In the Senate of the United States,

February 9, 2006.

Resolved, That the bill from the House of Representatives (H.R. 22) entitled ‘‘An Act to reform the postal laws

of the United States.’’, do pass with the following

AMENDMENT:

Strike out all after the enacting clause and insert:

1 SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

2 (a) SHORT TITLE.—This Act may be cited as the

3 ‘‘Postal Accountability and Enhancement Act’’.
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1 (b) TABLE OF CONTENTS.—The table of contents for

2 this Act is as follows:

Sec. 1. Short title; table of contents.

TITLE I—DEFINITIONS; POSTAL SERVICES

Sec. 101. Definitions.

Sec. 102. Postal Services.

TITLE II—MODERN RATE REGULATION

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

Sec. 202. Provisions relating to competitive products.

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

Sec. 204. Reporting requirements and related provisions.

Sec. 205. Complaints; appellate review and enforcement.

Sec. 206. Clerical amendment.

TITLE III—MODERN SERVICE STANDARDS

Sec. 301. Establishment of modern service standards.

Sec. 302. Postal service plan.

TITLE IV—PROVISIONS RELATING TO FAIR COMPETITION

Sec. 401. Postal Service Competitive Products Fund.

Sec. 402. Assumed Federal income tax on competitive products income.

Sec. 403. Unfair competition prohibited.

Sec. 404. Suits by and against the Postal Service.

Sec. 405. International postal arrangements.

TITLE V—GENERAL PROVISIONS

Sec. 501. Qualification and term requirements for Governors.

Sec. 502. Obligations.

Sec. 503. Private carriage of letters.

Sec. 504. Rulemaking authority.

Sec. 505. Noninterference with collective bargaining agreements.

Sec. 506. Bonus authority.

TITLE VI—ENHANCED REGULATORY COMMISSION

Sec. 601. Reorganization and modification of certain provisions relating to the

Postal Regulatory Commission.

Sec. 602. Authority for Postal Regulatory Commission to issue subpoenas.

Sec. 603. Authorization of appropriations from the Postal Service Fund.

Sec. 604. Redesignation of the Postal Rate Commission.

Sec. 605. Financial transparency.

TITLE VII—EVALUATIONS

Sec. 701. Assessments of ratemaking, classification, and other provisions.

Sec. 702. Report on universal postal service and the postal monopoly.

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

Sec. 704. Report on postal workplace safety and workplace-related injuries.

Sec. 705. Study on recycled paper.
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TITLE VIII—POSTAL SERVICE RETIREMENT AND HEALTH

BENEFITS FUNDING

Sec. 801. Short title.

Sec. 802. Civil Service Retirement System.

Sec. 803. Health insurance.

Sec. 804. Repeal of disposition of savings provision.

Sec. 805. Effective dates.

TITLE IX—COMPENSATION FOR WORK INJURIES

Sec. 901. Temporary disability; continuation of pay.

Sec. 902. Disability retirement for postal employees.

TITLE X—MISCELLANEOUS

Sec. 1001. Employment of postal police officers.

Sec. 1002. Obsolete provisions.

Sec. 1003. Reduced rates.

Sec. 1004. Sense of Congress regarding Postal Service purchasing reform.

Sec. 1005. Contracts for transportation of mail by air.

1 TITLE I—DEFINITIONS; POSTAL

2 SERVICES

3 SEC. 101. DEFINITIONS.

4 Section 102 of title 39, United States Code, is amended

5 by striking ‘‘and’’ at the end of paragraph (3), by striking

6 the period at the end of paragraph (4) and inserting a semi7 colon, and by adding at the end the following:

8 ‘‘(5) ‘postal service’ refers to the physical deliv9 ery of letters, printed matter, or packages weighing

10 up to 70 pounds, including physical acceptance, col11 lection, sorting, transportation, or other functions an12 cillary thereto;

13 ‘‘(6) ‘product’ means a postal service with a dis14 tinct cost or market characteristic for which a rate or

15 rates are applied;
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1 ‘‘(7) ‘rates’, as used with respect to products, in2 cludes fees for postal services;

3 ‘‘(8) ‘market-dominant product’ or ‘product in

4 the market-dominant category of mail’ means a prod5 uct subject to subchapter I of chapter 36; and

6 ‘‘(9) ‘competitive product’ or ‘product in the

7 competitive category of mail’ means a product subject

8 to subchapter II of chapter 36; and

9 ‘‘(10) ‘year’, as used in chapter 36 (other than

10 subchapters I and VI thereof), means a fiscal year.’’.

11 SEC. 102. POSTAL SERVICES.

12 (a) IN GENERAL.—Section 404 of title 39, United

13 States Code, is amended—

14 (1) in subsection (a), by striking paragraph (6)

15 and by redesignating paragraphs (7) through (9) as

16 paragraphs (6) through (8), respectively; and

17 (2) by adding at the end the following:

18 ‘‘(c) Except as provided in section 411, nothing in this

19 title shall be considered to permit or require that the Postal

20 Service provide any special nonpostal or similar services.’’.

21 (b) CONFORMING AMENDMENTS.—(1) Section

22 1402(b)(1)(B)(ii) of the Victims of Crime Act of 1984 (98

23 Stat. 2170; 42 U.S.C. 10601(b)(1)(B)(ii)) is amended by

24 striking ‘‘404(a)(8)’’ and inserting ‘‘404(a)(7)’’.
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1 (2) Section 2003(b)(1) of title 39, United States Code,

2 is amended by striking ‘‘and nonpostal’’.

3 TITLE II—MODERN RATE

4 REGULATION

5 SEC. 201. PROVISIONS RELATING TO MARKET-DOMINANT

6 PRODUCTS.

7 (a) IN GENERAL.—Chapter 36 of title 39, United

8 States Code, is amended by striking sections 3621 and 3622

9 and inserting the following:

10 ‘‘§ 3621. Applicability; definitions

11 ‘‘(a) APPLICABILITY.—This subchapter shall apply

12 with respect to—

13 ‘‘(1) first-class mail letters and sealed parcels;

14 ‘‘(2) first-class mail cards;

15 ‘‘(3) periodicals;

16 ‘‘(4) standard mail;

17 ‘‘(5) single-piece parcel post;

18 ‘‘(6) media mail;

19 ‘‘(7) bound printed matter;

20 ‘‘(8) library mail;

21 ‘‘(9) special services; and

22 ‘‘(10) single-piece international mail,

23 subject to any changes the Postal Regulatory Commission

24 may make under section 3642.
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1 ‘‘(b) RULE OF CONSTRUCTION.—Mail matter referred

2 to in subsection (a) shall, for purposes of this subchapter,

3 be considered to have the meaning given to such mail matter

4 under the mail classification schedule.

5 ‘‘§ 3622. Modern rate regulation

6 ‘‘(a) AUTHORITY GENERALLY.—The Postal Regulatory

7 Commission shall, within 12 months after the date of enact8 ment of this section, by regulation establish (and may from

9 time to time thereafter by regulation revise) a modern sys10 tem for regulating rates and classes for market-dominant

11 products.

12 ‘‘(b) OBJECTIVES.—Such system shall be designed to

13 achieve the following objectives, each of which shall be ap14 plied in conjunction with the others:

15 ‘‘(1) To reduce the administrative burden and

16 increase the transparency of the ratemaking process

17 while affording reasonable opportunities for interested

18 parties to participate in that process.

19 ‘‘(2) To create predictability and stability in

20 rates.

21 ‘‘(3) To maximize incentives to reduce costs and

22 increase efficiency.

23 ‘‘(4) To enhance mail security and deter ter24 rorism by promoting secure, sender-identified mail.
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1 ‘‘(5) To allow the Postal Service pricing flexi2 bility, including the ability to use pricing to promote

3 intelligent mail and encourage increased mail volume

4 during nonpeak periods.

5 ‘‘(6) To assure adequate revenues, including re6 tained earnings, to maintain financial stability and

7 meet the service standards established under section

8 3691.

9 ‘‘(7) To allocate the total institutional costs of

10 the Postal Service equitably between market-dominant

11 and competitive products.

12 ‘‘(8) To establish and maintain a just and rea13 sonable schedule for rates and classifications, however

14 the objective under this paragraph shall not be con15 strued to prohibit the Postal Service from making

16 changes of unequal magnitude within, between, or

17 among classes of mail.

18 ‘‘(c) FACTORS.—In establishing or revising such sys19 tem, the Postal Regulatory Commission shall take into

20 account—

21 ‘‘(1) the value of the mail service actually pro22 vided each class or type of mail service to both the

23 sender and the recipient, including but not limited to

24 the collection, mode of transportation, and priority of

25 delivery;
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1 ‘‘(2) the requirement that each class of mail or

2 type of mail service bear the direct and indirect post3 al costs attributable to each class or type of mail serv4 ice through reliably identified causal relationships

5 plus that portion of all other costs of the Postal Serv6 ice reasonably assignable to such class or type;

7 ‘‘(3) the effect of rate increases upon the general

8 public, business mail users, and enterprises in the

9 private sector of the economy engaged in the delivery

10 of mail matter other than letters;

11 ‘‘(4) the available alternative means of sending

12 and receiving letters and other mail matter at reason13 able costs;

14 ‘‘(5) the degree of preparation of mail for deliv15 ery into the postal system performed by the mailer

16 and its effect upon reducing costs to the Postal Serv17 ice;

18 ‘‘(6) simplicity of structure for the entire sched19 ule and simple, identifiable relationships between the

20 rates or fees charged the various classes of mail for

21 postal services;

22 ‘‘(7) the importance of pricing flexibility to en23 courage increased mail volume and operational effi24 ciency;
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1 ‘‘(8) the relative value to the people of the kinds

2 of mail matter entered into the postal system and the

3 desirability and justification for special classifica4 tions and services of mail;

5 ‘‘(9) the importance of providing classifications

6 with extremely high degrees of reliability and speed of

7 delivery and of providing those that do not require

8 high degrees of reliability and speed of delivery;

9 ‘‘(10) the desirability of special classifications

10 from the point of view of both the user and of the

11 Postal Service;

12 ‘‘(11) the educational, cultural, scientific, and

13 informational value to the recipient of mail matter;

14 ‘‘(12) the need for the Postal Service to increase

15 its efficiency and reduce its costs, including infra16 structure costs, to help maintain high quality, afford17 able, universal postal service; and

18 ‘‘(13) the policies of this title as well as such

19 other factors as the Commission determines appro20 priate.

21 ‘‘(d) REQUIREMENTS.—

22 ‘‘(1) IN GENERAL.—The system for regulating

23 rates and classes for market-dominant products

24 shall—
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1 ‘‘(A) include an annual limitation on the

2 percentage changes in rates to be set by the Post3 al Regulatory Commission that will be equal to

4 the change in the Consumer Price Index for All

5 Urban Consumers unadjusted for seasonal vari6 ation over the most recent available 12-month

7 period preceding the date the Postal Service files

8 notice of its intention to increase rates;

9 ‘‘(B) establish a schedule whereby rates,

10 when necessary and appropriate, would change

11 at regular intervals by predictable amounts;

12 ‘‘(C) not later than 45 days before the im13 plementation of any adjustment in rates under

14 this section—

15 ‘‘(i) require the Postal Service to pro16 vide public notice of the adjustment;

17 ‘‘(ii) provide an opportunity for review

18 by the Postal Regulatory Commission;

19 ‘‘(iii) provide for the Postal Regulatory

20 Commission to notify the Postal Service of

21 any noncompliance of the adjustment with

22 the limitation under subparagraph (A); and

23 ‘‘(iv) require the Postal Service to re24 spond to the notice provided under clause

25 (iii) and describe the actions to be taken to
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1 comply with the limitation under subpara2 graph (A);

3 ‘‘(D) establish procedures whereby the Post4 al Service may adjust rates not in excess of the

5 annual limitations under subparagraph (A); and

6 ‘‘(E) notwithstanding any limitation set

7 under subparagraphs (A) and (C), establish pro8 cedures whereby rates may be adjusted on an ex9 pedited basis due to unexpected and extraor10 dinary circumstances.

11 ‘‘(2) LIMITATIONS.—

12 ‘‘(A) CLASSES OF MAIL.—Except as pro13 vided under subparagraph (C), the annual limi14 tations under paragraph (1)(A) shall apply to a

15 class of mail, as defined in the Domestic Mail

16 Classification Schedule as in effect on the date of

17 enactment of the Postal Accountability and En18 hancement Act.

19 ‘‘(B) ROUNDING OF RATES AND FEES.—

20 Nothing in this subsection shall preclude the

21 Postal Service from rounding rates and fees to

22 the nearest whole integer, if the effect of such

23 rounding does not cause the overall rate increase

24 for any class to exceed the Consumer Price Index

25 for All Urban Consumers.
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1 ‘‘(C) USE OF UNUSED RATE AUTHORITY.—

2 ‘‘(i) DEFINITION.—In this subpara3 graph, the term ‘unused rate adjustment au4 thority’ means the difference between—

5 ‘‘(I) the maximum amount of a

6 rate adjustment that the Postal Service

7 is authorized to make in any year sub8 ject to the annual limitation under

9 paragraph (1); and

10 ‘‘(II) the amount of the rate ad11 justment the Postal Service actually

12 makes in that year.

13 ‘‘(ii) AUTHORITY.—Subject to clause

14 (iii), the Postal Service may use any un15 used rate adjustment authority for any of

16 the 5 years following the year such author17 ity occurred.

18 ‘‘(iii) LIMITATIONS.—In exercising the

19 authority under clause (ii) in any year, the

20 Postal Service—

21 ‘‘(I) may use unused rate adjust22 ment authority from more than 1 year;

23 ‘‘(II) may use any part of the un24 used rate adjustment authority from

25 any year;
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1 ‘‘(III) shall use the unused rate

2 adjustment authority from the earliest

3 year such authority first occurred and

4 then each following year; and

5 ‘‘(IV) for any class or service,

6 may not exceed the annual limitation

7 under paragraph (1) by more than 2

8 percentage points.

9 ‘‘(e) WORKSHARE DISCOUNTS.—

10 ‘‘(1) DEFINITION.—In this subsection, the term

11 ‘workshare discount’ refers to rate discounts provided

12 to mailers for the presorting, prebarcoding, handling,

13 or transportation of mail, as further defined by the

14 Postal Regulatory Commission under subsection (a).

15 ‘‘(2) REGULATIONS.—As part of the regulations

16 established under subsection (a), the Postal Regu17 latory Commission shall establish rules for workshare

18 discounts that ensure that such discounts do not ex19 ceed the cost that the Postal Service avoids as a result

20 of workshare activity, unless—

21 ‘‘(A) the discount is—

22 ‘‘(i) associated with a new postal serv23 ice, a change to an existing postal service,

24 or with a new workshare initiative related

25 to an existing postal service; and
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1 ‘‘(ii) necessary to induce mailer behav2 ior that furthers the economically efficient

3 operation of the Postal Service and the por4 tion of the discount in excess of the cost that

5 the Postal Service avoids as a result of the

6 workshare activity will be phased out over

7 a limited period of time;

8 ‘‘(B) a reduction in the discount would—

9 ‘‘(i) lead to a loss of volume in the af10 fected category or subclass of mail and re11 duce the aggregate contribution to the insti12 tutional costs of the Postal Service from the

13 category or subclass subject to the discount

14 below what it otherwise would have been if

15 the discount had not been reduced to costs

16 avoided;

17 ‘‘(ii) result in a further increase in the

18 rates paid by mailers not able to take ad19 vantage of the discount; or

20 ‘‘(iii) impede the efficient operation of

21 the Postal Service;

22 ‘‘(C) the amount of the discount above costs

23 avoided—

24 ‘‘(i) is necessary to mitigate rate shock;

25 and
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1 ‘‘(ii) will be phased out over time; or

2 ‘‘(D) the discount is provided in connection

3 with subclasses of mail consisting exclusively of

4 mail matter of educational, cultural, scientific,

5 or informational value.

6 ‘‘(3) REPORT.—Whenever the Postal Service es7 tablishes or maintains a workshare discount, the Post8 al Service shall, at the time it publishes the workshare

9 discount rate, submit to the Postal Regulatory Com10 mission a detailed report that—

11 ‘‘(A) explains the Postal Service’s reasons

12 for establishing or maintaining the rate;

13 ‘‘(B) sets forth the data, economic analyses,

14 and other information relied on by the Postal

15 Service to justify the rate; and

16 ‘‘(C) certifies that the discount will not ad17 versely affect rates or services provided to users

18 of postal services who do not take advantage of

19 the discount rate.

20 ‘‘(f) TRANSITION RULE.—For the 1-year period begin21 ning on the date of enactment of this section, rates and

22 classes for market-dominant products shall remain subject

23 to modification in accordance with the provisions of this

24 chapter and section 407, as such provisions were last in

25 effect before the date of enactment of this section. Pro-
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1 ceedings initiated to consider a request for a recommended

2 decision filed by the Postal Service during that 1-year pe3 riod shall be completed in accordance with subchapter II

4 of chapter 36 of this title and implementing regulations,

5 as in effect before the date of enactment of this section.’’.

6 (b) REPEALED SECTIONS.—Sections 3623, 3624, 3625,

7 and 3628 of title 39, United States Code, are repealed.

8 (c) REDESIGNATION.—Chapter 36 of title 39, United

9 States Code (as in effect after the amendment made by sec10 tion 601, but before the amendment made by section 202)

11 is amended by striking the heading for subchapter II and

12 inserting the following:

13 ‘‘SUBCHAPTER I—PROVISIONS RELATING TO

14 MARKET-DOMINANT PRODUCTS’’.

15 SEC. 202. PROVISIONS RELATING TO COMPETITIVE PROD16 UCTS.

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

18 by inserting after section 3629 the following:

19 ‘‘SUBCHAPTER II—PROVISIONS RELATING TO

20 COMPETITIVE PRODUCTS

21 ‘‘§ 3631. Applicability; definitions and updates

22 ‘‘(a) APPLICABILITY.—This subchapter shall apply

23 with respect to—

24 ‘‘(1) priority mail;

25 ‘‘(2) expedited mail;
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1 ‘‘(3) bulk parcel post;

2 ‘‘(4) bulk international mail; and

3 ‘‘(5) mailgrams;

4 subject to subsection (d) and any changes the Postal Regu5 latory Commission may make under section 3642.

6 ‘‘(b) DEFINITION.—For purposes of this subchapter,

7 the term ‘costs attributable’, as used with respect to a prod8 uct, means the direct and indirect postal costs attributable

9 to such product through reliably identified causal relation10 ships.

11 ‘‘(c) RULE OF CONSTRUCTION.—Mail matter referred

12 to in subsection (a) shall, for purposes of this subchapter,

13 be considered to have the meaning given to such mail matter

14 under the mail classification schedule.

15 ‘‘(d) LIMITATION.—Notwithstanding any other provi16 sion of this section, nothing in this subchapter shall be con17 sidered to apply with respect to any product then currently

18 in the market-dominant category of mail.

19 ‘‘§ 3632. Action of the Governors

20 ‘‘(a) AUTHORITY TO ESTABLISH RATES AND CLASS21 ES.—The Governors, with the written concurrence of a ma22 jority of all of the Governors then holding office, shall estab23 lish rates and classes for products in the competitive cat24 egory of mail in accordance with the requirements of this
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1 subchapter and regulations promulgated under section

2 3633.

3 ‘‘(b) PROCEDURES.—

4 ‘‘(1) IN GENERAL.—Rates and classes shall be es5 tablished in writing, complete with a statement of ex6 planation and justification, and the date as of which

7 each such rate or class takes effect.

8 ‘‘(2) PUBLIC NOTICE; REVIEW; AND COMPLI9 ANCE.—Not later than 30 days before the date of im10 plementation of any adjustment in rates under this

11 section—

12 ‘‘(A) the Governors shall provide public no13 tice of the adjustment and an opportunity for re14 view by the Postal Regulatory Commission;

15 ‘‘(B) the Postal Regulatory Commission

16 shall notify the Governors of any noncompliance

17 of the adjustment with section 3633; and

18 ‘‘(C) the Governors shall respond to the no19 tice provided under subparagraph (B) and de20 scribe the actions to be taken to comply with sec21 tion 3633.

22 ‘‘(c) TRANSITION RULE.—Until regulations under sec23 tion 3633 first take effect, rates and classes for competitive

24 products shall remain subject to modification in accordance

25 with the provisions of this chapter and section 407, as such
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1 provisions were as last in effect before the date of enactment

2 of this section.

3 ‘‘§ 3633. Provisions applicable to rates for competitive

4 products

5 ‘‘(a) IN GENERAL.—The Postal Regulatory Commis6 sion shall, within 180 days after the date of enactment of

7 this section, promulgate (and may from time to time there8 after revise) regulations to—

9 ‘‘(1) prohibit the subsidization of competitive

10 products by market-dominant products;

11 ‘‘(2) ensure that each competitive product covers

12 its costs attributable; and

13 ‘‘(3) ensure that all competitive products collec14 tively cover their share of the institutional costs of the

15 Postal Service.

16 ‘‘(b) REVIEW OF MINIMUM CONTRIBUTION.—Five

17 years after the date of enactment of this section, and every

18 5 years thereafter, the Postal Regulatory Commission shall

19 conduct a review to determine whether the institutional

20 costs contribution requirement under subsection (a)(3)

21 should be retained in its current form, modified, or elimi22 nated. In making its determination, the Commission shall

23 consider all relevant circumstances, including the pre24 vailing competitive conditions in the market, and the degree
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1 to which any costs are uniquely or disproportionately asso2 ciated with any competitive products.’’.

3 SEC. 203. PROVISIONS RELATING TO EXPERIMENTAL AND

4 NEW PRODUCTS.

5 Subchapter III of chapter 36 of title 39, United States

6 Code, is amended to read as follows:

7 ‘‘SUBCHAPTER III—PROVISIONS RELATING TO

8 EXPERIMENTAL AND NEW PRODUCTS

9 ‘‘§ 3641. Market tests of experimental products

10 ‘‘(a) AUTHORITY.—

11 ‘‘(1) IN GENERAL.—The Postal Service may con12 duct market tests of experimental products in accord13 ance with this section.

14 ‘‘(2) PROVISIONS WAIVED.—A product shall not,

15 while it is being tested under this section, be subject

16 to the requirements of sections 3622, 3633, or 3642,

17 or regulations promulgated under those sections.

18 ‘‘(b) CONDITIONS.—A product may not be tested under

19 this section unless it satisfies each of the following:

20 ‘‘(1) SIGNIFICANTLY DIFFERENT PRODUCT.—The

21 product is, from the viewpoint of the mail users, sig22 nificantly different from all products offered by the

23 Postal Service within the 2-year period preceding the

24 start of the test.
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1 ‘‘(2) MARKET DISRUPTION.—The introduction or

2 continued offering of the product will not create an

3 unfair or otherwise inappropriate competitive advan4 tage for the Postal Service or any mailer, particularly

5 in regard to small business concerns (as defined under

6 subsection (h)).

7 ‘‘(3) CORRECT CATEGORIZATION.—The Postal

8 Service identifies the product, for the purpose of a test

9 under this section, as either market-dominant or com10 petitive, consistent with the criteria under section

11 3642(b)(1). Costs and revenues attributable to a prod12 uct identified as competitive shall be included in any

13 determination under section 3633(3)(relating to pro14 visions applicable to competitive products collec15 tively). Any test that solely affects products currently

16 classified as competitive, or which provides services

17 ancillary to only competitive products, shall be pre18 sumed to be in the competitive product category with19 out regard to whether a similar ancillary product ex20 ists for market-dominant products.

21 ‘‘(c) NOTICE.—

22 ‘‘(1) IN GENERAL.—At least 30 days before initi23 ating a market test under this section, the Postal

24 Service shall file with the Postal Regulatory Commis25 sion and publish in the Federal Register a notice—
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1 ‘‘(A) setting out the basis for the Postal

2 Service’s determination that the market test is

3 covered by this section; and

4 ‘‘(B) describing the nature and scope of the

5 market test.

6 ‘‘(2) SAFEGUARDS.—For a competitive experi7 mental product, the provisions of section 504(g) shall

8 be available with respect to any information required

9 to be filed under paragraph (1) to the same extent

10 and in the same manner as in the case of any matter

11 described in section 504(g)(1). Nothing in paragraph

12 (1) shall be considered to permit or require the publi13 cation of any information as to which confidential

14 treatment is accorded under the preceding sentence

15 (subject to the same exception as set forth in section

16 504(g)(3)).

17 ‘‘(d) DURATION.—

18 ‘‘(1) IN GENERAL.—A market test of a product

19 under this section may be conducted over a period of

20 not to exceed 24 months.

21 ‘‘(2) EXTENSION AUTHORITY.—If necessary in

22 order to determine the feasibility or desirability of a

23 product being tested under this section, the Postal

24 Regulatory Commission may, upon written applica25 tion of the Postal Service (filed not later than 60 days
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1 before the date as of which the testing of such product

2 would otherwise be scheduled to terminate under

3 paragraph (1)), extend the testing of such product for

4 not to exceed an additional 12 months.

5 ‘‘(e) DOLLAR-AMOUNT LIMITATION.—

6 ‘‘(1) IN GENERAL.—A product may only be test7 ed under this section if the total revenues that are an8 ticipated, or in fact received, by the Postal Service

9 from such product do not exceed $10,000,000 in any

10 year, subject to paragraph (2) and subsection (g).

11 ‘‘(2) EXEMPTION AUTHORITY.—The Postal Regu12 latory Commission may, upon written application of

13 the Postal Service, exempt the market test from the

14 limit in paragraph (1) if the total revenues that are

15 anticipated, or in fact received, by the Postal Service

16 from such product do not exceed $50,000,000 in any

17 year, subject to subsection (g). In reviewing an appli18 cation under this paragraph, the Postal Regulatory

19 Commission shall approve such application if it de20 termines that—

21 ‘‘(A) the product is likely to benefit the pub22 lic and meet an expected demand;

23 ‘‘(B) the product is likely to contribute to

24 the financial stability of the Postal Service; and
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1 ‘‘(C) the product is not likely to result in

2 unfair or otherwise inappropriate competition.

3 ‘‘(f) CANCELLATION.—If the Postal Regulatory Com4 mission at any time determines that a market test under

5 this section fails to meet 1 or more of the requirements of

6 this section, it may order the cancellation of the test in7 volved or take such other action as it considers appropriate.

8 A determination under this subsection shall be made in ac9 cordance with such procedures as the Commission shall by

10 regulation prescribe.

11 ‘‘(g) ADJUSTMENT FOR INFLATION.—For purposes of

12 each year following the year in which occurs the deadline

13 for the Postal Service’s first report to the Postal Regulatory

14 Commission under section 3652(a), each dollar amount con15 tained in this section shall be adjusted by the change in

16 the Consumer Price Index for such year (as determined

17 under regulations of the Commission).

18 ‘‘(h) DEFINITION OF A SMALL BUSINESS CONCERN.—

19 The criteria used in defining small business concerns or oth20 erwise categorizing business concerns as small business con21 cerns shall, for purposes of this section, be established by

22 the Postal Regulatory Commission in conformance with the

23 requirements of section 3 of the Small Business Act.

24 ‘‘(i) EFFECTIVE DATE.—Market tests under this sub25 chapter may be conducted in any year beginning with the
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1 first year in which occurs the deadline for the Postal Serv2 ice’s first report to the Postal Regulatory Commission under

3 section 3652(a).

4 ‘‘§ 3642. New products and transfers of products be5 tween the market-dominant and competi6 tive categories of mail

7 ‘‘(a) IN GENERAL.—Upon request of the Postal Service

8 or users of the mails, or upon its own initiative, the Postal

9 Regulatory Commission may change the list of market-dom10 inant products under section 3621 and the list of competi11 tive products under section 3631 by adding new products

12 to the lists, removing products from the lists, or transferring

13 products between the lists.

14 ‘‘(b) CRITERIA.—All determinations by the Postal Reg15 ulatory Commission under subsection (a) shall be made in

16 accordance with the following criteria:

17 ‘‘(1) The market-dominant category of products

18 shall consist of each product in the sale of which the

19 Postal Service exercises sufficient market power that

20 it can effectively set the price of such product substan21 tially above costs, raise prices significantly, decrease

22 quality, or decrease output, without risk of losing sub23 stantial business to other firms offering similar prod24 ucts. The competitive category of products shall con25 sist of all other products.
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1 ‘‘(2) EXCLUSION OF PRODUCTS COVERED BY

2 POSTAL MONOPOLY.—A product covered by the postal

3 monopoly shall not be subject to transfer under this

4 section from the market-dominant category of mail.

5 For purposes of the preceding sentence, the term

6 ‘product covered by the postal monopoly’ means any

7 product the conveyance or transmission of which is

8 reserved to the United States under section 1696 of

9 title 18, subject to the same exception as set forth in

10 the last sentence of section 409(e)(1).

11 ‘‘(3) ADDITIONAL CONSIDERATIONS.—In making

12 any decision under this section, due regard shall be

13 given to—

14 ‘‘(A) the availability and nature of enter15 prises in the private sector engaged in the deliv16 ery of the product involved;

17 ‘‘(B) the views of those who use the product

18 involved on the appropriateness of the proposed

19 action; and

20 ‘‘(C) the likely impact of the proposed ac21 tion on small business concerns (within the

22 meaning of section 3641(h)).

23 ‘‘(c) TRANSFERS OF SUBCLASSES AND OTHER SUBOR24 DINATE UNITS ALLOWABLE.—Nothing in this title shall be

25 considered to prevent transfers under this section from being
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1 made by reason of the fact that they would involve only

2 some (but not all) of the subclasses or other subordinate

3 units of the class of mail or type of postal service involved

4 (without regard to satisfaction of minimum quantity re5 quirements standing alone).

6 ‘‘(d) NOTIFICATION AND PUBLICATION REQUIRE7 MENTS.—

8 ‘‘(1) NOTIFICATION REQUIREMENT.—The Postal

9 Service shall, whenever it requests to add a product

10 or transfer a product to a different category, file with

11 the Postal Regulatory Commission and publish in the

12 Federal Register a notice setting out the basis for its

13 determination that the product satisfies the criteria

14 under subsection (b) and, in the case of a request to

15 add a product or transfer a product to the competi16 tive category of mail, that the product meets the regu17 lations promulgated by the Postal Regulatory Com18 mission under section 3633. The provisions of section

19 504(g) shall be available with respect to any informa20 tion required to be filed.

21 ‘‘(2) PUBLICATION REQUIREMENT.—The Postal

22 Regulatory Commission shall, whenever it changes the

23 list of products in the market-dominant or competi24 tive category of mail, prescribe new lists of products.

25 The revised lists shall indicate how and when any
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1 previous lists (including the lists under sections 3621

2 and 3631) are superseded, and shall be published in

3 the Federal Register.

4 ‘‘(e) PROHIBITION.—Except as provided in section

5 3641, no product that involves the physical delivery of let6 ters, printed matter, or packages may be offered by the Post7 al Service unless it has been assigned to the market-domi8 nant or competitive category of mail (as appropriate)

9 either—

10 ‘‘(1) under this subchapter; or

11 ‘‘(2) by or under any other provision of law.’’.

12 SEC. 204. REPORTING REQUIREMENTS AND RELATED PRO13 VISIONS.

14 (a) REDESIGNATION.—Chapter 36 of title 39, United

15 States Code (as in effect before the amendment made by sub16 section (b)) is amended—

17 (1) by striking the heading for subchapter IV

18 and inserting the following:

19 ‘‘SUBCHAPTER V—POSTAL SERVICES,

20 COMPLAINTS, AND JUDICIAL REVIEW’’; and

21 (2) by striking the heading for subchapter V and

22 inserting the following:
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1 ‘‘SUBCHAPTER VI—GENERAL’’.

2 (b) REPORTS AND COMPLIANCE.—Chapter 36 of title

3 39, United States Code, is amended by inserting after sub4 chapter III the following:

5 ‘‘SUBCHAPTER IV—REPORTING REQUIREMENTS

6 AND RELATED PROVISIONS

7 ‘‘§ 3651. Annual reports by the Commission

8 ‘‘(a) IN GENERAL.—The Postal Regulatory Commis9 sion shall submit an annual report to the President and

10 the Congress concerning the operations of the Commission

11 under this title, including the extent to which regulations

12 are achieving the objectives under sections 3622, 3633, and

13 3691.

14 ‘‘(b) INFORMATION FROM POSTAL SERVICE.—The

15 Postal Service shall provide the Postal Regulatory Commis16 sion with such information as may, in the judgment of the

17 Commission, be necessary in order for the Commission to

18 prepare its reports under this section.

19 ‘‘§ 3652. Annual reports to the Commission

20 ‘‘(a) COSTS, REVENUES, RATES, AND SERVICE.—Ex21 cept as provided in subsection (c), the Postal Service shall,

22 no later than 90 days after the end of each year, prepare

23 and submit to the Postal Regulatory Commission a report

24 (together with such nonpublic annex to the report as the

25 Commission may require under subsection (e))—
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HR 22 EAS

1 ‘‘(1) which shall analyze costs, revenues, rates,

2 and quality of service in sufficient detail to dem3 onstrate that all products during such year complied

4 with all applicable requirements of this title; and

5 ‘‘(2) which shall, for each market-dominant

6 product provided in such year, provide—

7 ‘‘(A) product information, including mail

8 volumes; and

9 ‘‘(B) measures of the service afforded by the

10 Postal Service in connection with such product,

11 including—

12 ‘‘(i) the level of service (described in

13 terms of speed of delivery and reliability)

14 provided; and

15 ‘‘(ii) the degree of customer satisfaction

16 with the service provided.

17 Before submitting a report under this subsection (in18 cluding any annex to the report and the information

19 required under subsection (b)), the Postal Service

20 shall have the information contained in such report

21 (and annex) audited by the Inspector General. The re22 sults of any such audit shall be submitted along with

23 the report to which it pertains.

24 ‘‘(b) INFORMATION RELATING TO WORKSHARE DIS25 COUNTS.—The Postal Service shall include, in each report
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1 under subsection (a), the following information with respect

2 to each market-dominant product for which a workshare

3 discount was in effect during the period covered by such

4 report:

5 ‘‘(1) The per-item cost avoided by the Postal

6 Service by virtue of such discount.

7 ‘‘(2) The percentage of such per-item cost avoided

8 that the per-item workshare discount represents.

9 ‘‘(3) The per-item contribution made to institu10 tional costs.

11 ‘‘(c) SERVICE AGREEMENTS AND MARKET TESTS.—In

12 carrying out subsections (a) and (b) with respect to service

13 agreements and experimental products offered through mar14 ket tests under section 3641 in a year, the Postal Service—

15 ‘‘(1) may report summary data on the costs, rev16 enues, and quality of service by service agreement and

17 market test; and

18 ‘‘(2) shall report such data as the Postal Regu19 latory Commission requires.

20 ‘‘(d) SUPPORTING MATTER.—The Postal Regulatory

21 Commission shall have access, in accordance with such reg22 ulations as the Commission shall prescribe, to the working

23 papers and any other supporting matter of the Postal Serv24 ice and the Inspector General in connection with any infor25 mation submitted under this section.
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1 ‘‘(e) CONTENT AND FORM OF REPORTS.—

2 ‘‘(1) IN GENERAL.—The Postal Regulatory Com3 mission shall, by regulation, prescribe the content and

4 form of the public reports (and any nonpublic annex

5 and supporting matter relating to the report) to be

6 provided by the Postal Service under this section. In

7 carrying out this subsection, the Commission shall

8 give due consideration to—

9 ‘‘(A) providing the public with timely, ade10 quate information to assess the lawfulness of

11 rates charged;

12 ‘‘(B) avoiding unnecessary or unwarranted

13 administrative effort and expense on the part of

14 the Postal Service; and

15 ‘‘(C) protecting the confidentiality of com16 mercially sensitive information.

17 ‘‘(2) REVISED REQUIREMENTS.—The Commis18 sion may, on its own motion or on request of an in19 terested party, initiate proceedings (to be conducted

20 in accordance with regulations that the Commission

21 shall prescribe) to improve the quality, accuracy, or

22 completeness of Postal Service data required by the

23 Commission under this subsection whenever it shall

24 appear that—
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1 ‘‘(A) the attribution of costs or revenues to

2 products has become significantly inaccurate or

3 can be significantly improved;

4 ‘‘(B) the quality of service data has become

5 significantly inaccurate or can be significantly

6 improved; or

7 ‘‘(C) such revisions are, in the judgment of

8 the Commission, otherwise necessitated by the

9 public interest.

10 ‘‘(f) CONFIDENTIAL INFORMATION.—

11 ‘‘(1) IN GENERAL.—If the Postal Service deter12 mines that any document or portion of a document,

13 or other matter, which it provides to the Postal Regu14 latory Commission in a nonpublic annex under this

15 section or under subsection (d) contains information

16 which is described in section 410(c) of this title, or ex17 empt from public disclosure under section 552(b) of

18 title 5, the Postal Service shall, at the time of pro19 viding such matter to the Commission, notify the

20 Commission of its determination, in writing, and de21 scribe with particularity the documents (or portions

22 of documents) or other matter for which confiden23 tiality is sought and the reasons therefor.

24 ‘‘(2) TREATMENT.—Any information or other

25 matter described in paragraph (1) to which the Com-
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1 mission gains access under this section shall be sub2 ject to paragraphs (2) and (3) of section 504(g) in the

3 same way as if the Commission had received notifica4 tion with respect to such matter under section

5 504(g)(1).

6 ‘‘(g) OTHER REPORTS.—The Postal Service shall sub7 mit to the Postal Regulatory Commission, together with any

8 other submission that the Postal Service is required to make

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

10 ‘‘(1) comprehensive statement under section

11 2401(e);

12 ‘‘(2) strategic plan under section 2802;

13 ‘‘(3) performance plan under section 2803; and

14 ‘‘(4) program performance reports under section

15 2804.

16 ‘‘§ 3653. Annual determination of compliance

17 ‘‘(a) OPPORTUNITY FOR PUBLIC COMMENT.—After re18 ceiving the reports required under section 3652 for any

19 year, the Postal Regulatory Commission shall promptly

20 provide an opportunity for comment on such reports by

21 users of the mails, affected parties, and an officer of the

22 Commission who shall be required to represent the interests

23 of the general public.

24 ‘‘(b) DETERMINATION OF COMPLIANCE OR NONCOMPLI25 ANCE.—Not later than 90 days after receiving the submis-
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1 sions required under section 3652 with respect to a year,

2 the Postal Regulatory Commission shall make a written de3 termination as to—

4 ‘‘(1) whether any rates or fees in effect during

5 such year (for products individually or collectively)

6 were not in compliance with applicable provisions of

7 this chapter (or regulations promulgated thereunder);

8 or

9 ‘‘(2) whether any service standards in effect dur10 ing such year were not met.

11 If, with respect to a year, no instance of noncompliance

12 is found under this subsection to have occurred in such year,

13 the written determination shall be to that effect.

14 ‘‘(c) IF ANY NONCOMPLIANCE IS FOUND.—If, for a

15 year, a timely written determination of noncompliance is

16 made under subsection (b), the Postal Regulatory Commis17 sion shall take any appropriate remedial action authorized

18 by section 3662(c).

19 ‘‘(d) REBUTTABLE PRESUMPTION.—A timely written

20 determination described in the last sentence of subsection

21 (b) shall, for purposes of any proceeding under section 3662,

22 create a rebuttable presumption of compliance by the Postal

23 Service (with regard to the matters described under para24 graphs (1) and (2) of subsection (b)) during the year to

25 which such determination relates.’’.
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1 SEC. 205. COMPLAINTS; APPELLATE REVIEW AND ENFORCE2 MENT.

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

4 by striking sections 3662 and 3663 and inserting the fol5 lowing:

6 ‘‘§ 3662. Rate and service complaints

7 ‘‘(a) IN GENERAL.—Any interested party (including

8 an officer of the Postal Regulatory Commission representing

9 the interests of the general public) who believes the Postal

10 Service is not operating in conformance with the require11 ments of the provisions of chapter 1 (except section 101(c)),

12 sections 401, 403, 404, 404a, 601, or this chapter (or regula13 tions promulgated under any of those provisions) may lodge

14 a complaint with the Postal Regulatory Commission in

15 such form and manner as the Commission may prescribe.

16 ‘‘(b) PROMPT RESPONSE REQUIRED.—

17 ‘‘(1) IN GENERAL.—The Postal Regulatory Com18 mission shall, within 90 days after receiving a com19 plaint under subsection (a)—

20 ‘‘(A) either—

21 ‘‘(i) upon a finding that such com22 plaint raises substantial and material

23 issues of fact or law, begin proceedings on

24 such complaint; or

25 ‘‘(ii) issue an order dismissing the

26 complaint; and
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1 ‘‘(B) with respect to any action taken under

2 subparagraph (A) (i) or (ii), issue a written

3 statement setting forth the bases of its determina4 tion.

5 ‘‘(2) TREATMENT OF COMPLAINTS NOT TIMELY

6 ACTED ON.—For purposes of section 3663, any com7 plaint under subsection (a) on which the Commission

8 fails to act in the time and manner required by para9 graph (1) shall be treated in the same way as if it

10 had been dismissed under an order issued by the

11 Commission on the last day allowable for the issuance

12 of such order under paragraph (1).

13 ‘‘(c) ACTION REQUIRED IF COMPLAINT FOUND TO BE

14 JUSTIFIED.—If the Postal Regulatory Commission finds

15 upon clear and convincing evidence the complaint to be jus16 tified, it shall order that the Postal Service take such action

17 as is necessary to achieve compliance with the applicable

18 requirements and to remedy the effects of any noncompli19 ance.

20 ‘‘(d) AUTHORITY TO ORDER FINES IN CASES OF DE21 LIBERATE NONCOMPLIANCE.—In addition, in cases of delib22 erate noncompliance by the Postal Service with the require23 ments of this title, the Postal Regulatory Commission may

24 order, based on the nature, circumstances, extent, and seri25 ousness of the noncompliance, a fine (in the amount speci-
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1 fied by the Commission in its order) for each incidence of

2 noncompliance. Fines resulting from the provision of com3 petitive products shall be paid from the Competitive Prod4 ucts Fund established in section 2011. All receipts from

5 fines imposed under this subsection shall be deposited in

6 the general fund of the Treasury of the United States.

7 ‘‘§ 3663. Appellate review

8 ‘‘A person, including the Postal Service, adversely af9 fected or aggrieved by a final order or decision of the Postal

10 Regulatory Commission may, within 30 days after such

11 order or decision becomes final, institute proceedings for re12 view thereof by filing a petition in the United States Court

13 of Appeals for the District of Columbia. The court shall re14 view the order or decision in accordance with section 706

15 of title 5, and chapter 158 and section 2112 of title 28,

16 on the basis of the record before the Commission.

17 ‘‘§ 3664. Enforcement of orders

18 ‘‘The several district courts have jurisdiction specifi19 cally to enforce, and to enjoin and restrain the Postal Serv20 ice from violating, any order issued by the Postal Regu21 latory Commission.’’.

22 SEC. 206. CLERICAL AMENDMENT.

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

24 by striking the heading and analysis for such chapter and

25 inserting the following:
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‘‘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.

‘‘SUBCHAPTER VII—MODERN SERVICE STANDARDS

‘‘3691. Establishment of modern service standards.’’.
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1 TITLE III—MODERN SERVICE

2 STANDARDS

3 SEC. 301. ESTABLISHMENT OF MODERN SERVICE STAND4 ARDS.

5 Chapter 36 of title 39, United States Code, as amended

6 by this Act, is further amended by adding at the end the

7 following:

8 ‘‘SUBCHAPTER VII—MODERN SERVICE

9 STANDARDS

10 ‘‘§ 3691. Establishment of modern service standards

11 ‘‘(a) AUTHORITY GENERALLY.—Not later than 12

12 months after the date of enactment of this section, the Postal

13 Service shall, in consultation with the Postal Regulatory

14 Commission, by regulation establish (and may from time

15 to time thereafter by regulation revise) a set of service

16 standards for market-dominant products consistent with the

17 Postal Service’s universal service obligation as defined in

18 sections 101 (a) and (b) and 403.

19 ‘‘(b) OBJECTIVES.—Such standards shall be designed

20 to achieve the following objectives:

21 ‘‘(1) To enhance the value of postal services to

22 both senders and recipients.

23 ‘‘(2) To preserve regular and effective access to

24 postal services in all communities, including those in
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1 rural areas or where post offices are not self-sus2 taining.

3 ‘‘(3) To reasonably assure Postal Service cus4 tomers delivery reliability, speed and frequency con5 sistent with reasonable rates and best business prac6 tices.

7 ‘‘(4) To provide a system of objective external

8 performance measurements for each market-dominant

9 product as a basis for measurement of Postal Service

10 performance.

11 ‘‘(c) FACTORS.—In establishing or revising such stand12 ards, the Postal Service shall take into account—

13 ‘‘(1) the actual level of service that Postal Service

14 customers receive under any service guidelines pre15 viously established by the Postal Service or service

16 standards established under this section;

17 ‘‘(2) the degree of customer satisfaction with

18 Postal Service performance in the acceptance, proc19 essing and delivery of mail;

20 ‘‘(3) the needs of Postal Service customers, in21 cluding those with physical impairments;

22 ‘‘(4) mail volume and revenues projected for fu23 ture years;
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1 ‘‘(5) the projected growth in the number of ad2 dresses the Postal Service will be required to serve in

3 future years;

4 ‘‘(6) the current and projected future cost of serv5 ing Postal Service customers;

6 ‘‘(7) the effect of changes in technology, demo7 graphics, and population distribution on the efficient

8 and reliable operation of the postal delivery system;

9 and

10 ‘‘(8) the policies of this title and such other fac11 tors as the Postal Service determines appropriate.

12 ‘‘(d) REVIEW.—The regulations promulgated pursuant

13 to this section (and any revisions thereto) shall be subject

14 to review upon complaint under sections 3662 and 3663.’’.

15 SEC. 302. POSTAL SERVICE PLAN.

16 (a) IN GENERAL.—Within 6 months after the estab17 lishment of the service standards under section 3691 of title

18 39, United States Code, as added by this Act, the Postal

19 Service shall, in consultation with the Postal Regulatory

20 Commission, develop and submit to Congress a plan for

21 meeting those standards.

22 (b) CONTENTS.—The plan under this section shall—

23 (1) establish performance goals;

24 (2) describe any changes to the Postal Service’s

25 processing, transportation, delivery, and retail net-
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1 works necessary to allow the Postal Service to meet

2 the performance goals;

3 (3) describe any changes to planning and per4 formance management documents previously sub5 mitted to Congress to reflect new performance goals;

6 and

7 (4) contain the matters relating to postal facili8 ties provided under subsection (c).

9 (c) POSTAL FACILITIES.—

10 (1) FINDINGS.—Congress finds that—

11 (A) the Postal Service has more than 400

12 logistics facilities, separate from its post office

13 network;

14 (B) as noted by the President’s Commission

15 on the United States Postal Service, the Postal

16 Service has more facilities than it needs and the

17 streamlining of this distribution network can

18 pave the way for the potential consolidation of

19 sorting facilities and the elimination of excess

20 costs;

21 (C) the Postal Service has always revised its

22 distribution network to meet changing conditions

23 and is best suited to address its operational

24 needs; and
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1 (D) Congress strongly encourages the Postal

2 Service to—

3 (i) expeditiously move forward in its

4 streamlining efforts; and

5 (ii) keep unions, management associa6 tions, and local elected officials informed as

7 an essential part of this effort and abide by

8 any procedural requirements contained in

9 the national bargaining agreements.

10 (2) IN GENERAL.—The Postal Service plan shall

11 include a description of—

12 (A) the long-term vision of the Postal Serv13 ice for rationalizing its infrastructure and work14 force; and

15 (B) how the Postal Service intends to im16 plement that vision.

17 (3) CONTENT OF FACILITIES PLAN.—The plan

18 under this subsection shall include—

19 (A) a strategy for how the Postal Service

20 intends to rationalize the postal facilities net21 work and remove excess processing capacity and

22 space from the network, including estimated

23 timeframes, criteria, and processes to be used for

24 making changes to the facilities network, and the
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1 process for engaging policy makers and the pub2 lic in related decisions;

3 (B) a discussion of what impact any facil4 ity changes may have on the postal workforce

5 and whether the Postal Service has sufficient

6 flexibility to make needed workforce changes;

7 (C) an identification of anticipated costs,

8 cost savings, and other benefits associated with

9 the infrastructure rationalization alternatives

10 discussed in the plan; and

11 (D) procedures that the Postal Service will

12 use to—

13 (i) provide adequate public notice to

14 communities potentially affected by a pro15 posed rationalization decision;

16 (ii) make available, upon request, any

17 data, analyses, or other information consid18 ered by the Postal Service in making the

19 proposed decision;

20 (iii) afford affected persons ample op21 portunity to provide input on the proposed

22 decision; and

23 (iv) take such comments into account

24 in making a final decision.

25 (4) ANNUAL REPORTS.—
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1 (A) IN GENERAL.—Not later than 90 days

2 after the end of each fiscal year, the Postal Serv3 ice shall prepare and submit a report to Con4 gress on how postal decisions have impacted or

5 will impact rationalization plans.

6 (B) CONTENTS.—Each report under this

7 paragraph shall include—

8 (i) an account of actions taken during

9 the preceding fiscal year to improve the effi10 ciency and effectiveness of its processing,

11 transportation, and distribution networks

12 while preserving the timely delivery of post13 al services, including overall estimated costs

14 and cost savings;

15 (ii) an account of actions taken to

16 identify any excess capacity within its

17 processing, transportation, and distribution

18 networks and implement savings through

19 realignment or consolidation of facilities in20 cluding overall estimated costs and cost sav21 ings;

22 (iii) an estimate of how postal deci23 sions related to mail changes, security, au24 tomation initiatives, worksharing, informa25 tion technology systems, excess capacity,
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1 consolidating and closing facilities, and

2 other areas will impact rationalization

3 plans;

4 (iv) identification of any statutory or

5 regulatory obstacles that prevented or will

6 prevent or hinder the Postal Service from

7 taking action to realign or consolidate fa8 cilities; and

9 (v) such additional topics and rec10 ommendations as the Postal Service con11 siders appropriate.

12 (5) EXISTING EFFORTS.—Effective on the date of

13 enactment of this Act, the Postal Service may not

14 close or consolidate any processing or logistics facili15 ties without using procedures for public notice and

16 input consistent with those described under para17 graph (3)(D).

18 (d) ALTERNATE RETAIL OPTIONS.—The Postal Service

19 plan shall include plans to expand and market retail access

20 to postal services, in addition to post offices, including—

21 (1) vending machines;

22 (2) the Internet;

23 (3) postage meters;

24 (4) Stamps by Mail;

25 (5) Postal Service employees on delivery routes;
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1 (6) retail facilities in which overhead costs are

2 shared with private businesses and other government

3 agencies; or

4 (7) any other nonpost office access channel pro5 viding market retail access to postal services.

6 (e) REEMPLOYMENT ASSISTANCE AND RETIREMENT

7 BENEFITS.—The Postal Service plan shall include—

8 (1) a plan under which reemployment assistance

9 shall be afforded to employees displaced as a result of

10 the automation of any of its functions or the closing

11 and consolidation of any of its facilities; and

12 (2) a plan, developed in consultation with the

13 Office of Personnel Management, to offer early retire14 ment benefits.

15 (f) INSPECTOR GENERAL REPORT.—

16 (1) IN GENERALBefore submitting the plan under

17 subsection (a) and each annual report under sub18 section (c) to Congress, the Postal Service shall submit

19 the plan and each annual report to the Inspector

20 General of the United States Postal Service in a time21 ly manner to carry out this subsection.

22 (2) REPORT.—The Inspector General shall pre23 pare a report describing the extent to which the Postal

24 Service plan and each annual report under subsection

25 (c)—
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1 (A) are consistent with the continuing obli2 gations of the Postal Service under title 39,

3 United States Code;

4 (B) provide for the Postal Service to meet

5 the service standards established under section

6 3691 of title 39, United States Code; and

7 (C) allow progress toward improving overall

8 efficiency and effectiveness consistent with the

9 need to maintain universal postal service at af10 fordable rates.

11 (g) CONTINUED AUTHORITY.—Nothing in this section

12 shall be construed to prohibit the Postal Service from imple13 menting any change to its processing, transportation, deliv14 ery, and retail networks under any authority granted to

15 the Postal Service for those purposes.

16 TITLE IV—PROVISIONS RELAT17 ING TO FAIR COMPETITION

18 SEC. 401. POSTAL SERVICE COMPETITIVE PRODUCTS FUND.

19 (a) PROVISIONS RELATING TO POSTAL SERVICE COM20 PETITIVE PRODUCTS FUND AND RELATED MATTERS.—

21 (1) IN GENERAL.—Chapter 20 of title 39, United

22 States Code, is amended by adding at the end the fol23 lowing:
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1 ‘‘§ 2011. Provisions relating to competitive products

2 ‘‘(a)(1) In this subsection, the term ‘costs attributable’

3 has the meaning given such term by section 3631.

4 ‘‘(2) There is established in the Treasury of the United

5 States a revolving fund, to be called the Postal Service Com6 petitive Products Fund, which shall be available to the Post7 al Service without fiscal year limitation for the payment

8 of—

9 ‘‘(A) costs attributable to competitive products;

10 and

11 ‘‘(B) all other costs incurred by the Postal Serv12 ice, to the extent allocable to competitive products.

13 ‘‘(b) There shall be deposited in the Competitive Prod14 ucts Fund, subject to withdrawal by the Postal Service—

15 ‘‘(1) revenues from competitive products;

16 ‘‘(2) amounts received from obligations issued by

17 Postal Service under subsection (e);

18 ‘‘(3) interest and dividends earned on invest19 ments of the Competitive Products Fund; and

20 ‘‘(4) any other receipts of the Postal Service (in21 cluding from the sale of assets), to the extent allocable

22 to competitive products.

23 ‘‘(c) If the Postal Service determines that the moneys

24 of the Competitive Products Fund are in excess of current

25 needs, the Postal Service may request the investment of such

26 amounts as the Postal Service determines advisable by the
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1 Secretary of the Treasury in obligations of, or obligations

2 guaranteed by, the Government of the United States, and,

3 with the approval of the Secretary, in such other obligations

4 or securities as the Postal Service determines appropriate.

5 ‘‘(d) With the approval of the Secretary of the Treas6 ury, the Postal Service may deposit moneys of the Competi7 tive Products Fund in any Federal Reserve bank, any de8 pository for public funds, or in such other places and in

9 such manner as the Postal Service and the Secretary may

10 mutually agree.

11 ‘‘(e)(1)(A) Subject to the limitations specified in sec12 tion 2005(a), the Postal Service is authorized to borrow

13 money and to issue and sell such obligations as the Postal

14 Service determines necessary to provide for competitive

15 products and deposit such amounts in the Competitive

16 Products Fund.

17 ‘‘(B) Subject to paragraph (5), any borrowings by the

18 Postal Service under subparagraph (A) shall be supported

19 and serviced by—

20 ‘‘(i) the revenues and receipts from competitive

21 products and the assets related to the provision of

22 competitive products (as determined under subsection

23 (h)); or

24 ‘‘(ii) for purposes of any period before account25 ing practices and principles under subsection (h) have
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1 been established and applied, the best information

2 available from the Postal Service, including the au3 dited statements required by section 2008(e).

4 ‘‘(2) The Postal Service may enter into binding cov5 enants with the holders of such obligations, and with any

6 trustee under any agreement entered into in connection

7 with the issuance of such obligations with respect to—

8 ‘‘(A) the establishment of reserve, sinking, and

9 other funds;

10 ‘‘(B) application and use of revenues and re11 ceipts of the Competitive Products Fund;

12 ‘‘(C) stipulations concerning the subsequent

13 issuance of obligations or the execution of leases or

14 lease purchases relating to properties of the Postal

15 Service; and

16 ‘‘(D) such other matters as the Postal Service,

17 considers necessary or desirable to enhance the mar18 ketability of such obligations.

19 ‘‘(3) Obligations issued by the Postal Service under

20 this subsection—

21 ‘‘(A) shall be in such forms and denominations;

22 ‘‘(B) shall be sold at such times and in such

23 amounts;

24 ‘‘(C) shall mature at such time or times;

25 ‘‘(D) shall be sold at such prices;
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1 ‘‘(E) shall bear such rates of interest;

2 ‘‘(F) may be redeemable before maturity in such

3 manner, at such times, and at such redemption pre4 miums;

5 ‘‘(G) may be entitled to such relative priorities

6 of claim on the assets of the Postal Service with re7 spect to principal and interest payments; and

8 ‘‘(H) shall be subject to such other terms and

9 conditions,

10 as the Postal Service determines.

11 ‘‘(4) Obligations issued by the Postal Service under

12 this subsection—

13 ‘‘(A) shall be negotiable or nonnegotiable and

14 bearer or registered instruments, as specified therein

15 and in any indenture or covenant relating thereto;

16 ‘‘(B) shall contain a recital that such obligations

17 are issued under this subsection, and such recital

18 shall be conclusive evidence of the regularity of the

19 issuance and sale of such obligations and of their va20 lidity;

21 ‘‘(C) shall be lawful investments and may be ac22 cepted as security for all fiduciary, trust, and public

23 funds, the investment or deposit of which shall be

24 under the authority or control of any officer or agen25 cy of the Government of the United States, and the
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1 Secretary of the Treasury or any other officer or

2 agency having authority over or control of any such

3 fiduciary, trust, or public funds, may at any time sell

4 any of the obligations of the Postal Service acquired

5 under this section;

6 ‘‘(D) shall not be exempt either as to principal

7 or interest from any taxation now or hereafter im8 posed by any State or local taxing authority; and

9 ‘‘(E) except as provided in section 2006(c), shall

10 not be obligations of, nor shall payment of the prin11 cipal thereof or interest thereon be guaranteed by, the

12 Government of the United States, and the obligations

13 shall so plainly state.

14 ‘‘(5)(A) Subject to subparagraph (B), the Postal Serv15 ice shall make payments of principal, or interest, or both

16 on obligations issued under this subsection from—

17 ‘‘(i) revenues and receipts from competitive prod18 ucts and assets related to the provision of competitive

19 products (as determined under subsection (h)); or

20 ‘‘(ii) for purposes of any period before account21 ing practices and principles under subsection (h) have

22 been established and applied, the best information

23 available, including the audited statements required

24 by section 2008(e).
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1 ‘‘(B) Based on the audited financial statements for the

2 most recently completed fiscal year, the total assets of the

3 Competitive Products Fund may not be less than the

4 amount determined by multiplying—

5 ‘‘(i) the quotient resulting from the total revenue

6 of the Competitive Products Fund divided by the total

7 revenue of the Postal Service; and

8 ‘‘(ii) the total assets of the Postal Service.

9 ‘‘(f) The receipts and disbursements of the Competitive

10 Products Fund shall be accorded the same budgetary treat11 ment as is accorded to receipts and disbursements of the

12 Postal Service Fund under section 2009a.

13 ‘‘(g) A judgment (or settlement of a claim) against the

14 Postal Service or the Government of the United States shall

15 be paid out of the Competitive Products Fund to the extent

16 that the judgment or claim arises out of activities of the

17 Postal Service in the provision of competitive products.

18 ‘‘(h)(1)(A) The Secretary of the Treasury, in consulta19 tion with the Postal Service and an independent, certified

20 public accounting firm and other advisors as the Secretary

21 considers appropriate, shall develop recommendations

22 regarding—

23 ‘‘(i) the accounting practices and principles that

24 should be followed by the Postal Service with the ob25 jectives of—
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1 ‘‘(I) identifying and valuing the assets and

2 liabilities of the Postal Service associated with

3 providing competitive products, including the

4 capital and operating costs incurred by the Post5 al Service in providing such competitive prod6 ucts; and

7 ‘‘(II) subject to subsection (e)(5), preventing

8 the subsidization of such products by market9 dominant products; and

10 ‘‘(ii) the substantive and procedural rules that

11 should be followed in determining the assumed Fed12 eral income tax on competitive products income of the

13 Postal Service for any year (within the meaning of

14 section 3634).

15 ‘‘(B) Not earlier than 6 months after the date of enact16 ment of this section, and not later than 12 months after

17 such date, the Secretary of the Treasury shall submit the

18 recommendations under subparagraph (A) to the Postal

19 Regulatory Commission.

20 ‘‘(2)(A) Upon receiving the recommendations of the

21 Secretary of the Treasury under paragraph (1), the Com22 mission shall give interested parties, including the Postal

23 Service, users of the mails, and an officer of the Commission

24 who shall be required to represent the interests of the general

25 public, an opportunity to present their views on those rec-
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1 ommendations through submission of written data, views,

2 or arguments with or without opportunity for oral presen3 tation, or in such other manner as the Commission con4 siders appropriate.

5 ‘‘(B)(i) After due consideration of the views and other

6 information received under subparagraph (A), the Commis7 sion shall by rule—

8 ‘‘(I) provide for the establishment and applica9 tion of the accounting practices and principles which

10 shall be followed by the Postal Service;

11 ‘‘(II) provide for the establishment and applica12 tion of the substantive and procedural rules described

13 under paragraph (1)(A)(ii); and

14 ‘‘(III) provide for the submission by the Postal

15 Service to the Postal Regulatory Commission of an16 nual and other periodic reports setting forth such in17 formation as the Commission may require.

18 ‘‘(ii) Final rules under this subparagraph shall be

19 issued not later than 12 months after the date on which

20 recommendations are submitted under paragraph (1) (or

21 by such later date on which the Commission and the Postal

22 Service may agree). The Commission may revise such rules.

23 ‘‘(C)(i) Reports described under subparagraph

24 (B)(i)(III) shall be submitted at such time and in such
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1 form, and shall include such information, as the Commis2 sion by rule requires.

3 ‘‘(ii) The Commission may, on its own motion or on

4 request of an interested party, initiate proceedings (to be

5 conducted in accordance with such rules as the Commission

6 shall prescribe) to improve the quality, accuracy, or com7 pleteness of Postal Service information under subparagraph

8 (B)(i)(III) whenever it shall appear that—

9 ‘‘(I) the quality of the information furnished in

10 those reports has become significantly inaccurate or

11 can be significantly improved; or

12 ‘‘(II) such revisions are, in the judgment of the

13 Commission, otherwise necessitated by the public in14 terest.

15 ‘‘(D) A copy of each report described under subpara16 graph (B)(i)(III) shall be submitted by the Postal Service

17 to the Secretary of the Treasury and the Inspector General

18 of the United States Postal Service.

19 ‘‘(i)(1) The Postal Service shall submit an annual re20 port to the Secretary of the Treasury concerning the oper21 ation of the Competitive Products Fund. The report shall

22 address such matters as risk limitations, reserve balances,

23 allocation or distribution of moneys, liquidity require24 ments, and measures to safeguard against losses.
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1 ‘‘(2) A copy of the most recent report submitted under

2 paragraph (1) shall be included in the annual report sub3 mitted by the Postal Regulatory Commission under section

4 3652(g).’’.

5 (2) CLERICAL AMENDMENT.—The table of sec6 tions for chapter 20 of title 39, United States Code,

7 is amended by adding after the item relating to sec8 tion 2010 the following:

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

9 (b) TECHNICAL AND CONFORMING AMENDMENTS.—

10 (1) DEFINITION.—Section 2001 of title 39,

11 United States Code, is amended by striking ‘‘and’’ at

12 the end of paragraph (1), by redesignating paragraph

13 (2) as paragraph (3), and by inserting after para14 graph (1) the following:

15 ‘‘(2) COMPETITIVE PRODUCTS FUND.—The term

16 ‘Competitive Products Fund’ means the Postal Service

17 Competitive Products Fund established by section

18 2011; and’’.

19 (2) CAPITAL OF THE POSTAL SERVICE.—Section

20 2002(b) of title 39, United States Code, is amended

21 by striking ‘‘Fund,’’ and inserting ‘‘Fund and the

22 balance in the Competitive Products Fund,’’.

23 (3) POSTAL SERVICE FUND.—

24 (A) PURPOSES FOR WHICH AVAILABLE.—

25 Section 2003(a) of title 39, United States Code,
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1 is amended by striking ‘‘title.’’ and inserting

2 ‘‘title (other than any of the purposes, functions,

3 or powers for which the Competitive Products

4 Fund is available).’’.

5 (B) DEPOSITS.—Section 2003(b) of title 39,

6 United States Code, is amended by striking

7 ‘‘There’’ and inserting ‘‘Except as otherwise pro8 vided in section 2011, there’’.

9 (4) RELATIONSHIP BETWEEN THE TREASURY

10 AND THE POSTAL SERVICE.—Section 2006 of title 39,

11 United States Code, is amended—

12 (A) in subsection (a), in the first sentence,

13 by inserting ‘‘or 2011’’ after ‘‘section 2005’’;

14 (B) in subsection (b)—

15 (i) in the first sentence, by inserting

16 ‘‘under section 2005’’ before ‘‘in such

17 amounts’’; and

18 (ii) in the second sentence, by inserting

19 ‘‘under section 2005’’ before ‘‘in excess of

20 such amount.’’; and

21 (C) in subsection (c), by inserting ‘‘or

22 2011(e)(4)(E)’’ after ‘‘section 2005(d)(5)’’.
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1 SEC. 402. ASSUMED FEDERAL INCOME TAX ON COMPETI2 TIVE PRODUCTS INCOME.

3 Subchapter II of chapter 36 of title 39, United States

4 Code, as amended by section 202, is amended by adding

5 at the end the following:

6 ‘‘§ 3634. Assumed Federal income tax on competitive

7 products income

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

9 ‘‘(1) the term ‘assumed Federal income tax on

10 competitive products income’ means the net income

11 tax that would be imposed by chapter 1 of the Inter12 nal Revenue Code of 1986 on the Postal Service’s as13 sumed taxable income from competitive products for

14 the year; and

15 ‘‘(2) the term ‘assumed taxable income from com16 petitive products’, with respect to a year, refers to the

17 amount representing what would be the taxable in18 come of a corporation under the Internal Revenue

19 Code of 1986 for the year, if—

20 ‘‘(A) the only activities of such corporation

21 were the activities of the Postal Service allocable

22 under section 2011(h) to competitive products;

23 and

24 ‘‘(B) the only assets held by such corpora25 tion were the assets of the Postal Service allo26 cable under section 2011(h) to such activities.
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1 ‘‘(b) COMPUTATION AND TRANSFER REQUIREMENTS.—

2 The Postal Service shall, for each year beginning with the

3 year in which occurs the deadline for the Postal Service’s

4 first report to the Postal Regulatory Commission under sec5 tion 3652(a)—

6 ‘‘(1) compute its assumed Federal income tax on

7 competitive products income for such year; and

8 ‘‘(2) transfer from the Competitive Products

9 Fund to the Postal Service Fund the amount of that

10 assumed tax.

11 ‘‘(c) DEADLINE FOR TRANSFERS.—Any transfer re12 quired to be made under this section for a year shall be

13 due on or before the January 15th next occurring after the

14 close of such year.’’.

15 SEC. 403. UNFAIR COMPETITION PROHIBITED.

16 (a) SPECIFIC LIMITATIONS.—Chapter 4 of title 39,

17 United States Code, is amended by adding after section 404

18 the following:

19 ‘‘§ 404a. Specific limitations

20 ‘‘(a) Except as specifically authorized by law, the Post21 al Service may not—

22 ‘‘(1) establish any rule or regulation (including

23 any standard) the effect of which is to preclude com24 petition or establish the terms of competition unless

25 the Postal Service demonstrates that the regulation
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1 does not create an unfair competitive advantage for

2 itself or any entity funded (in whole or in part) by

3 the Postal Service;

4 ‘‘(2) compel the disclosure, transfer, or licensing

5 of intellectual property to any third party (such as

6 patents, copyrights, trademarks, trade secrets, and

7 proprietary information); or

8 ‘‘(3) obtain information from a person that pro9 vides (or seeks to provide) any product, and then offer

10 any postal service that uses or is based in whole or

11 in part on such information, without the consent of

12 the person providing that information, unless sub13 stantially the same information is obtained (or ob14 tainable) from an independent source or is otherwise

15 obtained (or obtainable).

16 ‘‘(b) The Postal Regulatory Commission shall prescribe

17 regulations to carry out this section.

18 ‘‘(c) Any party (including an officer of the Commis19 sion representing the interests of the general public) who

20 believes that the Postal Service has violated this section may

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

22 (b) CONFORMING AMENDMENTS.—

23 (1) GENERAL POWERS.—Section 401 of title 39,

24 United States Code, is amended by striking ‘‘The’’
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1 and inserting ‘‘Subject to the provisions of section

2 404a, the’’.

3 (2) SPECIFIC POWERS.—Section 404(a) of title

4 39, United States Code, is amended by striking

5 ‘‘Without’’ and inserting ‘‘Subject to the provisions of

6 section 404a, but otherwise without’’.

7 (c) CLERICAL AMENDMENT.—The analysis for chapter

8 4 of title 39, United States Code, is amended by inserting

9 after the item relating to section 404 the following:

‘‘404a. Specific limitations.’’.

10 SEC. 404. SUITS BY AND AGAINST THE POSTAL SERVICE.

11 (a) IN GENERAL.—Section 409 of title 39, United

12 States Code, is amended by striking subsections (d) and (e)

13 and inserting the following:

14 ‘‘(d)(1) For purposes of the provisions of law cited in

15 paragraphs (2)(A) and (2)(B), respectively, the Postal

16 Service—

17 ‘‘(A) shall be considered to be a ‘person’, as used

18 in the provisions of law involved; and

19 ‘‘(B) shall not be immune under any other doc20 trine of sovereign immunity from suit in Federal

21 court by any person for any violation of any of those

22 provisions of law by any officer or employee of the

23 Postal Service.

24 ‘‘(2) This subsection applies with respect to—
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1 ‘‘(A) the Act of July 5, 1946 (commonly referred

2 to as the ‘Trademark Act of 1946’ (15 U.S.C. 1051

3 and following)); and

4 ‘‘(B) the provisions of section 5 of the Federal

5 Trade Commission Act to the extent that such section

6 5 applies to unfair or deceptive acts or practices.

7 ‘‘(e)(1) To the extent that the Postal Service, or other

8 Federal agency acting on behalf of or in concert with the

9 Postal Service, engages in conduct with respect to any prod10 uct which is not reserved to the United States under section

11 1696 of title 18, the Postal Service or other Federal agency

12 (as the case may be)—

13 ‘‘(A) shall not be immune under any doctrine of

14 sovereign immunity from suit in Federal court by

15 any person for any violation of Federal law by such

16 agency or any officer or employee thereof; and

17 ‘‘(B) shall be considered to be a person (as de18 fined in subsection (a) of the first section of the Clay19 ton Act) for purposes of—

20 ‘‘(i) the antitrust laws (as defined in such

21 subsection); and

22 ‘‘(ii) section 5 of the Federal Trade Com23 mission Act to the extent that such section 5 ap24 plies to unfair methods of competition.
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1 For purposes of the preceding sentence, any private carriage

2 of mail allowable by virtue of section 601 shall not be con3 sidered a service reserved to the United States under section

4 1696 of title 18.

5 ‘‘(2) No damages, interest on damages, costs or attor6 ney’s fees may be recovered, and no criminal liability may

7 be imposed, under the antitrust laws (as so defined) from

8 any officer or employee of the Postal Service, or other Fed9 eral agency acting on behalf of or in concert with the Postal

10 Service, acting in an official capacity.

11 ‘‘(3) This subsection shall not apply with respect to

12 conduct occurring before the date of enactment of this sub13 section.

14 ‘‘(f) To the extent that the Postal Service engages in

15 conduct with respect to the provision of competitive prod16 ucts, it shall be considered a person for the purposes of the

17 Federal bankruptcy laws.

18 ‘‘(g)(1) Each building constructed or altered by the

19 Postal Service shall be constructed or altered, to the max20 imum extent feasible as determined by the Postal Service,

21 in compliance with 1 of the nationally recognized model

22 building codes and with other applicable nationally recog23 nized codes. To the extent practicable, model building codes

24 should meet the voluntary consensus criteria established for

25 codes and standards as required in the National Technology
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1 Transfer and Advancement Act of 1995 as defined in Office

2 of Management and Budget Circular A1190. For purposes

3 of life safety, the Postal Service shall continue to comply

4 with the most current edition of the Life Safety Code of

5 the National Fire Protection Association (NFPA 101).

6 ‘‘(2) Each building constructed or altered by the Postal

7 Service shall be constructed or altered only after consider8 ation of all requirements (other than procedural require9 ments) of zoning laws, land use laws, and applicable envi10 ronmental laws of a State or subdivision of a State which

11 would apply to the building if it were not a building con12 structed or altered by an establishment of the Government

13 of the United States.

14 ‘‘(3) For purposes of meeting the requirements of para15 graphs (1) and (2) with respect to a building, the Postal

16 Service shall—

17 ‘‘(A) in preparing plans for the building, consult

18 with appropriate officials of the State or political

19 subdivision, or both, in which the building will be lo20 cated;

21 ‘‘(B) upon request, submit such plans in a time22 ly manner to such officials for review by such officials

23 for a reasonable period of time not exceeding 30 days;

24 and
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1 ‘‘(C) permit inspection by such officials during

2 construction or alteration of the building, in accord3 ance with the customary schedule of inspections for

4 construction or alteration of buildings in the locality,

5 if such officials provide to the Postal Service—

6 ‘‘(i) a copy of such schedule before construc7 tion of the building is begun; and

8 ‘‘(ii) reasonable notice of their intention to

9 conduct any inspection before conducting such

10 inspection.

11 Nothing in this subsection shall impose an obligation

12 on any State or political subdivision to take any ac13 tion under the preceding sentence, nor shall anything

14 in this subsection require the Postal Service or any

15 of its contractors to pay for any action taken by a

16 State or political subdivision to carry out this sub17 section (including reviewing plans, carrying out on18 site inspections, issuing building permits, and mak19 ing recommendations).

20 ‘‘(4) Appropriate officials of a State or a political sub21 division of a State may make recommendations to the Post22 al Service concerning measures necessary to meet the re23 quirements of paragraphs (1) and (2). Such officials may

24 also make recommendations to the Postal Service con25 cerning measures which should be taken in the construction
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1 or alteration of the building to take into account local con2 ditions. The Postal Service shall give due consideration to

3 any such recommendations.

4 ‘‘(5) In addition to consulting with local and State

5 officials under paragraph (3), the Postal Service shall estab6 lish procedures for soliciting, assessing, and incorporating

7 local community input on real property and land use deci8 sions.

9 ‘‘(6) For purposes of this subsection, the term ‘State’

10 includes the District of Columbia, the Commonwealth of

11 Puerto Rico, and a territory or possession of the United

12 States.

13 ‘‘(h)(1) Notwithstanding any other provision of law,

14 legal representation may not be furnished by the Depart15 ment of Justice to the Postal Service in any action, suit,

16 or proceeding arising, in whole or in part, under any of

17 the following:

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

19 ‘‘(B) Subsection (f) or (g) of section 504 (relating

20 to administrative subpoenas by the Postal Regulatory

21 Commission).

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

23 The Postal Service may, by contract or otherwise, employ

24 attorneys to obtain any legal representation that it is pre-
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1 cluded from obtaining from the Department of Justice

2 under this paragraph.

3 ‘‘(2) In any circumstance not covered by paragraph

4 (1), the Department of Justice shall, under section 411, fur5 nish the Postal Service such legal representation as it may

6 require, except that, with the prior consent of the Attorney

7 General, the Postal Service may, in any such circumstance,

8 employ attorneys by contract or otherwise to conduct litiga9 tion brought by or against the Postal Service or its officers

10 or employees in matters affecting the Postal Service.

11 ‘‘(3)(A) In any action, suit, or proceeding in a court

12 of the United States arising in whole or in part under any

13 of the provisions of law referred to in subparagraph (B)

14 or (C) of paragraph (1), and to which the Commission is

15 not otherwise a party, the Commission shall be permitted

16 to appear as a party on its own motion and as of right.

17 ‘‘(B) The Department of Justice shall, under such

18 terms and conditions as the Commission and the Attorney

19 General shall consider appropriate, furnish the Commission

20 such legal representation as it may require in connection

21 with any such action, suit, or proceeding, except that, with

22 the prior consent of the Attorney General, the Commission

23 may employ attorneys by contract or otherwise for that pur24 pose.
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1 ‘‘(i) A judgment against the Government of the United

2 States arising out of activities of the Postal Service shall

3 be paid by the Postal Service out of any funds available

4 to the Postal Service, subject to the restriction specified in

5 section 2011(g).’’.

6 (b) TECHNICAL AMENDMENT.—Section 409(a) of title

7 39, United States Code, is amended by striking ‘‘Except as

8 provided in section 3628 of this title,’’ and inserting ‘‘Ex9 cept as otherwise provided in this title,’’.

10 SEC. 405. INTERNATIONAL POSTAL ARRANGEMENTS.

11 (a) IN GENERAL.—Section 407 of title 39, United

12 States Code, is amended to read as follows:

13 ‘‘§ 407. International postal arrangements

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

15 ‘‘(1) to promote and encourage communications

16 between peoples by efficient operation of international

17 postal services and other international delivery serv18 ices for cultural, social, and economic purposes;

19 ‘‘(2) to promote and encourage unrestricted and

20 undistorted competition in the provision of inter21 national postal services and other international deliv22 ery services, except where provision of such services by

23 private companies may be prohibited by law of the

24 United States;
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1 ‘‘(3) to promote and encourage a clear distinc2 tion between governmental and operational respon3 sibilities with respect to the provision of international

4 postal services; and

5 ‘‘(4) to participate in multilateral and bilateral

6 agreements with other countries to accomplish these

7 objectives.

8 ‘‘(b)(1) The Secretary of State shall be responsible for

9 formulation, coordination, and oversight of foreign policy

10 related to international postal services and shall have the

11 power to conclude postal treaties and conventions, except

12 that the Secretary may not conclude any postal treaty or

13 convention if such treaty or convention would, with respect

14 to any competitive product, grant an undue or unreason15 able preference to the Postal Service, a private provider of

16 international postal services, or any other person.

17 ‘‘(2) In carrying out the responsibilities specified in

18 paragraph (1), the Secretary of State shall exercise primary

19 authority for the conduct of foreign policy with respect to

20 international postal services, including the determination

21 of United States positions and the conduct of United States

22 participation in negotiations with foreign governments and

23 international bodies. In exercising this authority, the

24 Secretary—
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1 ‘‘(A) shall coordinate with other agencies as ap2 propriate, and in particular, should consider the au3 thority vested by law or Executive order in the Postal

4 Regulatory Commission, the Department of Com5 merce, the Department of Transportation, and the Of6 fice of the United States Trade Representative in this

7 area;

8 ‘‘(B) shall maintain continuing liaison with

9 other executive branch agencies concerned with postal

10 and delivery services;

11 ‘‘(C) shall maintain continuing liaison with the

12 Committee on Homeland Security and Governmental

13 Affairs of the Senate and the Committee on Govern14 ment Reform of the House of Representatives;

15 ‘‘(D) shall maintain appropriate liaison with

16 both representatives of the Postal Service and rep17 resentatives of users and private providers of inter18 national postal services and other international deliv19 ery services to keep informed of their interests and

20 problems, and to provide such assistance as may be

21 needed to ensure that matters of concern are promptly

22 considered by the Department of State or (if applica23 ble, and to the extent practicable) other executive

24 branch agencies; and
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1 ‘‘(E) shall assist in arranging meetings of such

2 public sector advisory groups as may be established to

3 advise the Department of State and other executive

4 branch agencies in connection with international

5 postal services and international delivery services.

6 ‘‘(3) The Secretary of State shall establish an advisory

7 committee (within the meaning of the Federal Advisory

8 Committee Act) to perform such functions as the Secretary

9 considers appropriate in connection with carrying out sub10 paragraphs (A) through (D) of paragraph (2).

11 ‘‘(c) Before concluding any postal treaty or convention

12 that establishes a rate or classification for a product subject

13 to subchapter I of chapter 36, the Secretary of State shall

14 request the Postal Regulatory Commission to submit its

15 views on whether such rate or classification is consistent

16 with the standards and criteria established by the Commis17 sion under section 3622.

18 ‘‘(d) Nothing in this section shall be considered to pre19 vent the Postal Service from entering into such commercial

20 or operational contracts related to providing international

21 postal services as it deems appropriate, except that—

22 ‘‘(1) any such contract made with an agency of

23 a foreign government (whether under authority of this

24 subsection or otherwise) shall be solely contractual in
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1 nature and may not purport to be binding under

2 international law; and

3 ‘‘(2) a copy of each such contract between the

4 Postal Service and an agency of a foreign government

5 shall be transmitted to the Secretary of State and the

6 Postal Regulatory Commission not later than the ef7 fective date of such contract.

8 ‘‘(e)(1) With respect to shipments of international mail

9 that are competitive products within the meaning of section

10 3631 that are exported or imported by the Postal Service,

11 the Customs Service and other appropriate Federal agencies

12 shall apply the customs laws of the United States and all

13 other laws relating to the importation or exportation of such

14 shipments in the same manner to both shipments by the

15 Postal Service and similar shipments by private companies.

16 ‘‘(2) In exercising the authority under subsection (b)

17 to conclude new postal treaties and conventions related to

18 international postal services and to renegotiate such treaties

19 and conventions, the Secretary of State shall, to the max20 imum extent practicable, take such measures as are within

21 the Secretary’s control to encourage the governments of

22 other countries to make available to the Postal Service and

23 private companies a range of nondiscriminatory customs

24 procedures that will fully meet the needs of all types of

25 American shippers. The Secretary of State shall consult
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1 with the United States Trade Representative and the Com2 missioner of Customs in carrying out this paragraph.

3 ‘‘(3) The provisions of this subsection shall take effect

4 6 months after the date of enactment of this subsection or

5 such earlier date as the Customs Service may determine in

6 writing.’’.

7 (b) EFFECTIVE DATE.—Notwithstanding any provi8 sion of the amendment made by subsection (a), the author9 ity of the United States Postal Service to establish the rates

10 of postage or other charges on mail matter conveyed between

11 the United States and other countries shall remain avail12 able to the Postal Service until—

13 (1) with respect to market-dominant products,

14 the date as of which the regulations promulgated

15 under section 3622 of title 39, United States Code (as

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

17 (2) with respect to competitive products, the date

18 as of which the regulations promulgated under section

19 3633 of title 39, United States Code (as amended by

20 section 202) take effect.

21 TITLE V—GENERAL PROVISIONS

22 SEC. 501. QUALIFICATION AND TERM REQUIREMENTS FOR

23 GOVERNORS.

24 (a) QUALIFICATIONS.—
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1 (1) IN GENERAL.—Section 202(a) of title 39,

2 United States Code, is amended by striking ‘‘(a)’’ and

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

4 and inserting the following: ‘‘The Governors shall rep5 resent the public interest generally, and shall be cho6 sen solely on the basis of their experience in the fields

7 of public service, law or accounting or on their dem8 onstrated ability in managing organizations or cor9 porations (in either the public or private sector) of

10 substantial size. The Governors shall not be represent11 atives of specific interests using the Postal Service,

12 and may be removed only for cause.’’.

13 (2) APPLICABILITY.—The amendment made by

14 paragraph (1) shall not affect the appointment or ten15 ure of any person serving as a Governor of the United

16 States Postal Service under an appointment made be17 fore the date of enactment of this Act however, when

18 any such office becomes vacant, the appointment of

19 any person to fill that office shall be made in accord20 ance with such amendment. The requirement set forth

21 in the fourth sentence of section 202(a)(1) of title 39,

22 United States Code (as amended by subsection (a))

23 shall be met beginning not later than 9 years after the

24 date of enactment of this Act.
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1 (b) CONSULTATION REQUIREMENT.—Section 202(a) of

2 title 39, United States Code, is amended by adding at the

3 end the following:

4 ‘‘(2) In selecting the individuals described in para5 graph (1) for nomination for appointment to the position

6 of Governor, the President should consult with the Speaker

7 of the House of Representatives, the minority leader of the

8 House of Representatives, the majority leader of the Senate,

9 and the minority leader of the Senate.’’.

10 (c) 7-YEAR TERMS.—

11 (1) IN GENERAL.—Section 202(b) of title 39,

12 United States code, is amended in the first sentence

13 by striking ‘‘9 years’’ and inserting ‘‘7 years’’.

14 (2) APPLICABILITY.—

15 (A) CONTINUATION BY INCUMBENTS.—The

16 amendment made by paragraph (1) shall not af17 fect the tenure of any person serving as a Gov18 ernor of the United States Postal Service on the

19 date of enactment of this Act and such person

20 may continue to serve the remainder of the ap21 plicable term.

22 (B) VACANCY BY INCUMBENT BEFORE 5

23 YEARS OF SERVICE.—If a person who is serving

24 as a Governor of the United States Postal Serv25 ice on the date of enactment of this Act resigns,
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1 is removed, or dies before the expiration of the 9-

2 year term of that Governor, and that Governor

3 has served less than 5 years of that term, the re4 sulting vacancy in office shall be treated as a va5 cancy in a 5-year term.

6 (C) VACANCY BY INCUMBENT AFTER 5

7 YEARS OF SERVICE.—If a person who is serving

8 as a Governor of the United States Postal Serv9 ice on the date of enactment of this Act resigns,

10 is removed, or dies before the expiration of the 9-

11 year term of that Governor, and that Governor

12 has served 5 years or more of that term, that

13 term shall be deemed to have been a 5-year term

14 beginning on its commencement date for pur15 poses of determining vacancies in office. Any ap16 pointment to the vacant office shall be for a 5-

17 year term beginning at the end of the original 9-

18 year term determined without regard to the

19 deeming under the preceding sentence. Nothing

20 in this subparagraph shall be construed to affect

21 any action or authority of any Governor or the

22 Board of Governors during any portion of a 9-

23 year term deemed to be 5-year term under this

24 subparagraph.

25 (d) TERM LIMITATION.—
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1 (1) IN GENERAL.—Section 202(b) of title 39,

2 United States Code, is amended—

3 (A) by inserting ‘‘(1)’’ after ‘‘(b)’’; and

4 (B) by adding at the end the following:

5 ‘‘(2) No person may serve more than 2 terms as

6 a Governor.’’.

7 (2) APPLICABILITY.—The amendments made by

8 paragraph (1) shall not affect the tenure of any per9 son serving as a Governor of the United States Postal

10 Service on the date of enactment of this Act with re11 spect to the term which that person is serving on that

12 date. Such person may continue to serve the remain13 der of the applicable term, after which the amend14 ments made by paragraph (1) shall apply.

15 SEC. 502. OBLIGATIONS.

16 (a) PURPOSES FOR WHICH OBLIGATIONS MAY BE

17 ISSUED.—The first sentence of section 2005(a)(1) of title

18 39, United States Code, is amended by striking ‘‘title.’’ and

19 inserting ‘‘title, other than any of the purposes for which

20 the corresponding authority is available to the Postal Serv21 ice under section 2011.’’.

22 (b) INCREASE RELATING TO OBLIGATIONS ISSUED FOR

23 CAPITAL IMPROVEMENTS.—Section 2005(a)(1) of title 39,

24 United States Code, is amended by striking the third sen25 tence.
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1 (c) AMOUNTS WHICH MAY BE PLEDGED.—

2 (1) OBLIGATIONS TO WHICH PROVISIONS

3 APPLY.—The first sentence of section 2005(b) of title

4 39, United States Code, is amended by striking ‘‘such

5 obligations,’’ and inserting ‘‘obligations issued by the

6 Postal Service under this section,’’.

7 (2) ASSETS, REVENUES, AND RECEIPTS TO

8 WHICH PROVISIONS APPLY.—Subsection (b) of section

9 2005 of title 39, United States Code, is amended by

10 striking ‘‘(b)’’ and inserting ‘‘(b)(1)’’, and by adding

11 at the end the following:

12 ‘‘(2) Notwithstanding any other provision of this

13 section—

14 ‘‘(A) the authority to pledge assets of the Postal

15 Service under this subsection shall be available only

16 to the extent that such assets are not related to the

17 provision of competitive products (as determined

18 under section 2011(h) or, for purposes of any period

19 before accounting practices and principles under sec20 tion 2011(h) have been established and applied, the

21 best information available from the Postal Service,

22 including the audited statements required by section

23 2008(e)); and

24 ‘‘(B) any authority under this subsection relat25 ing to the pledging or other use of revenues or receipts
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1 of the Postal Service shall be available only to the ex2 tent that they are not revenues or receipts of the Com3 petitive Products Fund.’’.

4 SEC. 503. PRIVATE CARRIAGE OF LETTERS.

5 (a) IN GENERAL.—Section 601 of title 39, United

6 States Code, is amended by striking subsection (b) and in7 serting the following:

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

9 when—

10 ‘‘(1) the amount paid for the private carriage of

11 the letter is at least the amount equal to 6 times the

12 rate then currently charged for the 1st ounce of a sin13 gle-piece first class letter;

‘‘(2) the letter weighs at least 121 14 ⁄2 ounces; or

15 ‘‘(3) such carriage is within the scope of services

16 described by regulations of the United States Postal

17 Service (as in effect on July 1, 2001) that permit pri18 vate carriage by suspension of the operation of this

19 section (as then in effect).

20 ‘‘(c) Any regulations necessary to carry out this section

21 shall be promulgated by the Postal Regulatory Commis22 sion.’’.

23 (b) EFFECTIVE DATE.—This section shall take effect

24 on the date as of which the regulations promulgated under
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1 section 3633 of title 39, United States Code (as amended

2 by section 202) take effect.

3 SEC. 504. RULEMAKING AUTHORITY.

4 Paragraph (2) of section 401 of title 39, United States

5 Code, is amended to read as follows:

6 ‘‘(2) to adopt, amend, and repeal such rules and

7 regulations, not inconsistent with this title, as may be

8 necessary in the execution of its functions under this

9 title and such other functions as may be assigned to

10 the Postal Service under any provisions of law out11 side of this title;’’.

12 SEC. 505. NONINTERFERENCE WITH COLLECTIVE BAR13 GAINING AGREEMENTS.

14 (a) LABOR DISPUTES.—Section 1207 of title 39,

15 United States Code, is amended to read as follows:

16 ‘‘§ 1207. Labor disputes

17 ‘‘(a) If there is a collective-bargaining agreement in

18 effect, no party to such agreement shall terminate or modify

19 such agreement unless the party desiring such termination

20 or modification serves written notice upon the other party

21 to the agreement of the proposed termination or modifica22 tion not less than 90 days prior to the expiration date there23 of, or not less than 90 days prior to the time it is proposed

24 to make such termination or modification. The party serv25 ing such notice shall notify the Federal Mediation and Con-
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1 ciliation Service of the existence of a dispute within 45 days

2 after such notice, if no agreement has been reached by that

3 time.

4 ‘‘(b) If the parties fail to reach agreement or to adopt

5 a procedure providing for a binding resolution of a dispute

6 by the expiration date of the agreement in effect, or the date

7 of the proposed termination or modification, the Director

8 of the Federal Mediation and Conciliation Service shall

9 within 10 days appoint a mediator of nationwide reputa10 tion and professional stature, and who is also a member

11 of the National Academy of Arbitrators. The parties shall

12 cooperate with the mediator in an effort to reach an agree13 ment and shall meet and negotiate in good faith at such

14 times and places that the mediator, in consultation with

15 the parties, shall direct.

16 ‘‘(c)(1) If no agreement is reached within 60 days after

17 the expiration or termination of the agreement or the date

18 on which the agreement became subject to modification

19 under subsection (a) of this section, or if the parties decide

20 upon arbitration but do not agree upon the procedures

21 therefore, an arbitration board shall be established con22 sisting of 3 members, 1 of whom shall be selected by the

23 Postal Service, 1 by the bargaining representative of the

24 employees, and the third by the 2 thus selected. If either

25 of the parties fails to select a member, or if the members
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1 chosen by the parties fail to agree on the third person with2 in 5 days after their first meeting, the selection shall be

3 made from a list of names provided by the Director. This

4 list shall consist of not less then 9 names of arbitrators of

5 nationwide reputation and professional nature, who are

6 also members of the National Academy of Arbitrators, and

7 whom the Director has determined are available and will8 ing to serve.

9 ‘‘(2) The arbitration board shall give the parties a full

10 and fair hearing, including an opportunity to present evi11 dence in support of their claims, and an opportunity to

12 present their case in person, by counsel or by other rep13 resentative as they may elect. Decisions of the arbitration

14 board shall be conclusive and binding upon the parties. The

15 arbitration board shall render its decision within 45 days

16 after its appointment.

17 ‘‘(3) Costs of the arbitration board and mediation shall

18 be shared equally by the Postal Service and the bargaining

19 representative.

20 ‘‘(d) In the case of a bargaining unit whose recognized

21 collective-bargaining representative does not have an agree22 ment with the Postal Service, if the parties fail to reach

23 the agreement within 90 days after the commencement of

24 collective bargaining, a mediator shall be appointed in ac25 cordance with the terms in subsection (b) of this section,
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1 unless the parties have previously agreed to another proce2 dure for a binding resolution of their differences. If the par3 ties fail to reach agreement within 180 days after the com4 mencement of collective bargaining, and if they have not

5 agreed to another procedure for binding resolution, an arbi6 tration board shall be established to provide conclusive and

7 binding arbitration in accordance with the terms of sub8 section (c) of this section.’’.

9 (b) NONINTERFERENCE WITH COLLECTIVE BAR10 GAINING AGREEMENTS.—Except as otherwise provided by

11 the amendment made by subsection (a), nothing in this Act

12 shall restrict, expand, or otherwise affect any of the rights,

13 privileges, or benefits of either employees of or labor organi14 zations representing employees of the United States Postal

15 Service under chapter 12 of title 39, United States Code,

16 the National Labor Relations Act, any handbook or manual

17 affecting employee labor relations within the United States

18 Postal Service, or any collective bargaining agreement.

19 (c) FREE MAILING PRIVILEGES CONTINUE UN20 CHANGED.—Nothing in this Act or any amendment made

21 by this Act shall affect any free mailing privileges accorded

22 under section 3217 or sections 3403 through 3406 of title

23 39, United States Code.
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1 SEC. 506. BONUS AUTHORITY.

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

3 by inserting after section 3685 the following:

4 ‘‘§ 3686. Bonus authority

5 ‘‘(a) IN GENERAL.—The Postal Service may establish

6 1 or more programs to provide bonuses or other rewards

7 to officers and employees of the Postal Service in senior ex8 ecutive or equivalent positions to achieve the objectives of

9 this chapter.

10 ‘‘(b) LIMITATION ON TOTAL COMPENSATION.—

11 ‘‘(1) IN GENERAL.—Under any such program,

12 the Postal Service may award a bonus or other re13 ward in excess of the limitation set forth in the last

14 sentence of section 1003(a), if such program has been

15 approved under paragraph (2). Any such award or

16 bonus may not cause the total compensation of such

17 officer or employee to exceed the total annual com18 pensation payable to the Vice President under section

19 104 of title 3 as of the end of the calendar year in

20 which the bonus or award is paid.

21 ‘‘(2) APPROVAL PROCESS.—If the Postal Service

22 wishes to have the authority, under any program de23 scribed in subsection (a), to award bonuses or other

24 rewards in excess of the limitation set forth in the last

25 sentence of section 1003(a)—
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1 ‘‘(A) the Postal Service shall make an ap2 propriate request to the Board of Governors of

3 the Postal Service in such form and manner as

4 the Board requires; and

5 ‘‘(B) the Board of Governors shall approve

6 any such request if the Board certifies, for the

7 annual appraisal period involved, that the per8 formance appraisal system for affected officers

9 and employees of the Postal Service (as designed

10 and applied) makes meaningful distinctions

11 based on relative performance.

12 ‘‘(3) REVOCATION AUTHORITY.—If the Board of

13 Governors of the Postal Service finds that a perform14 ance appraisal system previously approved under

15 paragraph (2)(B) does not (as designed and applied)

16 make meaningful distinctions based on relative per17 formance, the Board may revoke or suspend the au18 thority of the Postal Service to continue a program

19 approved under paragraph (2) until such time as ap20 propriate corrective measures have, in the judgment of

21 the Board, 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 referred

8 to in subsection (b)(1) was exceeded as a result of

9 such bonus or other reward.’’.

10 TITLE VI—ENHANCED

11 REGULATORY COMMISSION

12 SEC. 601. REORGANIZATION AND MODIFICATION OF CER13 TAIN PROVISIONS RELATING TO THE POSTAL

14 REGULATORY COMMISSION.

15 (a) TRANSFER AND REDESIGNATION.—Title 39,

16 United States Code, is amended—

17 (1) by inserting after chapter 4 the following:

18 ‘‘CHAPTER 5—POSTAL REGULATORY

19 COMMISSION

‘‘Sec.

‘‘501. Establishment.

‘‘502. Commissioners.

‘‘503. Rules; regulations; procedures.

‘‘504. Administration.

‘‘505. Officer of the Postal Regulatory Commission representing the general public.
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1 ‘‘§ 501. Establishment

2 ‘‘The Postal Regulatory Commission is an independent

3 establishment of the executive branch of the Government of

4 the United States.

5 ‘‘§ 502. Commissioners

6 ‘‘(a) The Postal Regulatory Commission is composed

7 of 5 Commissioners, appointed by the President, by and

8 with the advice and consent of the Senate. The Commis9 sioners shall be chosen solely on the basis of their technical

10 qualifications, professional standing, and demonstrated ex11 pertise in economics, accounting, law, or public adminis12 tration, and may be removed by the President only for

13 cause. Each individual appointed to the Commission shall

14 have the qualifications and expertise necessary to carry out

15 the enhanced responsibilities accorded Commissioners under

16 the Postal Accountability and Enhancement Act. Not more

17 than 3 of the Commissioners may be adherents of the same

18 political party.

19 ‘‘(b) No Commissioner shall be financially interested

20 in any enterprise in the private sector of the economy en21 gaged in the delivery of mail matter.

22 ‘‘(c) A Commissioner may continue to serve after the

23 expiration of his term until his successor has qualified, ex24 cept that a Commissioner may not so continue to serve for

25 more than 1 year after the date upon which his term other26 wise would expire under subsection (f).
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1 ‘‘(d) One of the Commissioners shall be designated as

2 Chairman by, and shall serve in the position of Chairman

3 at the pleasure of, the President.

4 ‘‘(e) The Commissioners shall by majority vote des5 ignate a Vice Chairman of the Commission. The Vice Chair6 man shall act as Chairman of the Commission in the ab7 sence of the Chairman.

8 ‘‘(f) The Commissioners shall serve for terms of 6

9 years.’’;

10 (2) by striking, in subchapter I of chapter 36 (as

11 in effect before the amendment made by section

12 201(c)), the heading for such subchapter I and all

13 that follows through section 3602;

14 (3) by redesignating sections 3603 and 3604 as

15 sections 503 and 504, respectively, and transferring

16 such sections to the end of chapter 5 (as inserted by

17 paragraph (1)); and

18 (4) by adding after such section 504 the fol19 lowing:

20 ‘‘§ 505. Officer of the Postal Regulatory Commission

21 representing the general public

22 ‘‘The Postal Regulatory Commission shall designate an

23 officer of the Postal Regulatory Commission in all public

24 proceedings who shall represent the interests of the general

25 public.’’.
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1 (b) APPLICABILITY.—The amendment made by sub2 section (a)(1) shall not affect the appointment or tenure of

3 any person serving as a Commissioner on the Postal Regu4 latory Commission (as so redesignated by section 604)

5 under an appointment made before the date of enactment

6 of this Act or any nomination made before that date, but,

7 when any such office becomes vacant, the appointment of

8 any person to fill that office shall be made in accordance

9 with such amendment.

10 (c) CLERICAL AMENDMENT.—The analysis for part I

11 of title 39, United States Code, is amended by inserting

12 after the item relating to chapter 4 the following:

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

13 SEC. 602. AUTHORITY FOR POSTAL REGULATORY COMMIS14 SION TO ISSUE SUBPOENAS.

15 Section 504 of title 39, United States Code (as so redes16 ignated by section 601) is amended by adding at the end

17 the following:

18 ‘‘(f)(1) Any Commissioner of the Postal Regulatory

19 Commission, any administrative law judge appointed by

20 the Commission under section 3105 of title 5, and any em21 ployee of the Commission designated by the Commission

22 may administer oaths, examine witnesses, take depositions,

23 and receive evidence.

24 ‘‘(2) The Chairman of the Commission, any Commis25 sioner designated by the Chairman, and any administrative
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1 law judge appointed by the Commission under section 3105

2 of title 5 may, with respect to any proceeding conducted

3 by the Commission under this title or to obtain information

4 to be used to prepare a report under this title—

5 ‘‘(A) issue subpoenas requiring the attendance

6 and presentation of testimony by, or the production

7 of documentary or other evidence in the possession of,

8 any covered person; and

9 ‘‘(B) order the taking of depositions and re10 sponses to written interrogatories by a covered person.

11 The written concurrence of a majority of the Commissioners

12 then holding office shall, with respect to each subpoena

13 under subparagraph (A), be required in advance of its

14 issuance.

15 ‘‘(3) In the case of contumacy or failure to obey a sub16 poena issued under this subsection, upon application by the

17 Commission, the district court of the United States for the

18 district in which the person to whom the subpoena is ad19 dressed resides or is served may issue an order requiring

20 such person to appear at any designated place to testify

21 or produce documentary or other evidence. Any failure to

22 obey the order of the court may be punished by the court

23 as a contempt thereof.
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1 ‘‘(4) For purposes of this subsection, the term ‘covered

2 person’ means an officer, employee, agent, or contractor of

3 the Postal Service.

4 ‘‘(g)(1) If the Postal Service determines that any docu5 ment or other matter it provides to the Postal Regulatory

6 Commission under a subpoena issued under subsection (f),

7 or otherwise at the request of the Commission in connection

8 with any proceeding or other purpose under this title, con9 tains information which is described in section 410(c) of

10 this title, or exempt from public disclosure under section

11 552(b) of title 5, the Postal Service shall, at the time of

12 providing such matter to the Commission, notify the Com13 mission, in writing, of its determination (and the reasons

14 therefor).

15 ‘‘(2) Except as provided in paragraph (3), no officer

16 or employee of the Commission may, with respect to any

17 information as to which the Commission has been notified

18 under paragraph (1)—

19 ‘‘(A) use such information for purposes other

20 than the purposes for which it is supplied; or

21 ‘‘(B) permit anyone who is not an officer or em22 ployee of the Commission to have access to any such

23 information.

24 ‘‘(3)(A) Paragraph (2) shall not prohibit the

25 Commission from publicly disclosing relevant infor-
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1 mation in furtherance of its duties under this title,

2 provided that the Commission has adopted regula3 tions under section 553 of title 5, that establish a pro4 cedure for according appropriate confidentiality to

5 information identified by the Postal Service under

6 paragraph (1). In determining the appropriate degree

7 of confidentiality to be accorded information identi8 fied by the Postal Service under paragraph (1), the

9 Commission shall balance the nature and extent of the

10 likely commercial injury to the Postal Service against

11 the public interest in maintaining the financial

12 transparency of a government establishment com13 peting in commercial markets.

14 ‘‘(B) Paragraph (2) shall not prevent the Com15 mission from requiring production of information in

16 the course of any discovery procedure established in

17 connection with a proceeding under this title. The

18 Commission shall, by regulations based on rule 26(c)

19 of the Federal Rules of Civil Procedure, establish pro20 cedures for ensuring appropriate confidentiality for

21 information furnished to any party.’’.
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1 SEC. 603. AUTHORIZATION OF APPROPRIATIONS FROM THE

2 POSTAL SERVICE FUND.

3 (a) POSTAL REGULATORY COMMISSION.—Subsection

4 (d) of section 504 of title 39, United States Code (as so

5 redesignated by section 601) is amended to read as follows:

6 ‘‘(d) There are authorized to be appropriated, out of

7 the Postal Service Fund, such sums as may be necessary

8 for the Postal Regulatory Commission. In requesting an ap9 propriation under this subsection for a fiscal year, the Com10 mission shall prepare and submit to the Congress under sec11 tion 2009 a budget of the Commission’s expenses, including

12 expenses for facilities, supplies, compensation, and em13 ployee benefits.’’.

14 (b) OFFICE OF INSPECTOR GENERAL OF THE UNITED

15 STATES POSTAL SERVICE.—Section 8G(f) of the Inspector

16 General Act of 1978 (5 U.S.C. App.) is amended—

17 (1) by redesignating paragraph (4) as para18 graph (5);

19 (2) by redesignating the second paragraph (3)

20 (relating to employees and labor organizations) as

21 paragraph (4); and

22 (3) by adding at the end the following:

23 ‘‘(6) There are authorized to be appropriated,

24 out of the Postal Service Fund, such sums as may be

25 necessary for the Office of Inspector General of the

26 United States Postal Service.’’.
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1 (c) BUDGET PROGRAM.—

2 (1) IN GENERAL.—The next to last sentence of

3 section 2009 of title 39, United States Code, is

4 amended to read as follows: ‘‘The budget program

5 shall also include separate statements of the amounts

6 which (1) the Postal Service requests to be appro7 priated under subsections (b) and (c) of section 2401,

8 (2) the Office of Inspector General of the United

9 States Postal Service requests to be appropriated, out

10 of the Postal Service Fund, under section 8G(f) of the

11 Inspector General Act of 1978, and (3) the Postal

12 Regulatory Commission requests to be appropriated,

13 out of the Postal Service Fund, under section 504(d)

14 of this title.’’.

15 (2) CONFORMING AMENDMENT.—Section

16 2003(e)(1) of title 39, United States Code, is amended

17 by striking the first sentence and inserting the fol18 lowing: ‘‘The Fund shall be available for the payment

19 of (A) all expenses incurred by the Postal Service in

20 carrying out its functions as provided by law, subject

21 to the same limitation as set forth in the parenthet22 ical matter under subsection (a); (B) all expenses of

23 the Postal Regulatory Commission, subject to the

24 availability of amounts appropriated under section

25 504(d); and (C) all expenses of the Office of Inspector
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1 General, subject to the availability of amounts appro2 priated under section 8G(f) of the Inspector General

3 Act of 1978.’’.

4 (d) EFFECTIVE DATE.—

5 (1) IN GENERAL.—The amendments made by

6 this section shall apply with respect to fiscal years be7 ginning on or after October 1, 2005.

8 (2) SAVINGS PROVISION.—The provisions of title

9 39, United States Code, and the Inspector General

10 Act of 1978 (5 U.S.C. App.) that are amended by this

11 section shall, for purposes of any fiscal year before the

12 first fiscal year to which the amendments made by

13 this section apply, continue to apply in the same way

14 as if this section had never been enacted.

15 SEC. 604. REDESIGNATION OF THE POSTAL RATE COMMIS16 SION.

17 (a) AMENDMENTS TO TITLE 39, UNITED STATES

18 CODE.—Title 39, United States Code, is amended in sec19 tions 404, 503 and 504 (as so redesignated by section 601),

20 1001 and 1002, by striking ‘‘Postal Rate Commission’’ each

21 place it appears and inserting ‘‘Postal Regulatory Commis22 sion’’;

23 (b) AMENDMENTS TO TITLE 5, UNITED STATES

24 CODE.—Title 5, United States Code, is amended in sections

25 104(1), 306(f), 2104(b), 3371(3), 5314 (in the item relating
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1 to Chairman, Postal Rate Commission), 5315 (in the item

2 relating to Members, Postal Rate Commission),

3 5514(a)(5)(B), 7342(a)(1)(A), 7511(a)(1)(B)(ii),

4 8402(c)(1), 8423(b)(1)(B), and 8474(c)(4) by striking

5 ‘‘Postal Rate Commission’’ and inserting ‘‘Postal Regu6 latory Commission’’.

7 (c) AMENDMENT TO THE ETHICS IN GOVERNMENT ACT

8 OF 1978.—Section 101(f)(6) of the Ethics in Government

9 Act of 1978 (5 U.S.C. App.) is amended by striking ‘‘Postal

10 Rate Commission’’ and inserting ‘‘Postal Regulatory Com11 mission’’.

12 (d) AMENDMENT TO THE REHABILITATION ACT OF

13 1973.—Section 501(b) of the Rehabilitation Act of 1973 (29

14 U.S.C. 791(b)) is amended by striking ‘‘Postal Rate Office’’

15 and inserting ‘‘Postal Regulatory Commission’’.

16 (e) AMENDMENT TO TITLE 44, UNITED STATES

17 CODE.—Section 3502(5) of title 44, United States Code, is

18 amended by striking ‘‘Postal Rate Commission’’ and insert19 ing ‘‘Postal Regulatory Commission’’.

20 (f) OTHER REFERENCES.—Whenever a reference is

21 made in any provision of law (other than this Act or a

22 provision of law amended by this Act), regulation, rule, doc23 ument, or other record of the United States to the Postal

24 Rate Commission, such reference shall be considered a ref25 erence to the Postal Regulatory Commission.
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1 SEC. 605. FINANCIAL TRANSPARENCY.

2 (a) IN GENERAL.—Section 101 of title 39, United

3 States Code, is amended—

4 (1) by redesignating subsections (d) through (g)

5 as subsections (e) through (h), respectively; and

6 (2) by inserting after subsection (c) the fol7 lowing:

8 ‘‘(d) As an independent establishment of the executive

9 branch of the Government of the United States, the Postal

10 Service shall be subject to a high degree of transparency

11 to ensure fair treatment of customers of the Postal Service’s

12 market-dominant products and companies competing with

13 the Postal Service’s competitive products.’’.

14 (b) FINANCIAL REPORTING REQUIREMENTS AND EN15 FORCEMENT POWERS APPLICABLE TO POSTAL SERVICE.—

16 Section 503 of title 39, United States Code (as so redesig17 nated by section 601 and 604) is amended by—

18 (1) inserting ‘‘(a)’’ before ‘‘The Postal Regu19 latory Commission shall promulgate’’; and

20 (2) adding at the end the following:

21 ‘‘(b)(1) Beginning with the first full fiscal year fol22 lowing the date of enactment of the Postal Accountability

23 and Enhancement Act, the Postal Service shall file with the

24 Postal Regulatory Commission —

25 ‘‘(A) within 35 days after the end of each fiscal

26 quarter, a quarterly report containing the informa-
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1 tion prescribed in Form 10–Q of the Securities and

2 Exchange Commission under section 13 of the Securi3 ties Exchange Act of 1934 (15 U.S.C. 78m), or any

4 revised or successor form;

5 ‘‘(B) within 60 days after the end of each fiscal

6 year, an annual report containing the information

7 prescribed in Form 10–K of the Securities and Ex8 change Commission under section 13 of the Securities

9 Exchange Act of 1934 (15 U.S.C. 78m), or any re10 vised or successor form; and

11 ‘‘(C) periodic reports within the time frame and

12 containing the information prescribed in Form 8–K

13 of the Securities and Exchange Commission under

14 section 13 of the Securities Exchange Act of 1934 (15

15 U.S.C. 78m), or any revised or successor form.

16 ‘‘(2) For purposes of preparing the reports required

17 under paragraph (1), the Postal Service shall be deemed to

18 be the registrant described in the Securities and Exchange

19 Commission forms, and references contained in such forms

20 to Securities and Exchange Commission regulations are ap21 plicable.

22 ‘‘(3) For purposes of preparing the reports required

23 under paragraph (1), the Postal Service shall comply with

24 the rules prescribed by the Securities and Exchange Com25 mission implementing section 404 of the Sarbanes-Oxley
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1 Act of 2002 (15 U.S.C. 7262; Public Law 107–204) begin2 ning with fiscal year 2007 and in each fiscal year there3 after.

4 ‘‘(c)(1) The reports required under subsection (b)(1)(B)

5 shall include, with respect to the financial obligations of

6 the Postal Service under chapters 83, 84, and 89 of title

7 5 for retirees of the Postal Service—

8 ‘‘(A) the funded status of such obligations of the

9 Postal Service;

10 ‘‘(B) components of the net change in the fund

11 balances and obligations and the nature and cause of

12 any significant changes;

13 ‘‘(C) components of net periodic costs;

14 ‘‘(D) cost methods and assumptions underlying

15 the relevant actuarial valuations;

16 ‘‘(E) the effect of a one-percentage point increase

17 in the assumed health care cost trend rate for each fu18 ture year on the service and interest costs components

19 of net periodic cost and the accumulated obligation of

20 the Postal Service under chapter 89 of title 5 for re21 tirees of the Postal Service;

22 ‘‘(F) actual contributions to and payments from

23 the funds for the years presented and the estimated

24 future contributions and payments for each of the fol25 lowing 5 years;
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1 ‘‘(G) the composition of plan assets reflected in

2 the fund balances; and

3 ‘‘(H) the assumed rate of return on fund bal4 ances and the actual rates of return for the years pre5 sented.

6 ‘‘(2)(A) Beginning with the fiscal year 2007 and in

7 each fiscal year thereafter, for purposes of the reports re8 quired under subsection (b)(1) (A) and (B), the Postal Serv9 ice shall include segment reporting.

10 ‘‘(B) The Postal Service shall determine the appro11 priate segment reporting under subparagraph (A), after

12 consultation with the Postal Regulatory Commission.

13 ‘‘(d) For purposes of the annual reports required under

14 subsection (b)(1)(B), the Postal Service shall obtain an

15 opinion from an independent auditor on whether the infor16 mation listed under subsection (c) is fairly stated in all

17 material respects, either in relation to the basic financial

18 statements as a whole or on a stand-alone basis.

19 ‘‘(e) The Postal Regulatory Commission shall have ac20 cess to the audit documentation and any other supporting

21 matter of the Postal Service and its independent auditor

22 in connection with any information submitted under sub23 section (b)(1)(B).

24 ‘‘(f) The Postal Regulatory Commission may, on its

25 own motion or on request of an interested party, initiate
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1 proceedings (to be conducted in accordance with regulations

2 that the Commission shall prescribe) to improve the quality,

3 accuracy, or completeness of Postal Service data required

4 by the Commission under this section whenever it shall ap5 pear that the data—

6 ‘‘(1) have become significantly inaccurate;

7 ‘‘(2) can be significantly improved; or

8 ‘‘(3) are not cost beneficial.’’.

9 TITLE VII—EVALUATIONS

10 SEC. 701. ASSESSMENTS OF RATEMAKING, CLASSIFICATION,

11 AND OTHER PROVISIONS.

12 (a) IN GENERAL.—The Postal Regulatory Commission

13 shall, at least every 3 years, submit a report to the President

14 and Congress concerning—

15 (1) the operation of the amendments made by

16 this Act; and

17 (2) recommendations for any legislation or other

18 measures necessary to improve the effectiveness or effi19 ciency of the postal laws of the United States.

20 (b) POSTAL SERVICE VIEWS.—A report under this sec21 tion shall be submitted only after reasonable opportunity

22 has been afforded to the Postal Service to review the report

23 and to submit written comments on the report. Any com24 ments timely received from the Postal Service under the pre-
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1 ceding sentence shall be attached to the report submitted

2 under subsection (a).

3 SEC. 702. REPORT ON UNIVERSAL POSTAL SERVICE AND

4 THE POSTAL MONOPOLY.

5 (a) REPORT BY THE POSTAL REGULATORY COMMIS6 SION.—

7 (1) IN GENERAL.—Not later than 24 months

8 after the date of enactment of this Act, the Postal Reg9 ulatory Commission shall submit a report to the

10 President and Congress on universal postal service

11 and the postal monopoly in the United States (in this

12 section referred to as ‘‘universal service and the postal

13 monopoly’’), including the monopoly on the delivery

14 of mail and on access to mailboxes.

15 (2) CONTENTS.—The report under this subsection

16 shall include—

17 (A) a comprehensive review of the history

18 and development of universal service and the

19 postal monopoly, including how the scope and

20 standards of universal service and the postal mo21 nopoly have evolved over time for the Nation and

22 its urban and rural areas;

23 (B) the scope and standards of universal

24 service and the postal monopoly provided under

25 current law (including sections 101 and 403 of
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1 title 39, United States Code), and current rules,

2 regulations, policy statements, and practices of

3 the Postal Service;

4 (C) a description of any geographic areas,

5 populations, communities (including both urban

6 and rural communities), organizations, or other

7 groups or entities not currently covered by uni8 versal service or that are covered but that are re9 ceiving services deficient in scope or quality or

10 both; and

11 (D) the scope and standards of universal

12 service and the postal monopoly likely to be re13 quired in the future in order to meet the needs

14 and expectations of the United States public, in15 cluding all types of mail users, based on discus16 sion of such assumptions, alternative sets of as17 sumptions, and analyses as the Postal Service

18 considers plausible.

19 (b) RECOMMENDED CHANGES TO UNIVERSAL SERVICE

20 AND THE MONOPOLY.—The Postal Regulatory Commission

21 shall include in the report under subsection (a), and in all

22 reports submitted under section 701 of this Act—

23 (1) any recommended changes to universal serv24 ice and the postal monopoly as the Commission con25 siders appropriate, including changes that the Com-
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1 mission may implement under current law and

2 changes that would require changes to current law,

3 with estimated effects of the recommendations on the

4 service, financial condition, rates, and security of

5 mail provided by the Postal Service;

6 (2) with respect to each recommended change de7 scribed under paragraph (1)—

8 (A) an estimate of the costs of the Postal

9 Service attributable to the obligation to provide

10 universal service under current law; and

11 (B) an analysis of the likely benefit of the

12 current postal monopoly to the ability of the

13 Postal Service to sustain the current scope and

14 standards of universal service, including esti15 mates of the financial benefit of the postal mo16 nopoly to the extent practicable, under current

17 law; and

18 (3) such additional topics and recommendations

19 as the Commission considers appropriate, with esti20 mated effects of the recommendations on the service,

21 financial condition, rates, and the security of mail

22 provided by the Postal Service.
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1 SEC. 703. STUDY ON EQUAL APPLICATION OF LAWS TO COM2 PETITIVE PRODUCTS.

3 (a) IN GENERAL.—The Federal Trade Commission

4 shall prepare and submit to the President and Congress,

5 and to the Postal Regulatory Commission, within 1 year

6 after the date of enactment of this Act, a comprehensive re7 port identifying Federal and State laws that apply dif8 ferently to the United States Postal Service with respect to

9 the competitive category of mail (within the meaning of sec10 tion 102 of title 39, United States Code, as amended by

11 section 101) and similar products provided by private com12 panies.

13 (b) RECOMMENDATIONS.—The Federal Trade Commis14 sion shall include such recommendations as it considers ap15 propriate for bringing such legal discrimination to an end,

16 and in the interim, to account under section 3633 of title

17 39, United States Code (as added by this Act), for the net

18 economic advantages provided by those laws.

19 (c) CONSULTATION.—In preparing its report, the Fed20 eral Trade Commission shall consult with the United States

21 Postal Service, the Postal Regulatory Commission, other

22 Federal agencies, mailers, private companies that provide

23 delivery services, and the general public, and shall append

24 to such report any written comments received under this

25 subsection.
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1 (d) COMPETITIVE PRODUCT REGULATION.—The Postal

2 Regulatory Commission shall take into account the rec3 ommendations of the Federal Trade Commission in promul4 gating or revising the regulations required under section

5 3633 of title 39, United States Code.

6 SEC. 704. REPORT ON POSTAL WORKPLACE SAFETY AND

7 WORKPLACE-RELATED INJURIES.

8 (a) REPORT BY THE INSPECTOR GENERAL.—

9 (1) IN GENERAL.—Not later than 6 months after

10 the enactment of this Act, the Inspector General of the

11 United States Postal Service shall submit a report to

12 Congress and the Postal Service that—

13 (A) details and assesses any progress the

14 Postal Service has made in improving workplace

15 safety and reducing workplace-related injuries

16 nationwide; and

17 (B) identifies opportunities for improve18 ment that remain with respect to such improve19 ments and reductions.

20 (2) CONTENTS.—The report under this subsection

21 shall also—

22 (A) discuss any injury reduction goals es23 tablished by the Postal Service;

24 (B) describe the actions that the Postal

25 Service has taken to improve workplace safety
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1 and reduce workplace-related injuries, and assess

2 how successful the Postal Service has been in

3 meeting its injury reduction goal; and

4 (C) identify areas where the Postal Service

5 has failed to meet its injury reduction goals, ex6 plain the reasons why these goals were not met,

7 and identify opportunities for making further

8 progress in meeting these goals.

9 (b) REPORT BY THE POSTAL SERVICE.—

10 (1) REPORT TO CONGRESS.—Not later than 6

11 months after receiving the report under subsection (a),

12 the Postal Service shall submit a report to Congress

13 detailing how it plans to improve workplace safety

14 and reduce workplace-related injuries nationwide, in15 cluding goals and metrics.

16 (2) PROBLEM AREAS.—The report under this

17 subsection shall also include plans, developed in con18 sultation with the Inspector General and employee

19 representatives, including representatives of each post20 al labor union and management association, for ad21 dressing the problem areas identified by the Inspector

22 General in the report under subsection (a)(2)(C).

23 SEC. 705. STUDY ON RECYCLED PAPER.

24 (a) IN GENERAL.—Within 12 months after the date

25 of enactment of this Act, the Government Accountability Of-
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1 fice shall study and submit to the Congress, the Board of

2 Governors of the Postal Service, and to the Postal Regu3 latory Commission a report concerning—

4 (1) the economic and environmental efficacy of

5 establishing rate incentives for mailers linked to the

6 use of recycled paper;

7 (2) a description of the accomplishments of the

8 Postal Service in each of the preceding 5 years involv9 ing recycling activities, including the amount of an10 nual revenue generated and savings achieved by the

11 Postal Service as a result of its use of recycled paper

12 and other recycled products and its efforts to recycle

13 undeliverable and discarded mail and other mate14 rials; and

15 (3) additional opportunities that may be avail16 able for the United States Postal Service to engage in

17 recycling initiatives and the projected costs and reve18 nues of undertaking such opportunities.

19 (b) RECOMMENDATIONS.—The report shall include rec20 ommendations for any administrative or legislative actions

21 that may be appropriate.
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1 TITLE VIII—POSTAL SERVICE RE2 TIREMENT AND HEALTH BEN3 EFITS FUNDING

4 SEC. 801. SHORT TITLE.

5 This title may be cited as the ‘‘Postal Civil Service

6 Retirement and Health Benefits Funding Amendments of

7 2004’’.

8 SEC. 802. CIVIL SERVICE RETIREMENT SYSTEM.

9 (a) IN GENERAL.—Chapter 83 of title 5, United States

10 Code, is amended—

11 (1) in section 8334(a)(1)(B), by striking clause

12 (ii) and inserting the following:

13 ‘‘(ii) In the case of an employee of the United States

14 Postal Service, no amount shall be contributed under this

15 subparagraph.’’; and

16 (2) by amending section 8348(h) to read as fol17 lows:

18 ‘‘(h)(1) In this subsection, the term ‘Postal surplus or

19 supplemental liability’ means the estimated difference, as

20 determined by the Office, between—

21 ‘‘(A) the actuarial present value of all future

22 benefits payable from the Fund under this subchapter

23 to current or former employees of the United States

24 Postal Service and attributable to civilian employ25 ment with the United States Postal Service; and
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1 ‘‘(B) the sum of—

2 ‘‘(i) the actuarial present value of deduc3 tions to be withheld from the future basic pay of

4 employees of the United States Postal Service

5 currently subject to this subchapter under section

6 8334;

7 ‘‘(ii) that portion of the Fund balance, as of

8 the date the Postal surplus or supplemental li9 ability is determined, attributable to payments

10 to the Fund by the United States Postal Service

11 and its employees, minus benefit payments at12 tributable to civilian employment with the

13 United States Postal Service, plus the earnings

14 on such amounts while in the Fund; and

15 ‘‘(iii) any other appropriate amount, as de16 termined by the Office in accordance with gen17 erally accepted actuarial practices and prin18 ciples.

19 ‘‘(2)(A) Not later than June 15, 2006, the Office shall

20 determine the Postal surplus or supplemental liability, as

21 of September 30, 2005. If that result is a surplus, the

22 amount of the surplus shall be transferred to the Postal

23 Service Retiree Health Benefits Fund established under sec24 tion 8909a by June 30, 2006. If the result is a supplemental

25 liability, the Office shall establish an amortization schedule,
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1 including a series of annual installments commencing Sep2 tember 30, 2006, which provides for the liquidation of such

3 liability by September 30, 2043.

4 ‘‘(B) The Office shall redetermine the Postal surplus

5 or supplemental liability as of the close of the fiscal year,

6 for each fiscal year beginning after September 30, 2006,

7 through the fiscal year ending September 30, 2038. If the

8 result is a surplus, that amount shall remain in the Fund

9 until distribution is authorized under subparagraph (C),

10 and any prior amortization schedule for payments shall be

11 terminated. If the result is a supplemental liability, the Of12 fice shall establish a new amortization schedule, including

13 a series of annual installments commencing on September

14 30 of the subsequent fiscal year, which provides for the liq15 uidation of such liability by September 30, 2043.

16 ‘‘(C) As of the close of the fiscal years ending Sep17 tember 30, 2015, 2025, 2035, and 2039, if the result is a

18 surplus, that amount shall be transferred to the Postal Serv19 ice Retiree Health Benefits Fund, and any prior amortiza20 tion schedule for payments shall be terminated.

21 ‘‘(D) Amortization schedules established under this

22 paragraph shall be set in accordance with generally accept23 ed actuarial practices and principles, with interest com24 puted at the rate used in the most recent valuation of the

25 Civil Service Retirement System.
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1 ‘‘(E) The United States Postal Service shall pay the

2 amounts so determined to the Office, with payments due

3 not later than the date scheduled by the Office.

4 ‘‘(3) Notwithstanding any other provision of law, in

5 computing the amount of any payment under any other

6 subsection of this section that is based upon the amount

7 of the unfunded liability, such payment shall be computed

8 disregarding that portion of the unfunded liability that the

9 Office determines will be liquidated by payments under this

10 subsection.’’.

11 (b) CREDIT ALLOWED FOR MILITARY SERVICE.—In

12 the application of section 8348(g)(2) of title 5, United

13 States Code, for the fiscal year 2006, the Office of Personnel

14 Management shall include, in addition to the amount other15 wise computed under that paragraph, the amounts that

16 would have been included for the fiscal years 2003 through

17 2005 with respect to credit for military service of former

18 employees of the United States Postal Service as though the

19 Postal Civil Service Retirement System Funding Reform

20 Act of 2003 (Public Law 108–18) had not been enacted,

21 and the Secretary of the Treasury shall make the required

22 transfer to the Civil Service Retirement and Disability

23 Fund based on that amount.

24 (c) REVIEW.—

25 (1) IN GENERAL.—
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1 (A) REQUEST FOR REVIEW.—Notwith2 standing any other provision of this section (in3 cluding any amendment made by this section),

4 any determination or redetermination made by

5 the Office of Personnel Management under this

6 section (including any amendment made by this

7 section) shall, upon request of the United States

8 Postal Service, be subject to a review by the Post9 al Regulatory Commission under this subsection.

10 (B) REPORT.—Upon receiving a request

11 under subparagraph (A), the Commission shall

12 promptly procure the services of an actuary, who

13 shall hold membership in the American Academy

14 of Actuaries and shall be qualified in the evalua15 tion of pension obligations, to conduct a review

16 in accordance with generally accepted actuarial

17 practices and principles and to provide a report

18 to the Commission containing the results of the

19 review. The Commission, upon determining that

20 the report satisfies the requirements of this para21 graph, shall approve the report, with any com22 ments it may choose to make, and submit it with

23 any such comments to the Postal Service, the Of24 fice of Personnel Management, and Congress.
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1 (2) RECONSIDERATION.—Upon receiving the re2 port from the Commission under paragraph (1), the

3 Office of Personnel Management shall reconsider its

4 determination or redetermination in light of such re5 port, and shall make any appropriate adjustments.

6 The Office shall submit a report containing the results

7 of its reconsideration to the Commission, the Postal

8 Service, and Congress.

9 SEC. 803. HEALTH INSURANCE.

10 (a) IN GENERAL.—

11 (1) FUNDING.—Chapter 89 of title 5, United

12 States Code, is amended—

13 (A) in section 8906(g)(2)(A), by striking

14 ‘‘shall be paid by the United States Postal Serv15 ice.’’ and inserting ‘‘shall be paid first from the

16 Postal Service Retiree Health Benefits Fund up

17 to the amount contained in the Fund, with any

18 remaining amount paid by the United States

19 Postal Service.’’; and

20 (B) by inserting after section 8909 the fol21 lowing:

22 ‘‘§ 8909a. Postal Service Retiree Health Benefit Fund

23 ‘‘(a) There is in the Treasury of the United States a

24 Postal Service Retiree Health Benefits Fund which is ad25 ministered by the Office of Personnel Management.
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1 ‘‘(b) The Fund is available without fiscal year limita2 tion for payments required under section 8906(g)(2)(A).

3 ‘‘(c) The Secretary of the Treasury shall immediately

4 invest, in interest-bearing securities of the United States

5 such currently available portions of the Fund as are not

6 immediately required for payments from the Fund. Such

7 investments shall be made in the same manner as invest8 ments for the Civil Service Retirement and Disability Fund

9 under section 8348.

10 ‘‘(d)(1) Not later than June 30, 2006, and by June

11 30 of each succeeding year, the Office shall compute the net

12 present value of the future payments required under section

13 8906(g)(2)(A) and attributable to the service of Postal Serv14 ice employees during the most recently ended fiscal year.

15 ‘‘(2)(A) Not later than June 30, 2006, the Office shall

16 compute, and by June 30 of each succeeding year, the Office

17 shall recompute the difference between—

18 ‘‘(i) the net present value of the excess of future

19 payments required under section 8906(g)(2)(A) for

20 current and future United States Postal Service an21 nuitants as of the end of the fiscal year ending on

22 September 30 of that year; and

23 ‘‘(ii)(I) the value of the assets of the Postal Re24 tiree Health Benefits Fund as of the end of the fiscal

25 year ending on September 30 of that year; and
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1 ‘‘(II) the net present value computed under para2 graph (1).

3 ‘‘(B) Not later than June 30, 2006, the Office shall

4 compute, and by June 30 of each succeeding year shall re5 compute, an amortization schedule including a series of an6 nual installments which provide for the liquidation by Sep7 tember 30, 2045, or within 15 years, whichever is later, of

8 the net present value determined under subparagraph (A),

9 including interest at the rate used in that computation.

10 ‘‘(3) Not later than September 30, 2006, and by Sep11 tember 30 of each succeeding year, the United States Postal

12 Service shall pay into such Fund—

13 ‘‘(A) the net present value computed under para14 graph (1); and

15 ‘‘(B) the annual installment computed under

16 paragraph (2)(B).

17 ‘‘(4) Computations under this subsection shall be made

18 consistent with the assumptions and methodology used by

19 the Office for financial reporting under subchapter II of

20 chapter 35 of title 31.

21 ‘‘(5)(A)(i) Any computation or other determination of

22 the Office under this subsection shall, upon request of the

23 United States Postal Service, be subject to a review by the

24 Postal Regulatory Commission under this paragraph.
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1 ‘‘(ii) Upon receiving a request under clause (i), the

2 Commission shall promptly procure the services of an actu3 ary, who shall hold membership in the American Academy

4 of Actuaries and shall be qualified in the evaluation of

5 healthcare insurance obligations, to conduct a review in ac6 cordance with generally accepted actuarial practices and

7 principles and to provide a report to the Commission con8 taining the results of the review. The Commission, upon de9 termining that the report satisfies the requirements of this

10 subparagraph, shall approve the report, with any comments

11 it may choose to make, and submit it with any such com12 ments to the Postal Service, the Office of Personnel Manage13 ment, and Congress.

14 ‘‘(B) Upon receiving the report under subparagraph

15 (A), the Office of Personnel Management shall reconsider

16 its determination or redetermination in light of such report,

17 and shall make any appropriate adjustments. The Office

18 shall submit a report containing the results of its reconsid19 eration to the Commission, the Postal Service, and Con20 gress.

21 ‘‘(6) After consultation with the United States Postal

22 Service, the Office shall promulgate any regulations the Of23 fice determines necessary under this subsection.’’.

24 (2) TECHNICAL AND CONFORMING AMEND25 MENT.—The table of sections for chapter 89 of title 5,
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1 United States Code, is amended by inserting after the

2 item relating to section 8909 the following:

‘‘8909a. Postal Service Retiree Health Benefits Fund.’’.

3 (b) REVIEW.—

4 (1) IN GENERAL.—

5 (A) REQUEST FOR REVIEW.—Any regula6 tion established under section 8909a(d)(5) of title

7 5, United States Code (as added by subsection

8 (a)), shall, upon request of the United States

9 Postal Service, be subject to a review by the Post10 al Regulatory Commission under this para11 graph.

12 (B) REPORT.—Upon receiving a request

13 under subparagraph (A), the Commission shall

14 promptly procure the services of an actuary, who

15 shall hold membership in the American Academy

16 of Actuaries and shall be qualified in the evalua17 tion of healthcare insurance obligations, to con18 duct a review in accordance with generally ac19 cepted actuarial practices and principles and to

20 provide a report to the Commission containing

21 the results of the review. The Commission, upon

22 determining that the report satisfies the require23 ments of this paragraph, shall approve the re24 port, with any comments it may choose to make,

25 and submit it with any such comments to the
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1 Postal Service, the Office of Personnel Manage2 ment, and Congress.

3 (2) RECONSIDERATION.—Upon receiving the re4 port under paragraph (1), the Office of Personnel

5 Management shall reconsider its determination or re6 determination in light of such report, and shall make

7 any appropriate adjustments. The Office shall submit

8 a report containing the results of its reconsideration

9 to the Commission, the Postal Service, and Congress.

10 (c) TRANSITIONAL ADJUSTMENT FOR FISCAL YEAR

11 2006.—For fiscal year 2006, the amounts paid by the Post12 al Service in Government contributions under section

13 8906(g)(2)(A) of title 5, United States Code, for fiscal year

14 2006 contributions shall be deducted from the initial pay15 ment otherwise due from the Postal Service to the Postal

16 Service Retiree Health Benefits Fund under section

17 8909a(d)(3) of such title as added by this section.

18 SEC. 804. REPEAL OF DISPOSITION OF SAVINGS PROVISION.

19 Section 3 of the Postal Civil Service Retirement Sys20 tem Funding Reform Act of 2003 (Public Law 108–18) is

21 repealed.

22 SEC. 805. EFFECTIVE DATES.

23 (a) IN GENERAL.—Except as provided under sub24 section (b), this title shall take effect on October 1, 2005.
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1 (b) TERMINATION OF EMPLOYER CONTRIBUTION.—The

2 amendment made by paragraph (1) of section 802(a) shall

3 take effect on the first day of the first pay period beginning

4 on or after October 1, 2005.

5 TITLE IX—COMPENSATION FOR

6 WORK INJURIES

7 SEC. 901. TEMPORARY DISABILITY; CONTINUATION OF PAY.

8 (a) TIME OF ACCRUAL OF RIGHT.—Section 8117 of

9 title 5, United States Code, is amended—

10 (1) by striking ‘‘An employee’’ and inserting

11 ‘‘(a) An employee other than a Postal Service em12 ployee’’; and

13 (2) by adding at the end the following:

14 ‘‘(b) A Postal Service employee is not entitled to com15 pensation or continuation of pay for the first 3 days of tem16 porary disability, except as provided under paragraph (3)

17 of subsection (a). A Postal Service employee may use an18 nual leave, sick leave, or leave without pay during that 3-

19 day period, except that if the disability exceeds 14 days or

20 is followed by permanent disability, the employee may have

21 their sick leave or annual leave reinstated or receive pay

22 for the time spent on leave without pay under this section.’’.

23 (b) TECHNICAL AND CONFORMING AMENDMENT.—Sec24 tion 8118(b)(1) of title 5, United States Code, is amended

25 to read as follows:
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1 ‘‘(1) without a break in time, except as provided

2 under section 8117(b), unless controverted under regu3 lations of the Secretary’’.

4 SEC. 902. DISABILITY RETIREMENT FOR POSTAL EMPLOY5 EES.

6 (a) TOTAL DISABILITY.—Section 8105 of title 5,

7 United States Code, is amended—

8 (1) in subsection (a), by adding at the end the

9 following: ‘‘This section applies to a Postal Service

10 employee, except as provided under subsection (c).’’;

11 and

12 (2) by adding at the end the following:

13 ‘‘(c)(1) In this subsection, the term ‘retirement age’ has

14 the meaning given under section 216(l)(1) of the Social Se15 curity Act (42 U.S.C. 416(l)(1)).

16 ‘‘(2) Notwithstanding any other provision of law, for

17 any injury occurring on or after the date of enactment of

18 the Postal Accountability and Enhancement Act, and for

19 any new claim for a period of disability commencing on

20 or after that date, the compensation entitlement for total

21 disability is converted to 50 percent of the monthly pay of

22 the employee on the later of—

23 ‘‘(A) the date on which the injured employee

24 reaches retirement age; or
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1 ‘‘(B) 1 year after the employee begins receiving

2 compensation.’’.

3 (b) PARTIAL DISABILITY.—Section 8106 of title 5,

4 United States Code, is amended—

5 (1) in subsection (a), by adding at the end the

6 following: ‘‘This section applies to a Postal Service

7 employee, except as provided under subsection (d).’’;

8 and

9 (2) by adding at the end the following:

10 ‘‘(d)(1) In this subsection, the term ‘retirement age’ has

11 the meaning given under section 216(l)(1) of the Social Se12 curity Act (42 U.S.C. 416(l)(1)).

13 ‘‘(2) Notwithstanding any other provision of law,

14 for any injury occurring on or after the date of enact15 ment of this subsection, and for any new claim for a

16 period of disability commencing on or after that date,

17 the compensation entitlement for partial disability is

18 converted to 50 percent of the difference between the

19 monthly pay of an employee and the monthly wage

20 earning capacity of the employee after the beginning

21 of partial disability on the later of—

22 ‘‘(A) the date on which the injured employee

23 reaches retirement age; or

24 ‘‘(B) 1 year after the employee begins re25 ceiving compensation.’’.
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1 TITLE X—MISCELLANEOUS

2 SEC. 1001. EMPLOYMENT OF POSTAL POLICE OFFICERS.

3 Section 404 of title 39, United States Code (as amend4 ed by this Act), is further amended by adding at the end

5 the following:

6 ‘‘(d) The Postal Service may employ guards for all

7 buildings and areas owned or occupied by the Postal Service

8 or under the charge and control of the Postal Service, and

9 may give such guards, with respect to such property, any

10 of the powers of special policemen provided under section

11 1315 of title 40. The Postmaster General, or the designee

12 of the Postmaster General, may take any action that the

13 Secretary of Homeland Security may take under section

14 1315 of title 40, with respect to that property.

15 SEC. 1002. OBSOLETE PROVISIONS.

16 (a) REPEAL.—

17 (1) IN GENERAL.—Chapter 52 of title 39, United

18 States Code, is repealed.

19 (2) CONFORMING AMENDMENTS.—(A) Section

20 5005(a) of title 39, United States Code, is amended—

21 (i) by striking paragraph (1), and by redes22 ignating paragraphs (2) through (4) as para23 graphs (1) through (3), respectively; and
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1 (ii) in paragraph (3) (as so designated by

2 clause (i)), by striking ‘‘(as defined in section

3 5201(6) of this title)’’.

4 (B) Section 5005(b) of such title 39 is amended

5 by striking ‘‘(a)(4)’’ each place it appears and insert6 ing ‘‘(a)(3)’’.

7 (C) Section 5005(c) of such title 39 is amended

8 by striking ‘‘by carrier or person under subsection

9 (a)(1) of this section, by contract under subsection

10 (a)(4) of this section, or’’ and inserting ‘‘by contract

11 under subsection (a)(3) of this section or’’.

12 (b) ELIMINATING RESTRICTION ON LENGTH OF CON13 TRACTS.—(1) Section 5005(b)(1) of title 39, United States

14 Code, is amended by striking ‘‘(or where the Postal Service

15 determines that special conditions or the use of special

16 equipment warrants, not in excess of 6 years)’’ and insert17 ing ‘‘(or such longer period of time as may be determined

18 by the Postal Service to be advisable or appropriate)’’.

19 (2) Section 5402(d) of such title 39 is amended by

20 striking ‘‘for a period of not more than 4 years’’.

21 (3) Section 5605 of such title 39 is amended by strik22 ing ‘‘for periods of not in excess of 4 years’’.

23 (c) TECHNICAL AND CONFORMING AMENDMENT.—The

24 table of chapters for part V of title 39, United States Code,

25 is amended by repealing the item relating to chapter 52.
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1 SEC. 1003. REDUCED RATES.

2 Section 3626 of title 39, United States Code, is

3 amended—

4 (1) in subsection (a), by striking all before para5 graph (4) and inserting the following:

6 ‘‘(a)(1) Except as otherwise provided in this section,

7 rates of postage for a class of mail or kind of mailer under

8 former section 4358, 4452(b), 4452(c), 4554(b), or 4554(c)

9 of this title shall be established in accordance with section

10 3622.

11 ‘‘(2) For the purpose of this subsection, the term ‘reg12 ular-rate category’ means any class of mail or kind of mail13 er, other than a class or kind referred to in section 2401(c).

14 ‘‘(3) Rates of postage for a class of mail or kind of

15 mailer under former section 4358(a) through (c) of this title

16 shall be established so that postage on each mailing of such

17 mail reflects its preferred status as compared to the postage

18 for the most closely corresponding regular-rate category

19 mailing.’’;

20 (2) in subsection (g), by adding at the end the

21 following:

22 ‘‘(3) For purposes of this section and former section

23 4358(a) through (c) of this title, those copies of an issue

24 of a publication entered within the county in which it is

25 published, but distributed outside such county on postal

26 carrier routes originating in the county of publication, shall
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1 be treated as if they were distributed within the county of

2 publication.

3 ‘‘(4)(A) In the case of an issue of a publication, any

4 number of copies of which are mailed at the rates of postage

5 for a class of mail or kind of mailer under former section

6 4358(a) through (c) of this title, any copies of such issue

7 which are distributed outside the county of publication (ex8 cluding any copies subject to paragraph (3)) shall be subject

9 to rates of postage provided for under this paragraph.

10 ‘‘(B) The rates of postage applicable to mail under this

11 paragraph shall be established in accordance with section

12 3622.

13 ‘‘(C) This paragraph shall not apply with respect to

14 an issue of a publication unless the total paid circulation

15 of such issue outside the county of publication (not counting

16 recipients of copies subject to paragraph (3)) is less than

17 5,000.’’; and

18 (3) by adding at the end the following:

19 ‘‘(n) In the administration of this section, matter that

20 satisfies the circulation standards for requester publications

21 shall not be excluded from being mailed at the rates for mail

22 under former section 4358 solely because such matter is de23 signed primarily for free circulation or for circulation at

24 nominal rates, or fails to meet the requirements of former

25 section 4354(a)(5).’’.
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1 SEC. 1004. SENSE OF CONGRESS REGARDING POSTAL SERV2 ICE PURCHASING REFORM.

3 It is the sense of Congress that the Postal Service

4 should—

5 (1) ensure the fair and consistent treatment of

6 suppliers and contractors in its current purchasing

7 policies and any revision or replacement of such poli8 cies, such as through the use of competitive contract

9 award procedures, effective dispute resolution mecha10 nisms, and socioeconomic programs; and

11 (2) implement commercial best practices in Post12 al Service purchasing policies to achieve greater effi13 ciency and cost savings as recommended in July 2003

14 by the President’s Commission on the United States

15 Postal Service, in a manner that is compatible with

16 the fair and consistent treatment of suppliers and

17 contractors, as befitting an establishment in the

18 United States Government.

19 SEC. 1005. CONTRACTS FOR TRANSPORTATION OF MAIL BY

20 AIR.

21 (a) DEFINITIONS.—Section 5402(a) of title 39, United

22 States Code, is amended—

23 (1) in paragraph (4), by striking ‘‘(g)(1)(D)(i)’’

24 and inserting ‘‘(g)(1)(A)(iv)(I)’’;

25 (2) in paragraph (5), by striking ‘‘(g)(1)(D)(i)’’

26 and inserting ‘‘(g)(1)(A)(iv)(I)’’;
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1 (3) in paragraph (6), by striking ‘‘only’’;

2 (4) in paragraph (8), by striking ‘‘rates paid to

3 a bush carrier’’ and inserting ‘‘linehaul rates and a

4 single terminal handling payment at a bush terminal

5 handling rate paid to a bush carrier’’;

6 (5) in paragraph (11), by striking

7 ‘‘(g)(1)(D)(ii)’’ and inserting ‘‘(g)(1)(A)(iv)(II)’’;

8 (6) in paragraph (13)—

9 (A) in subparagraph (A)—

10 (i) by striking ‘‘clause (i) or (ii) of

11 subsection (g)(1)(D)’’ and inserting ‘‘sub12 clause (I) or (II) of subsection

13 (g)(1)(A)(iv)’’; and

14 (ii) by striking ‘‘and’’ after the semi15 colon;

16 (B) in subparagraph (B), by adding ‘‘and’’

17 after the semicolon; and

18 (C) by adding at the end the following:

19 ‘‘(C) is not comprised of previously quali20 fied existing mainline carriers as a result of

21 merger or sale;’’;

22 (7) in paragraph (18), by striking ‘‘bush routes’’

23 and inserting ‘‘routes’’; and

24 (8) in paragraph (22), by striking ‘‘bush routes’’

25 and inserting ‘‘routes’’.
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1 (b) NONPRIORITY BYPASS MAIL.—Section 5402(g) of

2 title 39, United States Code, is amended—

3 (1) in paragraph (2)(C), by inserting ‘‘or a des4 tination city’’ after ‘‘acceptance point and a hub’’;

5 (2) in paragraph (3), by adding at the end the

6 following:

7 ‘‘(C) When a new hub results from a change

8 in a determination under subparagraph (B),

9 mail tender from that hub during the 12-month

10 period beginning on the effective date of that

11 change shall be based on the passenger and

12 freight shares to the destinations of the affected

13 hub or hubs resulting in the new hub.’’; and

14 (3) in paragraph (5)(A)(i), by striking

15 ‘‘(g)(1)(D)(ii)’’ and inserting ‘‘(g)(1)(A)(iv)(II)’’.

16 (c) EQUITABLE TENDER.—Section 5402(h) of title 39,

17 United States Code, is amended—

18 (1) in paragraph (1), by inserting ‘‘bush’’ after

19 ‘‘providing scheduled’’;

20 (2) by striking paragraph (3) and inserting the

21 following:

22 ‘‘(3)(A) Except as provided under subparagraph

23 (C), a new or existing 121 bush passenger carrier

24 qualified under subsection (g)(1) shall be exempt from

25 the requirements under paragraphs (1)(B) and (2)(A)
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1 on a city pair route for a period which shall extend

2 for—

3 ‘‘(i) 1 year;

4 ‘‘(ii) 1 year in addition to the extension

5 under clause (i) if, as of the conclusion of the

6 first year, such carrier has been providing not

7 less than 5 percent of the passenger service on

8 that route (as calculated under paragraph (5));

9 and

10 ‘‘(iii) 1 year in addition to the extension

11 under clause (ii) if, as of the conclusion of the

12 second year, such carrier has been providing not

13 less than 10 percent of the passenger service on

14 that route (as calculated under paragraph (5)).

15 ‘‘(B)(i) The first 3 121 bush passenger carriers

16 entitled to the exemptions under subparagraph (A) on

17 any city pair route shall divide no more than an ad18 ditional 10 percent of the mail, apportioned equally,

19 comprised of no more than—

20 ‘‘(I) 5 percent of the share of each qualified

21 passenger carrier servicing that route that is not

22 a 121 bush passenger carrier; and

23 ‘‘(II) 5 percent of the share of each nonpas24 senger carrier servicing that route that trans-
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1 ports 25 percent or more of the total nonmail

2 freight under subsection (i)(1).

3 ‘‘(ii) Additional 121 bush passenger carriers en4 tering service on that city pair route after the first

5 3 shall not receive any additional mail share.

6 ‘‘(iii) If any 121 bush passenger carrier on a

7 city pair route receiving an additional share of the

8 mail under clause (ii) discontinues service on that

9 route, the 121 bush passenger carrier that has been

10 providing the longest period of service on that route

11 and is otherwise eligible but is not receiving a share

12 by reason of clause (ii), shall receive the share of the

13 carrier discontinuing service.

14 ‘‘(C) Notwithstanding the requirements of this

15 subsection, if only 1 passenger carrier or aircraft is

16 qualified to be tendered nonpriority bypass mail as a

17 passenger carrier or aircraft on a city pair route in

18 the State of Alaska, the Postal Service shall tender 20

19 percent of the nonpriority bypass mail described

20 under paragraph (1) to the passenger carrier or air21 craft providing at least 10 percent of the passenger

22 service on such route.’’;

23 (3) in paragraph (5)(A)—

24 (A) by striking ‘‘(i)’’ after ‘‘(A)’’; and

25 (B) by striking clause (ii).
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1 (d) PERCENT OF NONMAIL FREIGHT.—Section

2 5402(i)(6) of title 39, United States Code, is amended—

3 (1) by striking ‘‘(A)’’ after ‘‘(6)’’; and

4 (2) by striking subparagraph (B).

5 (e) PERCENT OF TENDER RATE.—Section

6 5402(j)(3)(B) of title 39, United States Code, is amended

7 by striking ‘‘bush routes in the State of Alaska’’ and insert8 ing ‘‘routes served exclusively by bush carriers in the State

9 of Alaska’’.

10 (f) DETERMINATION OF RATES.—Section 5402(k) of

11 title 39, United States Code, is amended by striking para12 graph (5).

13 (g) TECHNICAL AND CONFORMING AMENDMENT.—Sec14 tion 5402(p)(3) of title 39, United States Code, is amended

15 by striking ‘‘(g)(1)(D)’’ and inserting ‘‘(g)(1)(A)(iv)’’.

16 (h) EFFECTIVE DATE.—

17 (1) IN GENERAL.—Except as provided under

18 paragraph (2), this section shall take effect on the

19 date of enactment of this Act.

20 (2) EQUITABLE TENDER.—Subsection (c) shall

21 take effect on July 1, 2006.

Attest:

Secretary.
109TH CONGRESS

2D SESSION H. R. 22

AMENDMENT