulations—

(1) to prohibit the subsidization of competitive products by 

market-dominant products; 

(2) to ensure that each competitive product covers its costs 

attributable; and 

(3) to ensure that all competitive products collectively make 

a reasonable contribution to the institutional costs of the Postal 

Service. 

§ 3634. Assumed Federal income tax on competitive products 

income 

(a) DEFINITIONS.—For purposes of this section—

(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 income 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 allocable under section 2011(h) 

to competitive products; and 

(B) the only assets held by such corporation were the 

assets of the Postal Service allocable under section 2011(h) 

to such activities. 

(b) COMPUTATION AND TRANSFER REQUIREMENTS.—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 section 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.

101

øSUBCHAPTER III—TEMPORARY RATES AND CLASSES 

ø§ 3641. Temporary changes in rates and classes 

ø(a) In any case in which the Postal Rate Commission fails to 

transmit a recommended decision on a change in rates of postage 

or in fees for postal services to the Governors in accordance with 

section 3624(c) of this title, the Postal Service may establish temporary changes in rates of postage and in fees for postal services 

in accordance with the proposed changes under consideration by 

the Commission. Such temporary changes may take effect upon 

such date as the Postal Service may determine, except that such 

temporary changes may take effect only after 10 days’ notice in the 

Federal Register. 

ø(b) Any temporary rate or fee established by the Postal Service under subsection (a) of this section shall be in accordance with 

the policies of this title and shall not exceed such amount as may 

be necessary for sufficient revenues to assure that the total estimated income, including appropriations, of the Postal Service shall, 

to the extent practicable, be equal to the total estimated costs of 

the Postal Service. 

ø(c) Notwithstanding the provisions of subsection (b) of this 

section, the Postal Service may not establish any temporary rate 

for a class of mail or any temporary fee for a postal service which 

is more than the permanent rate or fee requested for such class or 

postal service by the Postal Service under section 3622 of this title. 

ø(d) Any temporary change in rates of postage or in fees for 

postal services made by the Postal Service under this section shall 

remain in effect no longer than 150 days after the date on which 

the Commission transmits its recommended decision to the Governors under section 3624(d) of this title, unless such temporary 

change is terminated by the Governors before the expiration of 

such period. 

ø(e) If the Postal Rate Commission does not transmit to the 

Governors within 90 days after the Postal Service has submitted, 

or within 30 days after the Postal Service has resubmitted, to the 

Commission a request for a recommended decision on a change in 

the mail classification schedule (after such schedule is established 

under section 3623 of this title), the Postal Service, upon 10 days’ 

notice in the Federal Register, may place into effect temporary 

changes in the mail classification schedule in accordance with proposed changes under consideration by the Commission. Any temporary change shall be effective for a period ending not later than 

30 days after the Commission has transmitted its recommended decision to the Governors. 

ø(f) If, under section 3628 of this title, a court orders a matter 

returned to the Commission for further consideration, the Postal 

Service, with the consent of the Commission, may place into effect 

temporary changes in rates of postage, and fees for postal services, 

or in the mail classification schedule. 

ø§ 3642. Special authority relating to reduced-rate categories 

of mail 

ø(a) In order to permit the timely implementation of section 

3626(a)(3), the Postal Service may establish temporary rates of 

102

postage for any class of mail or kind of mailer referred to in section 

3626(a)(3)(A). 

ø(b) Any exercise of authority under this section shall be in 

conformance with the requirements of section 3626(a), subject to 

the following: 

ø(1) All attributable costs and institutional-costs contributions assumed shall be the same as those which were assumed 

for purposes of the then most recent proceedings under subchapter II pursuant to which rates of postage for the class of 

mail or kind of mailer involved were last adjusted. 

ø(2) Any temporary rate established under this section 

shall take effect upon such date as the Postal Service may determine, except that—

ø(A) such a rate may take effect only after 10 days’ notice in the Federal Register; and 

ø(B) no such rate may take effect after September 30, 

1998. 

ø(3) A temporary rate under this section may remain in effect no longer than the last day of the fiscal year in which it 

first takes effect. 

ø(4) Authority under this section may not be exercised in 

a manner that would result in more than 1 change taking effect under this section, during the same fiscal year, in the 

rates of postage for a particular class of mail or kind of mailer, 

except as provided in paragraph (5). 

ø(5) Nothing in paragraph (4) shall prevent an adjustment 

under this section in rates for a class of mail or kind of mailer 

with respect to which any rates took effect under this section 

earlier in the same fiscal year if—

ø(A) the rates established for such class of mail or 

kind of mailer by the earlier adjustment are superseded by 

new rates established under subchapter II; and 

ø(B) authority under this paragraph has not previously been exercised with respect to such class of mail or 

kind of mailer based on the new rates referred to in subparagraph (A). 

ø(c) The Postal Service may prescribe any regulations which 

may be necessary to carry out this section, including provisions 

governing the coordination of adjustments under this section with 

any other adjustments under this title. 

ø(d) Notwithstanding any provision of section 3626(a)(3)(B) or 

subsection (a) of this section, any temporary rates established 

under this section for non-letter-shaped mail under former section 

4452(b) or 4452(c) of this title shall not be lower than the rates in 

effect for such mail on September 30, 1993.¿

SUBCHAPTER III—PROVISIONS RELATING TO 

EXPERIMENTAL AND NEW PRODUCTS 

§ 3641. Market tests of experimental products 

(a) AUTHORITY.—

(1) IN GENERAL.—The Postal Service may conduct market 

tests of experimental products in accordance with this section. 

(2) PROVISIONS WAIVED.—A product shall not, while it is 

being tested under this section, be subject to the requirements 

103

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 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 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 collectively). 

(c) NOTICE.— (1) IN GENERAL.—At least 30 days before initiating a market test under this section, the Postal Service shall file with the 

Postal Regulatory 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 experimental product, 

the provisions of section 504(g) shall be available with respect 

to any information 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 section 504(g)(1). Nothing in paragraph (1) 

shall be considered to permit or require the publication of any 

information as to which confidential 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 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 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 be tested under this section only if the total revenues that are anticipated, or in fact received, by the Postal Service from such product do not exceed 

$10,000,000 nationwide in any year, subject to paragraph (2) 

and subsection (g). In carrying out the preceding sentence, the 

104

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 in subsection (b)(2)). 

(2) EXEMPTION AUTHORITY.—The Postal Regulatory Commission may, upon written application 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 Postal 

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 Commission at any 

time determines that a market test under this section fails, with respect to any particular product, to meet one or more of the requirements of this section, it may order the cancellation of the test involved or take such other action as it considers appropriate. A determination under this subsection shall be made in accordance with 

such procedures as the Commission 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 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 

determined under regulations of the Commission). 

(h) DEFINITION OF A SMALL BUSINESS CONCERN.—The criteria 

used in defining small business 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 beginning with the first year in which occurs the deadline for the Postal Service’s first report to the Postal 

Regulatory Commission under section 3652(a). 

§ 3642. New products and transfers of products between the 

market-dominant and competitive 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 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: 

105

(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 substantially above costs, raise prices significantly, decrease quality, or decrease output, without risk of losing business to other firms offering similar products. The competitive category of products shall consist of all other products. 

(2) EXCLUSION OF PRODUCTS COVERED BY POSTAL MONOPOLY.—A product covered by the postal 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 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 enterprises 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 proposed action; and 

(C) the likely impact of the proposed action on small 

business concerns (within the meaning of section 3641(h)). 

(c) TRANSFERS OF SUBCLASSES AND OTHER SUBORDINATE

UNITS ALLOWABLE.—Nothing in this title shall be considered to prevent transfers under this section from being made by reason of the 

fact that they would involve only some (but not all) of the subclasses 

or other subordinate units of the class of mail or type of postal service involved (without regard to satisfaction of minimum quantity requirements standing alone). 

(d) NOTIFICATION AND PUBLICATION REQUIREMENTS.—

(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 Register a notice setting out the 

basis for its determination that the product satisfies the criteria 

under subsection (b) and, in the case of a request to add a product or transfer a product to the competitive category of mail, 

that the product meets the regulations promulgated by the Postal Regulatory Commission pursuant to section 3633. The provisions of section 504(g) shall be available with respect to any information required to be filed. 

(2) PUBLICATION REQUIREMENT.—The Postal Regulatory 

Commission shall, whenever it changes the list of products in 

the market-dominant or competitive category of mail, prescribe 

new lists of products. The revised lists shall indicate how and 

when any previous lists (including the lists under sections 3621 

and 3631) are superseded, and shall be published in the Federal Register. 

(e) NOTIFICATION REQUIREMENT.—The Postal Regulatory Commission shall, whenever it reaches a conclusion that a product or 

products should be transferred between the list of market-dominant 

products under section 3621 and the list of competitive products 

under section 3631, immediately notify the appropriate committees 

106

of the Congress. No such transfer may take effect less than 12 

months after such conclusion. 

(f) PROHIBITION.—Except as provided in section 3641, no product that involves the carriage of letters, printed matter, or mailable 

packages may be offered by the Postal Service unless it has been assigned to the market-dominant or competitive category of mail (as 

appropriate) either—

(1) under this subchapter; or 

(2) by or under any other provision of law. 

SUBCHAPTER IV—REPORTING REQUIREMENTS AND 

RELATED PROVISIONS 

§ 3651. Annual reports by the Commission 

(a) IN GENERAL.—The Postal Regulatory Commission shall submit an annual report to the President and the Congress concerning 

the operations of the Commission under this title, including the extent to which regulations are achieving the objectives under sections 

3622 and 3633, respectively. 

(b) ADDITIONAL INFORMATION.—In addition to the information 

required under subsection (a), each report under this section shall 

also include, with respect to the period covered by such report, an 

estimate of the costs incurred by the Postal Service in providing—

(1) postal services to areas of the Nation where, in the judgment of the Postal Regulatory Commission, the Postal Service 

either would not provide services at all or would not provide 

such services in accordance with the requirements of this title 

if the Postal Service were not required to 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); 

(2) free or reduced rates for postal services as required by 

this title; and 

(3) other public services or activities which, in the judgment 

of the Postal Regulatory Commission, would not otherwise have 

been provided by the Postal Service but for the requirements of 

law. 

The Commission shall detail the bases for its estimates and the statutory requirements giving rise to the costs identified in each report 

under this section. 

(c) INFORMATION FROM POSTAL SERVICE.—The Postal Service 

shall provide the Postal Regulatory Commission with such information as may, in the judgment of the Commission, be necessary in 

order for the Commission to prepare its reports under this section. 

§ 3652. Annual reports to the Commission 

(a) COSTS, REVENUES, AND RATES.—Except as provided in subsection (c), the Postal Service shall, no later than 90 days after the 

end of each year, prepare and submit to the Postal Regulatory Commission a report (together with such nonpublic annex thereto as the 

Commission may require under subsection (e))—

(1) which shall analyze costs, revenues, and rates, using 

such methodologies as the Commission shall by regulation prescribe, and in sufficient detail to demonstrate that the rates in 

107

effect for all products during such year complied with all applicable requirements of this title; and 

(2) which shall, for each market-dominant product provided in such year, provide—

(A) market information, including mail volumes; and 

(B) measures of the quality of service afforded by the 

Postal Service in connection with such product, including—

(i) the service standard applicable to such product; 

(ii) the level of service (described in terms of speed 

of delivery and reliability) provided; and 

(iii) the degree of customer satisfaction with the 

service provided. 

Before submitting a report under this subsection (including any 

annex thereto and the information required under subsection (b)), 

the Postal Service shall have the information contained in such report (and annex) audited by the Inspector General. The results of 

any such audit shall be submitted along with the report to which 

it pertains. 

(b) INFORMATION RELATING TO WORKSHARE DISCOUNTS.—

(1) IN GENERAL.—The Postal Service shall include, in each 

report under subsection (a), the following information with respect to each market-dominant product for which a workshare 

discount was in effect during the period covered by such report: 

(A) The per-item cost avoided by the Postal Service by 

virtue of such discount. 

(B) The percentage of such per-item cost avoided that 

the per-item workshare discount represents. 

(C) The per-item contribution made to institutional 

costs. 

(2) WORKSHARE DISCOUNT DEFINED.—For purposes of this 

subsection, the term ‘‘workshare discount’’ refers to presorting, 

barcoding, dropshipping, and other similar discounts, as further defined under regulations which the Postal Regulatory 

Commission shall prescribe. 

(c) MARKET TESTS.—In carrying out subsections (a) and (b) 

with respect to experimental products offered through market tests 

under section 3641 in a year, the Postal Service—

(1) may report summary data on the costs, revenues, and 

quality of service by market test; and 

(2) shall report such data as the Postal Regulatory Commission requires. 

(d) SUPPORTING MATTER.—The Postal Regulatory Commission 

shall have access, in accordance with such regulations as the Commission shall prescribe, to the working papers and any other supporting matter of the Postal Service and the Inspector General in 

connection with any information submitted under this section. 

(e) CONTENT AND FORM OF REPORTS.—

(1) IN GENERAL.—The Postal Regulatory Commission shall, 

by regulation, prescribe the content and form of the public reports (and any nonpublic annex and supporting matter relating 

thereto) 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 adequate information to 

assess the lawfulness of rates charged; 

108

(B) avoiding unnecessary or unwarranted administrative effort and expense on the part of the Postal Service; 

and 

(C) protecting the confidentiality of commercially sensitive information. 

(2) REVISED REQUIREMENTS.—The Commission may, on its 

own motion or on request of an interested party, initiate proceedings (to be conducted in accordance with regulations that 

the Commission shall prescribe) to improve the quality, accuracy, or completeness of Postal Service data required by the 

Commission under this subsection whenever it shall appear 

that—

(A) the attribution of costs or revenues to products has 

become significantly inaccurate or can be significantly improved; 

(B) the quality of service data has become significantly 

inaccurate or can be significantly 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 determines that any 

document or portion of a document, or other matter, which it 

provides to the Postal Regulatory Commission in a nonpublic 

annex under this section or pursuant to 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 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 section 

504(g)(1). 

(g) OTHER REPORTS.—The Postal Service shall submit to the 

Postal Regulatory Commission, together with any other submission 

that it is required to make under this section in a year, copies of 

its then most recent—

(1) comprehensive statement under section 2401(e); 

(2) performance plan under section 2803; and 

(3) program performance reports under section 2804. 

§ 3653. Annual determination of compliance 

(a) OPPORTUNITY FOR PUBLIC COMMENT.—After receiving the 

reports required under section 3652 for any year, the Postal Regulatory Commission shall promptly provide an opportunity for comment on such reports by users of the mails, affected parties, and an 

officer of the Commission who shall be required to represent the interests of the general public. 

(b) DETERMINATION OF COMPLIANCE OR NONCOMPLIANCE.—Not 

later than 90 days after receiving the submissions required under 

109

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 thereunder); 

(2) whether any performance goals established under section 2803 or 2804 for such year were not met; and 

(3) whether any market-dominant product failed to meet 

any service standard during such year. 

If, with respect to a year, no instance of noncompliance is found 

under this subsection to have occurred in such year, the written determination shall be to that effect. 

(c) IF ANY NONCOMPLIANCE IS FOUND.—If, for a year, a timely 

written determination of noncompliance is made under subsection 

(b), the Postal Regulatory Commission shall take appropriate action 

in accordance with subsections (c)–(e) of section 3662 (as if a complaint averring such noncompliance had been duly filed and found 

under such section to be justified). 

(d) REBUTTABLE PRESUMPTION.—A timely written determination described in the last sentence of subsection (b) shall, for purposes of any proceeding under section 3662, create a rebuttable presumption of compliance by the Postal Service (with regard to the 

matters described in paragraphs (1) through (3) of subsection (b)) 

during the year to which such determination relates.

øSUBCHAPTER IV—POSTAL SERVICES AND COMPLAINTS¿

SUBCHAPTER V—POSTAL SERVICES, COMPLAINTS, AND 

JUDICIAL REVIEW

* * * * * * *

ø§ 3662. Rate and service complaints 

øInterested parties who believe the Postal Service is charging 

rates which do not conform to the policies set out in this title or 

who believe that they are not receiving postal service in accordance 

with the policies of this title may lodge a complaint with the Postal 

Rate Commission in such form and in such manner as it may prescribe. The Commission may in its discretion hold hearings on such 

complaint. If the Commission, in a matter covered by subchapter 

II of this chapter, determines the complaint to be justified, it shall, 

after proceedings in conformity with section 3624 of this title, issue 

a recommended decision which shall be acted upon in accordance 

with the provisions of section 3625 of this title and subject to review in accordance with the provisions of section 3628 of this title. 

If a matter not covered by subchapter II of this chapter is involved, 

and the Commission after hearing finds the complaint to be justified, it shall render a public report thereon to the Postal Service 

which shall take such action as it deems appropriate. 

ø§ 3663. Annual report on international services 

ø(a) Not later than July 1 of each year, the Postal Rate Commission shall transmit to each House of Congress a comprehensive 

report of the costs, revenues, and volumes accrued by the Postal 

110

Service in connection with mail matter conveyed between the 

United States and other countries for the previous fiscal year. 

ø(b) Not later than March 15 of each year, the Postal Service 

shall provide to the Postal Rate Commission such data as the Commission may require to prepare the report required under subsection (a) of this section. Data shall be provided in sufficient detail 

to enable the Commission to analyze the costs, revenues, and volumes for each international mail product or service, under the 

methods determined appropriate by the Commission for the analysis of rates for domestic mail.¿

§ 3662. Rate and service complaints 

(a) IN GENERAL.—Interested persons (including an officer of the 

Postal Regulatory Commission representing the interests of the general public) who believe the Postal Service is not operating in conformance with the requirements of chapter 1, 4, or 6, or this chapter 

(or regulations promulgated under any of those chapters) may lodge 

a complaint with the Postal Regulatory Commission in such form 

and manner as the Commission may prescribe. 

(b) PROMPT RESPONSE REQUIRED.— (1) IN GENERAL.—The Postal Regulatory Commission shall, 

within 90 days after receiving a complaint under subsection (a), 

either—

(A) begin proceedings on such complaint; or 

(B) issue an order dismissing the complaint (together 

with a statement of the reasons therefor). 

(2) TREATMENT OF COMPLAINTS NOT TIMELY ACTED ON.— For purposes of section 3663, any complaint under subsection 

(a) on which the Commission fails to act in the time and manner required by paragraph (1) shall be treated in the same way 

as if it had been dismissed pursuant to an order issued by the 

Commission on the last day allowable for the issuance of such 

order under paragraph (1). 

(c) ACTION REQUIRED IF COMPLAINT FOUND TO BE JUSTIFIED.—

If the Postal Regulatory Commission finds the complaint to be justified, it shall order that the Postal Service take such action as the 

Commission considers 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 adjusted to 

lawful levels, ordering the cancellation of market tests, ordering the 

Postal Service to discontinue providing loss-making products, or requiring the Postal Service to make up for revenue shortfalls in competitive products). 

(d) SUSPENSION AUTHORITY.—The Postal Regulatory Commission may suspend implementation of rates or classifications under 

section 3632(b)(3) for a limited period of time pending expedited 

proceedings under this section. In evaluating whether circumstances 

warrant suspension, the Commission shall consider factors such as 

(1) whether there is a substantial likelihood that such rate or classification will violate the requirements of chapter 1, 4, or 6, or this 

chapter (or regulations promulgated under any of those chapters), 

(2) whether any persons would suffer substantial injury, loss, or 

damage absent a suspension, (3) whether the Postal Service or any 

other persons would suffer substantial injury, loss, or damage under 

a suspension, and (4) the public interest. 

111

(e) AUTHORITY TO ORDER FINES IN CASES OF DELIBERATE NONCOMPLIANCE.—In addition, in cases of deliberate noncompliance by 

the Postal Service with the requirements 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 provision of competitive products shall be paid out of the Competitive Products Fund established 

in section 2011. All receipts from fines imposed under this subsection shall be deposited in the general fund of the Treasury of the 

United States. 

§ 3663. Appellate review 

A person adversely affected or aggrieved by a final order or decision of the Postal Regulatory Commission may, within 30 days 

after such order or decision becomes final, institute proceedings for 

review thereof by filing a petition in the United States Court of Appeals for the District of Columbia. The court shall review the order 

or decision in accordance with section 706 of title 5, and chapter 

158 and section 2112 of title 28, on the basis of the record before 

the Commission. For purposes of this section, the term ‘‘person’’ includes the Postal Service. 

§ 3664. Enforcement of orders 

The several district courts have jurisdiction specifically to enforce, and to enjoin and restrain the Postal Service from violating, 

any order issued by the Postal Regulatory Commission.

øSUBCHAPTER V—GENERAL¿

SUBCHAPTER VI—GENERAL

§ 3681. Reimbursement 

No mailer may be reimbursed for any amount paid under any 

rate or fee which, after such payment, is determined to have been 

unlawful after proceedings in accordance with the provisions of 

øsection 3628¿ sections 3662 through 3664 of this title, or is superseded by a lower rate or fee established under subchapter II of this 

chapter. 

ø§ 3682. Size and weight limits 

øThe Postal Service may establish size and weight limitations 

for mail matter in the same manner as prescribed for changes in 

mail classification under subchapter II of this chapter.¿

§ 3682. Size and weight limits 

The Postal Service may establish size and weight limitations for 

mail matter in the market-dominant category of mail consistent 

with regulations the Postal Regulatory Commission may prescribe 

under section 3622. The Postal Service may establish size and 

weight limitations for mail matter in the competitive category of 

mail consistent with its authority under section 3632.

* * * * * * *

112

§ 3684. Limitations 

Except as provided in section 3627 of this title, no provision of 

this chapter shall be construed to give authority to the Governors 

to make any change in any provision øof section 3682 or 3683 or 

chapter 30, 32, or 34 of this title.¿ of this title.

* * * * * * *

§ 3686. Bonus authority 

(a) IN GENERAL.—The Postal Service may establish one or more 

programs to provide bonuses or other rewards to officers and employees of the Postal Service to achieve the objectives of this chapter. 

(b) WAIVER OF LIMITATION ON COMPENSATION.— (1) IN GENERAL.—Under any such program, the Postal 

Service may award a bonus or other reward in excess of the 

limitation set forth in the last sentence of section 1003(a), if 

such program has been approved under paragraph (2). 

(2) APPROVAL PROCESS.—If the Postal Service wishes to 

have the authority, under any program described in subsection 

(a), to award bonuses or other rewards in excess of the limitation referred to in paragraph (1)—

(A) the Postal Service shall make an appropriate request to the Postal Regulatory Commission, in such form 

and manner as the Commission requires; and 

(B) the Postal Regulatory Commission shall approve 

any such request if it finds that the program is likely to 

achieve the objectives of this chapter. 

(3) REVOCATION AUTHORITY.—If the Postal Regulatory 

Commission finds that a program previously approved under 

paragraph (2) is not achieving the objectives of this chapter, the 

Commission may revoke or suspend the authority of the Postal 

Service to continue such program until such time as appropriate corrective measures have, in the judgment of the Commission, been taken. 

(c) REPORTING REQUIREMENT RELATING TO BONUSES OR OTHER

REWARDS.—Included in its comprehensive statement under section 

2401(e) for any period shall be—

(1) the name of each person receiving a bonus or other reward during such period which would not have been allowable 

but for the provisions of subsection (b); 

(2) the amount of the bonus or other reward; and 

(3) the amount by which the limitation referred to in subsection (b)(1) was exceeded as a result of such bonus or other 

reward. 

§ 3687. Workshare discounts 

(a) IN GENERAL.—As part of the regulations established under 

section 3622(a), the Postal Regulatory Commission shall establish 

rules for workshare discounts that ensure that workshare discounts 

do not exceed the cost that the Postal Service avoids as the result 

of private sector workshare activity, except—

(1) where the discount is associated with a new product or 

service or with a change to an existing product or service and 

is necessary, over a period of time not to exceed 4 years, to induce mailer behavior that will enable the new or changed prodVerDate jul 14 2003 22:09 Sep 23, 2004 Jkt 029006 PO 00000 Frm 00112 Fmt 6659 Sfmt 6603 E:\HR\OC\HR672P2.XXX HR672P2
113

uct or service in furtherance of the overall economically efficient 

operation of the Postal Service; 

(2) to the extent that a reduction in the discount would lead 

to a loss of volume in the affected category and reduce the aggregate contribution to institutional costs of the Postal Service, 

from the mail matter subject to the discount, below what it otherwise would have been if the discount had not been reduced to 

costs avoided; would result in a further increase in the rates 

paid by mailers not able to take advantage of the discount; or 

would impede the efficient operation of the Postal Service; 

(3) where the amount of the discount above costs avoided 

is necessary to mitigate rate shock and will be phased out over 

time; or 

(4) where the workshare discount is provided in connection 

with subclasses of mail consisting exclusively of mail matter of 

educational, cultural, or scientific value. 

(b) REPORTING REQUIREMENT.—Whenever the Postal Service establishes or maintains a workshare discount, the Postal Service 

shall, at the time it publishes the workshare discount rate, file with 

the Postal Regulatory Commission a detailed report and explanation of its reasons for establishing or maintaining the rate, setting forth the data, economic analyses, and other information relied 

on by the Postal Service to justify the rate. 

(c) DEFINITION.—For purposes of this section, the term 

‘‘workshare discount’’ refers to rate discounts provided to mailers for 

presorting, prebarcoding, handling, or transportation, as further defined by the Postal Regulatory Commission as part of regulations 

established under section 3622(a).

PART V—TRANSPORTATION OF MAIL

Chap. Sec. 

50. General ........................................................................................................... 5001

ø52. Transportation of Mail by Surface Carrier ........................................ 5201¿

* * * * * * *

CHAPTER 50—GENERAL 

* * * * * * *

§ 5001. Provisions for carrying mail 

The Postal Service shall provide for the transportation of mail 

in accordance with the policies established under section ø101(e) 

and (f)¿ 101(f) and (g) of this title and the provisions of this chapter. Notwithstanding any other provision of this title, the Postal 

Service may make arrangements on a temporary basis for the 

transportation of mail when, as determined by the Postal Service, 

an emergency arises. Such arrangements shall terminate when the 

emergency ceases and the Postal Service is promptly able to secure 

transportation services under other provisions of this title. 

* * * * * * *

§ 5005. Mail transportation 

(a) The Postal Service may obtain mail transportation service—

114

ø(1) from common carriers by rail and motor vehicle or 

persons as provided in chapter 52 of this title;¿

ø(2)¿ (1) from air carriers as provided in chapter 54 of this 

title; 

ø(3)¿ (2) from water carriers as provided in chapter 56 of 

this title; and 

ø(4)¿ (3) by contract from any person ø(as defined in section 5201(6) of this title)¿ or carrier for surface and water 

transportation under such terms and conditions as it deems 

appropriate, subject to the provisions of this section. 

(b)(1) Contracts for the transportation of mail procured under 

subsection ø(a)(4)¿ (a)(3) of this section shall be for periods not in 

excess of 4 years ø(or where the Postal Service determines that 

special conditions or the use of special equipment warrants, not in 

excess of 6 years)¿ (or such longer period of time as may be determined by the Postal Service to be advisable or appropriate) and 

shall be entered into only after advertising a sufficient time previously for proposals. The Postal Service, with the consent of the 

holder of any such contract, may adjust the compensation allowed 

under that contract for increased or decreased costs resulting from 

changed conditions occurring during the term of the contract. 

(2) A contract under subsection ø(a)(4)¿ (a)(3) of this section 

may be renewed at the existing rate by mutual agreement between 

the contractor or subcontractor and the Postal Service. 

* * * * * * *

(c) The Postal Service, in determining whether to obtain transportation of mail øby carrier or person under subsection (a)(1) of 

this section, by contract under subsection (a)(4) of this section, or¿

by contract under subsection (a)(3) of this section or by Government 

motor vehicle, shall use the mode of transportation which best 

serves the public interest, due consideration being given to the cost 

of the transportation service under each mode. 

* * * * * * *

øCHAPTER 52—TRANSPORTATION OF MAIL BY SURFACE 

CARRIER

øSec. 

ø5201. Definitions. 

ø5202. Applicability. 

ø5203. Authorization of service by carrier. 

ø5204. Changes in service; placement of equipment. 

ø5205. Evidence of service. 

ø5206. Fines and deductions. 

ø5207. Surface Transportation Board to fix rates. 

ø5208. Procedures. 

ø5209. Special rates. 

ø5210. Intermodal transportation. 

ø5211. Statistical studies. 

ø5212. Special contracts. 

ø5213. Carrier operations; receipts; expenditures. 

ø5214. Agreements with passenger common carriers by motor vehicle. 

ø5215. Star route certification.

ø§ 5201. Definitions 

øFor purposes of this chapter—

ø(1) ‘‘Board’’ means the Surface Transportation Board; 

115

ø(2) ‘‘carrier’’ and ‘‘regulated surface carrier’’ mean a railroad, a freight forwarder, or a motor carrier; 

ø(3) ‘‘railroad’’ means a railway common carrier, including 

an electric urban and interurban railway common carrier; 

ø(4) ‘‘freight forwarder’’ means any regulated freight forwarder which holds itself out to the general public as a carrier 

to transport or provide transportation of property as authorized by a registration issued by the Board; 

ø(5) ‘‘motor carrier’’ means a motor carrier, except a passenger-carrying motor vehicle of such a carrier, within the 

meaning of section 13102(12) of title 49, that holds a registration issued by the Board; 

ø(6) ‘‘person’’ includes any person other than a carrier 

holding a certificate or registration issued by the Board; and 

ø(7) ‘‘mail’’ includes equipment and supplies of the Postal 

Service. 

ø§ 5202. Applicability 

øThis chapter applies to mail transportation performed by any 

person or carrier or carrier combination regardless of the mode of 

transportation actually used to provide the service. 

ø§ 5203. Authorization of service by carrier 

ø(a) The Postal Service may establish mail routes and authorize mail transportation service thereon. 

ø(b) A carrier shall transport mail offered for transportation by 

the Postal Service in the manner, under the conditions, and with 

the service prescribed by the Postal Service. A carrier is entitled 

to receive fair and reasonable compensation for the transportation 

and service connected therewith. 

ø(c) The Postal Service shall determine the trains or motor vehicles upon which mail shall be transported, except that no carrier 

shall be compelled to transport mail on any train or vehicle which 

is operated exclusively for the transportation of passengers and 

their baggage. 

ø(d) A carrier shall transport with due speed such mail as the 

Postal Service directs under this section. 

ø(e) No carrier shall be required to serve territory it is not otherwise authorized to serve, to provide service for the Postal Service 

at a rate which is less than compensatory cost, or to provide service 

at a detriment to the carrier or its other customers. 

ø(f) Any order or determination of the Postal Service providing 

for the transportation of mail by a motor carrier shall be filed with 

the Board. If the Board finds, within 90 days after the filing, that 

the order or determination will be detrimental to the motor carrier 

or its other customers, or that such carrier does not operate equipment suitable for the transportation of mail, the order or determination shall be terminated. 

ø(g) An order or determination of the Postal Service under this 

section shall be consistent with the orders of the Board under sections 5207 and 5208 of this title. 

ø§ 5204. Changes in service; placement of equipment 

ø(a) The Postal Service may authorize, according to the need 

therefor, new or additional mail transportation service by carriers 

116

at the rate or compensation fixed under this chapter. It may reduce 

or discontinue service with pro rata reductions in compensation 

and indemnity for the loss of reasonable investment in equipment 

used exclusively for mail. 

ø(b) A railroad shall place cars used for full or apartment post 

office service in position at such times before departure as the Postal Service directs. 

ø§ 5205. Evidence of service 

øA carrier shall submit evidence of its performance of mail 

transportation service, signed by an authorized official, in such 

form and at such times as the Postal Service requires. Mail transportation service is considered that of the carrier performing it regardless of the ownership of the property used by the carrier. 

ø§ 5206. Fines and deductions 

ø(a) The Postal Service may fine any carrier an amount not to 

exceed $500 for each day the carrier refuses to perform mail transportation services required by it at rates or compensation established under this chapter. 

ø(b) The Postal Service shall fine a carrier an amount it deems 

reasonable for failure or refusal by that carrier to transport mail 

as required by the Postal Service under section 5203 of this title. 

ø(c) The Board may make deductions from the compensation of 

a carrier for failure to perform mail transportation service as required under section 5203 of this title. If the failure to perform is 

due to the fault of the carrier, it may deduct a sum not exceeding 

twice the compensation applying to such service. Such deductions 

shall not be made prior to the expiration of 60 days following service upon the carrier by the Board of notice of intention to assess 

a fine or make a deduction and of the basis therefor. 

ø§ 5207. Surface Transportation Board to fix rates 

ø(a) The Board shall determine and fix the fair and reasonable 

rates or compensation for the transportation of mail by carrier and 

the service connected therewith, and shall prescribe the method of 

computing such rates or compensation. The Board shall publish its 

orders stating its determination under this section which shall remain in force until changed by it after notice and hearing. 

ø(b) For the purpose of determining and fixing rates or compensation under this section, the Board may make just and reasonable classifications of carriers and, where just and equitable, fix 

general rates applicable to carriers in the same classification. 

ø(c) In determining and fixing fair and reasonable rates or 

compensation under this section, the Board shall consider the relation between the Government and carriers as public service corporations, and the nature of public service as distinguished, if there 

is a distinction, from the ordinary transportation business of the 

carriers. 

ø(d) Initial rates or compensation for mail transportation service by any carrier or carriers shall be those agreed to by the Postal 

Service and the carrier or carriers, and such rates or compensation 

shall continue in effect until such time as the Board fixes the rates 

or compensation under subsection (a) of this section. 

117

ø§ 5208. Procedures 

ø(a) At any time after 6 months from the entry of an order 

stating the Board’s determination under section 5207 of this title, 

the Postal Service or an interested carrier may apply for a reexamination and substantially similar proceedings as have theretofore 

been had shall be followed with respect to the rates of compensation for services covered by the application. At the conclusion of the 

hearing the Board shall enter an order stating its determination. 

ø(b) Except as authorized by sections 5207(d), 5209, 5210, and 

5212 of this title, the Postal Service shall pay a carrier the rates 

or compensation so determined and fixed for application at such 

stated times as named in the order. 

ø(c) The Postal Service may file with the Board a comprehensive plan stating—

ø(1) its requirements for the transportation of mail by carrier; 

ø(2) the character and speed of the trains or motor vehicles 

which are to carry the various kinds of mail; 

ø(3) the service, both terminal and en route, which carriers 

are to render; 

ø(4) what it believes to be the fair and reasonable rates or 

compensation for the services required; and 

ø(5) all other information which may be material to the inquiry, but such other information may be filed at any time in 

the discretion of the Board. 

ø(d) When a comprehensive plan is filed, the Board shall give 

notice of not less than 30 days to each carrier required by the Postal Service to transport mail pursuant to such plan. A carrier may 

file its answer at the time fixed by the Board, but not later than 

30 days after the expiration date fixed by the Board in the notice, 

and the Board shall proceed with the hearing. 

ø§ 5209. Special rates 

øUpon petition by the Postal Service, the Board shall determine and fix carload or truckload, or less than carload or truckload, 

rates for the transportation of mail not entitled to high priority in 

transportation. A carrier shall perform the service at the rates so 

determined when requested to do so and under the conditions prescribed by the Postal Service. 

ø§ 5210. Intermodal transportation 

øThe Postal Service may permit a carrier to perform mail 

transportation by any form of transportation it deems appropriate 

at rates or compensation not exceeding those allowable for similar 

service by the designated form of transportation. 

ø§ 5211. Statistical studies 

øThe Postal Service may arrange for weighing and measuring 

mail transported on carrier mail routes and make other computations for statistical and administrative purposes to carry out the 

purposes of this chapter. 

ø§ 5212. Special contracts 

øThe Postal Service may enter into special contracts with any 

carrier or person, without advertising, for bids and for periods not 

118

in excess of 4 years. It may contract to pay lower rates or compensation or, where in its judgment conditions warrant, higher 

rates or compensation than those determined or fixed by the Board. 

The fact that the Board has not prescribed rates or compensation 

for the carrier involved, under section 5207 of this title, shall not 

preclude execution of a contract under this section. Such contracts 

may be negotiated only after reasonable notice has been posted in 

advance in post offices on the post roads to be served, and other 

carriers or persons have been given an opportunity to offer to negotiate for the transportation of mail. 

ø§ 5213. Carrier operations; receipts; expenditures 

øThe Postal Service shall request any carrier transporting the 

mails to furnish, under seal, such data relating to the operations, 

receipts, and expenditures of such carrier as may, in its judgment, 

be deemed necessary to enable it to ascertain the cost of mail 

transportation and the proper compensation to be paid for such 

service. 

ø§ 5214. Agreements with passenger common carriers by 

motor vehicle 

øThe Postal Service may enter into contracts under such terms 

and conditions as it shall prescribe and without advertising for bids 

for the transportation of mail, in passenger-carrying motor vehicles, by passenger common carriers, or by motor vehicles over the 

regular routes on which the carrier is permitted by law to transport passengers. 

ø§ 5215. Star route certification 

ø(a) Any person who was a contractor under a star route, mail 

messenger, or contract motor vehicle service contract on the effective date of this section (or successor in interest to any such person), shall, upon application to the Board for the territory within 

which such contractor operated on or before the effective date of 

this section be issued a certificate of public convenience and necessity as a motor carrier for the transportation of mail by the Board 

without the Board’s requiring further proof that the public convenience and necessity will be served by such operation and without 

further proceedings. 

ø(b) Applications of persons who were not contractors on the 

effective date of this section shall be decided in accordance with applicable Board procedure. 

ø(c) For purposes of this section, the term ‘‘person’’ has the 

same meaning given that term under section 1 of title 1.¿

CHAPTER 54—TRANSPORTATION OF MAIL BY AIR

Sec. 

5401. Authorization. 

* * * * * * *

ø5403. Fines.¿

* * * * * * *

119

§ 5402. Contracts for transportation of mail by air 

(a) * * *

* * * * * * *

ø(d) If the Postal Service determines that service by certificated air carriers or combination of air carriers between any pair 

or pairs of points in foreign air transportation is not adequate for 

its purposes, it may contract for a period of not more than 4 years, 

without advertising for bids, in such manner and under such terms 

and conditions as it may deem appropriate, with any air taxi operator or combination thereof for such air transportation service. 

Contracts made under this subsection may be renewed at the existing rate by mutual agreement between the holder and the Postal 

Service. The Postal Service, with the consent of the air taxi operator, may adjust the compensation under such contracts for increased or decreased costs occasioned by changed conditions occurring during the contract term. The Postal Service shall cancel such 

a contract when the Secretary authorizes an additional certificated 

carrier or carriers to provide service between any pair or pairs of 

points covered by the contract, and such carrier or carriers inaugurate schedules adequate for its purposes. 

ø(e)(1) The Postal Service may determine rates and contract 

with any air carrier for the transportation of mail by aircraft in 

interstate air transportation either through negotiations or competitive bidding. 

ø(2)(A) In the exercise of its authority under paragraph (1), the 

Postal Service may require any air carrier to accept as mail shipments of day-old poultry, honeybees, and such other live animals 

as postal regulations allow to be transmitted as mail matter. The 

authority of the Postal Service under this subparagraph shall not 

apply in the case of any air carrier who commonly and regularly 

refuses to accept any live animals as cargo. 

ø(B) Notwithstanding any other provision of law, the Postal 

Service is authorized to assess, as postage to be paid by the mailers 

of any shipments covered by subparagraph (A), a reasonable surcharge that the Postal Service determines in its discretion to be 

adequate to compensate air carriers for any necessary additional 

expense incurred in handling such shipments.¿

(d)(1) The Postal Service may contract with any air carrier for 

the transportation of mail by aircraft in interstate air transportation, including the rates therefor, either through negotiations or 

competitive bidding. 

(2) Notwithstanding subsections (a) through (c), the Postal 

Service may contract with any air carrier or foreign air carrier for 

the transportation of mail by aircraft in foreign air transportation, 

including the rates therefor, either through negotiations or competitive bidding, except that—

(A) any such contract may be awarded only to (i) an air 

carrier holding a certificate required by section 41101 of title 49 

or an exemption therefrom issued by the Secretary of Transportation, (ii) a foreign air carrier holding a permit required by 

section 41301 of title 49 or an exemption therefrom issued by 

the Secretary of Transportation, or (iii) a combination of such 

air carriers or foreign air carriers (or both); 

120

(B) mail transported under any such contract shall not be 

subject to any duty-to-carry requirement imposed by any provision of subtitle VII of title 49 or by any certificate, permit, or 

corresponding exemption authority issued by the Secretary of 

Transportation under that subtitle; 

(C) every contract that the Postal Service awards to a foreign air carrier under this paragraph shall be subject to the 

continuing requirement that air carriers shall be afforded the 

same opportunity to carry the mail of the country to and from 

which the mail is transported and the flag country of the foreign air carrier, if different, as the Postal Service has afforded 

the foreign air carrier; and 

(D) the Postmaster General shall consult with the Secretary 

of Defense concerning actions that affect the carriage of military 

mail transported in foreign air transportation. 

(3) Paragraph (2) shall not be interpreted as suspending or otherwise diminishing the authority of the Secretary of Transportation 

under section 41310 of title 49. 

(e) For purposes of this section, the terms ‘‘air carrier’’, ‘‘air 

transportation’’, ‘‘foreign air carrier’’, ‘‘foreign air transportation’’, 

‘‘interstate air transportation’’, and ‘‘mail’’ shall have the meanings 

given such terms in section 40102 of title 49.

* * * * * * *

ø§ 5403. Fines 

øThe Postal Service may impose or remit fines on carriers 

transporting mail by air on routes extending beyond the borders of 

the United States for—

ø(1) unreasonable or unnecessary delay to mail; and 

ø(2) other delinquencies in the transportation of the mail.¿

* * * * * * *

CHAPTER 56—TRANSPORTATION OF MAIL BY VESSEL 

* * * * * * *

§ 5605. Contracts for transportation of mail by vessel 

The Postal Service may contract for the transportation of mail 

by vessel without advertising for bids øfor periods of not in excess 

of 4 years¿. 

SECTION 1402 OF THE VICTIMS OF CRIME ACT OF 1984

CRIME VICTIMS FUND

SEC. 1402. (a)***

(b) Except as limited by subsection (c), there shall be deposited 

in the Fund—

(1) all fines that are collected from persons convicted of offenses against the United States except—

(A) * * *

(B) fines to be paid into—

121

(i) the railroad unemployment insurance account 

pursuant to the Railroad Unemployment Insurance 

Act (45 U.S.C. 351 et seq.); 

(ii) the Postal Service Fund pursuant to sections 

2601(a)(2) and 2003 of title 39 of the United States 

Code and for the purposes set forth in section 

ø404(a)(8)¿ 404(a)(7) of such title 39; 

* * * * * * *

TITLE 5, UNITED STATES CODE

* * * * * * *

PART I—THE AGENCIES GENERALLY 

* * * * * * *

CHAPTER 1—ORGANIZATION 

* * * * * * *

§ 104. Independent establishment 

For the purpose of this title, ‘‘independent establishment’’ 

means—

(1) an establishment in the executive branch (other than 

the United States Postal Service or the øPostal Rate¿ Postal 

Regulatory Commission) which is not an Executive department, military department, Government corporation, or part 

thereof, or part of an independent establishment; and 

* * * * * * *

CHAPTER 3—POWERS 

* * * * * * *

§ 306. Strategic plans 

(a) * * *

* * * * * * *

(f) For purposes of this section the term ‘‘agency’’ means an Executive agency defined under section 105, but does not include the 

Central Intelligence Agency, the General Accounting Office, the 

Panama Canal Commission, the United States Postal Service, and 

the øPostal Rate¿ Postal Regulatory Commission. 

* * * * * * *

PART III—EMPLOYEES 

Subpart A—General Provisions 

* * * * * * *

CHAPTER 21—DEFINITIONS 

* * * * * * *

122

§ 2104. Officer 

(a) * * *

(b) Except as otherwise provided by law, an officer of the 

United States Postal Service or of the øPostal Rate¿ Postal Regulatory Commission is deemed not an officer for purposes of this 

title. 

* * * * * * *

Subpart B—Employment and Retention 

* * * * * * *

CHAPTER 33—EXAMINATION, SELECTION, AND 

PLACEMENT 

* * * * * * *

SUBCHAPTER VI—ASSIGNMENTS TO AND FROM STATES 

§ 3371. Definitions 

For the purpose of this subchapter—

(1) * * *

* * * * * * *

(3) ‘‘Federal agency’’ means an Executive agency, military 

department, a court of the United States, the Administrative 

Office of the United States Courts, the Library of Congress, the 

Botanic Garden, the Government Printing Office, the Congressional Budget Office, the United States Postal Service, the 

øPostal Rate¿ Postal Regulatory Commission, the Office of the 

Architect of the Capitol, the Office of Technology Assessment, 

and such other similar agencies of the legislative and judicial 

branches as determined appropriate by the Office of Personnel 

Management; and 

* * * * * * *

Subpart D—Pay and Allowances 

* * * * * * *

CHAPTER 53—PAY RATES AND SYSTEMS 

* * * * * * *

SUBCHAPTER II—EXECUTIVE SCHEDULE PAY RATES 

* * * * * * *

§ 5314. Positions at level III 

Level III of the Executive Schedule applies to the following positions, for which the annual rate of basic pay shall be the rate determined with respect to such level under chapter 11 of title 2, as 

adjusted by section 5318 of this title: 

Solicitor General of the United States. 

* * * * * * *

123

Chairman, øPostal Rate¿ Postal Regulatory Commission. 

* * * * * * *

§ 5315. Positions at level IV 

Level IV of the Executive Schedule applies to the following positions, for which the annual rate of basic pay shall be the rate determined with respect to such level under chapter 11 of title 2, as 

adjusted by section 5318 of this title: 

Deputy Administrator of General Services. 

* * * * * * *

Members, øPostal Rate¿ Postal Regulatory Commission (4). 

* * * * * * *

CHAPTER 55—PAY ADMINISTRATION 

* * * * * * *

SUBCHAPTER II—WITHHOLDING PAY 

* * * * * * *

§ 5514. Installment deduction for indebtedness to the United 

States 

(a)(1)***

* * * * * * *

(5) For purposes of this subsection—

(A) * * *

(B) ‘‘agency’’ includes executive departments and agencies, the United States Postal Service, the øPostal Rate¿

Postal Regulatory Commission, the United States Senate, 

the United States House of Representatives, and any 

court, court administrative office, or instrumentality in the 

judicial or legislative branches of the Government, and 

government corporations. 

* * * * * * *

Subpart F—Labor-Management and Employee 

Relations 

* * * * * * *

CHAPTER 73—SUITABILITY, SECURITY, AND CONDUCT 

* * * * * * *

SUBCHAPTER IV—FOREIGN GIFTS AND DECORATIONS 

§ 7342. Receipt and disposition of foreign gifts and decorations 

(a) For the purpose of this section—

(1) ‘‘employee’’ means—

(A) an employee as defined by section 2105 of this title 

and an officer or employee of the United States Postal 

124

Service or of the øPostal Rate¿ Postal Regulatory Commission; 

* * * * * * *

CHAPTER 75—ADVERSE ACTIONS 

* * * * * * *

SUBCHAPTER II—REMOVAL, SUSPENSION FOR MORE THAN 

14 DAYS, REDUCTION IN GRADE OR PAY, OR FURLOUGH 

FOR 30 DAYS OR LESS 

§ 7511. Definitions; application 

(a) For the purpose of this subchapter—

(1) ‘‘employee’’ means—

(A) * * *

(B) a preference eligible in the excepted service who 

has completed 1 year of current continuous service in the 

same or similar positions—

(i) in an Executive agency; or 

(ii) in the United States Postal Service or øPostal 

Rate¿ Postal Regulatory Commission; and 

* * * * * * *

Subpart G—Insurance and Annuities 

* * * * * * *

CHAPTER 83—RETIREMENT 

* * * * * * *

SUBCHAPTER III—CIVIL SERVICE RETIREMENT 

* * * * * * *

§ 8334. Deductions, contributions, and deposits 

(a)(1)(A)***

(B)(i)***

(ii) In the case of an employee of the United States Postal 

Service, the amount to be contributed under this subparagraph 

shall (instead of the amount described in clause (i)) be equal to 

øthe product derived by multiplying the employee’s basic pay by 

the percentage equal to—

ø(I) the normal-cost percentage for the applicable employee 

category listed in subparagraph (A), minus 

ø(II) the percentage deduction rate that applies with respect to such employee under subparagraph (A).¿ zero

* * * * * * *

§ 8348. Civil Service Retirement and Disability Fund 

(a) * * *

* * * * * * *

125

ø(h)(1)(A) For purposes of this subsection, ‘‘Postal supplemental liability’’ means the estimated excess, as determined by the 

Office, of—

ø(i) the actuarial present value of all future benefits payable from the Fund under this subchapter attributable to the 

service of current or former employees of the United States 

Postal Service, over 

ø(ii) the sum of—

ø(I) the actuarial present value of deductions to be 

withheld from the future basic pay of employees of the 

United States Postal Service currently subject to this subchapter pursuant to section 8334; 

ø(II) the actuarial present value of the future contributions to be made pursuant to section 8334 with respect to 

employees of the United States Postal Service currently 

subject to this subchapter; 

ø(III) that portion of the Fund balance, as of the date 

the Postal supplemental liability is determined, attributable to payments to the Fund by the United States Postal Service and its employees, including earnings on those 

payments; and 

ø(IV) any other appropriate amount, as determined by 

the Office in accordance with generally accepted actuarial 

practices and principles. 

ø(B)(i) In computing the actuarial present value of future benefits, the Office shall include the full value of benefits attributable 

to military and volunteer service for United States Postal Service 

employees first employed after June 30, 1971, and a prorated share 

of the value of benefits attributable to military and volunteer service for United States Postal Service employees first employed before July 1, 1971. 

ø(ii) Military service so included shall not be included in the 

computation of any amount under subsection (g)(2). 

ø(2)(A) Not later than June 30, 2004, the Office shall determine the Postal supplemental liability as of September 30, 2003. 

The Office shall establish an amortization schedule, including a series of equal annual installments commencing September 30, 2004, 

which provides for the liquidation of such liability by September 

30, 2043. 

ø(B) The Office shall redetermine the Postal supplemental liability as of the close of the fiscal year, for each fiscal year beginning after September 30, 2003, through the fiscal year ending September 30, 2038, and shall establish a new amortization schedule, 

including a series of equal annual installments commencing on 

September 30 of the subsequent fiscal year, which provides for the 

liquidation of such liability by September 30, 2043. 

ø(C) The Office shall redetermine the Postal supplemental liability as of the close of the fiscal year for each fiscal year beginning after September 30, 2038, and shall establish a new amortization schedule, including a series of equal annual installments commencing on September 30 of the subsequent fiscal year, which provides for the liquidation of such liability over 5 years. 

ø(D) Amortization schedules established under this paragraph 

shall be set in accordance with generally accepted actuarial practices and principles, with interest computed at the rate used in the 

126

most recent dynamic actuarial valuation of the Civil Service Retirement System. 

ø(E) The United States Postal Service shall pay the amounts 

so determined to the Office, with payments due not later than the 

date scheduled by the Office. 

ø(F) An amortization schedule established under subparagraph 

(B) or (C) shall supersede any amortization schedule previously established under this paragraph. 

ø(3) Notwithstanding any other provision of law, in computing 

the amount of any payment under any other subsection of this section that is based upon the amount of the unfunded liability, such 

payment shall be computed disregarding that portion of the unfunded liability that the Office determines will be liquidated by 

payments under this subsection. 

ø(4) Notwithstanding any other provision of this subsection, 

any determination or redetermination made by the Office under 

this subsection shall, upon request of the Postal Service, be subject 

to reconsideration and review (including adjustment by the Board 

of Actuaries of the Civil Service Retirement System) to the same 

extent and in the same manner as provided under section 8423(c).¿

(h)(1) For purposes of this subsection, the ‘‘Postal surplus or 

supplemental liability’’ means the estimated difference, as determined by the Office, between—

(A) the actuarial present value of all future benefits which 

are payable from the Fund under this subchapter to current or 

former employees of the United States Postal Service, or their 

survivors, and attributable to civilian employment with the 

Postal Service, and 

(B) the sum of—

(i) the actuarial present value of deductions to be withheld from the future basic pay of employees of the Postal 

Service currently subject to this subchapter pursuant to section 8334; 

(ii) that portion of the Fund balance, as of the date the 

Postal surplus or supplemental liability is determined, attributable to payments to the Fund by the Postal Service 

and its employees, plus the earnings on such amounts 

while in the Fund; and 

(iii) any other appropriate amount, as determined by 

the Office in accordance with generally accepted actuarial 

practices and principles. 

(2)(A)(i) Not later than June 15, 2006, the Office shall determine the Postal surplus or supplemental liability as of September 

30, 2005. 

(ii) If a supplemental liability is determined under this subparagraph for fiscal year 2005, the Office shall establish an amortization schedule, including a series of equal annual installments 

commencing September 30, 2006, which provides for the liquidation 

of such liability by September 30, 2043. 

(iii) If a surplus is determined under this subparagraph for fiscal year 2005, the amount of the surplus shall be transferred to the 

Postal Service Retiree Health Benefits Fund by June 30, 2006. 

(B)(i) For each of fiscal years 2006 through 2038, the Office 

shall determine the Postal surplus or supplemental liability as of 

127

the close of such fiscal year, with each such determination to be 

made by June 15th of the following fiscal year. 

(ii) If a supplemental liability is determined under this subparagraph for a fiscal year, the Office shall establish an amortization schedule, including a series of equal annual installments commencing on September 30 of the following fiscal year, which provides for the liquidation of such liability by September 30, 2043. 

(iii)(I) If a surplus of $500,000,000 or more is determined under 

this subparagraph for a fiscal year, the amount of the surplus shall 

be transferred to the Postal Service Retiree Health Benefits Fund by 

June 30th of the following fiscal year. 

(II) If a surplus of less than $500,000,000 is determined under 

this subparagraph for a fiscal year, the surplus shall remain in the 

Fund, subject to transfer in a subsequent fiscal year under subclause (I) or subparagraph (C)(iii). 

(C)(i) Not later than June 15, 2040, the Office shall determine 

the Postal surplus or supplemental liability as of September 30, 

2039. 

(ii) If a supplemental liability is determined under this subparagraph for fiscal year 2039, the Office shall establish an amortization schedule, including a series of equal annual installments 

commencing September 30, 2040, which provides for the liquidation 

of such liability by September 30, 2043. 

(iii) If a surplus is determined under this subparagraph for fiscal year 2039, the amount of the surplus—

(I) shall be applied first toward reducing the amount of any 

supplemental liability described in section 8423(b)(1)(B); and 

(II) to the extent that any portion of such surplus remains 

after the application of subclause (I), shall, not later than June 

30, 2040, be transferred to the Postal Service Retiree Health 

Benefits Fund. 

(D) An amortization schedule under this paragraph—

(i) shall be established in accordance with generally accepted actuarial practices and principles, with interest computed at 

the rate used in the most recent valuation of the Civil Service 

Retirement System; 

(ii) shall supersede any amortization schedule previously 

established under this paragraph; and 

(iii) shall not be taken into account, for purposes of any determination of Postal surplus or supplemental liability, except 

to the extent of any amounts under such schedule actually paid. 

(E) The Postal Service shall pay to the Office the amounts due 

under any amortization schedule established under this paragraph 

that has not been superseded. 

(3) Notwithstanding any other provision of law, in computing 

the amount of any payment under any other subsection of this section that is based on the amount of the unfunded liability, such payment shall be computed disregarding that portion of the unfunded 

liability that the Office determines will be liquidated by payments 

under this subsection. 

(4) As used in this subsection, ‘‘Postal Service Retiree Health 

Benefits Fund’’ refers to the Postal Service Retiree Health Benefits 

Fund, as established by section 8909a.

* * * * * * *

128

CHAPTER 84—FEDERAL EMPLOYEES’ RETIREMENT 

SYSTEM 

* * * * * * *

SUBCHAPTER I—GENERAL PROVISIONS 

* * * * * * *

§ 8402. Federal Employees’ Retirement System; exclusions 

(a) * * *

* * * * * * *

(c)(1) The Office may exclude from the operation of this chapter 

an employee or group of employees in or under an Executive agency, the United States Postal Service, or the øPostal Rate¿ Postal 

Regulatory Commission, whose employment is temporary or intermittent, except an employee whose employment is part-time career 

employment (as defined in section 3401(2)). 

* * * * * * *

SUBCHAPTER II—BASIC ANNUITY 

* * * * * * *

§ 8423. Government contributions 

(a) * * *

(b)(1) The Office shall compute—

(A) the amount of the supplemental liability of the Fund 

with respect to individuals other than those to whom subparagraph (B) relates, and 

(B) the amount of the supplemental liability of the Fund 

with respect to current or former employees of the United 

States Postal Service (and the øPostal Rate¿ Postal Regulatory

Commission) and their survivors; 

as of the close of each fiscal year beginning after September 30, 

1987. 

* * * * * * *

SUBCHAPTER VII—FEDERAL RETIREMENT THRIFT 

INVESTMENT MANAGEMENT SYSTEM 

* * * * * * *

§ 8474. Executive Director 

(a) * * *

* * * * * * *

(c) The Executive Director may—

(1) * * *

* * * * * * *

(4) secure directly from an Executive agency, the United 

States Postal Service, or the øPostal Rate¿ Postal Regulatory

Commission any information necessary to carry out the proviVerDate jul 14 2003 22:09 Sep 23, 2004 Jkt 029006 PO 00000 Frm 00128 Fmt 6659 Sfmt 6601 E:\HR\OC\HR672P2.XXX HR672P2
129

sions of this subchapter or subchapter III of this chapter and 

policies of the Board; 

* * * * * * *

CHAPTER 89—HEALTH INSURANCE

Sec. 

8901. Definitions. 

* * * * * * *

8909a. Postal Service Retiree Health Benefits Fund.

* * * * * * *

§ 8906. Contributions 

(a) * * *

* * * * * * *

(g)(1)***

(2)(A) The Government contributions authorized by this section 

for health benefits for an individual who first becomes an annuitant by reason of retirement from employment with the United 

States Postal Service on or after July 1, 1971, or for a survivor of 

such an individual or of an individual who died on or after July 1, 

1971, while employed by the United States Postal Service, shall be 

paid øby the United States Postal Service.¿ first from the Postal 

Service Retiree Health Benefits Fund up to the amount contained 

therein, with any remaining amount paid by the United States Postal Service.

* * * * * * *

§ 8909a. Postal Service Retiree Health Benefits Fund 

(a) There is in the Treasury of the United States a Postal Service Retiree Health Benefits Fund (hereinafter in this section referred 

to as the ‘‘Fund’’) which is administered by the Office of Personnel 

Management. Any amounts transferred to the Fund under section 

8348(h)(2) shall yield interest at a rate equal to the weighted average yield of all the investments in the Civil Service Retirement and 

Disability Fund as of the date of transfer. All other investments of 

amounts in the Fund shall be made in accordance with subsections 

(c)–(e) of section 8348. 

(b) The Fund is available without fiscal year limitation for payments required by section 8906(g)(2). 

(c)(1) Not later than June 30, 2006, and by June 30 of each succeeding year, the Office of Personnel Management shall compute the 

net present value of the excess of future payments required by section 8906(g)(2)(A) for current and future United States Postal Service annuitants over the value of the assets of the Fund as of the end 

of the fiscal year ending on September 30 of that year. The actuarial 

costing method to be used by the Office and all actuarial assumptions shall be established by the Office after consultation with the 

United States Postal Service and must be in accordance with generally accepted actuarial practices and principles. 

(2) Not later than September 30, 2006, and by September 30 of 

each succeeding year, the Office shall compute and the United 

States Postal Service shall pay into such Fund—

130

(A) the portion of the net present value described in paragraph (1) attributable to the current year’s service of Postal 

Service employees; and 

(B) interest on the net present value described in paragraph 

(1) for that fiscal year, at the interest rate used in computing 

that net present value. 

(3)(A) Any computation or other determination of the Office 

under this subsection shall, upon request of the Postal Service, be 

subject to review by the Postal Regulatory Commission. The Commission shall submit a report containing the results of any such review to the Postal Service, the Office of Personnel Management, and 

the Congress. 

(B) Upon receiving the report of the Postal Regulatory Commission, the Office of Personnel Management shall reconsider its computation or other determination in light of such report, and shall 

make any appropriate adjustments. The Office shall submit a report 

containing the results of its reconsideration to the Commission, the 

Postal Service, and the Congress. 

(4) The Office shall promulgate, after consultation with the 

United States Postal Service, any regulations it deems necessary 

under this subsection.

* * * * * * *

SECTION 101 OF THE ETHICS IN GOVERNMENT ACT OF 

1978

PERSONS REQUIRED TO FILE

SEC. 101. (a)***

* * * * * * *

(f) The officers and employees referred to in subsections (a), 

(d), and (e) are—

(1) * * *

* * * * * * *

(6) the Postmaster General, the Deputy Postmaster General, each Governor of the Board of Governors of the United 

States Postal Service and each officer or employee of the 

United States Postal Service or øPostal Rate¿ Postal Regulatory Commission who occupies a position for which the rate 

of basic pay is equal to or greater than 120 percent of the minimum rate of basic pay payable for GS–15 of the General 

Schedule; 

* * * * * * *

SECTION 501 OF THE REHABILITATION ACT OF 1973

EMPLOYMENT OF INDIVIDUALS WITH DISABILITIES

SEC. 501. (a)***

(b) Each department, agency, and instrumentality (including 

the United States Postal Service and the øPostal Rate Office¿ PostVerDate jul 14 2003 22:09 Sep 23, 2004 Jkt 029006 PO 00000 Frm 00130 Fmt 6659 Sfmt 6601 E:\HR\OC\HR672P2.XXX HR672P2
131

al Regulatory Commission) in the executive branch and the Smithsonian Institution shall, within one hundred and eighty days after 

the date of enactment of this Act, submit to the Commission and 

to the Committee an affirmative action program plan for the hiring, placement, and advancement of individuals with disabilities in 

such department, agency, instrumentality, or Institution. Such plan 

shall include a description of the extent to which and methods 

whereby the special needs of employees who are individuals with 

disabilities are being met. Such plan shall be updated annually, 

and shall be reviewed annually and approved by the Commission, 

if the Commission determines, after consultation with the Committee, that such plan provides sufficient assurances, procedures, 

and commitments to provide adequate hiring, placement, and advancement opportunities for individuals with disabilities. 

* * * * * * *

SECTION 3502 OF TITLE 44, UNITED STATES CODE

§ 3502. Definitions 

As used in this subchapter—

(1) * * *

* * * * * * *

(5) the term ‘‘independent regulatory agency’’ means the 

Board of Governors of the Federal Reserve System, the Commodity Futures Trading Commission, the Consumer Product 

Safety Commission, the Federal Communications Commission, 

the Federal Deposit Insurance Corporation, the Federal Energy 

Regulatory Commission, the Federal Housing Finance Board, 

the Federal Maritime Commission, the Federal Trade Commission, the Interstate Commerce Commission, the Mine Enforcement Safety and Health Review Commission, the National 

Labor Relations Board, the Nuclear Regulatory Commission, 

the Occupational Safety and Health Review Commission, the 

øPostal Rate¿ Postal Regulatory Commission, the Securities 

and Exchange Commission, and any other similar agency designated by statute as a Federal independent regulatory agency 

or commission; 

* * * * * * *

INSPECTOR GENERAL ACT OF 1978

* * * * * * *

AUTHORITY; ADMINISTRATION PROVISIONS

SEC. 6. (a) * * *

* * * * * * *

(e)(1)***

* * * * * * *

132

(3) The Inspector General offices of the Department of Commerce, Department of Education, Department of Energy, Department of Health and Human Services, Department of Homeland Security, Department of Housing and Urban Development, Department of the Interior, Department of Justice, Department of Labor, 

Department of State, Department of Transportation, Department of 

the Treasury, Department of Veterans Affairs, Agency for International Development, Environmental Protection Agency, Federal 

Deposit Insurance Corporation, Federal Emergency Management 

Agency, General Services Administration, National Aeronautics 

and Space Administration, Nuclear Regulatory Commission, Office 

of Personnel Management, Railroad Retirement Board, Small Business Administration, Social Security Administration, øand the¿

Tennessee Valley Authority, and United States Postal Service are 

exempt from the requirement of paragraph (2) of an initial determination of eligibility by the Attorney General. 

* * * * * * *

REQUIREMENTS FOR FEDERAL ENTITIES AND DESIGNATED FEDERAL

ENTITIES

SEC. 8G. (a) Notwithstanding section 11 of this Act, as used in 

this section—

(1) * * *

(2) the term ‘‘designated Federal entity’’ means Amtrak, 

the Appalachian Regional Commission, the Board of Governors 

of the Federal Reserve System, the Board for International 

Broadcasting, the Commodity Futures Trading Commission, 

the Consumer Product Safety Commission, the Corporation for 

Public Broadcasting, the Equal Employment Opportunity Commission, the Farm Credit Administration, the Federal Communications Commission, the Federal Deposit Insurance Corporation, the Federal Election Commission, the Election Assistance 

Commission, the Federal Housing Finance Board, the Federal 

Labor Relations Authority, the Federal Maritime Commission, 

the Federal Trade Commission, the Legal Services Corporation, 

the National Archives and Records Administration, the National Credit Union Administration, the National Endowment 

for the Arts, the National Endowment for the Humanities, the 

National Labor Relations Board, the National Science Foundation, the Panama Canal Commission, the Peace Corps, the 

Pension Benefit Guaranty Corporation, the Securities and Exchange Commission, the Smithsonian Institution, the United 

States International Trade Commissionø, and the United 

States Postal Service;¿ and the Postal Regulatory Commission;

* * * * * * *

(4) the term ‘‘head of the designated Federal entity’’ means 

any person or persons designated by statute as the head of a 

designated Federal entity and if no such designation exists, the 

chief policymaking officer or board of a designated Federal entity as identified in the list published pursuant to subsection 

(h)(1) of this section, øexcept that—

ø(A) with respect to the National Science Foundation, 

such term means the National Science Board; and 

133

ø(B) with respect to the United States Postal Service, 

such term means the Governors (within the meaning of 

section 102(3) of title 39, United States Code);¿ except that, 

with respect to the National Science Foundation, such term 

means the National Science Board;

* * * * * * *

(c) øExcept as provided under subsection (f) of this section, 

the¿ The Inspector General shall be appointed by the head of the 

designated Federal entity in accordance with the applicable laws 

and regulations governing appointments within the designated 

Federal entity. 

* * * * * * *

ø(f)(1) For purposes of carrying out subsection (c) with respect 

to the United States Postal Service, the appointment provisions of 

section 202(e) of title 39, United States Code, shall be applied. 

ø(2) In carrying out the duties and responsibilities specified in 

this Act, the Inspector General of the United States Postal Service 

(hereinafter in this subsection referred to as the ‘‘Inspector General’’) shall have oversight responsibility for all activities of the 

Postal Inspection Service, including any internal investigation performed by the Postal Inspection Service. The Chief Postal Inspector 

shall promptly report the significant activities being carried out by 

the Postal Inspection Service to such Inspector General. 

ø(3)(A)(i) Notwithstanding subsection (d), the Inspector General shall be under the authority, direction, and control of the Governors with respect to audits or investigations, or the issuance of 

subpoenas, which require access to sensitive information concerning— 

ø(I) ongoing civil or criminal investigations or proceedings; 

ø(II) undercover operations; 

ø(III) the identity of confidential sources, including protected witnesses; 

ø(IV) intelligence or counterintelligence matters; or 

ø(V) other matters the disclosure of which would constitute 

a serious threat to national security. 

ø(ii) With respect to the information described under clause 

(i), the Governors may prohibit the Inspector General from carrying 

out or completing any audit or investigation, or from issuing any 

subpoena, after such Inspector General has decided to initiate, 

carry out, or complete such audit or investigation or to issue such 

subpoena, if the Governors determine that such prohibition is necessary to prevent the disclosure of any information described under 

clause (i) or to prevent the significant impairment to the national 

interests of the United States. 

ø(iii) If the Governors exercise any power under clause (i) or 

(ii), the Governors shall notify the Inspector General in writing 

stating the reasons for such exercise. Within 30 days after receipt 

of any such notice, the Inspector General shall transmit a copy of 

such notice to the Committee on Governmental Affairs of the Senate and the Committee on Government Reform and Oversight of 

the House of Representatives, and to other appropriate committees 

or subcommittees of the Congress. 

ø(B) In carrying out the duties and responsibilities specified 

in this Act, the Inspector General—

134

ø(i) may initiate, conduct and supervise such audits and 

investigations in the United States Postal Service as the Inspector General considers appropriate; and 

ø(ii) shall give particular regard to the activities of the 

Postal Inspection Service with a view toward avoiding duplication and insuring effective coordination and cooperation. 

ø(C) Any report required to be transmitted by the Governors 

to the appropriate committees or subcommittees of the Congress 

under section 5(d) shall also be transmitted, within the seven-day 

period specified under such section, to the Committee on Governmental Affairs of the Senate and the Committee on Government 

Reform and Oversight of the House of Representatives. 

ø(3) Nothing in this Act shall restrict, eliminate, or otherwise adversely affect any of the rights, privileges, or benefits of either employees of the United States Postal Service, or labor organizations representing employees of the United States Postal Service, 

under chapter 12 of title 39, United States Code, the National 

Labor Relations Act, any handbook or manual affecting employee 

labor relations with the United States Postal Service, or any collective bargaining agreement. 

ø(4) As used in this subsection, the term ‘‘Governors’’ has the 

meaning given such term by section 102(3) of title 39, United 

States Code.¿

* * * * * * *

SPECIAL PROVISIONS CONCERNING THE UNITED STATES POSTAL

SERVICE

SEC. 8J. (a) In carrying out the duties and responsibilities specified in this Act, the Inspector General of the United States Postal 

Service shall have oversight responsibility for all activities of the 

Postal Inspection Service, including any internal investigation performed by the Postal Inspection Service. The Chief Postal Inspector 

shall promptly report any significant activities being carried out by 

the Postal Inspection Service to such Inspector General. The Postmaster General shall promptly report to such Inspector General all 

allegations of theft, fraud, or misconduct by Postal Service officers 

or employees, and entities or individuals doing business with the 

Postal Service. 

(b) In the case of any report that the Governors of the United 

States Postal Service (within the meaning of section 102(3) of title 

39, United States Code) are required to transmit under the second 

sentence of section 5(d), such sentence shall be applied by deeming 

the term ‘‘appropriate committees of Congress’’ to mean the Committee on Government Reform of the House of Representatives, the 

Committee on Governmental Affairs of the Senate, and such other 

committees or subcommittees of Congress as may be appropriate. 

(c) Notwithstanding any provision of paragraph (7) or (8) of section 6(a), the Inspector General of the United States Postal Service 

may select, appoint, and employ such officers and employees as may 

be necessary for carrying out the functions, powers, and duties of 

the Office of Inspector General and to obtain the temporary or intermittent services of experts or consultants or an organization of experts or consultants, subject to the applicable laws and regulations 

135

that govern such selections, appointments, and employment, and the 

obtaining of such services, within the United States Postal Service. 

(d) Nothing in this Act shall restrict, eliminate, or otherwise adversely affect any of the rights, privileges, or benefits of employees 

of the United States Postal Service, or labor organizations representing employees of the United States Postal Service, under chapter 12 of title 39, United States Code, the National Labor Relations 

Act, any handbook or manual affecting employee labor relations 

with the United States Postal Service, or any collective bargaining 

agreement. 

(e) There are authorized to be appropriated, out of the Postal 

Service Fund, such sums as may be necessary for the Office of Inspector General of the United States Postal Service.

RULE OF CONSTRUCTION OF SPECIAL PROVISIONS

SEC. ø8J.¿ 8K. The special provisions under section 8, 8A, 8B, 

8C, 8D, ø8E or 8F¿ 8E, 8F, 8H, or 8J of this Act relate only to the 

establishment named in such section and no inference shall be 

drawn from the presence or absence of a provision in any such section with respect to an establishment not named in such section or 

with respect to a designated Federal entity as defined under section 8G(a). 

* * * * * * *

DEFINITIONS

SEC. 11. As used in this Act—

(1) the term ‘‘head of the establishment’’ means the Secretary of Agriculture, Commerce, Defense, Education, Energy, 

Health and Human Services, Housing and Urban Development, the Interior, Labor, State, Transportation, Homeland Security, or the Treasury; the Attorney General; the Administrator of the Agency for International Development, Environmental Protection, General Services, National Aeronautics and 

Space, or Small Business, or Veterans’ Affairs; the Director of 

the Federal Emergency Management Agency, or the Office of 

Personnel Management; the Chairman of the Nuclear Regulatory Commission or the Railroad Retirement Board; the 

Chairperson of the Thrift Depositor Protection Oversight 

Board; the Chief Executive Officer of the Corporation for National and Community Service; the Administrator of the Community Development Financial Institutions Fund; the chief executive officer of the Resolution Trust Corporation; the Chairperson of the Federal Deposit Insurance Corporation; the Commissioner of Social Security, Social Security Administration; 

the Board of Directors of the Tennessee Valley Authority; øor¿

the President of the Export-Import Bank; or the Governors of 

the United States Postal Service (within the meaning of section 

102(3) of title 39, United States Code); as the case may be;

(2) the term ‘‘establishment’’ means the Department of Agriculture, Commerce, Defense, Education, Energy, Health and 

Human Services, Housing and Urban Development, the Interior, Justice, Labor, State, Transportation, Homeland Security, 

or the Treasury; the Agency for International Development, the 

Community Development Financial Institutions Fund, the EnVerDate jul 14 2003 22:09 Sep 23, 2004 Jkt 029006 PO 00000 Frm 00135 Fmt 6659 Sfmt 9001 E:\HR\OC\HR672P2.XXX HR672P2
136

vironmental Protection Agency, the Federal Emergency Management Agency, the General Services Administration, the National Aeronautics and Space Administration, the Nuclear Regulatory Commission, the Office of Personnel Management, the 

Railroad Retirement Board, the Resolution Trust Corporation, 

the Federal Deposit Insurance Corporation, the Small Business 

Administration, the Corporation for National and Community 

Service, or the Veterans’ Administration, the Social Security 

Administration, the Tennessee Valley Authority, øor¿ the Export-Import Bank, or the United States Postal Service, as the 

case may be; 

* * * * * * *

SECTION 160 OF THE ENERGY POLICY ACT OF 1992

SEC. 160. INSPECTOR GENERAL REVIEW AND AGENCY ACCOUNTABILITY. 

(a) AUDIT SURVEY.—Not later than 120 days after the date of 

the enactment of this Act, each Inspector General created to conduct and supervise audits and investigations relating to the programs and operations of the establishments listed in section 11(2) 

of the Inspector General Act of 1978 (5 U.S.C. App.)ø, and the 

Chief Postal Inspector of the United States Postal Service, in accordance with section 8E(f)(1) as established by section 8E(a)(2) of 

the Inspector General Act Amendments of 1988 (Public Law 100–

504)¿ shall—

(1) * * *

* * * * * * *

SECTION 8 OF THE POSTAL REORGANIZATION ACT

TRANSFER OF POST OFFICE DEPARTMENT PERSONNEL

SEC. 8. (a) Officers and employees of the Post Office Department shall become officers and employees of the United States 

Postal Service on the effective date of this section. The provisions 

of this section shall not apply to persons occupying the positions of 

Postmaster General, Deputy Postmaster General, Assistant Postmasters General, General Counsel, or Judicial Officer. This section 

shall not be construed, however, to prohibit the appointment of 

such persons to positions in the Postal Service. 

(b) For purposes of chapter 81 of title 5, United States Code, the 

Postal Service shall, with respect to any individual receiving benefits under such chapter as an officer or employee of the former Post 

Office Department, have the same authorities and responsibilities as 

it has with respect to an officer or employee of the Postal Service 

receiving such benefits.

TITLE 49, UNITED STATES CODE

* * * * * * *

137

SUBTITLE VII—AVIATION PROGRAMS 

* * * * * * *

SUBPART II—ECONOMIC REGULATION 

* * * * * * *

CHAPTER 411—AIR CARRIER CERTIFICATES 

* * * * * * *

§ 41107. Transportation of mail 

When the United States Postal Service finds that the needs of 

the Postal Service require the transportation of mail by aircraft øin 

foreign air transportation or¿ between places in Alaska, in addition 

to the transportation of mail authorized under certificates in effect, 

the Postal Service shall certify that finding to the Secretary of 

Transportation with a statement about the additional transportation and facilities necessary to provide the additional transportation. A copy of each certification and statement shall be posted 

for at least 20 days in the office of the Secretary. After notice and 

an opportunity for a hearing, the Secretary shall issue a new certificate under section 41102 of this title, or amend or modify an existing certificate under section 41110(a)(2)(A) of this title, to provide the additional transportation and facilities if the Secretary 

finds the additional transportation is required by the public convenience and necessity. 

* * * * * * *

CHAPTER 419—TRANSPORTATION OF MAIL 

* * * * * * *

§ 41901. General authority 

ø(a) TITLE 39.—The United States Postal Service may provide 

for the transportation of mail by aircraft in interstate air transportation under section 5402(e) and (f) of title 39.¿

(a) TITLE 39.—The United States Postal Service may provide 

for the transportation of mail by aircraft in air transportation 

under this chapter and under chapter 54 of title 39.

(b) AUTHORITY TO PRESCRIBE PRICES.—Except as provided in 

section 5402 of title 39, on the initiative of the Secretary of Transportation or on petition by the Postal Service or an air carrier, the 

Secretary shall prescribe and publish—

(1) after notice and an opportunity for a hearing on the 

record, reasonable prices to be paid by the Postal Service for 

the transportation of mail by aircraft øin foreign air transportation or¿ between places in Alaska, the facilities used in and 

useful for the transportation of mail, and the services related 

to the transportation of mail for each carrier holding a certificate that authorizes that transportation; 

* * * * * * *

138

§ 41902. Schedules for certain transportation of mail 

(a) REQUIREMENT.—Except as provided in section 41906 of this 

title and section 5402 of title 39, an air carrier may transport mail 

by aircraft øin foreign air transportation or¿ between places in 

Alaska only under a schedule designated or required to be established under subsection (c) of this section for the transportation of 

mail. 

(b) STATEMENTS ON PLACES AND SCHEDULES.—Every air carrier 

shall file with the Secretary of Transportation and the United 

States Postal Service a statement showing—

(1) the places between which the carrier is authorized to 

provide foreign air transportation (other than foreign air transportation of mail); 

* * * * * * *

§ 41903. Duty to provide certain transportation of mail 

(a) AIR CARRIERS.—Subject to subsection (b) of this section, an 

air carrier authorized by its certificate to transport mail by aircraft 

øin foreign air transportation or¿ between places in Alaska shall—

(1) * * *

* * * * * * *

(b) MAXIMUM MAIL LOAD.—The Secretary of Transportation 

may prescribe the maximum mail load for a schedule or for an aircraft or type of aircraft for the transportation of mail by aircraft 

øin foreign air transportation or¿ between places in Alaska. If the 

Postal Service tenders to an air carrier mail exceeding the maximum load for transportation by the carrier under a schedule designated or required to be established for the transportation of mail 

under section 41902(c) of this title, the carrier, as nearly in accordance with the schedule as the Secretary decides is possible, shall—

(1) * * *

* * * * * * *

§ 41907. Prices for foreign transportation of mail 

ø(a) LIMITATIONS.—¿When air transportation is provided between the United States and a foreign country both by aircraft 

owned or operated by an air carrier holding a certificate under 

chapter 411 of this title and by aircraft owned or operated by a foreign air carrier, the United States Postal Service may not pay to 

or for the account of the foreign air carrier a price for transporting 

mail by aircraft between the United States and the foreign country 

that the Postal Service believes will result (over a reasonable period determined by the Postal Service considering exchange fluctuations and other factors) in the foreign air carrier receiving a 

price for transporting the mail that is higher than the price—

(1) the government of a foreign country or foreign postal 

administration pays to air carriers for transporting mail of the 

foreign country by aircraft between the foreign country and the 

United States; or 

(2) determined by the Postal Service to be comparable to 

the price the government of a foreign country or foreign postal 

administration pays to air carriers for transporting mail of the 

foreign country by aircraft between the foreign country and an 

139

intermediate country on the route of the air carrier between 

the foreign country and the United States. 

ø(b) CHANGES.—The Secretary of Transportation shall act expeditiously on proposed changes in prices for transporting mail by 

aircraft in foreign air transportation. When prescribing those 

prices, the Secretary shall consider—

ø(1) the prices paid for transportation of mail under the 

Universal Postal Union Convention as ratified by the United 

States Government; 

ø(2) the price-making elements used by the Universal 

Postal Union in prescribing its airmail prices; and 

ø(3) the competitive disadvantage to United States flag air 

carriers resulting from foreign air carriers receiving Universal 

Postal Union prices for transporting United States mail and 

national origin mail of their own countries.¿

* * * * * * *

TITLE 18, UNITED STATES CODE

* * * * * * *

PART I—CRIMES 

* * * * * * *

CHAPTER 83—POSTAL SERVICE 

* * * * * * *

§ 1716. Injurious articles as nonmailable 

(a) All kinds of poison, and all articles and compositions containing poison, and all poisonous animals, insects, reptiles, and all 

explosives, hazardous materials, inflammable materials, infernal 

machines, and mechanical, chemical, or other devices or compositions which may ignite or explode, and all disease germs or scabs, 

and all other natural or artificial articles, compositions, or material 

which may kill or injure another, or injure the mails or other property, whether or not sealed as first-class matter, are nonmailable 

matter and shall not be conveyed in the mails or delivered from 

any post office or station thereof, nor by any officer or employee of 

the Postal Service. 

* * * * * * *

PART II—CRIMINAL PROCEDURE 

* * * * * * *

CHAPTER 203—ARREST AND COMMITMENT 

* * * * * * *

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§ 3061. Investigative powers of Postal Service personnel 

(a) * * *

* * * * * * *

(c)(1) The Postal Service may employ police officers for duty in 

connection with the protection of property owned or occupied by the 

Postal Service or under the charge and control of the Postal Service, 

and persons on the property, including duty in areas outside the 

property to the extent necessary to protect the property and persons 

on the property. 

(2) With respect to such property, such officers shall have the 

power to—

(A) enforce Federal laws and regulations for the protection 

of persons and property; 

(B) carry firearms; and 

(C) make arrests without a warrant for any offense against 

the United States committed in the presence of the officer or for 

any felony cognizable under the laws of the United States if the 

officer has reasonable grounds to believe that the person to be 

arrested has committed or is committing a felony. 

(3) With respect to such property, such officers may have, to 

such extent as the Postal Service may by regulations prescribe, the 

power to—

(A) serve warrants and subpoenas issued under the authority of the United States; and 

(B) conduct investigations, on and off the property in question, of offenses that may have been committed against property 

owned or occupied by the Postal Service or persons on the property. 

(4)(A) As to such property, the Postmaster General may prescribe regulations necessary for the protection and administration of 

property owned or occupied by the Postal Service and persons on the 

property. The regulations may include reasonable penalties, within 

the limits prescribed in subparagraph (B), for violations of the regulations. The regulations shall be posted and remain posted in a conspicuous place on the property. 

(B) A person violating a regulation prescribed under this subsection shall be fined under this title, imprisoned for not more than 

30 days, or both.

* * * * * * *

SECTION 3 OF THE POSTAL CIVIL SERVICE 

RETIREMENT SYSTEM FUNDING REFORM ACT OF 2003

(Public Law 108–18)

* * * * * * *

øSEC. 3. DISPOSITION OF SAVINGS ACCRUING TO THE UNITED 

STATES POSTAL SERVICE. 

ø(a) IN GENERAL.—Savings accruing to the United States Postal Service as a result of the enactment of this Act—

ø(1) shall, to the extent that such savings are attributable 

to fiscal year 2003 or 2004, be used to reduce the postal debt 

141

(in consultation with the Secretary of the Treasury), and the 

Postal Service shall not incur additional debt to offset the use 

of the savings to reduce the postal debt in fiscal years 2003 

and 2004; 

ø(2) shall, to the extent that such savings are attributable 

to fiscal year 2005, be used to continue holding postage rates 

unchanged and to reduce the postal debt, to such extent and 

in such manner as the Postal Service shall specify (in consultation with the Secretary of the Treasury); and 

ø(3) to the extent that such savings are attributable to any 

fiscal year after fiscal year 2005, shall be considered to be operating expenses of the Postal Service and, until otherwise provided for by law, shall be held in escrow and may not be obligated or expended. 

ø(b) AMOUNTS SAVED.—

ø(1) IN GENERAL.—The amounts representing any savings 

accruing to the Postal Service in any fiscal year as a result of 

the enactment of this Act shall be computed by the Office of 

Personnel Management for each such fiscal year in accordance 

with paragraph (2). 

ø(2) METHODOLOGY.—Not later than July 31, 2003, the Office of Personnel Management shall—

ø(A) formulate a plan specifically enumerating the actuarial methods and assumptions by which the Office shall 

make its computations under paragraph (1); and 

ø(B) submit such plan to the Committee on Government Reform of the House of Representatives and the 

Committee on Governmental Affairs of the Senate. 

ø(3) REQUIREMENTS.—The plan shall be formulated in consultation with the Postal Service and shall include the opportunity for the Postal Service to request reconsideration of computations under this subsection, and for the Board of Actuaries 

of the Civil Service Retirement System to review and make adjustments to such computations, to the same extent and in the 

same manner as provided under section 8423(c) of title 5, 

United States Code. 

ø(c) REPORTING REQUIREMENT.—The Postal Service shall include in each report rendered under section 2402 of title 39, United 

States Code, the amount applied toward reducing the postal debt, 

and the size of the postal debt before and after the application of 

subsection (a), during the period covered by such report. 

ø(d) SENSE OF CONGRESS.—It is the sense of the Congress 

that—

ø(1) the savings accruing to the Postal Service as a result 

of the enactment of this Act will be sufficient to allow the Postal Service to fulfill its commitment to hold postage rates unchanged until at least 2006; 

ø(2) because the Postal Service still faces substantial obligations related to postretirement health benefits for its current 

and former employees, some portion of the savings referred to 

in paragraph (1) should be used to address those unfunded obligations; and 

ø(3) none of the savings referred to in paragraph (1) 

should be used in the computation of any bonuses for Postal 

Service executives. 

142

ø(e) POSTAL SERVICE PROPOSAL.—

ø(1) IN GENERAL.—The United States Postal Service shall, 

by September 30, 2003, prepare and submit to the President, 

the Congress, and the General Accounting Office its proposal 

detailing how any savings accruing to the Postal Service as a 

result of the enactment of this Act, which are attributable to 

any fiscal year after fiscal year 2005, should be expended. 

ø(2) MATTERS TO CONSIDER.—In preparing its proposal 

under this subsection, the Postal Service shall consider—

ø(A) whether, and to what extent, those future savings 

should be used to address—

ø(i) debt repayment; 

ø(ii) prefunding of postretirement healthcare benefits for current and former postal employees; 

ø(iii) productivity and cost saving capital investments; 

ø(iv) delaying or moderating increases in postal 

rates; and 

ø(v) any other matter; and 

ø(B) the work of the President’s Commission on the 

United States Postal Service under section 5 of Executive 

Order 13278 (67 Fed. Reg. 76672). 

ø(3) GAO REVIEW AND REPORT.—Not later than 60 days 

after the Postal Service submits its proposal pursuant to paragraph (1), the General Accounting Office shall prepare and 

submit a written evaluation of such proposal to the Committee 

on Government Reform of the House of Representatives and 

the Committee on Governmental Affairs of the Senate. 

ø(4) LEGISLATIVE ACTION.—Not later than 180 days after it 

has received both the proposal of the Postal Service and the 

evaluation of such proposal by the General Accounting Office 

under this subsection, Congress shall revisit the question of 

how the savings accruing to the Postal Service as a result of 

the enactment of this Act should be used. 

ø(f) DETERMINATION AND DISPOSITION OF SURPLUS.—

ø(1) IN GENERAL.—If, as of the date under paragraph (2), 

the Office of Personnel Management determines (after consultation with the Postmaster General) that the computation 

under section 8348(h)(1)(A) of title 5, United States Code, 

yields a negative amount (hereinafter referred to as a ‘‘surplus’’)—

ø(A) the Office shall inform the Postmaster General of 

its determination, including the size of the surplus so determined; and 

ø(B) the Postmaster General shall submit to the Congress a report describing how the Postal Service proposes 

that such surplus be used, including a draft of any legislation that might be necessary. 

ø(2) DETERMINATION DATE.—The date to be used for purposes of paragraph (1) shall be September 30, 2025, or such 

earlier date as, in the judgment of the Office, is the date by 

which all postal employees under the Civil Service Retirement 

System will have retired. 

ø(g) DEFINITIONS.—For purposes of this section—

143

ø(1) the savings accruing to the Postal Service as a result 

of the enactment of this Act shall, for any fiscal year, be equal 

to the amount (if any) by which—

ø(A) the contributions that the Postal Service would 

otherwise have been required to make to the Civil Service 

Retirement and Disability Fund for such fiscal year if this 

Act had not been enacted, exceed 

ø(B) the contributions made by the Postal Service to 

such Fund for such fiscal year; and 

ø(2) the term ‘‘postal debt’’ means the outstanding obligations of the Postal Service, as determined under chapter 20 of 

title 39, United States Code.¿

144

COMMITEE JURISDICTION LETTER


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MARKUP TRANSCRIPT

BUSINESS MEETING 

WEDNESDAY, SEPTEMBER 15, 2004

HOUSE OF REPRESENTATIVES, 

COMMITTEE ON THE JUDICIARY, 

Washington, DC. 

The Committee met, pursuant to notice, at 10:10 a.m., in Room 

2141, Rayburn House Office Building, Hon. F. James Sensenbrenner, Jr. [Chairman of the Committee] presiding. 

Chairman SENSENBRENNER. The Committee will be in order. A 

working quorum is present. 

Pursuant to notice I call up the bill, H.R. 4341, the ‘‘Postal Accountability and Enhancement Act,’’ for purposes of markup, and 

move its favorable recommendation to the House. 

Without objection, the bill will be considered as read and open 

for amendment at any point, and the Chair recognizes himself for 

5 minutes to explain the bill. 

[The bill, H.R. 4341, follows:]

148

I

108TH CONGRESS

2D SESSION H. R. 4341

To reform the postal laws of the United States.

IN THE HOUSE OF REPRESENTATIVES

MAY 12, 2004

Mr. MCHUGH (for himself, Mr. DAVIS of Illinois, Mr. TOM DAVIS of Virginia,

Mr. WAXMAN, Mrs. MILLER of Michigan, Mr. BURTON of Indiana, Mr.

SCHROCK, Mr. SHAYS, Mr. OWENS, Mrs. MALONEY, Mr. MICA, Mr.

LATOURETTE, Mr. LEWIS of Kentucky, Mr. PLATTS, Mr. CANNON, Mr.

PUTNAM, Mr. DUNCAN, Mr. DEAL of Georgia, Ms. WATSON, Mr. LYNCH,

Ms. NORTON, Mr. MURPHY, Mr. TURNER of Ohio, Mr. CARTER, Mrs.

BLACKBURN, Mr. TIBERI, and Ms. HARRIS) introduced the following bill;

which was referred to the Committee on Government Reform

A BILL

To reform the postal laws of the United States.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

4 (a) SHORT TITLE.—This Act may be cited as the

5 ‘‘Postal Accountability and Enhancement Act’’.

6 (b) TABLE OF CONTENTS.—The table of contents for

7 this Act is as follows:

Sec. 1. Short title; table of contents.


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TITLE I—DEFINITIONS; POSTAL SERVICES

Sec. 101. Definitions.

Sec. 102. Postal services.

Sec. 103. Financial transparency.

TITLE II—MODERN RATE REGULATION

Sec. 201. Provisions relating to market-dominant products.

Sec. 202. Provisions relating to competitive products.

Sec. 203. Provisions relating to experimental and new products.

Sec. 204. Reporting requirements and related provisions.

Sec. 205. Complaints; appellate review and enforcement.

Sec. 206. Workshare discounts.

Sec. 207. Clerical amendment.

TITLE III—PROVISIONS RELATING TO FAIR COMPETITION

Sec. 301. Postal Service Competitive Products Fund.

Sec. 302. Assumed Federal income tax on competitive products income.

Sec. 303. Unfair competition prohibited.

Sec. 304. Suits by and against the Postal Service.

Sec. 305. International postal arrangements.

Sec. 306. Redesignation.

Sec. 307. Clarification.

TITLE IV—GENERAL PROVISIONS

Sec. 401. Qualification requirements for Governors.

Sec. 402. Obligations.

Sec. 403. Private carriage of letters.

Sec. 404. Rulemaking authority.

Sec. 405. Noninterference with collective bargaining agreements, etc.

Sec. 406. Bonus authority.

Sec. 407. Mediation in collective-bargaining disputes.

TITLE V—ENHANCED REGULATORY COMMISSION

Sec. 501. Reorganization and modification of certain provisions relating to the

Postal Regulatory Commission.

Sec. 502. Authority for Postal Regulatory Commission to issue subpoenas.

Sec. 503. Appropriations for the Postal Regulatory Commission.

Sec. 504. Redesignation of the Postal Rate Commission.

Sec. 505. Officer of the Postal Regulatory Commission representing the general

public.

TITLE VI—INSPECTORS GENERAL

Sec. 601. Inspector General of the Postal Regulatory Commission.

Sec. 602. Inspector General of the United States Postal Service to be appointed

by the President.

TITLE VII—EVALUATIONS

Sec. 701. Universal postal service study.

Sec. 702. Assessments of ratemaking, classification, and other provisions.

Sec. 703. Study on equal application of laws to competitive products.


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Sec. 704. Greater diversity in Postal Service Executive and administrative

schedule management positions.

Sec. 705. Plan for assisting displaced workers.

Sec. 706. Contracts with women, minorities, and small businesses.

Sec. 707. Rates for periodicals.

Sec. 708. Assessment of certain rate deficiencies.

Sec. 709. Postal processing and distribution network study.

Sec. 710. Definition.

TITLE VIII—MISCELLANEOUS; TECHNICAL AND CONFORMING

AMENDMENTS

Sec. 801. Employment of postal police officers.

Sec. 802. Date of postmark to be treated as date of appeal in connection with

the closing or consolidation of post offices.

Sec. 803. Provisions relating to benefits under chapter 81 of title 5, United

States Code, for officers and employees of the former Post Office Department.

Sec. 804. Obsolete provisions.

Sec. 805. Expanded contracting authority.

Sec. 806. Investments.

Sec. 807. Repeal of section 5403.

Sec. 808. Reduced rates.

Sec. 809. Hazardous matter.

Sec. 810. Provisions relating to cooperative mailings.

Sec. 811. Technical and conforming amendments.

TITLE IX—POSTAL PENSION FUNDING REFORM AMENDMENTS

Sec. 901. Civil Service Retirement System.

Sec. 902. Health insurance.

Sec. 903. Repealer.

Sec. 904. Ensuring appropriate use of escrow and military savings.

Sec. 905. Effective dates.

1 TITLE I—DEFINITIONS; POSTAL

2 SERVICES

3 SEC. 101. DEFINITIONS.

4 Section 102 of title 39, United States Code, is

5 amended by striking ‘‘and’’ at the end of paragraph (3),

6 by striking the period at the end of paragraph (4) and

7 inserting a semicolon, and by adding at the end the fol8 lowing:

9 ‘‘(5) ‘postal service’ means the carriage of let10 ters, printed matter, or mailable packages, including


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1 acceptance, collection, processing, delivery, or other

2 services supportive or ancillary thereto;

3 ‘‘(6) ‘product’ means a postal service with a

4 distinct cost or market characteristic for which a

5 rate or rates are, or may reasonably be, applied;

6 ‘‘(7) ‘rates’, as used with respect to products,

7 includes fees for postal services;

8 ‘‘(8) ‘market-dominant product’ or ‘product in

9 the market-dominant category of mail’ means a

10 product subject to subchapter I of chapter 36;

11 ‘‘(9) ‘competitive product’ or ‘product in the

12 competitive category of mail’ means a product sub13 ject to subchapter II of chapter 36;

14 ‘‘(10) ‘Consumer Price Index’ means the Con15 sumer Price Index for All Urban Consumers pub16 lished monthly by the Bureau of Labor Statistics of

17 the Department of Labor; and

18 ‘‘(11) ‘year’, as used in chapter 36 (other than

19 subchapters I and VI thereof), means a fiscal year.’’.

20 SEC. 102. POSTAL SERVICES.

21 (a) IN GENERAL.—Section 404 of title 39, United

22 States Code, is amended—

23 (1) in subsection (a), by striking paragraph (6)

24 and by redesignating paragraphs (7) through (9) as

25 paragraphs (6) through (8), respectively; and


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1 (2) by adding at the end the following:

2 ‘‘(c) Nothing in this title shall be considered to permit

3 or require that the Postal Service provide any special non4 postal or similar services, except that nothing in this sub5 section shall prevent the Postal Service from providing any

6 special nonpostal or similar services provided by the Postal

7 Service as of May 12, 2004.’’.

8 (b) CONFORMING AMENDMENT.—Section

9 1402(b)(1)(B)(ii) of the Victims of Crime Act of 1984 (98

10 Stat. 2170; 42 U.S.C. 10601(b)(1)(B)(ii)) is amended by

11 striking ‘‘404(a)(8)’’ and inserting ‘‘404(a)(7)’’.

12 SEC. 103. FINANCIAL TRANSPARENCY.

13 (a) IN GENERAL.—Section 101 of title 39, United

14 States Code, is amended by redesignating subsections (d)

15 through (g) as subsections (e) through (h), respectively,

16 and by inserting after subsection (c) the following:

17 ‘‘(d) As an establishment that provides both market18 dominant and competitive products, the Postal Service

19 shall be subject to a high degree of transparency, including

20 in its finances and operations, to ensure fair treatment

21 of customers of the Postal Service’s market-dominant

22 products and companies competing with the Postal Serv23 ice’s competitive products.’’.


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1 (b) CONFORMING AMENDMENT.—Section 5001 of

2 title 39, United States Code, is amended by striking

3 ‘‘101(e) and (f)’’ and inserting ‘‘101(f) and (g)’’.

4 TITLE II—MODERN RATE

5 REGULATION

6 SEC. 201. PROVISIONS RELATING TO MARKET-DOMINANT

7 PRODUCTS.

8 (a) IN GENERAL.—Chapter 36 of title 39, United

9 States Code, is amended by striking sections 3621 and

10 3622 and inserting the following:

11 ‘‘§ 3621. Applicability; definitions

12 ‘‘(a) APPLICABILITY.—This subchapter shall apply

13 with respect to—

14 ‘‘(1)(A) single piece first-class letters (both do15 mestic and international);

16 ‘‘(B) single piece first-class cards (both domes17 tic and international); and

18 ‘‘(C) special services;

19 ‘‘(2) all first-class mail not included under

20 paragraph (1);

21 ‘‘(3) periodicals;

22 ‘‘(4) standard mail;

23 ‘‘(5) media mail;

24 ‘‘(6) library mail; and

25 ‘‘(7) bound printed matter,


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1 subject to any changes the Postal Regulatory Commission

2 may make under section 3642.

3 ‘‘(b) RULE OF CONSTRUCTION.—Mail matter re4 ferred to in subsection (a) shall, for purposes of this sub5 chapter, be considered to have the meaning given to such

6 mail matter under the mail classification schedule.

7 ‘‘§ 3622. Modern rate regulation

8 ‘‘(a) AUTHORITY GENERALLY.—The Postal Regu9 latory Commission shall, within 24 months after the date

10 of the enactment of this section, by regulation establish

11 (and may from time to time thereafter by regulation re12 vise) a modern system for regulating rates and classes for

13 market-dominant products.

14 ‘‘(b) OBJECTIVES.—Such system shall be designed to

15 achieve the following objectives:

16 ‘‘(1) To maximize incentives to reduce costs

17 and increase efficiency.

18 ‘‘(2) To create predictability and stability in

19 rates.

20 ‘‘(3) To maintain high quality service stand21 ards.

22 ‘‘(4) To allow the Postal Service pricing flexi23 bility.

24 ‘‘(5) To assure adequate revenues, including re25 tained earnings, to maintain financial stability.


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1 ‘‘(6) To reduce the administrative burden of the

2 ratemaking process.

3 ‘‘(c) FACTORS.—In establishing or revising such sys4 tem, the Postal Regulatory Commission shall take into

5 account—

6 ‘‘(1) the establishment and maintenance of a

7 fair and equitable schedule for rates and classifica8 tion system;

9 ‘‘(2) the value of the mail service actually pro10 vided each class or type of mail service to both the

11 sender and the recipient, including but not limited to

12 the collection, mode of transportation, and priority

13 of delivery;

14 ‘‘(3) the direct and indirect postal costs attrib15 utable to each class or type of mail service plus that

16 portion of all other costs of the Postal Service rea17 sonably assignable to such class or type;

18 ‘‘(4) the effect of rate increases upon the gen19 eral public, business mail users, and enterprises in

20 the private sector of the economy engaged in the de21 livery of mail matter other than letters;

22 ‘‘(5) the available alternative means of sending

23 and receiving letters and other mail matter at rea24 sonable costs;


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1 ‘‘(6) the degree of preparation of mail for deliv2 ery into the postal system performed by the mailer

3 and its effect upon reducing costs to the Postal

4 Service;

5 ‘‘(7) simplicity of structure for the entire sched6 ule and simple, identifiable relationships between the

7 rates or fees charged the various classes of mail for

8 postal services;

9 ‘‘(8) the relative value to the people of the

10 kinds of mail matter entered into the postal system

11 and the desirability and justification for special clas12 sifications and services of mail;

13 ‘‘(9) the importance of providing classifications

14 with extremely high degrees of reliability and speed

15 of delivery and of providing those that do not re16 quire high degrees of reliability and speed of deliv17 ery;

18 ‘‘(10) the desirability of special classifications

19 from the point of view of both the user and of the

20 Postal Service;

21 ‘‘(11) the educational, cultural, scientific, and

22 informational value to the recipient of mail matter;

23 and

24 ‘‘(12) the policies of this title as well as such

25 other factors as the Commission deems appropriate.


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1 ‘‘(d) ALLOWABLE PROVISIONS.—The system for reg2 ulating rates and classes for market-dominant products

3 may include one or more of the following:

4 ‘‘(1) Price caps, revenue targets, or other form

5 of incentive regulation.

6 ‘‘(2) Cost-of-service regulation.

7 ‘‘(3) Such other form of regulation as the Com8 mission considers appropriate to achieve, consistent

9 with subsection (c), the objectives of subsection (b).

10 ‘‘(e) LIMITATION.—In the administration of this sec11 tion, the Commission shall not permit the average rate in

12 any subclass of mail to increase at an annual rate greater

13 than the comparable increase in the Consumer Price

14 Index, unless it has, after notice and opportunity for a

15 public hearing and comment, determined that such in16 crease is reasonable and equitable and necessary to enable

17 the Postal Service, under best practices of honest, effi18 cient, and economical management, to maintain and con19 tinue the development of postal services of the kind and

20 quality adapted to the needs of the United States.

21 ‘‘(f) TRANSITION RULE.—Until regulations under

22 this section first take effect, rates and classes for market23 dominant products shall remain subject to modification in

24 accordance with the provisions of this chapter and section


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1 407, as such provisions were last in effect before the date

2 of the enactment of this section.’’.

3 (b) REPEALED SECTIONS.—Sections 3623, 3624,

4 3625, and 3628 of title 39, United States Code, are re5 pealed.

6 (c) REDESIGNATION.—Chapter 36 of title 39, United

7 States Code (as in effect after the amendment made by

8 section 501(a)(2), but before the amendment made by sec9 tion 202) is amended by striking the heading for sub10 chapter II and inserting the following:

11 ‘‘SUBCHAPTER I—PROVISIONS RELATING TO

12 MARKET-DOMINANT PRODUCTS’’.

13 SEC. 202. PROVISIONS RELATING TO COMPETITIVE PROD14 UCTS.

15 Chapter 36 of title 39, United States Code, is amend16 ed by inserting after section 3629 the following:

17 ‘‘SUBCHAPTER II—PROVISIONS RELATING TO

18 COMPETITIVE PRODUCTS

19 ‘‘§ 3631. Applicability; definitions and updates

20 ‘‘(a) APPLICABILITY.—This subchapter shall apply

21 with respect to—

22 ‘‘(1) priority mail;

23 ‘‘(2) expedited mail;

24 ‘‘(3) mailgrams;

25 ‘‘(4) international mail; and


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1 ‘‘(5) parcel post,

2 subject to any changes the Postal Regulatory Commission

3 may make under section 3642.

4 ‘‘(b) DEFINITION.—For purposes of this subchapter,

5 the term ‘costs attributable’, as used with respect to a

6 product, means the direct and indirect postal costs attrib7 utable to such product.

8 ‘‘(c) RULE OF CONSTRUCTION.—Mail matter re9 ferred to in subsection (a) shall, for purposes of this sub10 chapter, be considered to have the meaning given to such

11 mail matter under the mail classification schedule.

12 ‘‘§ 3632. Action of the Governors

13 ‘‘(a) AUTHORITY TO ESTABLISH RATES AND CLASS14 ES.—The Governors shall establish rates and classes for

15 products in the competitive category of mail in accordance

16 with the requirements of this subchapter and regulations

17 promulgated under section 3633.

18 ‘‘(b) PROCEDURES.—

19 ‘‘(1) IN GENERAL.—Rates and classes shall be

20 established in writing, complete with a statement of

21 explanation and justification, and the date as of

22 which each such rate or class takes effect.

23 ‘‘(2) RATES OR CLASSES OF GENERAL APPLICA24 BILITY.—In the case of rates or classes of general

25 applicability in the Nation as a whole or in any subVerDate jul 14 2003 22:09 Sep 23, 2004 Jkt 029006 PO 00000 Frm 00159 Fmt 6659 Sfmt 6601 E:\HR\OC\HR672P2.XXX HR672P2

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1 stantial region of the Nation, the Governors shall

2 cause each rate and class decision under this section

3 and the record of the Governors’ proceedings in con4 nection with such decision to be published in the

5 Federal Register at least 30 days before the effective

6 date of any new rates or classes.

7 ‘‘(3) RATES OR CLASSES NOT OF GENERAL AP8 PLICABILITY.—In the case of rates or classes not of

9 general applicability in the Nation as a whole or in

10 any substantial region of the Nation, the Governors

11 shall cause each rate and class decision under this

12 section and the record of the proceedings in connec13 tion with such decision to be filed with the Postal

14 Regulatory Commission by such date before the ef15 fective date of any new rates or classes as the Gov16 ernors consider appropriate, but in no case less than

17 15 days.

18 ‘‘(4) CRITERIA.—As part of the regulations re19 quired under section 3633, the Postal Regulatory

20 Commission shall establish criteria for determining

21 when a rate or class established under this sub22 chapter is or is not of general applicability in the

23 Nation as a whole or in any substantial region of the

24 Nation.


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1 ‘‘(c) TRANSITION RULE.—Until regulations under

2 section 3633 first take effect, rates and classes for com3 petitive products shall remain subject to modification in

4 accordance with the provisions of this chapter and section

5 407, as such provisions were as last in effect before the

6 date of the enactment of this section.

7 ‘‘§ 3633. Provisions applicable to rates for competitive

8 products

9 ‘‘The Postal Regulatory Commission shall, within 18

10 months after the date of the enactment of this section,

11 promulgate (and may from time to time thereafter revise)

12 regulations—

13 ‘‘(1) to prohibit the subsidization of competitive

14 products by market-dominant products;

15 ‘‘(2) to ensure that each competitive product

16 covers its costs attributable; and

17 ‘‘(3) to ensure that all competitive products col18 lectively make a reasonable contribution to the insti19 tutional costs of the Postal Service.’’.

20 SEC. 203. PROVISIONS RELATING TO EXPERIMENTAL AND

21 NEW PRODUCTS.

22 Subchapter III of chapter 36 of title 39, United

23 States Code, is amended to read as follows:


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1 ‘‘SUBCHAPTER III—PROVISIONS RELATING TO

2 EXPERIMENTAL AND NEW PRODUCTS

3 ‘‘§ 3641. Market tests of experimental products

4 ‘‘(a) AUTHORITY.—

5 ‘‘(1) IN GENERAL.—The Postal Service may

6 conduct market tests of experimental products in ac7 cordance with this section.

8 ‘‘(2) PROVISIONS WAIVED.—A product shall

9 not, while it is being tested under this section, be

10 subject to the requirements of sections 3622, 3633,

11 or 3642, or regulations promulgated under those

12 sections.

13 ‘‘(b) CONDITIONS.—A product may not be tested

14 under this section unless it satisfies each of the following:

15 ‘‘(1) SIGNIFICANTLY DIFFERENT PRODUCT.—

16 The product is, from the viewpoint of the mail users,

17 significantly different from all products offered by

18 the Postal Service within the 2-year period preceding

19 the start of the test.

20 ‘‘(2) MARKET DISRUPTION.—The introduction

21 or continued offering of the product will not create

22 an unfair or otherwise inappropriate competitive ad23 vantage for the Postal Service or any mailer, par24 ticularly in regard to small business concerns (as de25 fined under subsection (h)).


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1 ‘‘(3) CORRECT CATEGORIZATION.—The Postal

2 Service identifies the product, for the purpose of a

3 test under this section, as either market dominant or

4 competitive, consistent with the criteria under sec5 tion 3642(b)(1). Costs and revenues attributable to

6 a product identified as competitive shall be included

7 in any determination under section 3633(3) (relating

8 to provisions applicable to competitive products col9 lectively).

10 ‘‘(c) NOTICE.—

11 ‘‘(1) IN GENERAL.—At least 30 days before ini12 tiating a market test under this section, the Postal

13 Service shall file with the Postal Regulatory Com14 mission and publish in the Federal Register a

15 notice—

16 ‘‘(A) setting out the basis for the Postal

17 Service’s determination that the market test is

18 covered by this section; and

19 ‘‘(B) describing the nature and scope of

20 the market test.

21 ‘‘(2) SAFEGUARDS.—For a competitive experi22 mental product, the provisions of section 504(g)

23 shall be available with respect to any information re24 quired to be filed under paragraph (1) to the same

25 extent and in the same manner as in the case of any


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1 matter described in section 504(g)(1). Nothing in

2 paragraph (1) shall be considered to permit or re3 quire the publication of any information as to which

4 confidential treatment is accorded under the pre5 ceding sentence (subject to the same exception as set

6 forth in section 504(g)(3)).

7 ‘‘(d) DURATION.—

8 ‘‘(1) IN GENERAL.—A market test of a product

9 under this section may be conducted over a period

10 of not to exceed 24 months.

11 ‘‘(2) EXTENSION AUTHORITY.—If necessary in

12 order to determine the feasibility or desirability of a

13 product being tested under this section, the Postal

14 Regulatory Commission may, upon written applica15 tion of the Postal Service (filed not later than 60

16 days before the date as of which the testing of such

17 product would otherwise be scheduled to terminate

18 under paragraph (1)), extend the testing of such

19 product for not to exceed an additional 12 months.

20 ‘‘(e) DOLLAR-AMOUNT LIMITATION.—

21 ‘‘(1) IN GENERAL.—A product may be tested

22 under this section only if the total revenues that are

23 anticipated, or in fact received, by the Postal Service

24 from such product do not exceed $10,000,000 na25 tionwide in any year, subject to paragraph (2) and


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1 subsection (g). In carrying out the preceding sen2 tence, the Postal Regulatory Commission may limit

3 the amount of revenues the Postal Service may ob4 tain from any particular geographic market as nec5 essary to prevent market disruption (as defined in

6 subsection (b)(2)).

7 ‘‘(2) EXEMPTION AUTHORITY.—The Postal

8 Regulatory Commission may, upon written applica9 tion of the Postal Service, exempt the market test

10 from the limit in paragraph (1) if the total revenues

11 that are anticipated, or in fact received, by the Post12 al Service from such product do not exceed

13 $50,000,000 in any year, subject to subsection (g).

14 In reviewing an application under this paragraph,

15 the Postal Regulatory Commission shall approve

16 such application if it determines that—

17 ‘‘(A) the product is likely to benefit the

18 public and meet an expected demand;

19 ‘‘(B) the product is likely to contribute to

20 the financial stability of the Postal Service; and

21 ‘‘(C) the product is not likely to result in

22 unfair or otherwise inappropriate competition.

23 ‘‘(f) CANCELLATION.—If the Postal Regulatory Com24 mission at any time determines that a market test under

25 this section fails, with respect to any particular product,


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1 to meet one or more of the requirements of this section,

2 it may order the cancellation of the test involved or take

3 such other action as it considers appropriate. A determina4 tion under this subsection shall be made in accordance

5 with such procedures as the Commission shall by regula6 tion prescribe.

7 ‘‘(g) ADJUSTMENT FOR INFLATION.—For purposes

8 of each year following the year in which occurs the dead9 line for the Postal Service’s first report to the Postal Reg10 ulatory Commission under section 3652(a), each dollar

11 amount contained in this section shall be adjusted by the

12 change in the Consumer Price Index for such year (as de13 termined under regulations of the Commission).

14 ‘‘(h) DEFINITION OF A SMALL BUSINESS CON15 CERN.—The criteria used in defining small business con16 cerns or otherwise categorizing business concerns as small

17 business concerns shall, for purposes of this section, be

18 established by the Postal Regulatory Commission in con19 formance with the requirements of section 3 of the Small

20 Business Act.

21 ‘‘(i) EFFECTIVE DATE.—Market tests under this

22 subchapter may be conducted in any year beginning with

23 the first year in which occurs the deadline for the Postal

24 Service’s first report to the Postal Regulatory Commission

25 under section 3652(a).


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1 ‘‘§ 3642. New products and transfers of products be2 tween the market-dominant and competi3 tive categories of mail

4 ‘‘(a) IN GENERAL.—Upon request of the Postal Serv5 ice or users of the mails, or upon its own initiative, the

6 Postal Regulatory Commission may change the list of

7 market-dominant products under section 3621 and the list

8 of competitive products under section 3631 by adding new

9 products to the lists, removing products from the lists, or

10 transferring products between the lists.

11 ‘‘(b) CRITERIA.—All determinations by the Postal

12 Regulatory Commission under subsection (a) shall be

13 made in accordance with the following criteria:

14 ‘‘(1) The market-dominant category of products

15 shall consist of each product in the sale of which the

16 Postal Service exercises sufficient market power that

17 it can effectively set the price of such product sub18 stantially above costs, raise prices significantly, de19 crease quality, or decrease output, without risk of

20 losing business to other firms offering similar prod21 ucts. The competitive category of products shall con22 sist of all other products.

23 ‘‘(2) EXCLUSION OF PRODUCTS COVERED BY

24 POSTAL MONOPOLY.—A product covered by the post25 al monopoly shall not be subject to transfer under

26 this section from the market-dominant category of


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1 mail. For purposes of the preceding sentence, the

2 term ‘product covered by the postal monopoly’

3 means any product the conveyance or transmission

4 of which is reserved to the United States under sec5 tion 1696 of title 18, subject to the same exception

6 as set forth in the last sentence of section 409(e)(1).

7 ‘‘(3) ADDITIONAL CONSIDERATIONS.—In mak8 ing any decision under this section, due regard shall

9 be given to—

10 ‘‘(A) the availability and nature of enter11 prises in the private sector engaged in the deliv12 ery of the product involved;

13 ‘‘(B) the views of those who use the prod14 uct involved on the appropriateness of the pro15 posed action; and

16 ‘‘(C) the likely impact of the proposed ac17 tion on small business concerns (within the

18 meaning of section 3641(h)).

19 ‘‘(c) TRANSFERS OF SUBCLASSES AND OTHER SUB20 ORDINATE UNITS ALLOWABLE.—Nothing in this title

21 shall be considered to prevent transfers under this section

22 from being made by reason of the fact that they would

23 involve only some (but not all) of the subclasses or other

24 subordinate units of the class of mail or type of postal


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1 service involved (without regard to satisfaction of min2 imum quantity requirements standing alone).

3 ‘‘(d) NOTIFICATION AND PUBLICATION REQUIRE4 MENTS.—

5 ‘‘(1) NOTIFICATION REQUIREMENT.—The Post6 al Service shall, whenever it requests to add a prod7 uct or transfer a product to a different category, file

8 with the Postal Regulatory Commission and publish

9 in the Federal Register a notice setting out the basis

10 for its determination that the product satisfies the

11 criteria under subsection (b) and, in the case of a

12 request to add a product or transfer a product to

13 the competitive category of mail, that the product

14 meets the regulations promulgated by the Postal

15 Regulatory Commission pursuant to section 3633.

16 The provisions of section 504(g) shall be available

17 with respect to any information required to be filed.

18 ‘‘(2) PUBLICATION REQUIREMENT.—The Postal

19 Regulatory Commission shall, whenever it changes

20 the list of products in the market-dominant or com21 petitive category of mail, prescribe new lists of prod22 ucts. The revised lists shall indicate how and when

23 any previous lists (including the lists under sections

24 3621 and 3631) are superseded, and shall be pub25 lished in the Federal Register.


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1 ‘‘(e) NOTIFICATION REQUIREMENT.—The Postal

2 Regulatory Commission shall, whenever it reaches a con3 clusion that a product or products should be transferred

4 between the list of market-dominant products under sec5 tion 3621 and the list of competitive products under sec6 tion 3631, immediately notify the appropriate committees

7 of the Congress. No such transfer may take effect less

8 than 12 months after such conclusion.

9 ‘‘(f) PROHIBITION.—Except as provided in section

10 3641, no product that involves the carriage of letters,

11 printed matter, or mailable packages may be offered by

12 the Postal Service unless it has been assigned to the mar13 ket-dominant or competitive category of mail (as appro14 priate) either—

15 ‘‘(1) under this subchapter; or

16 ‘‘(2) by or under any other provision of law.’’.

17 SEC. 204. REPORTING REQUIREMENTS AND RELATED PRO18 VISIONS.

19 (a) REDESIGNATION.—Chapter 36 of title 39, United

20 States Code (as in effect before the amendment made by

21 subsection (b)) is amended by striking the heading for

22 subchapter IV and inserting the following:


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1 ‘‘SUBCHAPTER V—POSTAL SERVICES,

2 COMPLAINTS, AND JUDICIAL REVIEW’’.

3 (b) REPORTS AND COMPLIANCE.—Chapter 36 of title

4 39, United States Code, is amended by inserting after sub5 chapter III the following:

6 ‘‘SUBCHAPTER IV—REPORTING

7 REQUIREMENTS AND RELATED PROVISIONS

8 ‘‘§ 3651. Annual reports by the Commission

9 ‘‘(a) IN GENERAL.—The Postal Regulatory Commis10 sion shall submit an annual report to the President and

11 the Congress concerning the operations of the Commission

12 under this title, including the extent to which regulations

13 are achieving the objectives under sections 3622 and 3633,

14 respectively.

15 ‘‘(b) ADDITIONAL INFORMATION.—In addition to the

16 information required under subsection (a), each report

17 under this section shall also include, with respect to the

18 period covered by such report, an estimate of the costs

19 incurred by the Postal Service in providing—

20 ‘‘(1) postal services to areas of the Nation

21 where, in the judgment of the Postal Regulatory

22 Commission, the Postal Service either would not

23 provide services at all or would not provide such

24 services in accordance with the requirements of this

25 title if the Postal Service were not required to proVerDate jul 14 2003 22:09 Sep 23, 2004 Jkt 029006 PO 00000 Frm 00171 Fmt 6659 Sfmt 6601 E:\HR\OC\HR672P2.XXX HR672P2

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1 vide prompt, reliable, and efficient services to pa2 trons in all areas and all communities, including as

3 required under the first sentence of section 101(b);

4 ‘‘(2) free or reduced rates for postal services as

5 required by this title; and

6 ‘‘(3) other public services or activities which, in

7 the judgment of the Postal Regulatory Commission,

8 would not otherwise have been provided by the Post9 al Service but for the requirements of law.

10 The Commission shall detail the bases for its estimates

11 and the statutory requirements giving rise to the costs

12 identified in each report under this section.

13 ‘‘(c) INFORMATION FROM POSTAL SERVICE.—The

14 Postal Service shall provide the Postal Regulatory Com15 mission with such information as may, in the judgment

16 of the Commission, be necessary in order for the Commis17 sion to prepare its reports under this section.

18 ‘‘§ 3652. Annual reports to the Commission

19 ‘‘(a) COSTS, REVENUES, AND RATES.—Except as

20 provided in subsection (c), the Postal Service shall, no

21 later than 90 days after the end of each year, prepare and

22 submit to the Postal Regulatory Commission a report (to23 gether with such nonpublic annex thereto as the Commis24 sion may require under subsection (e))—


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1 ‘‘(1) which shall analyze costs, revenues, and

2 rates, using such methodologies as the Commission

3 shall by regulation prescribe, and in sufficient detail

4 to demonstrate that the rates in effect for all prod5 ucts during such year complied with all applicable

6 requirements of this title; and

7 ‘‘(2) which shall, for each market-dominant

8 product provided in such year, provide—

9 ‘‘(A) market information, including mail

10 volumes; and

11 ‘‘(B) measures of the quality of service af12 forded by the Postal Service in connection with

13 such product, including—

14 ‘‘(i) the service standard applicable to

15 such product;

16 ‘‘(ii) the level of service (described in

17 terms of speed of delivery and reliability)

18 provided; and

19 ‘‘(iii) the degree of customer satisfac20 tion with the service provided.

21 Before submitting a report under this subsection (includ22 ing any annex thereto and the information required under

23 subsection (b)), the Postal Service shall have the informa24 tion contained in such report (and annex) audited by the


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1 Inspector General. The results of any such audit shall be

2 submitted along with the report to which it pertains.

3 ‘‘(b) INFORMATION RELATING TO WORKSHARE DIS4 COUNTS.—

5 ‘‘(1) IN GENERAL.—The Postal Service shall in6 clude, in each report under subsection (a), the fol7 lowing information with respect to each market-dom8 inant product for which a workshare discount was in

9 effect during the period covered by such report:

10 ‘‘(A) The per-item cost avoided by the

11 Postal Service by virtue of such discount.

12 ‘‘(B) The percentage of such per-item cost

13 avoided that the per-item workshare discount

14 represents.

15 ‘‘(C) The per-item contribution made to in16 stitutional costs.

17 ‘‘(2) WORKSHARE DISCOUNT DEFINED.—For

18 purposes of this subsection, the term ‘workshare dis19 count’ refers to presorting, barcoding, dropshipping,

20 and other similar discounts, as further defined under

21 regulations which the Postal Regulatory Commission

22 shall prescribe.

23 ‘‘(c) MARKET TESTS.—In carrying out subsections

24 (a) and (b) with respect to experimental products offered


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1 through market tests under section 3641 in a year, the

2 Postal Service—

3 ‘‘(1) may report summary data on the costs,

4 revenues, and quality of service by market test; and

5 ‘‘(2) shall report such data as the Postal Regu6 latory Commission requires.

7 ‘‘(d) SUPPORTING MATTER.—The Postal Regulatory

8 Commission shall have access, in accordance with such

9 regulations as the Commission shall prescribe, to the

10 working papers and any other supporting matter of the

11 Postal Service and the Inspector General in connection

12 with any information submitted under this section.

13 ‘‘(e) CONTENT AND FORM OF REPORTS.—

14 ‘‘(1) IN GENERAL.—The Postal Regulatory

15 Commission shall, by regulation, prescribe the con16 tent and form of the public reports (and any non17 public annex and supporting matter relating thereto)

18 to be provided by the Postal Service under this sec19 tion. In carrying out this subsection, the Commis20 sion shall give due consideration to—

21 ‘‘(A) providing the public with adequate in22 formation to assess the lawfulness of rates

23 charged;


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1 ‘‘(B) avoiding unnecessary or unwarranted

2 administrative effort and expense on the part of

3 the Postal Service; and

4 ‘‘(C) protecting the confidentiality of com5 mercially sensitive information.

6 ‘‘(2) REVISED REQUIREMENTS.—The Commis7 sion may, on its own motion or on request of an in8 terested party, initiate proceedings (to be conducted

9 in accordance with regulations that the Commission

10 shall prescribe) to improve the quality, accuracy, or

11 completeness of Postal Service data required by the

12 Commission under this subsection whenever it shall

13 appear that—

14 ‘‘(A) the attribution of costs or revenues to

15 products has become significantly inaccurate or

16 can be significantly improved;

17 ‘‘(B) the quality of service data has be18 come significantly inaccurate or can be signifi19 cantly improved; or

20 ‘‘(C) such revisions are, in the judgment of

21 the Commission, otherwise necessitated by the

22 public interest.

23 ‘‘(f) CONFIDENTIAL INFORMATION.—

24 ‘‘(1) IN GENERAL.—If the Postal Service deter25 mines that any document or portion of a document,


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1 or other matter, which it provides to the Postal Reg2 ulatory Commission in a nonpublic annex under this

3 section or pursuant to subsection (d) contains infor4 mation which is described in section 410(c) of this

5 title, or exempt from public disclosure under section

6 552(b) of title 5, the Postal Service shall, at the

7 time of providing such matter to the Commission,

8 notify the Commission of its determination, in writ9 ing, and describe with particularity the documents

10 (or portions of documents) or other matter for which

11 confidentiality is sought and the reasons therefor.

12 ‘‘(2) TREATMENT.—Any information or other

13 matter described in paragraph (1) to which the

14 Commission gains access under this section shall be

15 subject to paragraphs (2) and (3) of section 504(g)

16 in the same way as if the Commission had received

17 notification with respect to such matter under sec18 tion 504(g)(1).

19 ‘‘(g) OTHER REPORTS.—The Postal Service shall

20 submit to the Postal Regulatory Commission, together

21 with any other submission that it is required to make

22 under this section in a year, copies of its then most

23 recent—

24 ‘‘(1) comprehensive statement under section

25 2401(e);


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1 ‘‘(2) performance plan under section 2803; and

2 ‘‘(3) program performance reports under sec3 tion 2804.

4 ‘‘§ 3653. Annual determination of compliance

5 ‘‘(a) OPPORTUNITY FOR PUBLIC COMMENT.—After

6 receiving the reports required under section 3652 for any

7 year, the Postal Regulatory Commission shall promptly

8 provide an opportunity for comment on such reports by

9 users of the mails, affected parties, and an officer of the

10 Commission who shall be required to represent the inter11 ests of the general public.

12 ‘‘(b) DETERMINATION OF COMPLIANCE OR NON13 COMPLIANCE.—Not later than 90 days after receiving the

14 submissions required under section 3652 with respect to

15 a year, the Postal Regulatory Commission shall make a

16 written determination as to—

17 ‘‘(1) whether any rates or fees in effect during

18 such year (for products individually or collectively)

19 were not in compliance with applicable provisions of

20 this chapter (or regulations promulgated there21 under);

22 ‘‘(2) whether any performance goals established

23 under section 2803 or 2804 for such year were not

24 met; and


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1 ‘‘(3) whether any market-dominant product

2 failed to meet any service standard during such

3 year.

4 If, with respect to a year, no instance of noncompliance

5 is found under this subsection to have occurred in such

6 year, the written determination shall be to that effect.

7 ‘‘(c) IF ANY NONCOMPLIANCE IS FOUND.—If, for a

8 year, a timely written determination of noncompliance is

9 made under subsection (b), the Postal Regulatory Com10 mission shall take appropriate action in accordance with

11 subsections (c)–(e) of section 3662 (as if a complaint aver12 ring such noncompliance had been duly filed and found

13 under such section to be justified).

14 ‘‘(d) REBUTTABLE PRESUMPTION.—A timely written

15 determination described in the last sentence of subsection

16 (b) shall, for purposes of any proceeding under section

17 3662, create a rebuttable presumption of compliance by

18 the Postal Service (with regard to the matters described

19 in paragraphs (1) through (3) of subsection (b)) during

20 the year to which such determination relates.’’.

21 SEC. 205. COMPLAINTS; APPELLATE REVIEW AND EN22 FORCEMENT.

23 Chapter 36 of title 39, United States Code, is amend24 ed by striking sections 3662 and 3663 and inserting the

25 following:


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1 ‘‘§ 3662. Rate and service complaints

2 ‘‘(a) IN GENERAL.—Interested persons (including an

3 officer of the Postal Regulatory Commission representing

4 the interests of the general public) who believe the Postal

5 Service is not operating in conformance with the require6 ments of chapter 1, 4, or 6, or this chapter (or regulations

7 promulgated under any of those chapters) may lodge a

8 complaint with the Postal Regulatory Commission in such

9 form and manner as the Commission may prescribe.

10 ‘‘(b) PROMPT RESPONSE REQUIRED.—

11 ‘‘(1) IN GENERAL.—The Postal Regulatory

12 Commission shall, within 90 days after receiving a

13 complaint under subsection (a), either—

14 ‘‘(A) begin proceedings on such complaint;

15 or

16 ‘‘(B) issue an order dismissing the com17 plaint (together with a statement of the reasons

18 therefor).

19 ‘‘(2) TREATMENT OF COMPLAINTS NOT TIMELY

20 ACTED ON.—For purposes of section 3663, any com21 plaint under subsection (a) on which the Commis22 sion fails to act in the time and manner required by

23 paragraph (1) shall be treated in the same way as

24 if it had been dismissed pursuant to an order issued

25 by the Commission on the last day allowable for the

26 issuance of such order under paragraph (1).


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1 ‘‘(c) ACTION REQUIRED IF COMPLAINT FOUND TO

2 BE JUSTIFIED.—If the Postal Regulatory Commission

3 finds the complaint to be justified, it shall order that the

4 Postal Service take such action as the Commission con5 siders appropriate in order to achieve compliance with the

6 applicable requirements and to remedy the effects of any

7 noncompliance (such as ordering unlawful rates to be ad8 justed to lawful levels, ordering the cancellation of market

9 tests, ordering the Postal Service to discontinue providing

10 loss-making products, or requiring the Postal Service to

11 make up for revenue shortfalls in competitive products).

12 ‘‘(d) SUSPENSION AUTHORITY.—The Postal Regu13 latory Commission may suspend implementation of rates

14 or classifications under section 3632(b)(3) for a limited

15 period of time pending expedited proceedings under this

16 section. In evaluating whether circumstances warrant sus17 pension, the Commission shall consider factors such as (1)

18 whether there is a substantial likelihood that such rate or

19 classification will violate the requirements of chapter 1,

20 4, or 6, or this chapter (or regulations promulgated under

21 any of those chapters), (2) whether any persons would suf22 fer substantial injury, loss, or damage absent a suspen23 sion, (3) whether the Postal Service or any other persons

24 would suffer substantial injury, loss, or damage under a

25 suspension, and (4) the public interest.


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1 ‘‘(e) AUTHORITY TO ORDER FINES IN CASES OF DE2 LIBERATE NONCOMPLIANCE.—In addition, in cases of de3 liberate noncompliance by the Postal Service with the re4 quirements of this title, the Postal Regulatory Commission

5 may order, based on the nature, circumstances, extent,

6 and seriousness of the noncompliance, a fine (in the

7 amount specified by the Commission in its order) for each

8 incidence of noncompliance. Fines resulting from the pro9 vision of competitive products shall be paid out of the

10 Competitive Products Fund established in section 2011.

11 All receipts from fines imposed under this subsection shall

12 be deposited in the general fund of the Treasury of the

13 United States.

14 ‘‘§ 3663. Appellate review

15 ‘‘A person adversely affected or aggrieved by a final

16 order or decision of the Postal Regulatory Commission

17 may, within 30 days after such order or decision becomes

18 final, institute proceedings for review thereof by filing a

19 petition in the United States Court of Appeals for the Dis20 trict of Columbia. The court shall review the order or deci21 sion in accordance with section 706 of title 5, and chapter

22 158 and section 2112 of title 28, on the basis of the record

23 before the Commission. For purposes of this section, the

24 term ‘person’ includes the Postal Service.


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1 ‘‘§ 3664. Enforcement of orders

2 ‘‘The several district courts have jurisdiction specifi3 cally to enforce, and to enjoin and restrain the Postal

4 Service from violating, any order issued by the Postal Reg5 ulatory Commission.’’.

6 SEC. 206. WORKSHARE DISCOUNTS.

7 (a) IN GENERAL.—Title 39, United States Code, is

8 amended by adding after section 3686 (as added by sec9 tion 406) the following:

10 ‘‘§ 3687. Workshare discounts

11 ‘‘(a) IN GENERAL.—As part of the regulations estab12 lished under section 3622(a), the Postal Regulatory Com13 mission shall establish rules for workshare discounts that

14 ensure that workshare discounts do not exceed the cost

15 that the Postal Service avoids as the result of private sec16 tor workshare activity, except—

17 ‘‘(1) where the discount is associated with a

18 new product or service or with a change to an exist19 ing product or service and is necessary, over a pe20 riod of time not to exceed 4 years, to induce mailer

21 behavior that will enable the new or changed product

22 or service in furtherance of the overall economically

23 efficient operation of the Postal Service;

24 ‘‘(2) to the extent that a reduction in the dis25 count would lead to a loss of volume in the affected

26 category and reduce the aggregate contribution to


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1 institutional costs of the Postal Service, from the

2 mail matter subject to the discount, below what it

3 otherwise would have been if the discount had not

4 been reduced to costs avoided; would result in a fur5 ther increase in the rates paid by mailers not able

6 to take advantage of the discount; or would impede

7 the efficient operation of the Postal Service;

8 ‘‘(3) where the amount of the discount above

9 costs avoided is necessary to mitigate rate shock and

10 will be phased out over time; or

11 ‘‘(4) where the workshare discount is provided

12 in connection with subclasses of mail consisting ex13 clusively of mail matter of educational, cultural, or

14 scientific value.

15 ‘‘(b) REPORTING REQUIREMENT.—Whenever the

16 Postal Service establishes or maintains a workshare dis17 count, the Postal Service shall, at the time it publishes

18 the workshare discount rate, file with the Postal Regu19 latory Commission a detailed report and explanation of its

20 reasons for establishing or maintaining the rate, setting

21 forth the data, economic analyses, and other information

22 relied on by the Postal Service to justify the rate.

23 ‘‘(c) DEFINITION.—For purposes of this section, the

24 term ‘workshare discount’ refers to rate discounts pro25 vided to mailers for presorting, prebarcoding, handling, or


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1 transportation, as further defined by the Postal Regu2 latory Commission as part of regulations established

3 under section 3622(a).’’.

4 (b) CLERICAL AMENDMENT.—The analysis for chap5 ter 36 of title 39, United States Code (as amended by

6 section 207) is amended by adding after the item relating

7 to section 3686 the following:

‘‘3687. Workshare discounts.’’.

8 SEC. 207. CLERICAL AMENDMENT.

9 Chapter 36 of title 39, United States Code, is amend10 ed by striking the heading and analysis for such chapter

11 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.

‘‘[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.


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‘‘SUBCHAPTER IV—REPORTING REQUIREMENTS AND RELATED PROVISIONS

‘‘3651. Annual reports by the Commission.

‘‘3652. Annual reports to the Commission.

‘‘3653. Annual determination of compliance.

‘‘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.’’.

1 TITLE III—PROVISIONS RELAT2 ING TO FAIR COMPETITION

3 SEC. 301. POSTAL SERVICE COMPETITIVE PRODUCTS

4 FUND.

5 (a) PROVISIONS RELATING TO POSTAL SERVICE

6 COMPETITIVE PRODUCTS FUND AND RELATED MAT7 TERS.—

8 (1) IN GENERAL.—Chapter 20 of title 39,

9 United States Code, is amended by adding at the

10 end the following:

11 ‘‘§ 2011. Provisions relating to competitive products

12 ‘‘(a) There is established in the Treasury of the

13 United States a revolving fund, to be called the Postal

14 Service Competitive Products Fund, which shall be avail15 able to the Postal Service without fiscal year limitation

16 for the payment of—


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1 ‘‘(1) costs attributable to competitive products;

2 and

3 ‘‘(2) all other costs incurred by the Postal Serv4 ice, to the extent allocable to competitive products.

5 For purposes of this subsection, the term ‘costs attrib6 utable’ has the meaning given such term by section 3631.

7 ‘‘(b) There shall be deposited in the Competitive

8 Products Fund, subject to withdrawal by the Postal

9 Service—

10 ‘‘(1) revenues from competitive products;

11 ‘‘(2) amounts received from obligations issued

12 by the Postal Service under subsection (e);

13 ‘‘(3) interest and dividends earned on invest14 ments of the Competitive Products Fund; and

15 ‘‘(4) any other receipts of the Postal Service

16 (including from the sale of assets), to the extent al17 locable to competitive products.

18 ‘‘(c) If the Postal Service determines that the moneys

19 of the Competitive Products Fund are in excess of current

20 needs, it may invest such amounts as it considers appro21 priate in—

22 ‘‘(1) obligations of, or obligations guaranteed

23 by, the Government of the United States; and

24 ‘‘(2) in accordance with regulations which the

25 Secretary of the Treasury shall prescribe (by not


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1 later than 18 months after the date of the enact2 ment of the Postal Accountability and Enhancement

3 Act), such other obligations or securities as it deems

4 appropriate.

5 ‘‘(d) The Postal Service may, in its sole discretion,

6 provide that moneys of the Competitive Products Fund be

7 deposited in a Federal Reserve bank or a depository for

8 public funds.

9 ‘‘(e)(1) Subject to the limitations specified in section

10 2005(a), the Postal Service is authorized to borrow money

11 and to issue and sell such obligations as it determines nec12 essary to provide for competitive products and deposit

13 such amounts in the Competitive Products Fund, except

14 that the Postal Service may pledge only assets related to

15 the provision of competitive products (as determined

16 under subsection (h) or, for purposes of any period before

17 accounting practices and principles under subsection (h)

18 have been established and applied, the best information

19 available from the Postal Service, including the audited

20 statements required by section 2008(e)), and the revenues

21 and receipts from such products, for the payment of the

22 principal of or interest on such obligations, for the pur23 chase or redemption thereof, and for other purposes inci24 dental thereto, including creation of reserve, sinking, and

25 other funds which may be similarly pledged and used, to


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1 such extent and in such manner as it deems necessary or

2 desirable.

3 ‘‘(2) The Postal Service may enter into binding cov4 enants with the holders of such obligations, and with the

5 trustee, if any, under any agreement entered into in con6 nection with the issuance thereof with respect to—

7 ‘‘(A) the establishment of reserve, sinking, and

8 other funds;

9 ‘‘(B) application and use of revenues and re10 ceipts of the Competitive Products Fund;

11 ‘‘(C) stipulations concerning the subsequent

12 issuance of obligations or the execution of leases or

13 lease purchases relating to properties of the Postal

14 Service; and

15 ‘‘(D) such other matters as the Postal Service

16 considers necessary or desirable to enhance the mar17 ketability of such obligations.

18 ‘‘(3) Obligations issued by the Postal Service under

19 this subsection—

20 ‘‘(A) may not be purchased by the Secretary of

21 the Treasury;

22 ‘‘(B) shall not be exempt either as to principal

23 or interest from any taxation now or hereafter im24 posed by any State or local taxing authority;


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1 ‘‘(C) shall not be obligations of, nor shall pay2 ment of the principal thereof or interest thereon be

3 guaranteed by, the Government of the United

4 States, and the obligations shall so plainly state; and

5 ‘‘(D) notwithstanding the provisions of the Fed6 eral Financing Bank Act of 1973 or any other provi7 sion of law (except as specifically provided by ref8 erence to this subparagraph in a law enacted after

9 this subparagraph takes effect), shall not be eligible

10 for purchase by, commitment to purchase by, or sale

11 or issuance to, the Federal Financing Bank.

12 ‘‘(4)(A) This paragraph applies with respect to the

13 period beginning on the date of the enactment of this

14 paragraph and ending at the close of the 5-year period

15 which begins on the date on which the Postal Service

16 makes its submission under subsection (h)(1).

17 ‘‘(B) During the period described in subparagraph

18 (A), nothing in subparagraph (A) or (D) of paragraph (3)

19 or the last sentence of section 2006(b) shall, with respect

20 to any obligations sought to be issued by the Postal Serv21 ice under this subsection, be considered to affect such obli22 gations’ eligibility for purchase by, commitment to pur23 chase by, or sale or issuance to, the Federal Financing

24 Bank.


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1 ‘‘(C) The Federal Financing Bank may elect to pur2 chase such obligations under such terms, including rates

3 of interest, as the Bank and the Postal Service may agree,

4 but at a rate of yield no less than the prevailing yield on

5 outstanding marketable securities of comparable maturity

6 issued by entities with the same credit rating as the rating

7 then most recently obtained by the Postal Service under

8 subparagraph (D), as determined by the Bank.

9 ‘‘(D) In order to be eligible to borrow under this

10 paragraph, the Postal Service shall first obtain a credit

11 rating from a nationally recognized credit rating organiza12 tion. Such rating—

13 ‘‘(i) shall be determined taking into account

14 only those assets and activities of the Postal Service

15 which are described in section 3634(a)(2) (relating

16 to the Postal Service’s assumed taxable income from

17 competitive products); and

18 ‘‘(ii) may, before final rules of the Postal Regu19 latory Commission under subsection (h) are issued

20 (or deemed to have been issued), be based on the

21 best information available from the Postal Service,

22 including the audited statements required by section

23 2008(e).

24 ‘‘(f) The receipts and disbursements of the Competi25 tive Products Fund shall be accorded the same budgetary


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1 treatment as is accorded to receipts and disbursements of

2 the Postal Service Fund under section 2009a.

3 ‘‘(g) A judgment against the Postal Service or the

4 Government of the United States (or settlement of a

5 claim) shall, to the extent that it arises out of activities

6 of the Postal Service in the provision of competitive prod7 ucts, be paid out of the Competitive Products Fund.

8 ‘‘(h)(1) The Secretary of the Treasury, in consulta9 tion with the Postal Service and an independent, certified

10 public accounting firm and such other advisors as the Sec11 retary considers appropriate, shall develop recommenda12 tions regarding—

13 ‘‘(A) the accounting practices and principles

14 that should be followed by the Postal Service with

15 the objectives of (i) identifying and valuing the as16 sets and liabilities of the Postal Service associated

17 with providing, and the capital and operating costs

18 incurred by the Postal Service in providing, competi19 tive products, and (ii) preventing the subsidization

20 of such products by market-dominant products; and

21 ‘‘(B) the substantive and procedural rules that

22 should be followed in determining the Postal Serv23 ice’s assumed Federal income tax on competitive

24 products income for any year (within the meaning of

25 section 3634).


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1 Such recommendations shall be submitted to the Postal

2 Regulatory Commission no earlier than 6 months, and no

3 later than 12 months, after the effective date of this sec4 tion.

5 ‘‘(2)(A) Upon receiving the recommendations of the

6 Secretary of the Treasury under paragraph (1), the Com7 mission shall give interested parties, including the Postal

8 Service, users of the mails, and an officer of the Commis9 sion who shall be required to represent the interests of

10 the general public, an opportunity to present their views

11 on those recommendations through submission of written

12 data, views, or arguments with or without opportunity for

13 oral presentation, or in such other manner as the Commis14 sion considers appropriate.

15 ‘‘(B) After due consideration of the views and other

16 information received under subparagraph (A), the Com17 mission shall by rule—

18 ‘‘(i) provide for the establishment and applica19 tion of the accounting practices and principles which

20 shall be followed by the Postal Service;

21 ‘‘(ii) provide for the establishment and applica22 tion of the substantive and procedural rules de23 scribed in paragraph (1)(B); and

24 ‘‘(iii) provide for the submission by the Postal

25 Service to the Postal Regulatory Commission of anVerDate jul 14 2003 22:09 Sep 23, 2004 Jkt 029006 PO 00000 Frm 00193 Fmt 6659 Sfmt 6601 E:\HR\OC\HR672P2.XXX HR672P2

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1 nual and other periodic reports setting forth such in2 formation as the Commission may require.

3 Final rules under this subparagraph shall be issued not

4 later than 12 months after the date on which the Sec5 retary of the Treasury makes his submission to the Com6 mission under paragraph (1) (or by such later date as the

7 Commission and the Postal Service may agree to). The

8 Commission is authorized to promulgate regulations revis9 ing such rules.

10 ‘‘(C) Reports described in subparagraph (B)(iii) shall

11 be submitted at such time and in such form, and shall

12 include such information, as the Commission by rule re13 quires. The Commission may, on its own motion or on re14 quest of an interested party, initiate proceedings (to be

15 conducted in accordance with such rules as the Commis16 sion shall prescribe) to improve the quality, accuracy, or

17 completeness of Postal Service data under such subpara18 graph whenever it shall appear that—

19 ‘‘(i) the quality of the information furnished in

20 those reports has become significantly inaccurate or

21 can be significantly improved; or

22 ‘‘(ii) such revisions are, in the judgment of the

23 Commission, otherwise necessitated by the public in24 terest.


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1 ‘‘(D) A copy of each report described in subpara2 graph (B)(iii) shall also be transmitted by the Postal Serv3 ice to the Secretary of the Treasury and the Inspector

4 General of the United States Postal Service.

5 ‘‘(i) The Postal Service shall render an annual report

6 to the Secretary of the Treasury concerning the operation

7 of the Competitive Products Fund, in which it shall ad8 dress such matters as risk limitations, reserve balances,

9 allocation or distribution of moneys, liquidity require10 ments, and measures to safeguard against losses. A copy

11 of its then most recent report under this subsection shall

12 be included with any other submission that it is required

13 to make to the Postal Regulatory Commission under sec14 tion 3652(g).’’.

15 (2) CLERICAL AMENDMENT.—The analysis for

16 chapter 20 of title 39, United States Code, is

17 amended by adding after the item relating to section

18 2010 the following:

‘‘2011. Provisions relating to competitive products.’’.

19 (b) TECHNICAL AND CONFORMING AMENDMENTS.—

20 (1) DEFINITION.—Section 2001 of title 39,

21 United States Code, is amended by striking ‘‘and’’

22 at the end of paragraph (1), by redesignating para23 graph (2) as paragraph (3), and by inserting after

24 paragraph (1) the following:


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1 ‘‘(2) ‘Competitive Products Fund’ means the

2 Postal Service Competitive Products Fund estab3 lished by section 2011; and’’.

4 (2) CAPITAL OF THE POSTAL SERVICE.—Sec5 tion 2002(b) of title 39, United States Code, is

6 amended by striking ‘‘Fund,’’ and inserting ‘‘Fund

7 and the balance in the Competitive Products

8 Fund,’’.

9 (3) POSTAL SERVICE FUND.—

10 (A) PURPOSES FOR WHICH AVAILABLE.—

11 Section 2003(a) of title 39, United States Code,

12 is amended by striking ‘‘title.’’ and inserting

13 ‘‘title (other than any of the purposes, func14 tions, or powers for which the Competitive

15 Products Fund is available).’’.

16 (B) DEPOSITS.—Section 2003(b) of title

17 39, United States Code, is amended by striking

18 ‘‘There’’ and inserting ‘‘Except as otherwise

19 provided in section 2011, there’’.

20 (4) RELATIONSHIP BETWEEN THE TREASURY

21 AND THE POSTAL SERVICE.—Section 2006 of title

22 39, United States Code, is amended—

23 (A) in subsection (b), by adding at the end

24 the following: ‘‘Nothing in this chapter shall be

25 considered to permit or require the Secretary of


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1 the Treasury to purchase any obligations of the

2 Postal Service other than those issued under

3 section 2005.’’; and

4 (B) in subsection (c), by inserting ‘‘under

5 section 2005’’ before ‘‘shall be obligations’’.

6 SEC. 302. ASSUMED FEDERAL INCOME TAX ON COMPETI7 TIVE PRODUCTS INCOME.

8 Subchapter II of chapter 36 of title 39, United States

9 Code, as amended by section 202, is amended by adding

10 at the end the following:

11 ‘‘§ 3634. Assumed Federal income tax on competitive

12 products income

13 ‘‘(a) DEFINITIONS.—For purposes of this section—

14 ‘‘(1) the term ‘assumed Federal income tax on

15 competitive products income’ means the net income

16 tax that would be imposed by chapter 1 of the Inter17 nal Revenue Code of 1986 on the Postal Service’s

18 assumed taxable income from competitive products

19 for the year; and

20 ‘‘(2) the term ‘assumed taxable income from

21 competitive products’, with respect to a year, refers

22 to the amount representing what would be the tax23 able income of a corporation under the Internal Rev24 enue Code of 1986 for the year, if—


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1 ‘‘(A) the only activities of such corporation

2 were the activities of the Postal Service allo3 cable under section 2011(h) to competitive

4 products; and

5 ‘‘(B) the only assets held by such corpora6 tion were the assets of the Postal Service allo7 cable under section 2011(h) to such activities.

8 ‘‘(b) COMPUTATION AND TRANSFER REQUIRE9 MENTS.—The Postal Service shall, for each year beginning

10 with the year in which occurs the deadline for the Postal

11 Service’s first report to the Postal Regulatory Commission

12 under section 3652(a)—

13 ‘‘(1) compute its assumed Federal income tax

14 on competitive products income for such year; and

15 ‘‘(2) transfer from the Competitive Products

16 Fund to the Postal Service Fund the amount of that

17 assumed tax.

18 ‘‘(c) DEADLINE FOR TRANSFERS.—Any transfer re19 quired to be made under this section for a year shall be

20 due on or before the January 15th next occurring after

21 the close of such year.’’.

22 SEC. 303. UNFAIR COMPETITION PROHIBITED.

23 (a) SPECIFIC LIMITATIONS.—Chapter 4 of title 39,

24 United States Code, is amended by adding after section

25 404 the following:


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1 ‘‘§ 404a. Specific Limitations

2 ‘‘(a) Except as specifically authorized by law, the

3 Postal Service may not—

4 ‘‘(1) establish any rule or regulation (including

5 any standard) the effect of which is to preclude com6 petition or establish the terms of competition unless

7 the Postal Service demonstrates that the regulation

8 does not create an unfair competitive advantage for

9 itself or any entity funded (in whole or in part) by

10 the Postal Service;

11 ‘‘(2) compel the disclosure, transfer, or licens12 ing of intellectual property to any third party (such

13 as patents, copyrights, trademarks, trade secrets,

14 and proprietary information); or

15 ‘‘(3) obtain information from a person that pro16 vides (or seeks to provide) any product, and then

17 offer any product or service that uses or is based in

18 whole or in part on such information, without the

19 consent of the person providing that information,

20 unless substantially the same information is obtained

21 (or obtainable) from an independent source or is

22 otherwise obtained (or obtainable).

23 ‘‘(b) The Postal Regulatory Commission shall pre24 scribe regulations to carry out this section.

25 ‘‘(c) Any party (including an officer of the Commis26 sion representing the interests of the general public) who


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1 believes that the Postal Service has violated this section

2 may bring a complaint in accordance with section 3662.’’.

3 (b) CONFORMING AMENDMENTS.—

4 (1) GENERAL POWERS.—Section 401 of title

5 39, United States Code, is amended by striking

6 ‘‘The’’ and inserting ‘‘Subject to the provisions of

7 section 404a, the’’.

8 (2) SPECIFIC POWERS.—Section 404(a) of title

9 39, United States Code, is amended by striking

10 ‘‘Without’’ and inserting ‘‘Subject to the provisions

11 of section 404a, but otherwise without’’.

12 (c) CLERICAL AMENDMENT.—The analysis for chap13 ter 4 of title 39, United States Code, is amended by insert14 ing after the item relating to section 404 the following:

‘‘404a. Specific limitations.’’.

15 SEC. 304. SUITS BY AND AGAINST THE POSTAL SERVICE.

16 (a) IN GENERAL.—Section 409 of title 39, United

17 States Code, is amended by striking subsections (d) and

18 (e) and inserting the following:

19 ‘‘(d)(1) For purposes of the provisions of law cited

20 in paragraphs (2)(A) and (2)(B), respectively, the Postal

21 Service—

22 ‘‘(A) shall be considered to be a ‘person’, as

23 used in the provisions of law involved; and

24 ‘‘(B) shall not be immune under any other doc25 trine of sovereign immunity from suit in Federal


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1 court by any person for any violation of any of those

2 provisions of law by any officer or employee of the

3 Postal Service.

4 ‘‘(2) This subsection applies with respect to—

5 ‘‘(A) the Act of July 5, 1946 (commonly re6 ferred to as the ‘Trademark Act of 1946’ (15 U.S.C.

7 1051 and following)); and

8 ‘‘(B) the provisions of section 5 of the Federal

9 Trade Commission Act to the extent that such sec10 tion 5 applies to unfair or deceptive acts or prac11 tices.

12 ‘‘(e)(1) To the extent that the Postal Service, or other

13 Federal agency acting on behalf of or in concert with the

14 Postal Service, engages in conduct with respect to any

15 competitive product, the Postal Service or other Federal

16 agency (as the case may be)—

17 ‘‘(A) shall not be immune under any doctrine of

18 sovereign immunity from suit in Federal court by

19 any person for any violation of Federal law by such

20 agency or any officer or employee thereof; and

21 ‘‘(B) shall be considered to be a person (as de22 fined in subsection (a) of the first section of the

23 Clayton Act) for purposes of—

24 ‘‘(i) the antitrust laws (as defined in such

25 subsection); and


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1 ‘‘(ii) section 5 of the Federal Trade Com2 mission Act to the extent that such section 5

3 applies to unfair methods of competition.

4 ‘‘(2) No damages, interest on damages, costs or at5 torney’s fees may be recovered, and no criminal liability

6 may be imposed, under the antitrust laws (as so defined)

7 from any officer or employee of the Postal Service, or

8 other Federal agency acting on behalf of or in concert with

9 the Postal Service, acting in an official capacity.

10 ‘‘(3) This subsection shall not apply with respect to

11 conduct occurring before the date of the enactment of this

12 subsection.

13 ‘‘(f) To the extent that the Postal Service engages

14 in conduct with respect to the provision of competitive

15 products, it shall be considered a person for the purposes

16 of the Federal bankruptcy laws.

17 ‘‘(g)(1) Each building constructed or altered by the

18 Postal Service shall be constructed or altered, to the max19 imum extent feasible as determined by the Postal Service,

20 in compliance with one of the nationally recognized model

21 building codes and with other applicable nationally recog22 nized codes.

23 ‘‘(2) Each building constructed or altered by the

24 Postal Service shall be constructed or altered only after

25 consideration of all requirements (other than procedural


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1 requirements) of zoning laws, land use laws, and applica2 ble environmental laws of a State or subdivision of a State

3 which would apply to the building if it were not a building

4 constructed or altered by an establishment of the Govern5 ment of the United States.

6 ‘‘(3) For purposes of meeting the requirements of

7 paragraphs (1) and (2) with respect to a building, the

8 Postal Service shall—

9 ‘‘(A) in preparing plans for the building, con10 sult with appropriate officials of the State or polit11 ical subdivision, or both, in which the building will

12 be located;

13 ‘‘(B) upon request, submit such plans in a

14 timely manner to such officials for review by such

15 officials for a reasonable period of time not exceed16 ing 30 days; and

17 ‘‘(C) permit inspection by such officials during

18 construction or alteration of the building, in accord19 ance with the customary schedule of inspections for

20 construction or alteration of buildings in the locality,

21 if such officials provide to the Postal Service—

22 ‘‘(i) a copy of such schedule before con23 struction of the building is begun; and


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1 ‘‘(ii) reasonable notice of their intention to

2 conduct any inspection before conducting such

3 inspection.

4 Nothing in this subsection shall impose an obligation on

5 any State or political subdivision to take any action under

6 the preceding sentence, nor shall anything in this sub7 section require the Postal Service or any of its contractors

8 to pay for any action taken by a State or political subdivi9 sion to carry out this subsection (including reviewing

10 plans, carrying out on-site inspections, issuing building

11 permits, and making recommendations).

12 ‘‘(4) Appropriate officials of a State or a political

13 subdivision of a State may make recommendations to the

14 Postal Service concerning measures necessary to meet the

15 requirements of paragraphs (1) and (2). Such officials

16 may also make recommendations to the Postal Service

17 concerning measures which should be taken in the con18 struction or alteration of the building to take into account

19 local conditions. The Postal Service shall give due consid20 eration to any such recommendations.

21 ‘‘(5) In addition to consulting with local and State

22 officials under paragraph (3), the Postal Service shall es23 tablish procedures for soliciting, assessing, and incor24 porating local community input on real property and land

25 use decisions.


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1 ‘‘(6) For purposes of this subsection, the term ‘State’

2 includes the District of Columbia, the Commonwealth of

3 Puerto Rico, and a territory or possession of the United

4 States.

5 ‘‘(h)(1) Notwithstanding any other provision of law,

6 legal representation may not be furnished by the Depart7 ment of Justice to the Postal Service in any action, suit,

8 or proceeding arising, in whole or in part, under any of

9 the following:

10 ‘‘(A) Subsection (d) or (e) of this section.

11 ‘‘(B) Subsection (f) or (g) of section 504 (relat12 ing to administrative subpoenas by the Postal Regu13 latory Commission).

14 ‘‘(C) Section 3663 (relating to appellate re15 view).

16 The Postal Service may, by contract or otherwise, employ

17 attorneys to obtain any legal representation that it is pre18 cluded from obtaining from the Department of Justice

19 under this paragraph.

20 ‘‘(2) In any circumstance not covered by paragraph

21 (1), the Department of Justice shall, under section 411,

22 furnish the Postal Service such legal representation as it

23 may require, except that, with the prior consent of the

24 Attorney General, the Postal Service may, in any such cir25 cumstance, employ attorneys by contract or otherwise to


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1 conduct litigation brought by or against the Postal Service

2 or its officers or employees in matters affecting the Postal

3 Service.

4 ‘‘(3)(A) In any action, suit, or proceeding in a court

5 of the United States arising in whole or in part under any

6 of the provisions of law referred to in subparagraph (B)

7 or (C) of paragraph (1), and to which the Commission

8 is not otherwise a party, the Commission shall be per9 mitted to appear as a party on its own motion and as

10 of right.

11 ‘‘(B) The Department of Justice shall, under such

12 terms and conditions as the Commission and the Attorney

13 General shall consider appropriate, furnish the Commis14 sion such legal representation as it may require in connec15 tion with any such action, suit, or proceeding, except that,

16 with the prior consent of the Attorney General, the Com17 mission may employ attorneys by contract or otherwise for

18 that purpose.

19 ‘‘(i) A judgment against the Government of the

20 United States arising out of activities of the Postal Service

21 shall be paid by the Postal Service out of any funds avail22 able to the Postal Service, subject to the restriction speci23 fied in section 2011(g).’’.

24 (b) TECHNICAL AMENDMENT.—Section 409(a) of

25 title 39, United States Code, is amended by striking ‘‘ExVerDate jul 14 2003 22:09 Sep 23, 2004 Jkt 029006 PO 00000 Frm 00206 Fmt 6659 Sfmt 6601 E:\HR\OC\HR672P2.XXX HR672P2

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1 cept as provided in section 3628 of this title,’’ and insert2 ing ‘‘Except as otherwise provided in this title,’’.

3 SEC. 305. INTERNATIONAL POSTAL ARRANGEMENTS.

4 (a) IN GENERAL.—Section 407 of title 39, United

5 States Code, is amended to read as follows:

6 ‘‘§ 407. International postal arrangements

7 ‘‘(a) It is the policy of the United States—

8 ‘‘(1) to promote and encourage communications

9 between peoples by efficient operation of inter10 national postal services and other international deliv11 ery services for cultural, social, and economic pur12 poses;

13 ‘‘(2) to promote and encourage unrestricted and

14 undistorted competition in the provision of inter15 national postal services and other international deliv16 ery services, except where provision of such services

17 by private companies may be prohibited by law of

18 the United States;

19 ‘‘(3) to promote and encourage a clear distinc20 tion between governmental and operational respon21 sibilities with respect to the provision of inter22 national postal services and other international deliv23 ery services by the Government of the United States

24 and by intergovernmental organizations of which the

25 United States is a member; and


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1 ‘‘(4) to participate in multilateral and bilateral

2 agreements with other countries to accomplish these

3 objectives.

4 ‘‘(b)(1) The Secretary of State shall be responsible

5 for formulation, coordination, and oversight of foreign pol6 icy related to international postal services and other inter7 national delivery services, and shall have the power to con8 clude treaties, conventions and amendments related to

9 international postal services and other international deliv10 ery services, except that the Secretary may not conclude

11 any treaty, convention, or other international agreement

12 (including those regulating international postal services)

13 if such treaty, convention, or agreement would, with re14 spect to any competitive product, grant an undue or un15 reasonable preference to the Postal Service, a private pro16 vider of international postal or delivery services, or any

17 other person.

18 ‘‘(2) In carrying out the responsibilities specified in

19 paragraph (1), the Secretary of State shall exercise pri20 mary authority for the conduct of foreign policy with re21 spect to international postal services and international de22 livery services, including the determination of United

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1 national bodies. In exercising this authority, the

2 Secretary—

3 ‘‘(A) shall coordinate with other agencies as ap4 propriate, and in particular, shall give full consider5 ation to the authority vested by law or Executive

6 order in the Postal Regulatory Commission, the De7 partment of Commerce, the Department of Trans8 portation, and the Office of the United States Trade

9 Representative in this area;

10 ‘‘(B) shall maintain continuing liaison with

11 other executive branch agencies concerned with post12 al and delivery services;

13 ‘‘(C) shall maintain continuing liaison with the

14 Committee on Government Reform of the House of

15 Representatives and the Committee on Govern16 mental Affairs of the Senate;

17 ‘‘(D) shall maintain appropriate liaison with

18 both representatives of the Postal Service and rep19 resentatives of users and private providers of inter20 national postal services and other international deliv21 ery services to keep informed of their interests and

22 problems, and to provide such assistance as may be

23 needed to ensure that matters of concern are

24 promptly considered by the Department of State or


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1 (if applicable, and to the extent practicable) other

2 executive branch agencies; and

3 ‘‘(E) shall assist in arranging meetings of such

4 public sector advisory groups as may be established

5 to advise the Department of State and other execu6 tive branch agencies in connection with international

7 postal services and international delivery services.

8 ‘‘(3) The Secretary of State shall establish an advi9 sory committee (within the meaning of the Federal Advi10 sory Committee Act) to perform such functions as the Sec11 retary considers appropriate in connection with carrying

12 out subparagraphs (A) through (D) of paragraph (2).

13 ‘‘(c)(1) Before concluding any treaty, convention, or

14 amendment that establishes a rate or classification for a

15 product subject to subchapter I of chapter 36, the Sec16 retary of State shall request the Postal Regulatory Com17 mission to submit a decision on whether such rate or clas18 sification is consistent with the standards and criteria es19 tablished by the Commission under section 3622.

20 ‘‘(2) The Secretary shall ensure that each treaty, con21 vention, or amendment concluded under subsection (b) is

22 consistent with a decision of the Commission adopted

23 under paragraph (1), except if, or to the extent, the Sec24 retary determines, by written order, that considerations of


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1 foreign policy or national security require modification of

2 the Commission’s decision.

3 ‘‘(d) Nothing in this section shall be considered to

4 prevent the Postal Service from entering into such com5 mercial or operational contracts related to providing inter6 national postal services and other international delivery

7 services as it deems appropriate, except that—

8 ‘‘(1) any such contract made with an agency of

9 a foreign government (whether under authority of

10 this subsection or otherwise) shall be solely contrac11 tual in nature and may not purport to be inter12 national law; and

13 ‘‘(2) a copy of each such contract between the

14 Postal Service and an agency of a foreign govern15 ment shall be transmitted to the Secretary of State

16 and the Postal Regulatory Commission not later

17 than the effective date of such contract.

18 ‘‘(e)(1) With respect to shipments of international

19 mail that are competitive products within the meaning of

20 section 3631 that are exported or imported by the Postal

21 Service, the Bureau of Customs and Border Protection of

22 the Department of Homeland Security and other appro23 priate Federal agencies shall apply the customs laws of

24 the United States and all other laws relating to the impor25 tation or exportation of such shipments in the same manVerDate jul 14 2003 22:09 Sep 23, 2004 Jkt 029006 PO 00000 Frm 00211 Fmt 6659 Sfmt 6601 E:\HR\OC\HR672P2.XXX HR672P2

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1 ner to both shipments by the Postal Service and similar

2 shipments by private companies.

3 ‘‘(2) For purposes of this subsection, the term ‘pri4 vate company’ means a private company substantially

5 owned or controlled by persons who are citizens of the

6 United States.

7 ‘‘(3) In exercising the authority pursuant to sub8 section (b) to conclude new treaties, conventions and

9 amendments related to international postal services and

10 to renegotiate such treaties, conventions and amendments,

11 the Secretary of State shall, to the maximum extent prac12 ticable, take such measures as are within the Secretary’s

13 control to encourage the governments of other countries

14 to make available to the Postal Service and private compa15 nies a range of nondiscriminatory customs procedures that

16 will fully meet the needs of all types of American shippers.

17 The Secretary of State shall consult with the United

18 States Trade Representative and the Commissioner of

19 Customs, Department of Homeland Security in carrying

20 out this paragraph.

21 ‘‘(4) The provisions of this subsection shall take ef22 fect 6 months after the date of the enactment of this sub23 section or such earlier date as the Bureau of Customs and

24 Border Protection of the Department of Homeland Secu25 rity may determine in writing.’’.


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1 (b) EFFECTIVE DATE.—Notwithstanding any provi2 sion of the amendment made by subsection (a), the au3 thority of the United States Postal Service to establish

4 the rates of postage or other charges on mail matter con5 veyed between the United States and other countries shall

6 remain available to the Postal Service until—

7 (1) with respect to market-dominant products,

8 the date as of which the regulations promulgated

9 under section 3622 of title 39, United States Code

10 (as amended by section 201(a)) take effect; and

11 (2) with respect to competitive products, the

12 date as of which the regulations promulgated under

13 section 3633 of title 39, United States Code (as

14 amended by section 202) take effect.

15 SEC. 306. REDESIGNATION.

16 Chapter 36 of title 39, United States Code (as in ef17 fect before the amendment made by section 204(a)) is

18 amended by striking the heading for subchapter V and in19 serting the following:

20 ‘‘SUBCHAPTER VI—GENERAL’’.

21 SEC. 307. CLARIFICATION.

22 Section 403(c) of title 39, United States Code, is

23 amended by adding after ‘‘user.’’ the following: ‘‘The pro24 hibition in this subsection shall not be construed to pre25 vent the establishment of rates that vary with volume if


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1 such rates will be made available to similarly situated per2 sons and will increase the aggregate contribution to the

3 institutional costs of the Postal Service.’’.

4 TITLE IV—GENERAL

5 PROVISIONS

6 SEC. 401. QUALIFICATION REQUIREMENTS FOR GOV7 ERNORS.

8 (a) IN GENERAL.—Section 202(a) of title 39, United

9 States Code, is amended by striking ‘‘(a)’’ and inserting

10 ‘‘(a)(1)’’ and by striking the fourth sentence and inserting

11 the following: ‘‘The Governors shall represent the public

12 interest generally, and at least 4 of the Governors shall

13 be chosen solely on the basis of their demonstrated ability

14 in managing organizations or corporations (in either the

15 public or private sector) of substantial size; for purposes

16 of this sentence, an organization or corporation shall be

17 considered to be of substantial size if it employs at least

18 50,000 employees. The Governors shall not be representa19 tives of specific interests using the Postal Service, and

20 may be removed only for cause.’’.

21 (b) CONSULTATION REQUIREMENT.—Section 202(a)

22 of title 39, United States Code, is amended by adding at

23 the end the following:

24 ‘‘(2) In selecting the individuals described in para25 graph (1) for nomination for appointment to the position


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1 of Governor, the President should consult with the Speak2 er of the House of Representatives, the minority leader

3 of the House of Representatives, the majority leader of

4 the Senate, and the minority leader of the Senate.’’.

5 (c) RESTRICTION.—Section 202(b) of title 39, United

6 States Code, is amended by striking ‘‘(b)’’ and inserting

7 ‘‘(b)(1)’’, and by adding at the end the following:

8 ‘‘(2)(A) Notwithstanding any other provision of this

9 section, in the case of the office of the Governor the term

10 of which is the first one scheduled to expire at least 4

11 months after the date of the enactment of this

12 paragraph—

13 ‘‘(i) such office may not, in the case of any per14 son commencing service after that expiration date,

15 be filled by any person other than an individual cho16 sen from among persons nominated for such office

17 with the unanimous concurrence of all labor organi18 zations described in section 206(a)(1); and

19 ‘‘(ii) instead of the term that would otherwise

20 apply under the first sentence of paragraph (1), the

21 term of any person so appointed to such office shall

22 be 3 years.

23 ‘‘(B) Except as provided in subparagraph (A), an ap24 pointment under this paragraph shall be made in conformVerDate jul 14 2003 22:09 Sep 23, 2004 Jkt 029006 PO 00000 Frm 00215 Fmt 6659 Sfmt 6601 E:\HR\OC\HR672P2.XXX HR672P2

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1 ance with all provisions of this section that would other2 wise apply.’’.

3 (d) APPLICABILITY.—The amendment made by sub4 section (a) shall not affect the appointment or tenure of

5 any person serving as a Governor of the Board of Gov6 ernors of the United States Postal Service pursuant to an

7 appointment made before the date of the enactment of this

8 Act, or, except as provided in the amendment made by

9 subsection (c), any nomination made before that date;

10 however, when any such office becomes vacant, the ap11 pointment of any person to fill that office shall be made

12 in accordance with such amendment. The requirement set

13 forth in the fourth sentence of section 202(a)(1) of title

14 39, United States Code (as amended by subsection (a))

15 shall be met beginning not later than 9 years after the

16 date of the enactment of this Act.

17 SEC. 402. OBLIGATIONS.

18 (a) PURPOSES FOR WHICH OBLIGATIONS MAY BE

19 ISSUED.—The first sentence of section 2005(a)(1) of title

20 39, United States Code, is amended by striking ‘‘title.’’

21 and inserting ‘‘title, other than any of the purposes for

22 which the corresponding authority is available to the Post23 al Service under section 2011.’’.

24 (b) LIMITATION ON NET ANNUAL INCREASE IN OB25 LIGATIONS ISSUED FOR CERTAIN PURPOSES.—The third


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1 sentence of section 2005(a)(1) of title 39, United States

2 Code, is amended to read as follows: ‘‘In any one fiscal

3 year, the net increase in the amount of obligations out4 standing issued for the purpose of capital improvements

5 and the net increase in the amount of obligations out6 standing issued for the purpose of defraying operating ex7 penses of the Postal Service shall not exceed a combined

8 total of $3,000,000,000.’’ .

9 (c) LIMITATIONS ON OBLIGATIONS OUTSTANDING.—

10 (1) IN GENERAL.—Subsection (a) of section

11 2005 of title 39, United States Code, is amended by

12 adding at the end the following:

13 ‘‘(3) For purposes of applying the respective limita14 tions under this subsection, the aggregate amount of obli15 gations issued by the Postal Service which are outstanding

16 as of any one time, and the net increase in the amount

17 of obligations outstanding issued by the Postal Service for

18 the purpose of capital improvements or for the purpose

19 of defraying operating expenses of the Postal Service in

20 any fiscal year, shall be determined by aggregating the

21 relevant obligations issued by the Postal Service under this

22 section with the relevant obligations issued by the Postal

23 Service under section 2011.’’.

24 (2) CONFORMING AMENDMENT.—The second

25 sentence of section 2005(a)(1) of title 39, United


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1 States Code, is amended by striking ‘‘any such obli2 gations’’ and inserting ‘‘obligations issued by the

3 Postal Service which may be’’.

4 (d) AMOUNTS WHICH MAY BE PLEDGED, ETC.—

5 (1) OBLIGATIONS TO WHICH PROVISIONS

6 APPLY.—The first sentence of section 2005(b) of

7 title 39, United States Code, is amended by striking

8 ‘‘such obligations,’’ and inserting ‘‘obligations issued

9 by the Postal Service under this section,’’.

10 (2) ASSETS, REVENUES, AND RECEIPTS TO

11 WHICH PROVISIONS APPLY.—Subsection (b) of sec12 tion 2005 of title 39, United States Code, is amend13 ed by striking ‘‘(b)’’ and inserting ‘‘(b)(1)’’, and by

14 adding at the end the following:

15 ‘‘(2) Notwithstanding any other provision of this

16 section—

17 ‘‘(A) the authority to pledge assets of the Post18 al Service under this subsection shall be available

19 only to the extent that such assets are not related

20 to the provision of competitive products (as deter21 mined under section 2011(h) or, for purposes of any

22 period before accounting practices and principles

23 under section 2011(h) have been established and ap24 plied, the best information available from the Postal


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1 Service, including the audited statements required

2 by section 2008(e)); and

3 ‘‘(B) any authority under this subsection relat4 ing to the pledging or other use of revenues or re5 ceipts of the Postal Service shall be available only to

6 the extent that they are not revenues or receipts of

7 the Competitive Products Fund.’’.

8 SEC. 403. PRIVATE CARRIAGE OF LETTERS.

9 (a) IN GENERAL.—Section 601 of title 39, United

10 States Code, is amended by striking subsection (b) and

11 inserting the following:

12 ‘‘(b) A letter may also be carried out of the mails

13 when—

14 ‘‘(1) the amount paid for the private carriage of

15 the letter is at least the amount equal to 6 times the

16 rate then currently charged for the 1st ounce of a

17 single-piece first class letter;

‘‘(2) the letter weighs at least 121 18 ⁄2 ounces; or

19 ‘‘(3) such carriage is within the scope of serv20 ices described by regulations of the Postal Service

21 (including, in particular, sections 310.1 and 320.2–

22 320.8 of title 39 of the Code of Federal Regulations,

23 as in effect on July 1, 2003) that purport to permit

24 private carriage by suspension of the operation of

25 this section (as then in effect).


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1 ‘‘(c) Any regulations necessary to carry out this sec2 tion shall be promulgated by the Postal Regulatory Com3 mission.’’.

4 (b) EFFECTIVE DATE.—This section shall take effect

5 on the date as of which the regulations promulgated under

6 section 3633 of title 39, United States Code (as amended

7 by section 202) take effect.

8 SEC. 404. RULEMAKING AUTHORITY.

9 Paragraph (2) of section 401 of title 39, United

10 States Code, is amended to read as follows:

11 ‘‘(2) to adopt, amend, and repeal such rules

12 and regulations, not inconsistent with this title, as

13 may be necessary in the execution of its functions

14 under this title and such other functions as may be

15 assigned to the Postal Service under any provisions

16 of law outside of this title;’’.

17 SEC. 405. NONINTERFERENCE WITH COLLECTIVE BAR18 GAINING AGREEMENTS, ETC.

19 (a) NONINTERFERENCE WITH COLLECTIVE BAR20 GAINING AGREEMENTS.—Except as provided in section

21 407, nothing in this Act or any amendment made by this

22 Act shall restrict, expand, or otherwise affect any of the

23 rights, privileges, or benefits of either employees of or

24 labor organizations representing employees of the United

25 States Postal Service under chapter 12 of title 39, United


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1 States Code, the National Labor Relations Act, any hand2 book or manual affecting employee labor relations within

3 the United States Postal Service, or any collective bar4 gaining agreement.

5 (b) FREE MAILING PRIVILEGES CONTINUE UN6 CHANGED.—Nothing in this Act or any amendment made

7 by this Act shall affect any free mailing privileges ac8 corded under section 3217 or sections 3403 through 3406

9 of title 39, United States Code.

10 SEC. 406. BONUS AUTHORITY.

11 Subchapter VI of chapter 36 of title 39, United

12 States Code (as so redesignated by section 306) is amend13 ed by adding at the end the following:

14 ‘‘§ 3686. Bonus authority

15 ‘‘(a) IN GENERAL.—The Postal Service may establish

16 one or more programs to provide bonuses or other rewards

17 to officers and employees of the Postal Service to achieve

18 the objectives of this chapter.

19 ‘‘(b) WAIVER OF LIMITATION ON COMPENSATION.—

20 ‘‘(1) IN GENERAL.—Under any such program,

21 the Postal Service may award a bonus or other re22 ward in excess of the limitation set forth in the last

23 sentence of section 1003(a), if such program has

24 been approved under paragraph (2).


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1 ‘‘(2) APPROVAL PROCESS.—If the Postal Serv2 ice wishes to have the authority, under any program

3 described in subsection (a), to award bonuses or

4 other rewards in excess of the limitation referred to

5 in paragraph (1)—

6 ‘‘(A) the Postal Service shall make an ap7 propriate request to the Postal Regulatory

8 Commission, in such form and manner as the

9 Commission requires; and

10 ‘‘(B) the Postal Regulatory Commission

11 shall approve any such request if it finds that

12 the program is likely to achieve the objectives of

13 this chapter.

14 ‘‘(3) REVOCATION AUTHORITY.—If the Postal

15 Regulatory Commission finds that a program pre16 viously approved under paragraph (2) is not achiev17 ing the objectives of this chapter, the Commission

18 may revoke or suspend the authority of the Postal

19 Service to continue such program until such time as

20 appropriate corrective measures have, in the judg21 ment of the Commission, been taken.

22 ‘‘(c) REPORTING REQUIREMENT RELATING TO BO23 NUSES OR OTHER REWARDS.—Included in its comprehen24 sive statement under section 2401(e) for any period shall

25 be—


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1 ‘‘(1) the name of each person receiving a bonus

2 or other reward during such period which would not

3 have been allowable but for the provisions of sub4 section (b);

5 ‘‘(2) the amount of the bonus or other reward;

6 and

7 ‘‘(3) the amount by which the limitation re8 ferred to in subsection (b)(1) was exceeded as a re9 sult of such bonus or other reward.’’.

10 SEC. 407. MEDIATION IN COLLECTIVE-BARGAINING DIS11 PUTES.

12 (a) IN GENERAL.—Section 1207(b) of title 39,

13 United States Code, is amended by striking all that follows

14 ‘‘the Director of the Federal Mediation and Conciliation

15 Service shall’’ and inserting ‘‘, within 10 days appoint a

16 mediator of nationwide reputation and professional stat17 ure, and who is also a member of the National Academy

18 of Arbitrators. The parties shall cooperate with the medi19 ator in an effort to reach an agreement and shall meet

20 and negotiate in good faith at such times and places that

21 the mediator, in consultation with the parties, shall di22 rect.’’.

23 (b) PROVISIONS RELATING TO ARBITRATION

24 BOARDS.—Section 1207(c) of title 39, United States

25 Code, is amended—


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1 (1) in paragraph (1)—

2 (A) by striking ‘‘90’’ and inserting ‘‘60’’;

3 (B) by striking ‘‘not members of the fact4 finding panel,’’; and

5 (C) by striking all that follows ‘‘shall be

6 made’’ and inserting ‘‘from a list of names pro7 vided by the Director. This list shall consist of

8 not less than 9 names of arbitrators of nation9 wide reputation and professional stature, who

10 are also members of the National Academy of

11 Arbitrators, and whom the Director has deter12 mined are available and willing to serve.’’; and

13 (2) in paragraph (3), by striking ‘‘factfinding

14 panel’’ and inserting ‘‘mediation’’.

15 (c) CONFORMING AMENDMENT.—Section 1207(d) of

16 title 39, United States Code, is amended by striking ‘‘fact17 finding panel will be established’’ and inserting ‘‘mediator

18 shall be appointed’’.

19 TITLE V—ENHANCED

20 REGULATORY COMMISSION

21 SEC. 501. REORGANIZATION AND MODIFICATION OF CER22 TAIN PROVISIONS RELATING TO THE POSTAL

23 REGULATORY COMMISSION.

24 (a) TRANSFER AND REDESIGNATION.—Title 39,

25 United States Code, is amended—


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1 (1) by inserting after chapter 4 the following:

2 ‘‘CHAPTER 5—POSTAL REGULATORY

3 COMMISSION

‘‘Sec.

‘‘501. Establishment.

‘‘502. Commissioners.

‘‘503. Rules; regulations; procedures.

‘‘504. Administration.

4 ‘‘§ 501. Establishment

5 ‘‘The Postal Regulatory Commission is an inde6 pendent establishment of the executive branch of the Gov7 ernment of the United States.

8 ‘‘§ 502. Commissioners

9 ‘‘(a) The Postal Regulatory Commission is composed

10 of 5 Commissioners, appointed by the President, by and

11 with the advice and consent of the Senate. The Commis12 sioners shall be chosen solely on the basis of their technical

13 qualifications, professional standing, and demonstrated

14 expertise in economics, accounting, law, or public adminis15 tration, and may be removed by the President only for

16 cause. Each individual appointed to the Commission shall

17 have the qualifications and expertise necessary to carry

18 out the responsibilities accorded Commissioners under the

19 Postal Accountability and Enhancement Act. Not more

20 than 3 of the Commissioners may be adherents of the

21 same political party.


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1 ‘‘(b) A Commissioner may continue to serve after the

2 expiration of his term until his successor has qualified,

3 except that a Commissioner may not so continue to serve

4 for more than 1 year after the date upon which his term

5 otherwise would expire under subsection (e).

6 ‘‘(c) One of the Commissioners shall be designated

7 as Chairman by, and shall serve in the position of Chair8 man at the pleasure of, the President.

9 ‘‘(d) The Commissioners shall by majority vote des10 ignate a Vice Chairman of the Commission. The Vice

11 Chairman shall act as Chairman of the Commission in the

12 absence of the Chairman.

13 ‘‘(e) The Commissioners shall serve for terms of 6

14 years.’’;

15 (2) by striking, in subchapter I of chapter 36

16 (as in effect before the amendment made by section

17 201(c)), the heading for such subchapter I and all

18 that follows through section 3602; and

19 (3) by redesignating sections 3603 and 3604 as

20 sections 503 and 504, respectively, and transferring

21 such sections to the end of chapter 5 (as inserted by

22 paragraph (1)).

23 (b) DETERMINATIONS.—Section 503 of title 39,

24 United States Code, as so redesignated by subsection

25 (a)(3), is amended by adding at the end the following:


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1 ‘‘Such rules shall include procedures which balance, inter

2 alia, the need for protecting due process rights and ensur3 ing expeditious decision-making.’’.

4 (c) APPLICABILITY.—The amendment made by sub5 section (a)(1) shall not affect the appointment or tenure

6 of any person serving as a Commissioner on the Postal

7 Regulatory Commission (as so redesignated by section

8 504) pursuant to an appointment made before the date

9 of the enactment of this Act or any nomination made be10 fore that date, but, when any such office becomes vacant,

11 the appointment of any person to fill that office shall be

12 made in accordance with such amendment.

13 (d) CLERICAL AMENDMENT.—The analysis for part

14 I of title 39, United States Code, is amended by inserting

15 after the item relating to chapter 4 the following:

‘‘5. Postal Regulatory Commission .............................................. 501’’.

16 SEC. 502. AUTHORITY FOR POSTAL REGULATORY COMMIS17 SION TO ISSUE SUBPOENAS.

18 Section 504 of title 39, United States Code (as so

19 redesignated by section 501) is amended by adding at the

20 end the following:

21 ‘‘(f)(1) Any Commissioner of the Postal Regulatory

22 Commission, any administrative law judge appointed by

23 the Commission under section 3105 of title 5, and any

24 employee of the Commission designated by the CommisVerDate jul 14 2003 22:09 Sep 23, 2004 Jkt 029006 PO 00000 Frm 00227 Fmt 6659 Sfmt 6601 E:\HR\OC\HR672P2.XXX HR672P2

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1 sion may administer oaths, examine witnesses, take depo2 sitions, and receive evidence.

3 ‘‘(2) The Chairman of the Commission, any Commis4 sioner designated by the Chairman, and any administra5 tive law judge appointed by the Commission under section

6 3105 of title 5 may, with respect to any proceeding con7 ducted by the Commission under this title—

8 ‘‘(A) issue subpoenas requiring the attendance

9 and presentation of testimony by, or the production

10 of documentary or other evidence in the possession

11 of, any covered person; and

12 ‘‘(B) order the taking of depositions and re13 sponses to written interrogatories by a covered per14 son.

15 The written concurrence of a majority of the Commis16 sioners then holding office shall, with respect to each sub17 poena under subparagraph (A), be required in advance of

18 its issuance.

19 ‘‘(3) In the case of contumacy or failure to obey a

20 subpoena issued under this subsection, upon application

21 by the Commission, the district court of the United States

22 for the district in which the person to whom the subpoena

23 is addressed resides or is served may issue an order requir24 ing such person to appear at any designated place to tes25 tify or produce documentary or other evidence. Any failure


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1 to obey the order of the court may be punished by the

2 court as a contempt thereof.

3 ‘‘(4) For purposes of this subsection, the term ‘cov4 ered person’ means an officer, employee, agent, or con5 tractor of the Postal Service.

6 ‘‘(g)(1) If the Postal Service determines that any doc7 ument or other matter it provides to the Postal Regulatory

8 Commission pursuant to a subpoena issued under sub9 section (f), or otherwise at the request of the Commission

10 in connection with any proceeding or other purpose under

11 this title, contains information which is described in sec12 tion 410(c) of this title, or exempt from public disclosure

13 under section 552(b) of title 5, the Postal Service shall,

14 at the time of providing such matter to the Commission,

15 notify the Commission, in writing, of its determination

16 (and the reasons therefor).

17 ‘‘(2) No officer or employee of the Commission may,

18 with respect to any information as to which the Commis19 sion has been notified under paragraph (1)—

20 ‘‘(A) use such information for purposes other

21 than the purposes for which it is supplied; or

22 ‘‘(B) permit anyone who is not an officer or

23 employee of the Commission to have access to any

24 such information.


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1 ‘‘(3) Paragraph (2) shall not prevent information

2 from being furnished under any process of discovery estab3 lished under this title in connection with a proceeding

4 under this title. The Commission shall, by regulations

5 based on rule 26(c) of the Federal Rules of Civil Proce6 dure, establish procedures for ensuring appropriate con7 fidentiality for any information furnished under the pre8 ceding sentence.’’.

9 SEC. 503. APPROPRIATIONS FOR THE POSTAL REGU10 LATORY COMMISSION.

11 (a) AUTHORIZATION OF APPROPRIATIONS.—Sub12 section (d) of section 504 of title 39, United States Code

13 (as so redesignated by section 501) is amended to read

14 as follows:

15 ‘‘(d) There are authorized to be appropriated, out of

16 the Postal Service Fund, such sums as may be necessary

17 for the Postal Regulatory Commission. In requesting an

18 appropriation under this subsection for a fiscal year, the

19 Commission shall prepare and submit to the Congress

20 under section 2009 a budget of the Commission’s ex21 penses, including expenses for facilities, supplies, com22 pensation, and employee benefits.’’.

23 (b) BUDGET PROGRAM.—

24 (1) IN GENERAL.—The next to last sentence of

25 section 2009 of title 39, United States Code, is


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1 amended to read as follows: ‘‘The budget program

2 shall also include separate statements of the

3 amounts which (1) the Postal Service requests to be

4 appropriated under subsections (b) and (c) of section

5 2401, (2) the Office of Inspector General of the

6 United States Postal Service requests to be appro7 priated, out of the Postal Service Fund, under sec8 tion 8J(e) of the Inspector General Act of 1978, and

9 (3) the Postal Regulatory Commission requests to be

10 appropriated, out of the Postal Service Fund, under

11 section 504(d) of this title.’’.

12 (2) CONFORMING AMENDMENT.—Section

13 2003(e)(1) of title 39, United States Code, is

14 amended by striking the first sentence and inserting

15 the following: ‘‘The Fund shall be available for the

16 payment of (A) all expenses incurred by the Postal

17 Service in carrying out its functions as provided by

18 law, subject to the same limitation as set forth in

19 the parenthetical matter under subsection (a); (B)

20 all expenses of the Postal Regulatory Commission,

21 subject to the availability of amounts appropriated

22 pursuant to section 504(d); and (C) all expenses of

23 the Office of Inspector General, subject to the avail24 ability of amounts appropriated pursuant to section

25 8J(e) of the Inspector General Act of 1978.’’.


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1 (c) EFFECTIVE DATE.—

2 (1) IN GENERAL.—The amendments made by

3 this section shall apply with respect to fiscal years

4 beginning on or after October 1, 2004.

5 (2) SAVINGS PROVISION.—The provisions of

6 title 39, United States Code, that are amended by

7 this section shall, for purposes of any fiscal year be8 fore the first fiscal year to which the amendments

9 made by this section apply, continue to apply in the

10 same way as if this section had never been enacted.

11 SEC. 504. REDESIGNATION OF THE POSTAL RATE COMMIS12 SION.

13 (a) AMENDMENTS TO TITLE 39, UNITED STATES

14 CODE.—Title 39, United States Code, is amended in sec15 tions 404, 503–504 (as so redesignated by section 501),

16 1001, and 1002 by striking ‘‘Postal Rate Commission’’

17 each place it appears and inserting ‘‘Postal Regulatory

18 Commission’’.

19 (b) AMENDMENTS TO TITLE 5, UNITED STATES

20 CODE.—Title 5, United States Code, is amended in sec21 tions 104(1), 306(f), 2104(b), 3371(3), 5314 (in the item

22 relating to Chairman, Postal Rate Commission), 5315 (in

23 the item relating to Members, Postal Rate Commission),

24 5514(a)(5)(B), 7342(a)(1)(A), 7511(a)(1)(B)(ii),

25 8402(c)(1), 8423(b)(1)(B), and 8474(c)(4) by striking


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1 ‘‘Postal Rate Commission’’ and inserting ‘‘Postal Regu2 latory Commission’’.

3 (c) AMENDMENT TO THE ETHICS IN GOVERNMENT

4 ACT OF 1978.—Section 101(f)(6) of the Ethics in Govern5 ment Act of 1978 (5 U.S.C. App.) is amended by striking

6 ‘‘Postal Rate Commission’’ and inserting ‘‘Postal Regu7 latory Commission’’.

8 (d) AMENDMENT TO THE REHABILITATION ACT OF

9 1973.—Section 501(b) of the Rehabilitation Act of 1973

10 (29 U.S.C. 791(b)) is amended by striking ‘‘Postal Rate

11 Office’’ and inserting ‘‘Postal Regulatory Commission’’.

12 (e) AMENDMENT TO TITLE 44, UNITED STATES

13 CODE.—Section 3502(5) of title 44, United States Code,

14 is amended by striking ‘‘Postal Rate Commission’’ and in15 serting ‘‘Postal Regulatory Commission’’.

16 (f) OTHER REFERENCES.—Whenever a reference is

17 made in any provision of law (other than this Act or a

18 provision of law amended by this Act), regulation, rule,

19 document, or other record of the United States to the

20 Postal Rate Commission, such reference shall be consid21 ered a reference to the Postal Regulatory Commission.


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1 SEC. 505. OFFICER OF THE POSTAL REGULATORY COMMIS2 SION REPRESENTING THE GENERAL PUBLIC.

3 (a) IN GENERAL.—Chapter 5 of title 39, United

4 States Code (as added by this Act) is amended by adding

5 after section 504 the following:

6 ‘‘§ 505. Officer of the Postal Regulatory Commission

7 representing the general public

8 ‘‘The Postal Regulatory Commission shall designate

9 an officer of the Postal Regulatory Commission in all pub10 lic proceedings (such as developing rules, regulations, and

11 procedures) who shall represent the interests of the gen12 eral public.’’.

13 (b) CLERICAL AMENDMENT.—The analysis for chap14 ter 5 of title 39, United States Code (as amended by sec15 tion 501(a)(1)) is amended by adding after the item relat16 ing to section 504 the following:

‘‘505. Officer of the Postal Regulatory Commission representing the general

public.’’.

17 TITLE VI—INSPECTORS

18 GENERAL

19 SEC. 601. INSPECTOR GENERAL OF THE POSTAL REGU20 LATORY COMMISSION.

21 (a) IN GENERAL.—Paragraph (2) of section 8G(a)

22 of the Inspector General Act of 1978 is amended by insert23 ing ‘‘the Postal Regulatory Commission,’’ after ‘‘the

24 United States International Trade Commission,’’.


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1 (b) ADMINISTRATION.—Section 504 of title 39,

2 United States Code (as so redesignated by section 501)

3 is amended by adding after subsection (g) (as added by

4 section 502) the following:

5 ‘‘(h)(1) Notwithstanding any other provision of this

6 title or of the Inspector General Act of 1978, the authority

7 to select, appoint, and employ officers and employees of

8 the Office of Inspector General of the Postal Regulatory

9 Commission, and to obtain any temporary or intermittent

10 services of experts or consultants (or an organization of

11 experts or consultants) for such Office, shall reside with

12 the Inspector General of the Postal Regulatory Commis13 sion.

14 ‘‘(2) Except as provided in paragraph (1), any exer15 cise of authority under this subsection shall, to the extent

16 practicable, be in conformance with the applicable laws

17 and regulations that govern selections, appointments and

18 employment, and the obtaining of any such temporary or

19 intermittent services, within the Postal Regulatory Com20 mission.’’.

21 (c) DEADLINE.—No later than 180 days after the

22 date of the enactment of this Act—

23 (1) the first Inspector General of the Postal

24 Regulatory Commission shall be appointed; and


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1 (2) the Office of Inspector General of the Post2 al Regulatory Commission shall be established.

3 SEC. 602. INSPECTOR GENERAL OF THE UNITED STATES

4 POSTAL SERVICE TO BE APPOINTED BY THE

5 PRESIDENT.

6 (a) DEFINITIONAL AMENDMENTS TO THE INSPEC7 TOR GENERAL ACT OF 1978.—Section 11 of the Inspector

8 General Act of 1978 is amended—

9 (1) in paragraph (1)—

10 (A) by striking ‘‘or’’ before ‘‘the President

11 of the Export-Import Bank;’’ and

12 (B) by inserting ‘‘or the Governors of the

13 United States Postal Service (within the mean14 ing of section 102(3) of title 39, United States

15 Code);’’ after ‘‘the President of the Export-Im16 port Bank;’’; and

17 (2) in paragraph (2)—

18 (A) by striking ‘‘or’’ before ‘‘the Export19 Import Bank,’’; and

20 (B) by inserting ‘‘or the United States

21 Postal Service,’’ after ‘‘the Export-Import

22 Bank,’’.

23 (b) SPECIAL PROVISIONS CONCERNING THE UNITED

24 STATES POSTAL SERVICE.—


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1 (1) IN GENERAL.—The Inspector General Act

2 of 1978 is amended—

3 (A) by redesignating section 8J as section

4 8K; and

5 (B) by inserting after section 8I the fol6 lowing:

7 ‘‘SPECIAL PROVISIONS CONCERNING THE UNITED STATES

8 POSTAL SERVICE

9 ‘‘SEC. 8J. (a) In carrying out the duties and respon10 sibilities specified in this Act, the Inspector General of the

11 United States Postal Service shall have oversight responsi12 bility for all activities of the Postal Inspection Service, in13 cluding any internal investigation performed by the Postal

14 Inspection Service. The Chief Postal Inspector shall

15 promptly report any significant activities being carried out

16 by the Postal Inspection Service to such Inspector Gen17 eral. The Postmaster General shall promptly report to

18 such Inspector General all allegations of theft, fraud, or

19 misconduct by Postal Service officers or employees, and

20 entities or individuals doing business with the Postal Serv21 ice.

22 ‘‘(b) In the case of any report that the Governors of

23 the United States Postal Service (within the meaning of

24 section 102(3) of title 39, United States Code) are re25 quired to transmit under the second sentence of section

26 5(d), such sentence shall be applied by deeming the term


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1 ‘appropriate committees of Congress’ to mean the Com2 mittee on Government Reform of the House of Represent3 atives, the Committee on Governmental Affairs of the Sen4 ate, and such other committees or subcommittees of Con5 gress as may be appropriate.

6 ‘‘(c) Notwithstanding any provision of paragraph (7)

7 or (8) of section 6(a), the Inspector General of the United

8 States Postal Service may select, appoint, and employ

9 such officers and employees as may be necessary for car10 rying out the functions, powers, and duties of the Office

11 of Inspector General and to obtain the temporary or inter12 mittent services of experts or consultants or an organiza13 tion of experts or consultants, subject to the applicable

14 laws and regulations that govern such selections, appoint15 ments, and employment, and the obtaining of such serv16 ices, within the United States Postal Service.

17 ‘‘(d) Nothing in this Act shall restrict, eliminate, or

18 otherwise adversely affect any of the rights, privileges, or

19 benefits of employees of the United States Postal Service,

20 or labor organizations representing employees of the

21 United States Postal Service, under chapter 12 of title 39,

22 United States Code, the National Labor Relations Act,

23 any handbook or manual affecting employee labor rela24 tions with the United States Postal Service, or any collec25 tive bargaining agreement.


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1 ‘‘(e) There are authorized to be appropriated, out of

2 the Postal Service Fund, such sums as may be necessary

3 for the Office of Inspector General of the United States

4 Postal Service.’’.

5 (2) RELATED PROVISIONS.—For certain related

6 provisions, see section 503(b).

7 (c) EXERCISE OF CERTAIN POWERS.—Section

8 6(e)(3) of the Inspector General Act of 1978 is amended—

9 (1) by striking ‘‘and the’’ before ‘‘Tennessee

10 Valley Authority’’; and

11 (2) by inserting ‘‘, and United States Postal

12 Service’’ after ‘‘Tennessee Valley Authority’’.

13 (d) PUBLIC CONTRACTS.—

14 (1) ADDITIONAL PROVISIONS APPLICABLE.—

15 Section 410(b)(5) of title 39, United States Code, is

16 amended—

17 (A) in subparagraph (A), by striking

18 ‘‘and’’ after the semicolon; and

19 (B) by adding after subparagraph (B) the

20 following:

21 ‘‘(C) the Anti-Kickback Act of 1986 (41

22 U.S.C. 51 and following), other than sub23 sections (a) and (b) of 7 and section 8 of that

24 Act; and


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1 ‘‘(D) section 315 of the Federal Property

2 and Administrative Services Act of 1949 (41

3 U.S.C. 265) (relating to protecting contractor

4 employees from reprisal for disclosure of certain

5 information);’’.

6 (2) REGULATIONS ON ALLOWABLE COSTS.—

7 Section 410 of title 39, United States Code, is

8 amended by adding at the end the following:

9 ‘‘(e) The Postal Service shall develop and issue pur10 chasing regulations that prohibit contract costs not allow11 able under section 5.2.5 of the United States Postal Serv12 ice Procurement Manual (Publication 41), as in effect on

13 July 12, 1995.’’.

14 (e) AUDITS OF THE POSTAL SERVICE.—

15 (1) AUDITS.—Subsection (e) of section 2008 of

16 title 39, United States Code, is amended to read as

17 follows:

18 ‘‘(e)(1) At least once each year beginning with the

19 fiscal year commencing after the date of the enactment

20 of the Postal Accountability and Enhancement Act, the

21 financial statements of the Postal Service (including those

22 used in determining and establishing postal rates) shall

23 be audited by the Inspector General or by an independent

24 external auditor selected by the Inspector General.


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1 ‘‘(2) Audits under this section shall be conducted in

2 accordance with applicable generally accepted government

3 auditing standards.

4 ‘‘(3) Upon completion of the audit required by this

5 subsection, the person who audits the statement shall sub6 mit a report on the audit to the Postmaster General.’’.

7 (2) RESULTS OF INSPECTOR GENERAL’S AUDIT

8 TO BE INCLUDED IN ANNUAL REPORT.—Section

9 2402 of title 39, United States Code, is amended by

10 inserting after the first sentence the following:

11 ‘‘Each report under this section shall include a copy

12 of the report most recently received by the Post13 master General under section 2008(e)(3).’’.

14 (3) COORDINATION PROVISIONS.—Section

15 2008(d) of title 39, United States Code, is

16 amended—

17 (A) by striking ‘‘(d) Nothing’’ and insert18 ing ‘‘(d)(1) Except as provided in paragraph

19 (2), nothing’’; and

20 (B) by adding at the end the following:

21 ‘‘(2) An audit or report under paragraph (1) may not

22 be obtained without the prior written approval of the In23 spector General.’’.

24 (4) TRANSITION PROVISION.—For purposes of

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1 mencing after the date of the enactment of this Act,

2 the provisions of title 39, United States Code, shall

3 be applied as if the amendments made by this sub4 section had never been enacted.

5 (f) REPORTS.—Section 3013 of title 39, United

6 States Code, is amended by striking ‘‘Postmaster Gen7 eral’’ each place it appears and inserting ‘‘Chief Postal

8 Inspector’’.

9 (g) TECHNICAL AND CONFORMING AMENDMENTS.—

10 (1) RELATING TO THE INSPECTOR GENERAL

11 ACT OF 1978.—(A) Subsection (a) of section 8G of

12 the Inspector General Act of 1978 (as amended by

13 section 601(a)) is further amended—

14 (i) in paragraph (2), by striking ‘‘the Post15 al Regulatory Commission, and the United

16 States Postal Service;’’ and inserting ‘‘and the

17 Postal Regulatory Commission;’’ and

18 (ii) in paragraph (4), by striking ‘‘except

19 that’’ and all that follows through ‘‘Code);’’ and

20 inserting ‘‘except that, with respect to the Na21 tional Science Foundation, such term means the

22 National Science Board;’’.

23 (B)(i) Subsection (f) of section 8G of such Act

24 is repealed.


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1 (ii) Subsection (c) of section 8G of such Act is

2 amended by striking ‘‘Except as provided under sub3 section (f) of this section, the’’ and inserting ‘‘The’’.

4 (C) Section 8K of such Act (as so redesignated

5 by subsection (b)(1)(A)) is amended by striking the

6 matter after ‘‘8D,’’ and before ‘‘of this Act’’ and in7 serting ‘‘8E, 8F, 8H, or 8J’’.

8 (2) RELATING TO TITLE 39, UNITED STATES

9 CODE.—(A) Subsection (e) of section 202 of title 39,

10 United States Code, is repealed.

11 (B) Paragraph (4) of section 102 of such title

12 39 (as amended by section 101) is amended to read

13 as follows:

14 ‘‘(4) ‘Inspector General’ means the Inspector

15 General of the United States Postal Service, ap16 pointed under section 3(a) of the Inspector General

17 Act of 1978;’’.

18 (C) The first sentence of section 1003(a) of

19 such title 39 is amended by striking ‘‘chapters 2 and

20 12 of this title, section 8G of the Inspector General

21 Act of 1978, or other provision of law,’’ and insert22 ing ‘‘chapter 2 or 12 of this title, subsection (b) or

23 (c) of this section, or any other provision of law,’’.

24 (D) Section 1003(b) of such title 39 is amended

25 by striking ‘‘respective’’ and inserting ‘‘other’’.


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1 (E) Section 1003(c) of such title 39 is amended

2 by striking ‘‘included’’ and inserting ‘‘includes’’.

3 (3) RELATING TO THE ENERGY POLICY ACT OF

4 1992.—Section 160(a) of the Energy Policy Act of

5 1992 (42 U.S.C. 8262f(a)) is amended (in the mat6 ter before paragraph (1)) by striking all that follows

7 ‘‘(5 U.S.C. App.)’’ and before ‘‘shall—’’.

8 (h) EFFECTIVE DATE; TRANSITION PROVISIONS.—

9 (1) EFFECTIVE DATE.—Except as provided in

10 paragraph (2) or subsection (c), this section and the

11 amendments made by this section shall take effect

12 on the date of the enactment of this Act.

13 (2) TRANSITION PROVISIONS.—

14 (A) PRESIDENTIAL APPOINTMENT AU15 THORITY AVAILABLE IMMEDIATELY.—The au16 thority to appoint an Inspector General of the

17 United States Postal Service in accordance with

18 the amendments made by this section shall be

19 available as of the effective date of this section.

20 (B) CONTINUATION IN OFFICE.—Pending

21 the appointment of an Inspector General of the

22 United States Postal Service in accordance with

23 the amendments made by this section, the indi24 vidual serving as the Inspector General of the

25 United States Postal Service on the day before


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1 the effective date of this section may continue

2 to serve—

3 (i) in accordance with applicable pro4 visions of the Inspector General Act of

5 1978 and (except as provided in clause

6 (ii)) of title 39, United States Code, as last

7 in effect before the effective date of this

8 Act; but

9 (ii) subject to the provisions of such

10 title 39 as amended by subsections (e) and

11 (f) of this section (deeming any reference

12 to the ‘‘Inspector General’’ in such provi13 sions, as so amended, to refer to the indi14 vidual continuing to serve under authority

15 of this subparagraph) and subparagraph

16 (C).

17 (C) AUTHORIZATION OF APPROPRIA18 TIONS.—

19 (i) IN GENERAL.—Notwithstanding

20 any other provision of this subsection, sec21 tion 8J(e) of the Inspector General Act of

22 1978 (as amended by this section) shall be

23 effective for purposes of fiscal years begin24 ning on or after October 1, 2004.


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1 (ii) SAVINGS PROVISION.—For pur2 poses of the fiscal year ending on Sep3 tember 30, 2004, funding for the Office of

4 Inspector General of the United States

5 Postal Service shall be made available in

6 the same manner as if this Act had never

7 been enacted.

8 (D) ELIGIBILITY OF PRIOR INSPECTOR

9 GENERAL.—Nothing in this Act shall prevent

10 any individual who has served as Inspector

11 General of the United States Postal Service at

12 any time before the date of the enactment of

13 this Act from being appointed to that position

14 pursuant to the amendments made by this sec15 tion.

16 TITLE VII—EVALUATIONS

17 SEC. 701. UNIVERSAL POSTAL SERVICE STUDY.

18 (a) REPORT BY THE POSTAL SERVICE.—The United

19 States Postal Service shall, within 12 months after the

20 date of the enactment of this Act, submit to the President,

21 the Congress, and the Postal Regulatory Commission, a

22 written report on universal postal service in the United

23 States (hereinafter in this section referred to as ‘‘universal

24 service’’). Such report shall include at least the following:


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1 (1) A comprehensive review of the history and

2 development of universal service, including how the

3 scope and standards of universal service have

4 evolved over time.

5 (2) The scope and standards of universal serv6 ice provided under current law (including sections

7 101 and 403 of title 39, United States Code) and

8 current rules, regulations, policy statements, and

9 practices of the Postal Service.

10 (3) A description of any geographic areas, pop11 ulations, communities, organizations, or other

12 groups or entities not currently covered by universal

13 service or that are covered but that are receiving

14 services deficient in scope or quality or both.

15 (4) The scope and standards of universal serv16 ice likely to be required in the future in order to

17 meet the needs and expectations of the American

18 public, including all types of mail users, based on

19 such assumptions or alternative sets of assumptions

20 as the Postal Service considers plausible.

21 (5) Such recommendations as the Postal Serv22 ice considers appropriate.

23 (b) REPORT BY THE POSTAL REGULATORY COMMIS24 SION.—The Postal Regulatory Commission shall, within

25 12 months after receiving the report of the Postal Service


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1 under subsection (a), submit to the President and the

2 Congress a written report evaluating the report of the

3 Postal Service. The report of the Commission shall include

4 at least the following:

5 (1) Such comments and observations relating to

6 the matters addressed in the Postal Service’s report

7 as the Commission considers appropriate.

8 (2) An estimate of the cost attributable to the

9 obligation to provide universal service under prior

10 and current law, respectively.

11 (3) An estimate of the likely cost of fulfilling

12 the obligation to provide universal service under—

13 (A) the assumptions or respective sets of

14 assumptions of the Postal Service described in

15 subsection (a)(4); and

16 (B) such other assumptions or sets of as17 sumptions as the Commission considers plau18 sible.

19 (4) Such additional topics and recommenda20 tions as the Commission considers appropriate.

21 (c) CONSULTATION.—In preparing the reports re22 quired by this section, the Postal Service and the Postal

23 Regulatory Commission—

24 (1) shall consult with each other, other Federal

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1 vate sector engaged in the delivery of mail, and the

2 general public; and

3 (2) shall address in their respective reports any

4 written comments received under this section.

5 (d) CLARIFYING PROVISION.—Nothing in this section

6 shall be considered to relate to any services that are not

7 postal services (within the meaning of section 102 of title

8 39, United States Code, as amended by section 101).

9 SEC. 702. ASSESSMENTS OF RATEMAKING, CLASSIFICA10 TION, AND OTHER PROVISIONS.

11 (a) IN GENERAL.—The Postal Regulatory Commis12 sion shall, at least every 5 years, submit a report to the

13 President and the Congress concerning—

14 (1) the operation of the amendments made by

15 the Postal Accountability and Enhancement Act;

16 and

17 (2) recommendations for any legislation or

18 other measures necessary to improve the effective19 ness or efficiency of the postal laws of the United

20 States.

21 (b) POSTAL SERVICE VIEWS.—A report under this

22 section shall be submitted only after reasonable oppor23 tunity has been afforded to the Postal Service to review

24 such report and to submit written comments thereon. Any

25 comments timely received from the Postal Service under


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1 the preceding sentence shall be attached to the report sub2 mitted under subsection (a).

3 (c) SPECIFIC INFORMATION REQUIRED.—The Postal

4 Regulatory Commission shall include, as part of at least

5 its first report under subsection (a), the following:

6 (1) COST-COVERAGE REQUIREMENT RELATING

7 TO COMPETITIVE PRODUCTS COLLECTIVELY.—With

8 respect to section 3633 of title 39, United States

9 Code (as amended by this Act)—

10 (A) a description of how such section has

11 operated; and

12 (B) recommendations as to whether or not

13 such section should remain in effect and, if so,

14 any suggestions as to how it might be improved.

15 (2) COMPETITIVE PRODUCTS FUND.—With re16 spect to the Postal Service Competitive Products

17 Fund (under section 2011 of title 39, United States

18 Code, as amended by section 301), in consultation

19 with the Secretary of the Treasury—

20 (A) a description of how such Fund has

21 operated;

22 (B) any suggestions as to how the oper23 ation of such Fund might be improved; and

24 (C) a description and assessment of alter25 native accounting or financing mechanisms that


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1 might be used to achieve the objectives of such

2 Fund.

3 (3) ASSUMED FEDERAL INCOME TAX ON COM4 PETITIVE PRODUCTS FUND.—With respect to section

5 3634 of title 39, United States Code (as amended by

6 this Act), in consultation with the Secretary of the

7 Treasury—

8 (A) a description of how such section has

9 operated; and

10 (B) recommendations as to whether or not

11 such section should remain in effect and, if so,

12 any suggestions as to how it might be improved.

13 SEC. 703. STUDY ON EQUAL APPLICATION OF LAWS TO

14 COMPETITIVE PRODUCTS.

15 (a) IN GENERAL.—The Federal Trade Commission

16 shall prepare and submit to the President, the Congress,

17 and the Postal Regulatory Commission, within 1 year

18 after the date of the enactment of this Act, a comprehen19 sive report identifying Federal and State laws that apply

20 differently to the United States Postal Service with re21 spect to the competitive category of mail (within the mean22 ing of section 102 of title 39, United States Code, as

23 amended by section 101) and private companies providing

24 similar products.


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1 (b) RECOMMENDATIONS; ADJUSTMENTS.—The Fed2 eral Trade Commission shall include such recommenda3 tions as it considers appropriate for bringing such legal

4 differences to an end and, in the interim, to account under

5 section 3633, for the net economic effects provided by

6 those laws.

7 (c) CONSULTATION.—In preparing its report, the

8 Federal Trade Commission shall consult with the United

9 States Postal Service, the Postal Regulatory Commission,

10 other Federal agencies, mailers, private companies that

11 provide delivery services, and the general public, and shall

12 append to such report any written comments received

13 under this subsection.

14 (d) COMPETITIVE PRODUCT RATE REGULATION.—

15 The Postal Regulatory Commission shall take into account

16 the recommendations of the Federal Trade Commission,

17 and subsequent events that affect the continuing validity

18 of the estimate of the net economic effect, in promulgating

19 or revising the regulations required by section 3633 of title

20 39, United States Code.

21 SEC. 704. GREATER DIVERSITY IN POSTAL SERVICE EXECU22 TIVE AND ADMINISTRATIVE SCHEDULE MAN23 AGEMENT POSITIONS.

24 (a) STUDY.—The Board of Governors shall study

25 and, within 1 year after the date of the enactment of this


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1 Act, submit to the President and Congress a report con2 cerning the extent to which women and minorities are rep3 resented in supervisory and management positions within

4 the United States Postal Service. Any data included in the

5 report shall be presented in the aggregate and by pay level.

6 (b) PERFORMANCE EVALUATIONS.—The United

7 States Postal Service shall, as soon as practicable, take

8 such measures as may be necessary to ensure that, for

9 purposes of conducting performance appraisals of super10 visory or managerial employees, appropriate consideration

11 shall be given to meeting affirmative action goals, achiev12 ing equal employment opportunity requirements, and im13 plementation of plans designed to achieve greater diversity

14 in the workforce.

15 SEC. 705. PLAN FOR ASSISTING DISPLACED WORKERS.

16 (a) PLAN.—The United States Postal Service shall,

17 before the deadline specified in subsection (b), develop and

18 be prepared to implement, whenever necessary, a com19 prehensive plan under which reemployment assistance

20 shall be afforded to employees displaced as a result of the

21 automation or privatization of any of its functions.

22 (b) REPORT.—Not later than 1 year after the date

23 of the enactment of this Act, the United States Postal

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1 gress a written report describing its plan under this sec2 tion.

3 SEC. 706. CONTRACTS WITH WOMEN, MINORITIES, AND

4 SMALL BUSINESSES.

5 The Board of Governors shall study and, within 1

6 year after the date of the enactment of this Act, submit

7 to the President and the Congress a report concerning the

8 number and value of contracts and subcontracts the Post9 al Service has entered into with women, minorities, and

10 small businesses.

11 SEC. 707. RATES FOR PERIODICALS.

12 (a) IN GENERAL.—The United States Postal Service,

13 acting jointly with the Postal Regulatory Commission and

14 the General Accounting Office, shall study and submit to

15 the President and Congress a report concerning—

16 (1) the quality, accuracy, and completeness of

17 the information used by the Postal Service in deter18 mining the direct and indirect postal costs attrib19 utable to periodicals; and

20 (2) any opportunities that might exist for im21 proving efficiencies in the collection, handling, trans22 portation, or delivery of periodicals by the Postal

23 Service, including any pricing incentives for mailers

24 that might be appropriate.


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1 (b) RECOMMENDATIONS.—The report shall include

2 recommendations for any administrative action or legisla3 tion that might be appropriate.

4 SEC. 708. ASSESSMENT OF CERTAIN RATE DEFICIENCIES.

5 (a) IN GENERAL.—Within 12 months after the date

6 of the enactment of this Act, the Office of Inspector Gen7 eral of the United States Postal Service shall study and

8 submit to the President, the Congress, and the United

9 States Postal Service, a report concerning the administra10 tion of section 3626(k) of title 39, United States Code.

11 (b) SPECIFIC REQUIREMENTS.—The study and re12 port shall specifically address the adequacy and fairness

13 of the process by which assessments under section 3626(k)

14 of title 39, United States Code, are determined and ap15 pealable, including—

16 (1) whether the Postal Regulatory Commission

17 or any other body outside the Postal Service should

18 be assigned a role; and

19 (2) whether a statute of limitations should be

20 established for the commencement of proceedings by

21 the Postal Service thereunder.

22 SEC. 709. POSTAL PROCESSING AND DISTRIBUTION NET23 WORK STUDY.

24 The United States Postal Service shall, within 16

25 months after the date of the enactment of this Act, submit


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1 to the President, the Congress, and the Board of Gov2 ernors of the United States Postal Service a written report

3 on the postal processing and distribution network. Such

4 report shall include at least the following:

5 (1) Recommendations to improve the efficiency

6 and effectiveness of the processing and distribution

7 network while preserving the timely delivery of post8 al services.

9 (2) Identification of excess capacity (if any)

10 within the processing and distribution network and

11 opportunities for savings through realignment or

12 consolidation of facilities.

13 (3) Report of the Postal Service’s plans for

14 dealing with the recommendations and findings iden15 tified in paragraphs (1) and (2).

16 (4) Statutory or regulatory obstacles preventing

17 the Postal Service from taking action to realign or

18 consolidate facilities identified in paragraph (2).

19 (5) Such additional topics and recommenda20 tions as the Postal Service considers appropriate.

21 SEC. 710. DEFINITION.

22 For purposes of this title, the term ‘‘Board of Gov23 ernors’’ has the meaning given such term by section 102

24 of title 39, United States Code.


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1 TITLE VIII—MISCELLANEOUS;

2 TECHNICAL AND CON3 FORMING AMENDMENTS

4 SEC. 801. EMPLOYMENT OF POSTAL POLICE OFFICERS.

5 Section 404 of title 39, United States Code, as

6 amended by sections 102 and 811(e), is further amended

7 by adding at the end the following:

8 ‘‘(f) The Postal Service may employ police officers for

9 duty in connection with the protection of property owned

10 or occupied by the Postal Service or under the charge and

11 control of the Postal Service, and persons on the property,

12 including duty in areas outside the property to the extent

13 necessary to protect the property and persons on the prop14 erty. Such officers shall have, with respect to such prop15 erty, the powers available under section 1315 of title 40,

16 and, as to such property, the Postal Service may take any

17 action that the Secretary of Homeland Security may take

18 under such section, attaching thereto penalties under the

19 authority and within the limits provided in subsection

20 (c)(2) of such section.’’.


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1 SEC. 802. DATE OF POSTMARK TO BE TREATED AS DATE OF

2 APPEAL IN CONNECTION WITH THE CLOSING

3 OR CONSOLIDATION OF POST OFFICES.

4 (a) IN GENERAL.—Section 404(b) of title 39, United

5 States Code, is amended by adding at the end the fol6 lowing:

7 ‘‘(6) For purposes of paragraph (5), any appeal re8 ceived by the Commission shall—

9 ‘‘(A) if sent to the Commission through the

10 mails, be considered to have been received on the

11 date of the Postal Service postmark on the envelope

12 or other cover in which such appeal is mailed; or

13 ‘‘(B) if otherwise lawfully delivered to the Com14 mission, be considered to have been received on the

15 date determined based on any appropriate docu16 mentation or other indicia (as determined under reg17 ulations of the Commission).’’.

18 (b) EFFECTIVE DATE.—This section and the amend19 ments made by this section shall apply with respect to any

20 determination to close or consolidate a post office which

21 is first made available, in accordance with paragraph (3)

22 of section 404(b) of title 39, United States Code, after

23 the end of the 3-month period beginning on the date of

24 the enactment of this Act.


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1 SEC. 803. PROVISIONS RELATING TO BENEFITS UNDER

2 CHAPTER 81 OF TITLE 5, UNITED STATES

3 CODE, FOR OFFICERS AND EMPLOYEES OF

4 THE FORMER POST OFFICE DEPARTMENT.

5 (a) IN GENERAL.—Section 8 of the Postal Reorga6 nization Act (39 U.S.C. 1001 note) is amended by insert7 ing ‘‘(a)’’ after ‘‘8.’’ and by adding at the end the fol8 lowing:

9 ‘‘(b) For purposes of chapter 81 of title 5, United

10 States Code, the Postal Service shall, with respect to any

11 individual receiving benefits under such chapter as an offi12 cer or employee of the former Post Office Department,

13 have the same authorities and responsibilities as it has

14 with respect to an officer or employee of the Postal Service

15 receiving such benefits.’’.

16 (b) EFFECTIVE DATE.—This section and the amend17 ments made by this section shall be effective as of the first

18 day of the fiscal year in which this Act is enacted.

19 SEC. 804. OBSOLETE PROVISIONS.

20 (a) REPEAL.—

21 (1) IN GENERAL.—Chapter 52 of title 39,

22 United States Code, is repealed.

23 (2) CONFORMING AMENDMENTS.—(A) Section

24 5005(a) of title 39, United States Code, is

25 amended—


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1 (i) by striking paragraph (1), and by re2 designating paragraphs (2) through (4) as

3 paragraphs (1) through (3), respectively; and

4 (ii) in paragraph (3) (as so designated by

5 clause (i)), by striking ‘‘(as defined in section

6 5201(6) of this title)’’.

7 (B) Section 5005(b) of such title 39 is amended

8 by striking ‘‘(a)(4)’’ each place it appears and in9 serting ‘‘(a)(3)’’.

10 (C) Section 5005(c) of such title 39 is amended

11 by striking ‘‘by carrier or person under subsection

12 (a)(1) of this section, by contract under subsection

13 (a)(4) of this section, or’’ and inserting ‘‘by contract

14 under subsection (a)(3) of this section or’’.

15 (b) ELIMINATING RESTRICTION ON LENGTH OF CON16 TRACTS.—(1) Section 5005(b)(1) of title 39, United

17 States Code, is amended by striking ‘‘(or where the Postal

18 Service determines that special conditions or the use of

19 special equipment warrants, not in excess of 6 years)’’ and

20 inserting ‘‘(or such longer period of time as may be deter21 mined by the Postal Service to be advisable or appro22 priate)’’.

23 (2) Section 5402(d) of such title 39 is amended by

24 striking ‘‘for a period of not more than 4 years’’.


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1 (3) Section 5605 of such title 39 is amended by strik2 ing ‘‘for periods of not in excess of 4 years’’.

3 (c) CLERICAL AMENDMENT.—The analysis for part

4 V of title 39, United States Code, is amended by repealing

5 the item relating to chapter 52.

6 SEC. 805. EXPANDED CONTRACTING AUTHORITY.

7 (a) AMENDMENT TO TITLE 39, UNITED STATES

8 CODE.—

9 (1) CONTRACTS WITH AIR CARRIERS.—Sub10 section (d) of section 5402 of title 39, United States

11 Code, is amended to read as follows:

12 ‘‘(d)(1) The Postal Service may contract with any air

13 carrier for the transportation of mail by aircraft in inter14 state air transportation, including the rates therefor, ei15 ther through negotiations or competitive bidding.

16 ‘‘(2) Notwithstanding subsections (a) through (c), the

17 Postal Service may contract with any air carrier or foreign

18 air carrier for the transportation of mail by aircraft in

19 foreign air transportation, including the rates therefor, ei20 ther through negotiations or competitive bidding, except

21 that—

22 ‘‘(A) any such contract may be awarded only to

23 (i) an air carrier holding a certificate required by

24 section 41101 of title 49 or an exemption therefrom

25 issued by the Secretary of Transportation, (ii) a forVerDate jul 14 2003 22:09 Sep 23, 2004 Jkt 029006 PO 00000 Frm 00261 Fmt 6659 Sfmt 6601 E:\HR\OC\HR672P2.XXX HR672P2

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1 eign air carrier holding a permit required by section

2 41301 of title 49 or an exemption therefrom issued

3 by the Secretary of Transportation, or (iii) a com4 bination of such air carriers or foreign air carriers

5 (or both);

6 ‘‘(B) mail transported under any such contract

7 shall not be subject to any duty-to-carry requirement

8 imposed by any provision of subtitle VII of title 49

9 or by any certificate, permit, or corresponding ex10 emption authority issued by the Secretary of Trans11 portation under that subtitle;

12 ‘‘(C) every contract that the Postal Service

13 awards to a foreign air carrier under this paragraph

14 shall be subject to the continuing requirement that

15 air carriers shall be afforded the same opportunity

16 to carry the mail of the country to and from which

17 the mail is transported and the flag country of the

18 foreign air carrier, if different, as the Postal Service

19 has afforded the foreign air carrier; and

20 ‘‘(D) the Postmaster General shall consult with

21 the Secretary of Defense concerning actions that af22 fect the carriage of military mail transported in for23 eign air transportation.


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1 ‘‘(3) Paragraph (2) shall not be interpreted as sus2 pending or otherwise diminishing the authority of the Sec3 retary of Transportation under section 41310 of title 49.’’.

4 (2) DEFINITIONS.—Subsection (e) of section

5 5402 of title 39, United States Code, is amended to

6 read as follows:

7 ‘‘(e) For purposes of this section, the terms ‘air car8 rier’, ‘air transportation’, ‘foreign air carrier’, ‘foreign air

9 transportation’, ‘interstate air transportation’, and ‘mail’

10 shall have the meanings given such terms in section 40102

11 of title 49.’’.

12 (b) AMENDMENTS TO TITLE 49, UNITED STATES

13 CODE.—

14 (1) AUTHORITY OF POSTAL SERVICE TO PRO15 VIDE FOR INTERSTATE AIR TRANSPORTATION OF

16 MAIL.—Section 41901(a) of title 49, United States

17 Code, is amended to read as follows:

18 ‘‘(a) TITLE 39.—The United States Postal Service

19 may provide for the transportation of mail by aircraft in

20 air transportation under this chapter and under chapter

21 54 of title 39.’’.

22 (2) SCHEDULES FOR CERTAIN TRANSPOR23 TATION OF MAIL.—Section 41902(b)(1) of title 49,

24 United States Code, is amended by inserting before


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1 the semicolon at the end the following: ‘‘(other than

2 foreign air transportation of mail)’’.

3 (3) PRICES FOR FOREIGN TRANSPORTATION OF

4 MAIL.—Section 41907 of title 49, United States

5 Code, is amended—

6 (A) by striking ‘‘(a) LIMITATIONS.—’’; and

7 (B) by striking subsection (b).

8 (4) CONFORMING AMENDMENTS.—Sections

9 41107, 41901(b)(1), 41902(a), 41903(a), and

10 41903(b) of title 49, United States Code, are

11 amended by striking ‘‘in foreign air transportation

12 or’’.

13 SEC. 806. INVESTMENTS.

14 Subsection (c) of section 2003 of title 39, United

15 States Code, is amended—

16 (1) by striking ‘‘(c) If’’ and inserting ‘‘(c)(1)

17 Except as provided in paragraph (2), if’’; and

18 (2) by adding at the end the following:

19 ‘‘(2)(A) Nothing in this section shall be considered

20 to authorize any investment in any obligations or securi21 ties of a commercial entity.

22 ‘‘(B) For purposes of this paragraph, the term ‘com23 mercial entity’ means any corporation, company, associa24 tion, partnership, joint stock company, firm, society, or


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1 other similar entity, as further defined under regulations

2 prescribed by the Postal Regulatory Commission.’’.

3 SEC. 807. REPEAL OF SECTION 5403.

4 (a) IN GENERAL.—Section 5403 of title 39, United

5 States Code, is repealed.

6 (b) CLERICAL AMENDMENT.—The analysis for chap7 ter 54 of title 39, United States Code, is amended by re8 pealing the item relating to section 5403.

9 SEC. 808. REDUCED RATES.

10 Section 3626 of title 39, United States Code, is

11 amended—

12 (1) in subsection (a)—

13 (A) by striking all before paragraph (4)

14 and inserting the following:

15 ‘‘(a)(1) Except as otherwise provided in this section,

16 rates of postage for a class of mail or kind of mailer under

17 former section 4358, 4452(b), 4452(c), 4554(b), or

18 4554(c) of this title shall be established in accordance with

19 section 3622.

20 ‘‘(2) For the purpose of this subsection, the term

21 ‘regular-rate category’ means any class of mail or kind of

22 mailer, other than a class or kind referred to in section

23 2401(c).’’; and


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1 (B) by redesignating paragraphs (4)

2 through (7) as paragraphs (3) through (6), re3 spectively;

4 (2) in subsection (g), by adding at the end the

5 following:

6 ‘‘(3) For purposes of this section and former section

7 4358(a) through (c) of this title, those copies of an issue

8 of a publication entered within the county in which it is

9 published, but distributed outside such county on postal

10 carrier routes originating in the county of publication,

11 shall be treated as if they were distributed within the

12 county of publication.

13 ‘‘(4)(A) In the case of an issue of a publication, any

14 number of copies of which are mailed at the rates of post15 age for a class of mail or kind of mailer under former

16 section 4358(a) through (c) of this title, any copies of such

17 issue which are distributed outside the county of publica18 tion (excluding any copies subject to paragraph (3)) shall

19 be subject to rates of postage provided for under this para20 graph.

21 ‘‘(B) The rates of postage applicable to mail under

22 this paragraph shall be established in accordance with sec23 tion 3622.

24 ‘‘(C) This paragraph shall not apply with respect to

25 an issue of a publication unless the total paid circulation


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1 of such issue outside the county of publication (not count2 ing recipients of copies subject to paragraph (3)) is less

3 than 5,000.’’; and

4 (3) by adding at the end the following:

5 ‘‘(n) In the administration of this section, matter that

6 satisfies the circulation standards for requester publica7 tions shall not be excluded from being mailed at the rates

8 for mail under former section 4358 solely because such

9 matter is designed primarily for free circulation or for cir10 culation at nominal rates, or fails to meet the require11 ments of former section 4354(a)(5).’’.

12 SEC. 809. HAZARDOUS MATTER.

13 (a) NONMAILABILITY GENERALLY.—Section 3001 of

14 title 39, United States Code, is amended—

15 (1) by redesignating subsection (n) as sub16 section (o); and

17 (2) by inserting after subsection (m) the fol18 lowing:

19 ‘‘(o)(1) Except as otherwise authorized by law or reg20 ulations of the Postal Service, hazardous material is non21 mailable.

22 ‘‘(2) In this subsection, the term ‘hazardous material’

23 means a substance or material designated by the Secretary

24 of Transportation under section 5103(a) of title 49.’’.


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1 (b) MAILABILITY.—Chapter 30 of title 39, United

2 States Code, is amended by adding at the end the fol3 lowing:

4 ‘‘§ 3018. Hazardous material

5 ‘‘(a) IN GENERAL.—The Postal Service shall pre6 scribe regulations for the safe transportation of hazardous

7 material in the mail.

8 ‘‘(b) PROHIBITIONS.—No person may—

9 ‘‘(1) mail or cause to be mailed hazardous ma10 terial that has been declared by statute or Postal

11 Service regulation to be nonmailable;

12 ‘‘(2) mail or cause to be mailed hazardous ma13 terial in violation of any statute or Postal Service

14 regulation restricting the time, place, or manner in

15 which hazardous material may be mailed; or

16 ‘‘(3) manufacture, distribute, or sell any con17 tainer, packaging kit, or similar device that—

18 ‘‘(A) is represented, marked, certified, or

19 sold by such person for use in the mailing of

20 hazardous material; and

21 ‘‘(B) fails to conform with any statute or

22 Postal Service regulation setting forth stand23 ards for a container, packaging kit, or similar

24 device used for the mailing of hazardous mate25 rial.


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1 ‘‘(c) CIVIL PENALTY; CLEAN-UP COSTS AND DAM2 AGES.—

3 ‘‘(1) IN GENERAL.—A person who knowingly

4 violates this section or a regulation prescribed under

5 this section shall be liable for—

6 ‘‘(A) a civil penalty of at least $250, but

7 not more than $100,000, for each violation;

8 ‘‘(B) the costs of any clean-up associated

9 with each violation; and

10 ‘‘(C) damages.

11 ‘‘(2) KNOWING ACTION.—A person acts know12 ingly for purposes of paragraph (1) when—

13 ‘‘(A) the person has actual knowledge of

14 the facts giving rise to the violation; or

15 ‘‘(B) a reasonable person acting in the cir16 cumstances and exercising reasonable care

17 would have had that knowledge.

18 ‘‘(3) SEPARATE VIOLATIONS.—

19 ‘‘(A) VIOLATIONS OVER TIME.—A separate

20 violation under this subsection occurs for each

21 day hazardous material, mailed or caused to be

22 mailed in noncompliance with this section, is in

23 the mail.

24 ‘‘(B) SEPARATE ITEMS.—A separate viola25 tion under this subsection occurs for each item


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1 containing hazardous material that is mailed or

2 caused to be mailed in noncompliance with this

3 section.

4 ‘‘(d) HEARINGS.—The Postal Service may determine

5 that a person has violated this section or a regulation pre6 scribed under this section only after notice and an oppor7 tunity for a hearing. Proceedings under this section shall

8 be conducted in accordance with section 3001(m).

9 ‘‘(e) PENALTY CONSIDERATIONS.—In determining

10 the amount of a civil penalty for a violation of this section,

11 the Postal Service shall consider—

12 ‘‘(1) the nature, circumstances, extent, and

13 gravity of the violation;

14 ‘‘(2) with respect to the person who committed

15 the violation, the degree of culpability, any history of

16 prior violations, the ability to pay, and any effect on

17 the ability to continue in business;

18 ‘‘(3) the impact on Postal Service operations;

19 and

20 ‘‘(4) any other matters that justice requires.

21 ‘‘(f) CIVIL ACTIONS TO COLLECT.—

22 ‘‘(1) IN GENERAL.—In accordance with section

23 409(d), a civil action may be commenced in an ap24 propriate district court of the United States to colVerDate jul 14 2003 22:09 Sep 23, 2004 Jkt 029006 PO 00000 Frm 00270 Fmt 6659 Sfmt 6601 E:\HR\OC\HR672P2.XXX HR672P2

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1 lect a civil penalty, clean-up costs, and damages as2 sessed under subsection (c).

3 ‘‘(2) COMPROMISE.—The Postal Service may

4 compromise the amount of a civil penalty, clean-up

5 costs, and damages assessed under subsection (c) be6 fore commencing a civil action with respect to such

7 civil penalty, clean-up costs, and damages under

8 paragraph (1).

9 ‘‘(g) CIVIL JUDICIAL PENALTIES.—

10 ‘‘(1) IN GENERAL.—At the request of the Post11 al Service, the Attorney General may bring a civil

12 action in an appropriate district court of the United

13 States to enforce this section or a regulation pre14 scribed under this section.

15 ‘‘(2) RELIEF.—The court in a civil action under

16 paragraph (1) may award appropriate relief, includ17 ing a temporary or permanent injunction, civil pen18 alties as determined in accordance with this section,

19 or punitive damages.

20 ‘‘(3) CONSTRUCTION.—A civil action under this

21 subsection shall be in lieu of civil penalties for the

22 same violation under subsection (c)(1)(A).

23 ‘‘(h) DEPOSIT OF AMOUNTS COLLECTED.—

24 ‘‘(1) POSTAL SERVICE FUND.—Except as pro25 vided under paragraph (2), amounts collected under


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1 subsection (c)(1)(B) and (C) shall be deposited into

2 the Postal Service Fund under section 2003.

3 ‘‘(2) TREASURY.—Amounts collected under sub4 section (c)(1)(A) and any punitive damages collected

5 under subsection (c)(1)(C) shall be deposited into

6 the Treasury of the United States.’’.

7 (c) CONFORMING AMENDMENTS.—(1) Section

8 2003(b) of title 39, United States Code, is amended—

9 (A) in paragraph (7), by striking ‘‘and’’ after

10 the semicolon;

11 (B) in paragraph (8), by striking ‘‘purposes.’’

12 and inserting ‘‘purposes; and’’; and

13 (C) by adding at the end the following:

14 ‘‘(9) any amounts collected under section

15 3018.’’.

16 (2) The analysis for chapter 30 of title 39, United

17 States Code, is amended by adding at the end the fol18 lowing:

‘‘3018. Hazardous material.’’.

19 SEC. 810. PROVISIONS RELATING TO COOPERATIVE MAIL20 INGS.

21 (a) DETERMINATION.—The Postal Regulatory Com22 mission shall examine section E670.5.3 of the Domestic

23 Mail Manual to determine whether it contains adequate

24 safeguards to protect against (1) abuses of rates for non25 profit mail and (2) deception of consumers.


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1 (b) REGULATIONS.—If the Postal Regulatory Com2 mission determines that section E670.5.3 of the Domestic

3 Mail Manual does not contain adequate safeguards as de4 scribed in the preceding subsection, the Commission shall

5 promulgate such regulations as may be necessary to en6 sure such safeguards.

7 (c) TIMING.—The Postal Regulatory Commission

8 shall complete the examination required by subsection (a)

9 and the promulgation of any necessary regulations re10 quired by subsection (b) within one year after the date

11 of the enactment of this section.

12 SEC. 811. TECHNICAL AND CONFORMING AMENDMENTS.

13 (a) REIMBURSEMENT.—Section 3681 of title 39,

14 United States Code, is amended by striking ‘‘section

15 3628’’ and inserting ‘‘sections 3662 through 3664’’.

16 (b) SIZE AND WEIGHT LIMITS.—Section 3682 of title

17 39, United States Code, is amended to read as follows:

18 ‘‘§ 3682. Size and weight limits

19 ‘‘The Postal Service may establish size and weight

20 limitations for mail matter in the market-dominant cat21 egory of mail consistent with regulations the Postal Regu22 latory Commission may prescribe under section 3622. The

23 Postal Service may establish size and weight limitations

24 for mail matter in the competitive category of mail con25 sistent with its authority under section 3632.’’.


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1 (c) REVENUE FOREGONE, ETC.—Title 39, United

2 States Code, is amended—

3 (1) in section 503 (as so redesignated by sec4 tion 501), by striking ‘‘this chapter.’’ and inserting

5 ‘‘this title.’’; and

6 (2) in section 2401(d), by inserting ‘‘(as last in

7 effect before enactment of the Postal Accountability

8 and Enhancement Act)’’ after ‘‘3626(a)’’ and after

9 ‘‘3626(a)(3)(B)(ii)’’.

10 (d) APPROPRIATIONS AND REPORTING REQUIRE11 MENTS.—

12 (1) APPROPRIATIONS.—Subsection (e) of sec13 tion 2401 of title 39, United States Code, is

14 amended—

15 (A) by striking ‘‘Committee on Post Office

16 and Civil Service’’ each place it appears and in17 serting ‘‘Committee on Government Reform’’;

18 and

19 (B) by striking ‘‘Not later than March 15

20 of each year,’’ and inserting ‘‘Each year,’’.

21 (2) REPORTING REQUIREMENTS.—Sections

22 2803(a) and 2804(a) of title 39, United States

23 Code, are amended by striking ‘‘2401(g)’’ and in24 serting ‘‘2401(e)’’.


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1 (e) AUTHORITY TO FIX RATES AND CLASSES GEN2 ERALLY; REQUIREMENT RELATING TO LETTERS SEALED

3 AGAINST INSPECTION.—Section 404 of title 39, United

4 States Code (as amended by section 102, but before the

5 amendment made by section 801) is further amended by

6 redesignating subsections (b) and (c) as subsections (d)

7 and (e), respectively, and by inserting after subsection (a)

8 the following:

9 ‘‘(b) Except as otherwise provided, the Governors are

10 authorized to establish reasonable and equitable classes of

11 mail and reasonable and equitable rates of postage and

12 fees for postal services in accordance with the provisions

13 of chapter 36. Postal rates and fees shall be reasonable

14 and equitable and sufficient to enable the Postal Service,

15 under best practices of honest, efficient, and economical

16 management, to maintain and continue the development

17 of postal services of the kind and quality adapted to the

18 needs of the United States.

19 ‘‘(c) The Postal Service shall maintain one or more

20 classes of mail for the transmission of letters sealed

21 against inspection. The rate for each such class shall be

22 uniform throughout the United States, its territories, and

23 possessions. One such class shall provide for the most ex24 peditious handling and transportation afforded mail mat25 ter by the Postal Service. No letter of such a class of doVerDate jul 14 2003 22:09 Sep 23, 2004 Jkt 029006 PO 00000 Frm 00275 Fmt 6659 Sfmt 6601 E:\HR\OC\HR672P2.XXX HR672P2

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1 mestic origin shall be opened except under authority of

2 a search warrant authorized by law, or by an officer or

3 employee of the Postal Service for the sole purpose of de4 termining an address at which the letter can be delivered,

5 or pursuant to the authorization of the addressee.’’.

6 (f) LIMITATIONS.—Section 3684 of title 39, United

7 States Code, is amended by striking all that follows ‘‘any

8 provision’’ and inserting ‘‘of this title.’’.

9 (g) MISCELLANEOUS.—Title 39, United States Code,

10 is amended—

11 (1) in section 1005(d)(2)—

12 (A) by striking ‘‘subsection (g) of section

13 5532,’’; and

14 (B) by striking ‘‘8344,’’ and inserting

15 ‘‘8344’’;

16 (2) in the analysis for part III, by striking the

17 item relating to chapter 28 and inserting the fol18 lowing:

‘‘28. Strategic Planning and Performance Management .......................... 2801’’;

19 (3) in section 3005(a)—

20 (A) in the matter before paragraph (1), by

21 striking all that follows ‘‘nonmailable’’ and pre22 cedes ‘‘(h),’’ and inserting ‘‘under section

23 3001(d),’’; and

24 (B) in the sentence following paragraph

25 (3), by striking all that follows ‘‘nonmailable’’


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1 and precedes ‘‘(h),’’ and inserting ‘‘under such

2 section 3001(d),’’;

3 (4) in section 3210(a)(6)(C), by striking the

4 matter after ‘‘if such mass mailing’’ and before

5 ‘‘than 60 days’’ and inserting ‘‘is postmarked

6 fewer’’; and

7 (5) by striking the heading for section 3627

8 and inserting the following:

9 ‘‘§ 3627. Adjusting free rates’’.

10 TITLE IX—POSTAL PENSION

11 FUNDING REFORM AMEND12 MENTS

13 SEC. 901. CIVIL SERVICE RETIREMENT SYSTEM.

14 (a) TERMINATION OF OBLIGATION TO PAY GOVERN15 MENT CONTRIBUTIONS.—Section 8334(a)(1)(B)(ii) of

16 title 5, United States Code, is amended by striking all that

17 follows ‘‘be equal to’’ and inserting ‘‘zero’’.

18 (b) DETERMINATION AND DISPOSITION OF POSTAL

19 SURPLUS OR SUPPLEMENTAL LIABILITY.—Section

20 8348(h) of title 5, United States Code, is amended to read

21 as follows:

22 ‘‘(h)(1) For purposes of this subsection, the ‘Postal

23 surplus or supplemental liability’ means the estimated dif24 ference, as determined by the Office, between—


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1 ‘‘(A) the actuarial present value of all future

2 benefits which are payable from the Fund under this

3 subchapter to current or former employees of the

4 United States Postal Service, or their survivors, and

5 attributable to civilian employment with the Postal

6 Service, and

7 ‘‘(B) the sum of—

8 ‘‘(i) the actuarial present value of deduc9 tions to be withheld from the future basic pay

10 of employees of the Postal Service currently

11 subject to this subchapter pursuant to section

12 8334;

13 ‘‘(ii) that portion of the Fund balance, as

14 of the date the Postal surplus or supplemental

15 liability is determined, attributable to payments

16 to the Fund by the Postal Service and its em17 ployees, plus the earnings on such amounts

18 while in the Fund; and

19 ‘‘(iii) any other appropriate amount, as de20 termined by the Office in accordance with gen21 erally accepted actuarial practices and prin22 ciples.

23 ‘‘(2)(A)(i) Not later than June 15, 2006, the Office

24 shall determine the Postal surplus or supplemental liabil25 ity as of September 30, 2005.


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1 ‘‘(ii) If a supplemental liability is determined under

2 this subparagraph for fiscal year 2005, the Office shall

3 establish an amortization schedule, including a series of

4 equal annual installments commencing September 30,

5 2006, which provides for the liquidation of such liability

6 by September 30, 2043.

7 ‘‘(iii) If a surplus is determined under this subpara8 graph for fiscal year 2005, the amount of the surplus shall

9 be transferred to the Postal Service Retiree Health Bene10 fits Fund by June 30, 2006.

11 ‘‘(B)(i) For each of fiscal years 2006 through 2038,

12 the Office shall determine the Postal surplus or supple13 mental liability as of the close of such fiscal year, with

14 each such determination to be made by June 15th of the

15 following fiscal year.

16 ‘‘(ii) If a supplemental liability is determined under

17 this subparagraph for a fiscal year, the Office shall estab18 lish an amortization schedule, including a series of equal

19 annual installments commencing on September 30 of the

20 following fiscal year, which provides for the liquidation of

21 such liability by September 30, 2043.

22 ‘‘(iii)(I) If a surplus of $500,000,000 or more is de23 termined under this subparagraph for a fiscal year, the

24 amount of the surplus shall be transferred to the Postal


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1 Service Retiree Health Benefits Fund by June 30th of the

2 following fiscal year.

3 ‘‘(II) If a surplus of less than $500,000,000 is deter4 mined under this subparagraph for a fiscal year, the sur5 plus shall remain in the Fund, subject to transfer in a

6 subsequent fiscal year under subclause (I) or subpara7 graph (C)(iii).

8 ‘‘(C)(i) Not later than June 15, 2040, the Office shall

9 determine the Postal surplus or supplemental liability as

10 of September 30, 2039.

11 ‘‘(ii) If a supplemental liability is determined under

12 this subparagraph for fiscal year 2039, the Office shall

13 establish an amortization schedule, including a series of

14 equal annual installments commencing September 30,

15 2040, which provides for the liquidation of such liability

16 by September 30, 2043.

17 ‘‘(iii) If a surplus is determined under this subpara18 graph for fiscal year 2039, the amount of the surplus—

19 ‘‘(I) shall be applied first toward reducing the

20 amount of any supplemental liability described in

21 section 8423(b)(1)(B); and

22 ‘‘(II) to the extent that any portion of such sur23 plus remains after the application of subclause (I),

24 shall, not later than June 30, 2040, be transferred

25 to the Postal Service Retiree Health Benefits Fund.


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1 ‘‘(D) An amortization schedule under this

2 paragraph—

3 ‘‘(i) shall be established in accordance with gen4 erally accepted actuarial practices and principles,

5 with interest computed at the rate used in the most

6 recent valuation of the Civil Service Retirement Sys7 tem;

8 ‘‘(ii) shall supersede any amortization schedule

9 previously established under this paragraph; and

10 ‘‘(iii) shall not be taken into account, for pur11 poses of any determination of Postal surplus or sup12 plemental liability, except to the extent of any

13 amounts under such schedule actually paid.

14 ‘‘(E) The Postal Service shall pay to the Office the

15 amounts due under any amortization schedule established

16 under this paragraph that has not been superseded.

17 ‘‘(3) Notwithstanding any other provision of law, in

18 computing the amount of any payment under any other

19 subsection of this section that is based on the amount of

20 the unfunded liability, such payment shall be computed

21 disregarding that portion of the unfunded liability that the

22 Office determines will be liquidated by payments under

23 this subsection.

24 ‘‘(4) As used in this subsection, ‘Postal Service Re25 tiree Health Benefits Fund’ refers to the Postal Service


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1 Retiree Health Benefits Fund, as established by section

2 8909a.’’.

3 (c) PROVISIONS RELATING TO AMOUNTS FOR MILI4 TARY SERVICE.—In the application of paragraph (2) of

5 section 8348(g) of title 5, United States Code, for fiscal

6 year 2006, the Office of Personnel Management shall in7 clude, in addition to the amount otherwise computed

8 under that paragraph, the amounts that would have been

9 included for fiscal years 2003 through 2005 with respect

10 to credit for military service of former employees of the

11 United States Postal Service if Public Law 108-18 had

12 not been enacted (including earnings thereon) and the

13 Secretary of the Treasury shall make the required transfer

14 to the Civil Service Retirement and Disability Fund based

15 on that amount.

16 (d) REVIEW.—

17 (1) IN GENERAL.—Notwithstanding any other

18 provision of this section, any determination or rede19 termination made by the Office of Personnel Man20 agement under this section shall, upon request of

21 the United States Postal Service, be subject to re22 view by the Postal Regulatory Commission. The

23 Commission shall submit a report containing the re24 sults of any such review to the Postal Service, the

25 Office of Personnel Management, and the Congress.


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1 (2) RESPONSE.—Upon receiving the report of

2 the Postal Regulatory Commission, the Office of

3 Personnel Management shall reconsider its deter4 mination or redetermination in light of such report,

5 and shall make any appropriate adjustments. The

6 Office shall submit a report containing the results of

7 its reconsideration to the Commission, the Postal

8 Service, and the Congress.

9 SEC. 902. HEALTH INSURANCE.

10 (a) IN GENERAL.—Chapter 89 of title 5, United

11 States Code, is amended—

12 (1) in section 8906(g)(2)(A), by striking ‘‘by

13 the United States Postal Service.’’ and inserting

14 ‘‘first from the Postal Service Retiree Health Bene15 fits Fund up to the amount contained therein, with

16 any remaining amount paid by the United States

17 Postal Service.’’;

18 (2) by inserting after section 8909 the fol19 lowing:

20 ‘‘§ 8909a. Postal Service Retiree Health Benefits Fund

21 ‘‘(a) There is in the Treasury of the United States

22 a Postal Service Retiree Health Benefits Fund (herein23 after in this section referred to as the ‘Fund’) which is

24 administered by the Office of Personnel Management. Any

25 amounts transferred to the Fund under section


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1 8348(h)(2) shall yield interest at a rate equal to the

2 weighted average yield of all the investments in the Civil

3 Service Retirement and Disability Fund as of the date of

4 transfer. All other investments of amounts in the Fund

5 shall be made in accordance with subsections (c)–(e) of

6 section 8348.

7 ‘‘(b) The Fund is available without fiscal year limita8 tion for payments required by section 8906(g)(2).

9 ‘‘(c)(1) Not later than June 30, 2006, and by June

10 30 of each succeeding year, the Office of Personnel Man11 agement shall compute the net present value of the excess

12 of future payments required by section 8906(g)(2)(A) for

13 current and future United States Postal Service annu14 itants over the value of the assets of the Fund as of the

15 end of the fiscal year ending on September 30 of that year.

16 The actuarial costing method to be used by the Office and

17 all actuarial assumptions shall be established by the Office

18 after consultation with the United States Postal Service

19 and must be in accordance with generally accepted actu20 arial practices and principles.

21 ‘‘(2) Not later than September 30, 2006, and by Sep22 tember 30 of each succeeding year, the Office shall com23 pute and the United States Postal Service shall pay into

24 such Fund—


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1 ‘‘(A) the portion of the net present value de2 scribed in paragraph (1) attributable to the current

3 year’s service of Postal Service employees; and

4 ‘‘(B) interest on the net present value described

5 in paragraph (1) for that fiscal year, at the interest

6 rate used in computing that net present value.

7 ‘‘(3)(A) Any computation or other determination of

8 the Office under this subsection shall, upon request of the

9 Postal Service, be subject to review by the Postal Regu10 latory Commission. The Commission shall submit a report

11 containing the results of any such review to the Postal

12 Service, the Office of Personnel Management, and the

13 Congress.

14 ‘‘(B) Upon receiving the report of the Postal Regu15 latory Commission, the Office of Personnel Management

16 shall reconsider its computation or other determination in

17 light of such report, and shall make any appropriate ad18 justments. The Office shall submit a report containing the

19 results of its reconsideration to the Commission, the Post20 al Service, and the Congress.

21 ‘‘(4) The Office shall promulgate, after consultation

22 with the United States Postal Service, any regulations it

23 deems necessary under this subsection.’’; and

24 (3) in the analysis by inserting after the item

25 relating to section 8909 the following:

‘‘8909a. Postal Service Retiree Health Benefits Fund.’’.


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1 (b) REVIEW.—

2 (1) IN GENERAL.—Any regulation established

3 under section 8909a(c)(4) of title 5, United States

4 Code (as amended by subsection (a)) shall, upon re5 quest of the Postal Service, be subject to review by

6 the Postal Regulatory Commission. The Commission

7 shall submit a report containing the results of any

8 such review to the Postal Service, the Office of Per9 sonnel Management, and the Congress.

10 (2) RESPONSE.—Upon receiving the report of

11 the Postal Regulatory Commission, the Office of

12 Personnel Management shall reconsider its regula13 tion in light of such report, and shall take such ac14 tion as it considers appropriate. The Office shall

15 submit a report containing the results of its recon16 sideration to the Commission, the Postal Service,

17 and the Congress.

18 SEC. 903. REPEALER.

19 Section 3 of Public Law 108–18 is repealed.

20 SEC. 904. ENSURING APPROPRIATE USE OF ESCROW AND

21 MILITARY SAVINGS.

22 (a) DEFINITION.—For purposes of this section, the

23 term ‘‘total savings’’ means, for any fiscal year, the

24 amount equal to—


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1 (1) the amount of contributions that the Postal

2 Service would otherwise have been required to make

3 to the Civil Service Retirement and Disability Fund

4 under subchapter III of chapter 83 of title 5, United

5 States Code, for such fiscal year if Public Law 108-

6 18 and this Act had not been enacted, minus

7 (2) the amount of amortization payments (if

8 any) required under section 8348(h)(2) of title 5,

9 United States Code, for such fiscal year.

10 (b) CALCULATIONS.—The following calculations shall

11 be made for each of fiscal years 2006 through 2015:

12 (1) Not later than January 31 of the fiscal year

13 following the fiscal year involved, the Office of Per14 sonnel Management (in consultation with the Postal

15 Service) shall determine the total savings for the fis16 cal year.

17 (2) On the date of making its determination

18 under paragraph (1), the Office shall also determine

19 (in consultation with the Postal Service) the amount

20 by which—

21 (A) the amount the Postal Service paid for

22 that fiscal year into the Postal Service Retiree

23 Health Benefits Fund in accordance with

24 8909a(c)(2) of title 5, United States Code, ex25 ceeds (if at all)


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1 (B) the amount of payments made by the

2 Postal Service for that fiscal year from such

3 Fund in order to satisfy the requirements of

4 section 8906(g)(2) of such title 5.

5 (c) REQUIREMENTS.—

6 (1) IF THRESHOLD IS MET.—If the amount cal7 culated under subsection (b)(2) for a fiscal year is

8 greater than or equal to two-thirds of the total sav9 ings in such fiscal year, no further action under this

10 section is necessary with respect to such fiscal year.

11 (2) IF THRESHOLD IS NOT MET.—

12 (A) IN GENERAL.—If the amount cal13 culated under subsection (b)(2) for a fiscal year

14 is less than two-thirds of the total savings in

15 such fiscal year, the Postal Service shall pay

16 into the Postal Service Retiree Health Benefits

17 Fund, by June 30 of the following fiscal year,

18 an amount equal to the difference.

19 (B) ALLOWABLE ALTERNATIVE.—

20 (i) IN GENERAL.—Notwithstanding

21 subparagraph (A), and subject to clause

22 (ii), the Postal Service may instead use the

23 amount that it would otherwise be required

24 to pay into the Postal Service Retiree


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1 Health Benefits Fund for a year (or any

2 portion thereof) to reduce the postal debt.

3 (ii) LIMITATION.—Amounts used to

4 reduce the postal debt under this subpara5 graph may not exceed a total of

6 $3,000,000,000.

7 (3) AGGREGATION ALLOWED.—Notwithstanding

8 paragraph (2), if the amount calculated under sub9 section (b)(2) for a fiscal year is less than two-thirds

10 of the total savings in such fiscal year, but the sum

11 of the amounts calculated under subsection (b)(2)

12 for all fiscal years from 2006 to the fiscal year in13 volved is greater than or equal to two-thirds of the

14 sum of the total savings for such years, no further

15 action under this section is necessary with respect to

16 such fiscal year.

17 (d) REPORTING REQUIREMENT.—The Office of Per18 sonnel Management shall submit a report containing the

19 results of its calculations under subsection (b) to the Post20 al Service, the Postal Regulatory Commission, and the

21 Congress.

22 (e) WAIVER AUTHORITY.—The requirements of sub23 section (c)(2)(A) may, upon application of the Postal Serv24 ice, be waived by the Postal Regulatory Commission, to

25 the extent that the Commission determines that such


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1 waiver is reasonable and equitable and necessary to enable

2 the Postal Service, under best practices of honest, effi3 cient, and economical management, to maintain and con4 tinue the development of postal services of the kind and

5 quality adapted to the needs of the United States.

6 SEC. 905. EFFECTIVE DATES.

7 (a) IN GENERAL.—Except as otherwise provided, this

8 title shall take effect on October 1, 2005.

9 (b) GOVERNMENT CONTRIBUTIONS.—Section

10 901(a)(1) shall take effect on the first day of the first

11 pay period beginning on or after October 1, 2005.

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Chairman SENSENBRENNER. The U.S. Postal Service is the hub 

of a $900 billion industry employing 9 million American workers. 

Over the last several years, alternative technologies have led to a 

decrease in mail shipped by the Postal Service. Unfortunately, 

changing industry conditions have not been accompanied by structural reform of the Postal Service. This has produced a series of 

rate increases that serve as a direct tax on businesses and consumers. 

The Postal Accountability and Enhancement Act seeks to streamline the Postal Service by permitting it to engage in competing activities in a manner similar to private firms while protecting private industry from unfair competition. This legislation reflects the 

product of considerable consultation and deliberation, and was reported by the Committee on Government Reform and Oversight by 

unanimous consent on May 12. 

The Judiciary Committee received a sequential referral on several sections of this legislation. First, section 205 revises the complaint and appellate review procedures of the Postal Regulatory 

Commission, which is charged with setting postage rates and defining activities in which the Postal Service may compete with private 

industry. 

Section 301 establishes an off-budget fund within the Treasury 

Department for revenues and expenditures associated with services 

offered by the Postal Service on a competitive basis. 

Section 303 prohibits the Postal Service from issuing regulations 

that preclude competition or compel the disclosure of protected intellectual property. 

Section 304 ensures that laws regulating the conduct of private 

commercial activities also apply to the competitive activities undertaken by the Postal Service, including the antitrust laws, the Federal Trade Commission Act, and laws pertaining to sovereign immunity. This section also provides that the Postal Service, to the 

extent it engages in competitive activities, be considered a person 

for purposes of the bankruptcy laws. There are several problems 

associated with this bankruptcy provision, and Ranking Member 

Conyers and I will offer an amendment to strike it. 

Section 502 provides authority for the Postal Regulatory Commission to issue subpoenas to compel disclosure of evidence in its 

proceedings and to refer failures to adhere to Commission directives to Federal district court. 

Section 703 requires the FTC to prepare a report detailing how 

Federal and State laws apply differently to competitive activities of 

the Postal Service and private companies. 

Section 801 provides permanent authority for the Postal Service 

to employ postal police to protect property and persons on Postal 

Service property, and gives the Attorney General authority to collect penalties and cleanup costs associated with the unlawful mailing of hazardous materials. 

Finally, section 809 prohibits the mailing of hazardous materials 

and clarifies penalties for their shipment. While I fully support 

these provisions, Crime, Terrorism, and Homeland Security Subcommittee Chairman Coble will offer an amendment to place these 

changes to existing law in Title 18 of the United States Code, 

where they belong. 

292

I would also note that Members should limit their amendments 

to those portions of the sections which the Committee has jurisdiction over. 

H.R. 4341 was the product of careful consideration and deliberation, and I urge my colleagues to support the provisions within the 

Committee’s jurisdiction. 

I yield back the balance of my time. 

Does anybody wish to give an opening statement on the Democratic side? 

The gentleman from Virginia. 

Mr. SCOTT. Mr. Chairman, I ask unanimous consent that Members be given an opportunity to present their statements for the 

record. 

Chairman SENSENBRENNER. Without objection. 

Are there amendments? 

The Chair has an amendment at the desk. 

The CLERK. Amendment to H.R. 4341 offered by Mr. Sensenbrenner and Mr. Conyers. Page 55, strike lines 13 through 16 and 

make such technical and conforming changes as may be appropriate. 

[The amendment follows:]

Chairman SENSENBRENNER. The Chair recognizes himself for 5 

minutes. 

A provision in section 304 would in effect make the Postal Service, to the extent that it engages in conduct with respect to the provision of competitive products, eligible for bankruptcy relief either 

on a voluntary or involuntary basis. What this amendment does is 

strike that. 

I ask unanimous consent that my full statement appear in the 

record, and yield back the balance of my time. 

[The prepared statement of Mr. Sensenbrenner follows:]

PREPARED STATEMENT OF THE HONORABLE F. JAMES SENSENBRENNER, JR., A REPRESENTATIVE IN CONGRESS FROM THE STATE OF WISCONSIN, AND CHAIRMAN, COMMITTEE ON THE JUDICIARY

A provision in Section 304 of H.R. 4341 would in effect make the Postal Service—

to the extent it engages in conduct with respect to the provision of competitive products—eligible for bankruptcy relief, either on a voluntary or involuntary basis. 

Under current bankruptcy law, a governmental unit like the Postal Service, is not 

eligible to be a bankruptcy debtor. While this provision in Section 304 may be conceptually appealing, it unfortunately presents significant implementation issues. 


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The biggest problem presented by this provision is that it would be virtually impossible to implement under the Bankruptcy Code as it only allows some ill-defined 

portion of the Postal Service, that is—the part that engages in competitive activities—to be eligible for bankruptcy relief. 

Although H.R. 4341 will create a much needed financial firewall between the 

Postal Service’s market dominant services (such as First Class Mail) and its competitive services, this firewall will not result in a legal bifurcation of the Postal 

Service into separate entities. Bankruptcy law simply lacks any means to accord 

partial eligibility to a debtor. The entire entity must be eligible for bankruptcy relief. 

In addition, this provision may actually have the unintended result of giving the 

Postal Service an unfair, anti-competitive advantage with respect to its private sector counterparts. This provision would allow the Postal Service to avail itself of various extraordinary protections and equitable remedies unique to bankruptcy—such 

as the power to avoid certain contractual obligations and leases as well as the power 

to modify collective bargaining agreements and retiree benefits—that are not available to the Service’s private sector counterparts outside of bankruptcy. 

In a somewhat rare bipartisan meeting of the minds on the subject of bankruptcy 

in this Committee, I am pleased to offer an amendment together with my colleague, 

the Ranking Member of this Committee, that simply strikes this provision from Section 304 of H.R. 4341. Accordingly, I urge my colleagues—on both sides of the 

aisle—to support our amendment.

Chairman SENSENBRENNER. The question is on agreeing to the 

Sensenbrenner-Conyers amendment. Those in favor will say aye. 

Those opposed, no. 

The ayes appear to have it. The ayes have it. The amendment 

is agreed to. 

Are there further amendments? 

The gentleman from North Carolina Mr. Coble. 

Mr. COBLE. I have an amendment at the desk. 

Chairman SENSENBRENNER. The Clerk will report the amendment. 

The CLERK. Amendment to H.R. 4341, offered by Mr. Coble——

Mr. COBLE. I ask unanimous consent that it be considered as 

read. 

Chairman SENSENBRENNER. Without objection, the amendment is 

considered as read. 

[The amendment follows:]

294 H.L.C.

AMENDMENT TO H.R. 4341

OFFERED BY MR. COBLE OF NORTH CAROLINA

Strike section 801 and insert the following new section:

1 SEC. 801. EMPLOYMENT OF POSTAL POLICE OFFICERS.

2 Section 3061 of title 18, United States Code, is

3 amended by adding at the end the following:

4 ‘‘(c)(1) The Postal Service may employ police officers

5 for duty in connection with the protection of property

6 owned or occupied by the Postal Service or under the

7 charge and control of the Postal Service, and persons on

8 the property, including duty in areas outside the property

9 to the extent necessary to protect the property and persons

10 on the property.

11 ‘‘(2) With respect to such property, such officers shall

12 have the power to—

13 ‘‘(A) enforce Federal laws and regulations for

14 the protection of persons and property;

15 ‘‘(B) carry firearms; and

16 ‘‘(C) make arrests without a warrant for any

17 offense against the United States committed in the

18 presence of the officer or for any felony cognizable

19 under the laws of the United States if the officer has


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H.L.C.

1 reasonable grounds to believe that the person to be

2 arrested has committed or is committing a felony.

3 ‘‘(3) With respect to such property, such officers may

4 have, to such extent as the Postal Service may by regula5 tions prescribe, the power to—

6 ‘‘(A) serve warrants and subpoenas issued

7 under the authority of the United States; and

8 ‘‘(B) conduct investigations, on and off the

9 property in question, of offenses that may have been

10 committed against property owned or occupied by

11 the Postal Service or persons on the property.

12 ‘‘(4)(A) As to such property, the Postmaster General

13 may prescribe regulations necessary for the protection and

14 administration of property owned or occupied by the Post15 al Service and persons on the property. The regulations

16 may include reasonable penalties, within the limits pre17 scribed in subparagraph (B), for violations of the regula18 tions. The regulations shall be posted and remain posted

19 in a conspicuous place on the property.

20 ‘‘(B) A person violating a regulation prescribed under

21 this subsection shall be fined under this title, imprisoned

22 for not more than 30 days, or both.’’.

Section 809, insert at the end the following new subsection:


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H.L.C.

1 (d) INJURIOUS ARTICLES AS NONMAILABLE.—Sec2 tion 1716(a) of title 18, United States Code, is amended

3 by inserting after ‘‘explosives,’’ the following: ‘‘hazardous

4 materials,’’.


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Chairman SENSENBRENNER. The gentleman from North Carolina 

is recognized for 5 minutes. 

Mr. COBLE. Mr. Chairman, this amendment is simple. We have 

run this by the Majority and Minority. There appear to be no objections to it. 

The amendment creates two provisions in Title 18. First, the 

Postal Service currently employs more than 1,000 uniformed postal 

police officers who are assigned to critical postal facilities throughout the country. These officers are providing vital protective and 

security functions. Each year the authority for these officers has 

been provided in appropriation bills. The original legislation sought 

to make this authority permanent, which I do not oppose. However, 

I believe that if this authority is to be provided, it should be included in Title 18 along with the other police authorities of the 

Postal Service and other Federal Government agencies. The 

amendment establishes the authority of the Postal Service to employ these officers in Title 18. 

The second part of the amendment amends section 80 of H.R. 

4341. The original bill modifies current law, which has civil penalties for mailing certain nonmailable materials to include penalties for mailing hazardous materials. 

Currently Title 18 includes criminal penalties which mirror these 

civil penalties for mailing prohibited materials. The amendment 

adds hazardous materials to the list of nonmailable materials for 

which penalties may be imposed. 

Under Title 18, the Postal Service may continue to permit the 

transmission of these items under such rules and regulations as 

they provide or prescribe. The amendment makes these civil and 

criminal penalties consistent for all nonmailable items and continues to allow the Postal Service to make any exceptions it deems 

necessary. However, it does communicate the dangerous consequences of mailing these items. 

I urge my colleagues to support the amendment. 

Chairman SENSENBRENNER. Does the gentleman yield back? 

Mr. COBLE. I yield back. 

Chairman SENSENBRENNER. The question is on agreeing to the 

amendment offered by the gentleman from North Carolina Mr. 

Coble. Those in favor will say aye. 

Those opposed, no. 

The ayes appear to have it. The ayes have it. The amendment 

is agreed to. 

Are there further amendments? 

Ms. JACKSON LEE. Mr. Chairman, I am listening to see whether 

there are further amendments. I would like to strike the last word. 

Chairman SENSENBRENNER. The gentlewoman is recognized for 5 

minutes. 

Ms. JACKSON LEE. Thank you very much, Mr. Chairman. 

To my colleagues, I do have an amendment at the desk that at 

this time I will not offer, but I do want to raise this point, because 

I believe it is a sufficiently important point that I hope that I 

would have bipartisan support as we go to the floor of the House. 

The Chairman knows of his leadership on the No Fear Act, 

which some would call one of the first civil rights acts of the 21st 

century, and it deals with Federal employees. I want to have an 

amendment that sort of tracks the No Fear Act as relates to the 

298

Postal Service, but specifically focusing on the question of civil 

rights within that system and Service. The amendment I would 

have offered would have discussed that or presented those issues 

to my colleagues. 

We are going to continue to work on this legislation. I would like 

to be able to work with the Chairman and others just to ensure 

that it works for this system and the reform that is in place. I 

know a lot of this work deals with the Government Reform Committee, the Committee that deals with that restructuring, but I do 

believe these are important issues, particularly in our Federal 

agencies where employees’ rights are of particular importance, and 

we have the responsibility to address that question. 

Again, I would have offered this amendment. I will look forward 

to offering this amendment as this legislation goes to the floor and 

working with my colleagues on what I think is an important addition to the reform of the U.S. Postal Service. 

With that, I yield back my time. 

Chairman SENSENBRENNER. Are there further amendments? 

If there are no further amendments, a reporting quorum is 

present. 

The question occurs on the motion to report the bill, H.R. 4341, 

favorably as amended. All in favor will say aye. 

Opposed, no. 

The ayes appear to have it. The ayes have it. The motion to report favorably is agreed to. 

Without objection, the bill will be reported favorably to the 

House in the form of a single amendment in the nature of a substitute incorporating the amendments made today here. 

Without objection, the Chairman is authorized to move to go to 

conference pursuant to House rules. 

Without objection, the staff is directed to make any technical and 

conforming changes, and all Members will be given 2 days as provided by the House rules to present additional supplemental or dissenting Minority views.

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