IB 

Union Calendar No. 55 

109TH CONGRESS 

1ST SESSION H. R. 22 

[Report No. 109–66, Part I] 

To reform the postal laws of the United States. 

IN THE HOUSE OF REPRESENTATIVES 

JANUARY 4, 2005 

Mr. MCHUGH (for himself, Mr. DAVIS of Illinois, Mr. TOM DAVIS of Virginia, 

and Mr. WAXMAN) introduced the following bill; which was referred to 

the Committee on Government Reform 

APRIL 28, 2005 

Reported with an amendment and referred to the Committee on the Judiciary 

for a period ending not later than May 27, 2005, for consideration of 

such provisions of the bill and the amendment as fall within the jurisdiction of that committee pursuant to clause 1(l), rule X 

[Strike out all after the enacting clause and insert the part printed in italic] 

MAY 27, 2005 

Additional sponsors: Mr. GILLMOR, Mrs. MILLER of Michigan, Mr. CANNON, 

Mr. SHAYS, Mrs. BLACKBURN, Mr. MURPHY, Mr. CLAY, Mr. FRANK of 

Massachusetts, Mr. MCNULTY, Mrs. MALONEY, Mr. RUSH, Mr. OWENS, 

Mr. TOWNS, Mr. VAN HOLLEN, Mr. CUMMINGS, Mr. OXLEY, Mr. CHANDLER, Mr. LARSEN of Washington, Ms. SLAUGHTER, Mr. BAIRD, Mr. 

HOLT, Mr. DICKS, Ms. HARMAN, Mr. FORD, Mr. SHERMAN, Ms. WATSON, Ms. LORETTA SANCHEZ of California, Mr. CASE, Mr. BOOZMAN, 

Ms. ROYBAL-ALLARD, Mr. BLUMENAUER, Mr. ROSS, Mr. BACA, Ms. 

WOOLSEY, Ms. ZOE LOFGREN of California, Mr. ROTHMAN, Mr. LANTOS, 

Mr. HONDA, Mr. BERMAN, Ms. MILLENDER-MCDONALD, Mr. SAXTON, 

Ms. LEE, Ms. BERKLEY, Mr. FARR, Mr. STARK, Mr. GARRETT of New 

Jersey, Ms. HOOLEY, Mr. PLATTS, Mr. CARDOZA, Mr. SMITH of Washington, Mr. HIGGINS, Mrs. CUBIN, Mr. INSLEE, Mr. SCHIFF, Mr. 

MCDERMOTT, Mr. CHABOT, Mr. BECERRA, Mr. FILNER, Mrs. 

TAUSCHER, Mr. ALLEN, Mr. EVANS, Mr. BURTON of Indiana, Mr. SCOTT

of Georgia, Mrs. DAVIS of California, Mr. PALLONE, Mr. MORAN of Virginia, Mr. MICHAUD, Mr. LAHOOD, Mr. KUHL of New York, Ms. BALD-
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WIN, Mr. HINCHEY, Mr. PETERSON of Minnesota, Mr. SPRATT, Mr. LINCOLN DIAZ-BALART of Florida, Mr. PASCRELL, Mr. MOORE of Kansas, 

Ms. HERSETH, Mr. MEEK of Florida, Mr. PORTER, Mrs. DRAKE, Mr. 

SIMMONS, Mr. CONYERS, Ms. GINNY BROWN-WAITE of Florida, Mr. ANDREWS, Mr. MENENDEZ, Ms. LINDA T. SA ́NCHEZ of California, Mr. 

MURTHA, Mr. REYES, Mr. DUNCAN, Mr. BRADLEY of New Hampshire, 

Mr. LATOURETTE, Mr. TURNER, Mr. SOUDER, Mr. BISHOP of New York, 

Mr. ISSA, Mr. GUTIERREZ, Mr. WELLER, Ms. WASSERMAN SCHULTZ, 

Mr. WEXLER, Mr. PETERSON of Pennsylvania, Mr. DENT, Mr. LARSON

of Connecticut, Mr. MICA, Mrs. CAPITO, Mr. MCHENRY, Mr. WESTMORELAND, Mr. CUNNINGHAM, Ms. MATSUI, Ms. CARSON, Mr. MARCHANT, 

Mr. COSTA, Mr. GERLACH, Mr. TIBERI, Mr. MCKEON, Ms. KAPTUR, Mr. 

PASTOR, Mr. LIPINSKI, Mrs. NORTHUP, Mr. NEAL of Massachusetts, Mr. 

LATHAM, Mr. MCGOVERN, Mr. STRICKLAND, Mr. DAVIS of Florida, Mr. 

GIBBONS, Mr. LANGEVIN, Mr. NORWOOD, Mr. CARDIN, Mr. BASS, Mr. 

BILIRAKIS, Mr. DOYLE, Ms. ROS-LEHTINEN, Mr. GREEN of Wisconsin, 

Mr. CUELLAR, Mr. ENGLISH of Pennsylvania, Mrs. NAPOLITANO, Mr. 

FERGUSON, Mrs. CAPPS, Mr. SHUSTER, Mr. PETRI, Mr. RYAN of Ohio, 

Mr. BOUCHER, Mr. SANDERS, Mr. RAHALL, Mr. BOEHLERT, Mr. KANJORSKI, Mr. GARY G. MILLER of California, Mr. BISHOP of Georgia, Mr. 

SESSIONS, Mr. WILSON of South Carolina, Mr. THOMPSON of California, 

Ms. KILPATRICK of Michigan, Mr. CARNAHAN, Mr. LYNCH, Mr. 

SCHWARZ of Michigan, Ms. SOLIS, Mr. BACHUS, Mr. ABERCROMBIE, Mr. 

WU, Mr. DAVIS of Kentucky, and Mr. DELAHUNT

MAY 27, 2005

The Committee on the Judiciary discharged; committed to the Committee of 

the Whole House on the State of the Union and ordered to be printed 

[For text of introduced bill, see copy of bill as introduced on January 4, 2005] 

A BILL

To reform the postal laws of the United States.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 

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

5 ‘‘Postal Accountability and Enhancement Act’’. 
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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. 

Sec. 103. Financial transparency. 

TITLE II—MODERN RATE REGULATION 

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

Sec. 202. Provisions relating to competitive products. 

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

Sec. 204. Reporting requirements and related provisions. 

Sec. 205. Complaints; appellate review and enforcement. 

Sec. 206. Workshare discounts. 

Sec. 207. Clerical amendment. 

TITLE III—PROVISIONS RELATING TO FAIR COMPETITION 

Sec. 301. Postal Service Competitive Products Fund. 

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

Sec. 303. Unfair competition prohibited. 

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

Sec. 305. International postal arrangements. 

Sec. 306. Redesignation. 

TITLE IV—GENERAL PROVISIONS 

Sec. 401. Qualification requirements for Governors. 

Sec. 402. Obligations. 

Sec. 403. Private carriage of letters. 

Sec. 404. Rulemaking authority. 

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

Sec. 406. Bonus and compensation authority. 

Sec. 407. Mediation in collective-bargaining disputes. 

TITLE V—ENHANCED REGULATORY COMMISSION 

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

Postal Regulatory Commission. 

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

Sec. 503. Appropriations for the Postal Regulatory Commission. 

Sec. 504. Redesignation of the Postal Rate Commission. 

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

public. 

TITLE VI—INSPECTORS GENERAL 

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

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

by the President. 
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TITLE VII—EVALUATIONS 

Sec. 701. Universal postal service study. 

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

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

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

Sec. 705. Plan for assisting displaced workers. 

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

Sec. 707. Rates for periodicals. 

Sec. 708. Assessment of certain rate deficiencies. 

Sec. 709. Network optimization. 

Sec. 710. Assessment of future business model of the postal service. 

Sec. 711. Study on certain proposed amendments. 

Sec. 712. Definition. 

TITLE VIII—MISCELLANEOUS; TECHNICAL AND CONFORMING 

AMENDMENTS 

Sec. 801. Employment of postal police officers. 

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

closing or consolidation of post offices. 

Sec. 803. Provisions relating to benefits under chapter 81 of title 5, United States 

Code, for officers and employees of the former Post Office Department. 

Sec. 804. Obsolete provisions. 

Sec. 805. Investments. 

Sec. 806. Reduced rates. 

Sec. 807. Hazardous matter. 

Sec. 808. Provisions relating to cooperative mailings. 

Sec. 809. Technical and conforming amendments. 

TITLE IX—POSTAL PENSION FUNDING REFORM AMENDMENTS 

Sec. 901. Civil Service Retirement System. 

Sec. 902. Health insurance. 

Sec. 903. Repealer. 

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

Sec. 905. Effective dates. 

1 TITLE I—DEFINITIONS; POSTAL 

2 SERVICES 

3 SEC. 101. DEFINITIONS. 

4 Section 102 of title 39, United States Code, is 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: 
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1 ‘‘(5) ‘postal service’ means the carriage of letters, 

2 printed matter, or mailable packages, including ac3 ceptance, collection, processing, delivery, or other 

4 functions supportive or ancillary thereto; 

5 ‘‘(6) ‘product’ means a postal service with a dis6 tinct cost or market characteristic for which a rate or 

7 rates are, or may reasonably be, applied; 

8 ‘‘(7) ‘rates’, as used with respect to products, in9 cludes fees for postal services; 

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

11 the market-dominant category of mail’ means a prod12 uct subject to subchapter I of chapter 36; 

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

14 competitive category of mail’ means a product subject 

15 to subchapter II of chapter 36; 

16 ‘‘(10) ‘Consumer Price Index’ means the Con17 sumer Price Index for All Urban Consumers pub18 lished monthly by the Bureau of Labor Statistics of 

19 the Department of Labor; and 

20 ‘‘(11) ‘year’, as used in chapter 36 (other than 

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

22 SEC. 102. POSTAL SERVICES. 

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

24 States Code, is amended— 
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1 (1) in subsection (a), by striking paragraph (6) 

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

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

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

5 ‘‘(c) Nothing in this title shall be considered to permit 

6 or require that the Postal Service provide any special non7 postal or similar services, except that nothing in this sub8 section shall prevent the Postal Service from providing any 

9 special nonpostal or similar services provided by the Postal 

10 Service as of January 4, 2005.’’. 

11 (b) CONFORMING AMENDMENT.—Section 

12 1402(b)(1)(B)(ii) of the Victims of Crime Act of 1984 (98 

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

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

15 SEC. 103. FINANCIAL TRANSPARENCY. 

16 (a) IN GENERAL.—Section 101 of title 39, United 

17 States Code, is amended by redesignating subsections (d) 

18 through (g) as subsections (e) through (h), respectively, and 

19 by inserting after subsection (c) the following: 

20 ‘‘(d) As an establishment that provides both market21 dominant and competitive products, the Postal Service shall 

22 be subject to a high degree of transparency, including in 

23 its finances and operations, to ensure fair treatment of cus24 tomers of the Postal Service’s market-dominant products 
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1 and companies competing with the Postal Service’s com2 petitive products.’’. 

3 (b) CONFORMING AMENDMENT.—Section 5001 of title 

4 39, United States Code, is amended by striking ‘‘101(e) and 

5 (f)’’ and inserting ‘‘101(f) and (g)’’. 

6 TITLE II—MODERN RATE 

7 REGULATION 

8 SEC. 201. PROVISIONS RELATING TO MARKET-DOMINANT 

9 PRODUCTS. 

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

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

12 and inserting the following: 

13 ‘‘§ 3621. Applicability; definitions 

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

15 with respect to— 

16 ‘‘(1)(A) single piece first-class letters (both do17 mestic and international); 

18 ‘‘(B) single piece first-class cards (both domestic 

19 and international); and 

20 ‘‘(C) special services; 

21 ‘‘(2) all first-class mail not included under para22 graph (1); 

23 ‘‘(3) periodicals; 

24 ‘‘(4) standard mail; 

25 ‘‘(5) media mail; 
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1 ‘‘(6) library mail; and 

2 ‘‘(7) bound printed matter, 

3 subject to any changes the Postal Regulatory Commission 

4 may make under section 3642. 

5 ‘‘(b) RULE OF CONSTRUCTION.—Mail matter referred 

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

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

8 under the mail classification schedule. 

9 ‘‘§ 3622. Modern rate regulation 

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

11 Commission shall, within 24 months after the date of the 

12 enactment of this section, by regulation establish (and may 

13 from time to time thereafter by regulation revise) a modern 

14 system for regulating rates and classes for market-dominant 

15 products. 

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

17 achieve the following objectives: 

18 ‘‘(1) To establish and maintain a fair and equi19 table schedule for rates and classification. 

20 ‘‘(2) To maximize incentives to reduce costs and 

21 increase efficiency. 

22 ‘‘(3) To create predictability and stability in 

23 rates. 

24 ‘‘(4) To maintain high quality service standards. 
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1 ‘‘(5) To allow the Postal Service pricing flexi2 bility. 

3 ‘‘(6) To assure adequate revenues, including re4 tained earnings, to maintain financial stability. 

5 ‘‘(7) To reduce the administrative burden of the 

6 ratemaking process. 

7 ‘‘(c) FACTORS.—In establishing or revising such sys8 tem, the Postal Regulatory Commission shall take into ac9 count— 

10 ‘‘(1) the value of the mail service actually pro11 vided each class or type of mail service to both the 

12 sender and the recipient, including but not limited to 

13 the collection, mode of transportation, and priority of 

14 delivery; 

15 ‘‘(2) the direct and indirect postal costs attrib16 utable to each class or type of mail service plus that 

17 portion of all other costs of the Postal Service reason18 ably assignable to such class or type; 

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

20 public, business mail users, and enterprises in the 

21 private sector of the economy engaged in the delivery 

22 of mail matter other than letters; 

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

24 and receiving letters and other mail matter at reason25 able costs; 
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1 ‘‘(5) the degree of preparation of mail for deliv2 ery into the postal system performed by the mailer 

3 and its effect upon reducing costs to the Postal Serv4 ice; 

5 ‘‘(6) simplicity of structure for the entire sched6 ule and simple, identifiable relationships between the 

7 rates or fees charged the various classes of mail for 

8 postal services; 

9 ‘‘(7) the relative value to the people of the kinds 

10 of mail matter entered into the postal system and the 

11 desirability and justification for special classifica12 tions and services of mail; 

13 ‘‘(8) the importance of providing classifications 

14 with extremely high degrees of reliability and speed of 

15 delivery and of providing those that do not require 

16 high degrees of reliability and speed of delivery; 

17 ‘‘(9) the desirability of special classifications 

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

19 Postal Service; 

20 ‘‘(10) the educational, cultural, scientific, and 

21 informational value to the recipient of mail matter; 

22 and 

23 ‘‘(11) the policies of this title as well as such 

24 other factors as the Commission deems appropriate. 
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1 ‘‘(d) ALLOWABLE PROVISIONS.—The system for regu2 lating rates and classes for market-dominant products may 

3 include one or more of the following: 

4 ‘‘(1) Price caps, revenue targets, or other form of 

5 incentive regulation. 

6 ‘‘(2) Cost-of-service regulation. 

7 ‘‘(3) Such other form of regulation as the Com8 mission considers appropriate to achieve, consistent 

9 with subsection (c), the objectives of subsection (b). 

10 ‘‘(e) LIMITATION.—In the administration of this sec11 tion, the Commission shall not permit the average rate in 

12 any subclass of mail to increase at an annual rate greater 

13 than the comparable increase in the Consumer Price Index, 

14 unless it has, after notice and opportunity for a public 

15 hearing and comment, determined that such increase is rea16 sonable and equitable and necessary to enable the Postal 

17 Service, under best practices of honest, efficient, and eco18 nomical management, to maintain and continue the devel19 opment of postal services of the kind and quality adapted 

20 to the needs of the United States. 

21 ‘‘(f) TRANSITION RULE.—Until regulations under this 

22 section first take effect, rates and classes for market-domi23 nant products shall remain subject to modification in ac24 cordance with the provisions of this chapter and section 
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1 407, as such provisions were last in effect before the date 

2 of the enactment of this section.’’. 

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

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

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

6 States Code (as in effect after the amendment made by sec7 tion 501(a)(2), but before the amendment made by section 

8 202) is amended by striking the heading for subchapter II 

9 and inserting the following: 

10 ‘‘SUBCHAPTER I—PROVISIONS RELATING TO 

11 MARKET-DOMINANT PRODUCTS’’. 

12 SEC. 202. PROVISIONS RELATING TO COMPETITIVE PROD13 UCTS. 

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

15 by inserting after section 3629 the following: 

16 ‘‘SUBCHAPTER II—PROVISIONS RELATING TO 

17 COMPETITIVE PRODUCTS 

18 ‘‘§ 3631. Applicability; definitions and updates 

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

20 with respect to— 

21 ‘‘(1) priority mail; 

22 ‘‘(2) expedited mail; 

23 ‘‘(3) mailgrams; 

24 ‘‘(4) international mail; and 

25 ‘‘(5) parcel post, 
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1 subject to any changes the Postal Regulatory Commission 

2 may make under section 3642. 

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

4 the term ‘costs attributable’, as used with respect to a prod5 uct, means the direct and indirect postal costs attributable 

6 to such product. 

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

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

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

10 under the mail classification schedule. 

11 ‘‘§ 3632. Action of the Governors 

12 ‘‘(a) AUTHORITY TO ESTABLISH RATES AND CLASS13 ES.—The Governors shall establish rates and classes for 

14 products in the competitive category of mail in accordance 

15 with the requirements of this subchapter and regulations 

16 promulgated under section 3633. 

17 ‘‘(b) PROCEDURES.— 

18 ‘‘(1) IN GENERAL.—Rates and classes shall be es19 tablished in writing, complete with a statement of ex20 planation and justification, and the date as of which 

21 each such rate or class takes effect. 

22 ‘‘(2) RATES OR CLASSES OF GENERAL APPLICA23 BILITY.—In the case of rates or classes of general ap24 plicability in the Nation as a whole or in any sub25 stantial region of the Nation, the Governors shall 
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1 cause each rate and class decision under this section 

2 and the record of the Governors’ proceedings in con3 nection with such decision to be published in the Fed4 eral Register at least 30 days before the effective date 

5 of any new rates or classes. 

6 ‘‘(3) RATES OR CLASSES NOT OF GENERAL AP7 PLICABILITY.—In the case of rates or classes not of 

8 general applicability in the Nation as a whole or in 

9 any substantial region of the Nation, the Governors 

10 shall cause each rate and class decision under this 

11 section and the record of the proceedings in connec12 tion with such decision to be filed with the Postal 

13 Regulatory Commission by such date before the effec14 tive date of any new rates or classes as the Governors 

15 consider appropriate, but in no case less than 15 

16 days. 

17 ‘‘(4) CRITERIA.—As part of the regulations re18 quired under section 3633, the Postal Regulatory 

19 Commission shall establish criteria for determining 

20 when a rate or class established under this subchapter 

21 is or is not of general applicability in the Nation as 

22 a whole or in any substantial region of the Nation. 

23 ‘‘(c) TRANSITION RULE.—Until regulations under sec24 tion 3633 first take effect, rates and classes for competitive 

25 products shall remain subject to modification in accordance 
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1 with the provisions of this chapter and section 407, as such 

2 provisions were as last in effect before the date of the enact3 ment of this section. 

4 ‘‘§ 3633. Provisions applicable to rates for competitive 

5 products 

6 ‘‘The Postal Regulatory Commission shall, within 18 

7 months after the date of the enactment of this section, pro8 mulgate (and may from time to time thereafter revise) regu9 lations— 

10 ‘‘(1) to prohibit the subsidization of competitive 

11 products by market-dominant products; 

12 ‘‘(2) to ensure that each competitive product cov13 ers its costs attributable; and 

14 ‘‘(3) to ensure that all competitive products col15 lectively make a reasonable contribution to the insti16 tutional costs of the Postal Service.’’. 

17 SEC. 203. PROVISIONS RELATING TO EXPERIMENTAL AND 

18 NEW PRODUCTS. 

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

20 Code, is amended to read as follows: 

21 ‘‘SUBCHAPTER III—PROVISIONS RELATING TO 

22 EXPERIMENTAL AND NEW PRODUCTS 

23 ‘‘§ 3641. Market tests of experimental products 

24 ‘‘(a) AUTHORITY.— 
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1 ‘‘(1) IN GENERAL.—The Postal Service may con2 duct market tests of experimental products in accord3 ance with this section. 

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

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

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

7 or regulations promulgated under those sections. 

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

9 this section unless it satisfies each of the following: 

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

11 product is, from the viewpoint of the mail users, sig12 nificantly different from all products offered by the 

13 Postal Service within the 2-year period preceding the 

14 start of the test. 

15 ‘‘(2) MARKET DISRUPTION.—The introduction or 

16 continued offering of the product will not create an 

17 unfair or otherwise inappropriate competitive advan18 tage for the Postal Service or any mailer, particularly 

19 in regard to small business concerns (as defined under 

20 subsection (h)). 

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

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

23 under this section, as either market dominant or com24 petitive, consistent with the criteria under section 

25 3642(b)(1). Costs and revenues attributable to a prod-
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1 uct identified as competitive shall be included in any 

2 determination under section 3633(3) (relating to pro3 visions applicable to competitive products collec4 tively). 

5 ‘‘(c) NOTICE.— 

6 ‘‘(1) IN GENERAL.—At least 30 days before initi7 ating a market test under this section, the Postal 

8 Service shall file with the Postal Regulatory Commis9 sion and publish in the Federal Register a notice— 

10 ‘‘(A) setting out the basis for the Postal 

11 Service’s determination that the market test is 

12 covered by this section; and 

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

14 market test. 

15 ‘‘(2) SAFEGUARDS.—For a competitive experi16 mental product, the provisions of section 504(g) shall 

17 be available with respect to any information required 

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

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

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

21 (1) shall be considered to permit or require the publi22 cation of any information as to which confidential 

23 treatment is accorded under the preceding sentence 

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

25 504(g)(3)). 
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1 ‘‘(d) DURATION.— 

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

3 under this section may be conducted over a period of 

4 not to exceed 24 months. 

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

6 order to determine the feasibility or desirability of a 

7 product being tested under this section, the Postal 

8 Regulatory Commission may, upon written applica9 tion of the Postal Service (filed not later than 60 days 

10 before the date as of which the testing of such product 

11 would otherwise be scheduled to terminate under 

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

13 not to exceed an additional 12 months. 

14 ‘‘(e) DOLLAR-AMOUNT LIMITATION.— 

15 ‘‘(1) IN GENERAL.—A product may be tested 

16 under this section only if the total revenues that are 

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

18 from such product do not exceed $10,000,000 nation19 wide in any year, subject to paragraph (2) and sub20 section (g). In carrying out the preceding sentence, 

21 the Postal Regulatory Commission may limit the 

22 amount of revenues the Postal Service may obtain 

23 from any particular geographic market as necessary 

24 to prevent market disruption (as defined in subsection 

25 (b)(2)). 
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1 ‘‘(2) EXEMPTION AUTHORITY.—The Postal Regu2 latory Commission may, upon written application of 

3 the Postal Service, exempt the market test from the 

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

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

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

7 year, subject to subsection (g). In reviewing an appli8 cation under this paragraph, the Postal Regulatory 

9 Commission shall approve such application if it de10 termines that— 

11 ‘‘(A) the product is likely to benefit the pub12 lic and meet an expected demand; 

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

14 the financial stability of the Postal Service; and 

15 ‘‘(C) the product is not likely to result in 

16 unfair or otherwise inappropriate competition. 

17 ‘‘(f) CANCELLATION.—If the Postal Regulatory Com18 mission at any time determines that a market test under 

19 this section fails, with respect to any particular product, 

20 to meet one or more of the requirements of this section, it 

21 may order the cancellation of the test involved or take such 

22 other action as it considers appropriate. A determination 

23 under this subsection shall be made in accordance with such 

24 procedures as the Commission shall by regulation prescribe. 
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1 ‘‘(g) ADJUSTMENT FOR INFLATION.—For purposes of 

2 each year following the year in which occurs the deadline 

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

4 Commission under section 3652(a), each dollar amount con5 tained in this section shall be adjusted by the change in 

6 the Consumer Price Index for such year (as determined 

7 under regulations of the Commission). 

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

9 The criteria used in defining small business concerns or oth10 erwise categorizing business concerns as small business con11 cerns shall, for purposes of this section, be established by 

12 the Postal Regulatory Commission in conformance with the 

13 requirements of section 3 of the Small Business Act. 

14 ‘‘(i) EFFECTIVE DATE.—Market tests under this sub15 chapter may be conducted in any year beginning with the 

16 first year in which occurs the deadline for the Postal Serv17 ice’s first report to the Postal Regulatory Commission under 

18 section 3652(a). 

19 ‘‘§ 3642. New products and transfers of products be20 tween the market-dominant and competi21 tive categories of mail 

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

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

24 Regulatory Commission may change the list of market-dom25 inant products under section 3621 and the list of competi-
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1 tive products under section 3631 by adding new products 

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

3 products between the lists. 

4 ‘‘(b) CRITERIA.—All determinations by the Postal Reg5 ulatory Commission under subsection (a) shall be made in 

6 accordance with the following criteria: 

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

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

9 Postal Service exercises sufficient market power that 

10 it can effectively set the price of such product substan11 tially above costs, raise prices significantly, decrease 

12 quality, or decrease output, without risk of losing 

13 business to other firms offering similar products. The 

14 competitive category of products shall consist of all 

15 other products. 

16 ‘‘(2) EXCLUSION OF PRODUCTS COVERED BY

17 POSTAL MONOPOLY.—A product covered by the postal 

18 monopoly shall not be subject to transfer under this 

19 section from the market-dominant category of mail. 

20 For purposes of the preceding sentence, the term 

21 ‘product covered by the postal monopoly’ means any 

22 product the conveyance or transmission of which is 

23 reserved to the United States under section 1696 of 

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

25 the last sentence of section 409(e)(1). 
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1 ‘‘(3) ADDITIONAL CONSIDERATIONS.—In making 

2 any decision under this section, due regard shall be 

3 given to— 

4 ‘‘(A) the availability and nature of enter5 prises in the private sector engaged in the deliv6 ery of the product involved; 

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

8 involved on the appropriateness of the proposed 

9 action; and 

10 ‘‘(C) the likely impact of the proposed ac11 tion on small business concerns (within the 

12 meaning of section 3641(h)). 

13 ‘‘(c) TRANSFERS OF SUBCLASSES AND OTHER SUBOR14 DINATE UNITS ALLOWABLE.—Nothing in this title shall be 

15 considered to prevent transfers under this section from being 

16 made by reason of the fact that they would involve only 

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

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

19 (without regard to satisfaction of minimum quantity re20 quirements standing alone). 

21 ‘‘(d) NOTIFICATION AND PUBLICATION REQUIRE22 MENTS.— 

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

24 Service shall, whenever it requests to add a product 

25 or transfer a product to a different category, file with 
23 

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1 the Postal Regulatory Commission and publish in the 

2 Federal Register a notice setting out the basis for its 

3 determination that the product satisfies the criteria 

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

5 add a product or transfer a product to the competi6 tive category of mail, that the product meets the regu7 lations promulgated by the Postal Regulatory Com8 mission pursuant to section 3633. The provisions of 

9 section 504(g) shall be available with respect to any 

10 information required to be filed. 

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

12 Regulatory Commission shall, whenever it changes the 

13 list of products in the market-dominant or competi14 tive category of mail, prescribe new lists of products. 

15 The revised lists shall indicate how and when any 

16 previous lists (including the lists under sections 3621 

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

18 the Federal Register. 

19 ‘‘(e) NOTIFICATION REQUIREMENT.—The Postal Regu20 latory Commission shall, whenever it reaches a conclusion 

21 that a product or products should be transferred between 

22 the list of market-dominant products under section 3621 

23 and the list of competitive products under section 3631, im24 mediately notify the appropriate committees of the Con-
24 

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1 gress. No such transfer may take effect less than 12 months 

2 after such conclusion. 

3 ‘‘(f) PROHIBITION.—Except as provided in section 

4 3641, no product that involves the carriage of letters, print5 ed matter, or mailable packages may be offered by the Post6 al Service unless it has been assigned to the market-domi7 nant or competitive category of mail (as appropriate) ei8 ther— 

9 ‘‘(1) under this subchapter; or 

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

11 SEC. 204. REPORTING REQUIREMENTS AND RELATED PRO12 VISIONS. 

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

14 States Code (as in effect before the amendment made by sub15 section (b)) is amended by striking the heading for sub16 chapter IV and inserting the following: 

17 ‘‘SUBCHAPTER V—POSTAL SERVICES, 

18 COMPLAINTS, AND JUDICIAL REVIEW’’. 

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

20 39, United States Code, is amended by inserting after sub21 chapter III the following: 
25 

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1 ‘‘SUBCHAPTER IV—REPORTING REQUIREMENTS 

2 AND RELATED PROVISIONS 

3 ‘‘§ 3651. Annual reports by the Commission 

4 ‘‘(a) IN GENERAL.—The Postal Regulatory Commis5 sion shall submit an annual report to the President and 

6 the Congress concerning the operations of the Commission 

7 under this title, including the extent to which regulations 

8 are achieving the objectives under sections 3622 and 3633, 

9 respectively. 

10 ‘‘(b) ADDITIONAL INFORMATION.—In addition to the 

11 information required under subsection (a), each report 

12 under this section shall also include, with respect to the pe13 riod covered by such report, an estimate of the costs in14 curred by the Postal Service in providing— 

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

16 in the judgment of the Postal Regulatory Commission, 

17 the Postal Service either would not provide services at 

18 all or would not provide such services in accordance 

19 with the requirements of this title if the Postal Service 

20 were not required to provide prompt, reliable, and ef21 ficient services to patrons in all areas and all com22 munities, including as required under the first sen23 tence of section 101(b); 

24 ‘‘(2) free or reduced rates for postal services as 

25 required by this title; and 
26 

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1 ‘‘(3) other public services or activities which, in 

2 the judgment of the Postal Regulatory Commission, 

3 would not otherwise have been provided by the Postal 

4 Service but for the requirements of law. 

5 The Commission shall detail the bases for its estimates and 

6 the statutory requirements giving rise to the costs identified 

7 in each report under this section. 

8 ‘‘(c) INFORMATION FROM POSTAL SERVICE.—The 

9 Postal Service shall provide the Postal Regulatory Commis10 sion with such information as may, in the judgment of the 

11 Commission, be necessary in order for the Commission to 

12 prepare its reports under this section. 

13 ‘‘§ 3652. Annual reports to the Commission 

14 ‘‘(a) COSTS, REVENUES, AND RATES.—Except as pro15 vided in subsection (c), the Postal Service shall, no later 

16 than 90 days after the end of each year, prepare and submit 

17 to the Postal Regulatory Commission a report (together 

18 with such nonpublic annex thereto as the Commission may 

19 require under subsection (e))— 

20 ‘‘(1) which shall analyze costs, revenues, and 

21 rates, using such methodologies as the Commission 

22 shall by regulation prescribe, and in sufficient detail 

23 to demonstrate that the rates in effect for all products 

24 during such year complied with all applicable re25 quirements of this title; and 
27 

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

2 product provided in such year, provide— 

3 ‘‘(A) market information, including mail 

4 volumes; and 

5 ‘‘(B) measures of the quality of service af6 forded by the Postal Service in connection with 

7 such product, including— 

8 ‘‘(i) the service standard applicable to 

9 such product; 

10 ‘‘(ii) the level of service (described in 

11 terms of speed of delivery and reliability) 

12 provided; and 

13 ‘‘(iii) the degree of customer satisfac14 tion with the service provided. 

15 The Inspector General shall regularly audit the data collec16 tion systems and procedures utilized in collecting informa17 tion and preparing such report (including any annex there18 to and the information required under subsection (b)). The 

19 results of any such audit shall be submitted to the Postal 

20 Service and the Postal Regulatory Commission. 

21 ‘‘(b) INFORMATION RELATING TO WORKSHARE DIS22 COUNTS.— 

23 ‘‘(1) IN GENERAL.—The Postal Service shall in24 clude, in each report under subsection (a), the fol25 lowing information with respect to each market-domi-
28 

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1 nant product for which a workshare discount was in 

2 effect during the period covered by such report: 

3 ‘‘(A) The per-item cost avoided by the Post4 al Service by virtue of such discount. 

5 ‘‘(B) The percentage of such per-item cost 

6 avoided that the per-item workshare discount 

7 represents. 

8 ‘‘(C) The per-item contribution made to in9 stitutional costs. 

10 ‘‘(2) WORKSHARE DISCOUNT DEFINED.—For 

11 purposes of this subsection, the term ‘workshare dis12 count’ has the meaning given such term under section 

13 3687. 

14 ‘‘(c) MARKET TESTS.—In carrying out subsections (a) 

15 and (b) with respect to experimental products offered 

16 through market tests under section 3641 in a year, the Post17 al Service— 

18 ‘‘(1) may report summary data on the costs, rev19 enues, and quality of service by market test; and 

20 ‘‘(2) shall report such data as the Postal Regu21 latory Commission requires. 

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

23 Commission shall have access, in accordance with such reg24 ulations as the Commission shall prescribe, to the working 

25 papers and any other supporting matter of the Postal Serv-
29 

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1 ice and the Inspector General in connection with any infor2 mation submitted under this section. 

3 ‘‘(e) CONTENT AND FORM OF REPORTS.— 

4 ‘‘(1) IN GENERAL.—The Postal Regulatory Com5 mission shall, by regulation, prescribe the content and 

6 form of the public reports (and any nonpublic annex 

7 and supporting matter relating thereto) to be pro8 vided by the Postal Service under this section. In car9 rying out this subsection, the Commission shall give 

10 due consideration to— 

11 ‘‘(A) providing the public with adequate in12 formation to assess the lawfulness of rates 

13 charged; 

14 ‘‘(B) avoiding unnecessary or unwarranted 

15 administrative effort and expense on the part of 

16 the Postal Service; and 

17 ‘‘(C) protecting the confidentiality of com18 mercially sensitive information. 

19 ‘‘(2) REVISED REQUIREMENTS.—The Commis20 sion may, on its own motion or on request of an in21 terested party, initiate proceedings (to be conducted 

22 in accordance with regulations that the Commission 

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

24 completeness of Postal Service data required by the 
30 

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1 Commission under this subsection whenever it shall 

2 appear that— 

3 ‘‘(A) the attribution of costs or revenues to 

4 products has become significantly inaccurate or 

5 can be significantly improved; 

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

7 significantly inaccurate or can be significantly 

8 improved; or 

9 ‘‘(C) those revisions are, in the judgment of 

10 the Commission, otherwise necessitated by the 

11 public interest. 

12 ‘‘(f) CONFIDENTIAL INFORMATION.— 

13 ‘‘(1) IN GENERAL.—If the Postal Service deter14 mines that any document or portion of a document, 

15 or other matter, which it provides to the Postal Regu16 latory Commission in a nonpublic annex under this 

17 section or pursuant to subsection (d) contains infor18 mation which is described in section 410(c) of this 

19 title, or exempt from public disclosure under section 

20 552(b) of title 5, the Postal Service shall, at the time 

21 of providing such matter to the Commission, notify 

22 the Commission of its determination, in writing, and 

23 describe with particularity the documents (or portions 

24 of documents) or other matter for which confiden25 tiality is sought and the reasons therefor. 
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1 ‘‘(2) TREATMENT.—Any information or other 

2 matter described in paragraph (1) to which the Com3 mission gains access under this section shall be sub4 ject to paragraphs (2) and (3) of section 504(g) in the 

5 same way as if the Commission had received notifica6 tion with respect to such matter under section 

7 504(g)(1). 

8 ‘‘(g) OTHER REPORTS.—The Postal Service shall sub9 mit to the Postal Regulatory Commission, together with any 

10 other submission that it is required to make under this sec11 tion in a year, copies of its then most recent— 

12 ‘‘(1) comprehensive statement under section 

13 2401(e); 

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

15 ‘‘(3) program performance reports under section 

16 2804. 

17 ‘‘§ 3653. Annual determination of compliance 

18 ‘‘(a) OPPORTUNITY FOR PUBLIC COMMENT.—After re19 ceiving the reports required under section 3652 for any 

20 year, the Postal Regulatory Commission shall promptly 

21 provide an opportunity for comment on such reports by 

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

23 Commission who shall be required to represent the interests 

24 of the general public. 
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1 ‘‘(b) DETERMINATION OF COMPLIANCE OR NONCOMPLI2 ANCE.—Not later than 90 days after receiving the submis3 sions required under section 3652 with respect to a year, 

4 the Postal Regulatory Commission shall make a written de5 termination as to— 

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

7 such year (for products individually or collectively) 

8 were not in compliance with applicable provisions of 

9 this chapter (or regulations promulgated thereunder); 

10 ‘‘(2) whether any performance goals established 

11 under section 2803 or 2804 for such year were not 

12 met; and 

13 ‘‘(3) whether any market-dominant product 

14 failed to meet any service standard during such year. 

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

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

17 the written determination shall be to that effect. 

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

19 year, a timely written determination of noncompliance is 

20 made under subsection (b), the Postal Regulatory Commis21 sion shall take appropriate action in accordance with sub22 sections (c)–(e) of section 3662 (as if a complaint averring 

23 such noncompliance had been duly filed and found under 

24 such section to be justified). 
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1 ‘‘(d) REBUTTABLE PRESUMPTION.—A timely written 

2 determination described in the last sentence of subsection 

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

4 create a rebuttable presumption of compliance by the Postal 

5 Service (with regard to the matters described in paragraphs 

6 (1) through (3) of subsection (b)) during the year to which 

7 such determination relates. 

8 ‘‘§ 3654. Additional financial reporting 

9 ‘‘(a) ADDITIONAL FINANCIAL REPORTING.— 

10 ‘‘(1) IN GENERAL.—The Postal Service shall file 

11 with the Postal Regulatory Commission beginning 

12 with the first full fiscal year following the effective 

13 date of this section— 

14 ‘‘(A) within 35 days after the end of each 

15 fiscal quarter, a quarterly report containing the 

16 information required by the Securities and Ex17 change Commission to be included in quarterly 

18 reports under sections 13 and 15(d) of the Secu19 rities Exchange Act of 1934 (15 U.S.C. 78m, 

20 78o(d)) on Form 10-Q, as such Form (or any 

21 successor form) may be revised from time to 

22 time; 

23 ‘‘(B) within 60 days after the end of each 

24 fiscal year, an annual report containing the in25 formation required by the Securities and Ex-
34 

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1 change Commission to be included in annual re2 ports under such sections on Form 10-K, as such 

3 Form (or any successor form) may be revised 

4 from time to time; and 

5 ‘‘(C) periodic reports within the time frame 

6 and containing the information prescribed in 

7 Form 8-K of the Securities and Exchange Com8 mission, as such Form (or any successor form) 

9 may be revised from time to time. 

10 ‘‘(2) REGISTRANT DEFINED.—For purposes of 

11 defining the reports required by paragraph (1), the 

12 Postal Service shall be deemed to be the ‘registrant’ 

13 described in the Securities and Exchange Commission 

14 Forms, and references contained in such Forms to Se15 curities and Exchange Commission regulations are 

16 incorporated herein by reference, as amended. 

17 ‘‘(3) INTERNAL CONTROL REPORT.—For purposes 

18 of defining the reports required by paragraph (1)(B), 

19 the Postal Service shall comply with the rules pre20 scribed by the Securities and Exchange Commission 

21 implementing section 404 of the Sarbanes-Oxley Act 

22 of 2002 (15 U.S.C. 7262), beginning with the annual 

23 report for fiscal year 2007. 

24 ‘‘(b) FINANCIAL REPORTING.— 
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1 ‘‘(1) The reports required by subsection (a)(1)(B) 

2 shall include, with respect to the Postal Service’s pen3 sion and post-retirement health obligations— 

4 ‘‘(A) the funded status of the Postal Serv5 ice’s pension and ––postretirement health obliga6 tions; 

7 ‘‘(B) components of the net change in the 

8 fund balances and obligations and the nature 

9 and cause of any significant changes; 

10 ‘‘(C) components of net periodic costs; 

11 ‘‘(D) cost methods and assumptions under12 lying the relevant actuarial valuations; 

13 ‘‘(E) the effect of a one-percentage point in14 crease in the assumed health care cost trend rate 

15 for each future year on the service and interest 

16 costs components of net periodic postretirement 

17 health cost and the accumulated obligation; 

18 ‘‘(F) actual contributions to and payments 

19 from the funds for the years presented and the 

20 estimated future contributions and payments for 

21 each of the following 5 years; 

22 ‘‘(G) the composition of plan assets reflected 

23 in the fund balances; and 
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1 ‘‘(H) the assumed rate of return on fund 

2 balances and the actual rates of return for the 

3 years presented. 

4 ‘‘(2)(A) Beginning with reports for the fiscal 

5 year 2007, for purposes of the reports required under 

6 subparagraphs (A) and (B) of subsection (a)(1), the 

7 Postal Service shall include segment reporting. 

8 ‘‘(B) The Postal Service shall determine the ap9 propriate segment reporting under subparagraph (A) 

10 after consultation with the Postal Regulatory Com11 mission. 

12 ‘‘(c) TREATMENT.—For purposes of the reports re13 quired by subsection (a)(1)(B), the Postal Service shall ob14 tain an opinion from an independent auditor on whether 

15 the information listed in subsection (b) is fairly stated in 

16 all material respects, either in relation to the basic finan17 cial statements as a whole or on a stand-alone basis. 

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

19 Commission shall have access to the audit documentation 

20 and any other supporting matter of the Postal Service and 

21 its independent auditor in connection with any informa22 tion submitted under this section. 

23 ‘‘(e) REVISED REQUIREMENTS.—The Postal Regu24 latory Commission may, on its own motion or on request 

25 of an interested party, initiate proceedings (to be conducted 
37 

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1 in accordance with regulations that the Commission shall 

2 prescribe) to improve the quality, accuracy, or completeness 

3 of Postal Service data required under this section whenever 

4 it shall appear that— 

5 ‘‘(1) the data have become significantly inac6 curate or can be significantly improved; or 

7 ‘‘(2) those revisions are, in the judgment of the 

8 Commission, otherwise necessitated by the public in9 terest. 

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 pursuant to subsection (d) contains infor16 mation which is described in section 410(c) of this 

17 title, or exempt from public disclosure under section 

18 552(b) of title 5, the Postal Service shall, at the time 

19 of providing such matter to the Commission, notify 

20 the Commission of its determination, in writing, and 

21 describe 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-
38 

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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 SEC. 205. COMPLAINTS; APPELLATE REVIEW AND ENFORCE7 MENT. 

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

9 by striking sections 3662 and 3663 and inserting the fol10 lowing: 

11 ‘‘§ 3662. Rate and service complaints 

12 ‘‘(a) IN GENERAL.—Interested persons (including an 

13 officer of the Postal Regulatory Commission representing 

14 the interests of the general public) who believe the Postal 

15 Service is not operating in conformance with the require16 ments of chapter 1, 4, or 6, or this chapter (or regulations 

17 promulgated under any of those chapters) may lodge a com18 plaint with the Postal Regulatory Commission in such form 

19 and manner as the Commission may prescribe. 

20 ‘‘(b) PROMPT RESPONSE REQUIRED.— 

21 ‘‘(1) IN GENERAL.—The Postal Regulatory Com22 mission shall, within 90 days after receiving a com23 plaint under subsection (a), either— 

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

25 or 
39 

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1 ‘‘(B) issue an order dismissing the com2 plaint (together with a statement of the reasons 

3 therefor). 

4 ‘‘(2) TREATMENT OF COMPLAINTS NOT TIMELY

5 ACTED ON.—For purposes of section 3663, any com6 plaint under subsection (a) on which the Commission 

7 fails to act in the time and manner required by para8 graph (1) shall be treated in the same way as if it 

9 had been dismissed pursuant to an order issued by 

10 the Commission on the last day allowable for the 

11 issuance of such order under paragraph (1). 

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

13 JUSTIFIED.—If the Postal Regulatory Commission finds the 

14 complaint to be justified, it shall order that the Postal Serv15 ice take such action as the Commission considers appro16 priate in order to achieve compliance with the applicable 

17 requirements and to remedy the effects of any noncompli18 ance (such as ordering unlawful rates to be adjusted to law19 ful levels, ordering the cancellation of market tests, ordering 

20 the Postal Service to discontinue providing loss-making 

21 products, or requiring the Postal Service to make up for 

22 revenue shortfalls in competitive products). 

23 ‘‘(d) SUSPENSION AUTHORITY.—The Postal Regu24 latory Commission may suspend implementation of rates 

25 or classifications under section 3632(b)(3) for a limited pe-
40 

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1 riod of time pending expedited proceedings under this sec2 tion. In evaluating whether circumstances warrant suspen3 sion, the Commission shall consider factors such as (1) 

4 whether there is a substantial likelihood that such rate or 

5 classification will violate the requirements of chapter 1, 4, 

6 or 6, or this chapter (or regulations promulgated under any 

7 of those chapters), (2) whether any persons would suffer sub8 stantial injury, loss, or damage absent a suspension, (3) 

9 whether the Postal Service or any other persons would suffer 

10 substantial injury, loss, or damage under a suspension, and 

11 (4) the public interest. 

12 ‘‘(e) AUTHORITY TO ORDER FINES IN CASES OF DE13 LIBERATE NONCOMPLIANCE.—In addition, in cases of delib14 erate noncompliance by the Postal Service with the require15 ments of this title, the Postal Regulatory Commission may 

16 order, based on the nature, circumstances, extent, and seri17 ousness of the noncompliance, a fine (in the amount speci18 fied by the Commission in its order) for each incidence of 

19 noncompliance. Fines resulting from the provision of com20 petitive products shall be paid out of the Competitive Prod21 ucts Fund established in section 2011. All receipts from 

22 fines imposed under this subsection shall be deposited in 

23 the general fund of the Treasury of the United States. 
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1 ‘‘§ 3663. Appellate review 

2 ‘‘A person adversely affected or aggrieved by a final 

3 order or decision of the Postal Regulatory Commission may, 

4 within 30 days after such order or decision becomes final, 

5 institute proceedings for review thereof by filing a petition 

6 in the United States Court of Appeals for the District of 

7 Columbia. The court shall review the order or decision in 

8 accordance with section 706 of title 5, and chapter 158 and 

9 section 2112 of title 28, on the basis of the record before 

10 the Commission. For purposes of this section, the term ‘per11 son’ includes the Postal Service. 

12 ‘‘§ 3664. Enforcement of orders 

13 ‘‘The several district courts have jurisdiction specifi14 cally to enforce, and to enjoin and restrain the Postal Serv15 ice from violating, any order issued by the Postal Regu16 latory Commission.’’. 

17 SEC. 206. WORKSHARE DISCOUNTS. 

18 (a) IN GENERAL.—Title 39, United States Code, is 

19 amended by adding after section 3686 (as added by section 

20 406) the following: 

21 ‘‘§ 3687. Workshare discounts 

22 ‘‘(a) IN GENERAL.—As part of the regulations estab23 lished under section 3622(a), the Postal Regulatory Com24 mission shall establish rules for workshare discounts that 

25 ensure that such discounts do not exceed the cost that the 
42 

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1 Postal Service avoids as the result of workshare activity, 

2 unless— 

3 ‘‘(1) the discount is— 

4 ‘‘(A) associated with a new postal service, a 

5 change to an existing postal service, or a new 

6 workshare initiative related to an existing postal 

7 service; and 

8 ‘‘(B) necessary to induce mailer behavior 

9 that furthers the economically efficient operation 

10 of the Postal Service and the portion of the dis11 count in excess of the cost that the Postal Service 

12 avoids as a result of the workshare activity will 

13 be phased out over a limited period of time; 

14 ‘‘(2) a reduction in the discount would— 

15 ‘‘(A) lead to a loss of volume in the affected 

16 category or subclass of mail and reduce the ag17 gregate contribution to the institutional costs of 

18 the Postal Service from the category or subclass 

19 subject to the discount below what it otherwise 

20 would have been if the discount had not been re21 duced to costs avoided; 

22 ‘‘(B) result in a further increase in the 

23 rates paid by mailers not able to take advantage 

24 of the discount; or 
43 

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1 ‘‘(C) impede the efficient operation of the 

2 Postal Service; 

3 ‘‘(3) the amount of the discount above costs 

4 avoided— 

5 ‘‘(A) is necessary to mitigate rate shock; 

6 and 

7 ‘‘(B) will be phased out over time; or 

8 ‘‘(4) the discount is provided in connection with 

9 subclasses of mail consisting exclusively of mail mat10 ter of educational, cultural, scientific, or informa11 tional value. 

12 ‘‘(b) REPORT.—Whenever the Postal Service establishes 

13 or maintains a workshare discount, the Postal Service shall, 

14 at the time it publishes the workshare discount rate, submit 

15 to the Postal Regulatory Commission a detailed report 

16 that— 

17 ‘‘(1) explains the Postal Service’s reasons for es18 tablishing or maintaining the rate; 

19 ‘‘(2) sets forth the data, economic analyses, and 

20 other information relied on by the Postal Service to 

21 justify the rate; and 

22 ‘‘(3) certifies that the discount will not adversely 

23 affect rates or services provided to users of postal serv24 ices who do not take advantage of the discount rate. 
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1 ‘‘(c) DEFINITION.—For purposes of this section, the 

2 term ‘workshare discount’ refers to rate discounts provided 

3 to mailers for the presorting, prebarcoding, handling, or 

4 transportation of mail, as further defined by the Postal Reg5 ulatory Commission under section 3622(a).’’. 

6 (b) CLERICAL AMENDMENT.—The analysis for chapter 

7 36 of title 39, United States Code (as amended by section 

8 207) is amended by adding after the item relating to section 

9 3686 the following: 

‘‘3687. Workshare discounts.’’. 

10 SEC. 207. CLERICAL AMENDMENT. 

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

12 by striking the heading and analysis for such chapter and 

13 inserting the following: 

‘‘CHAPTER 36—POSTAL RATES, CLASSES AND SERVICES 

‘‘SUBCHAPTER I—PROVISIONS RELATING TO MARKET-DOMINANT PRODUCTS

‘‘Sec. 

‘‘3621. Applicability; definitions. 

‘‘3622. Modern rate regulation. 

‘‘3626. Reduced rates. 

‘‘3627. Adjusting free rates. 

‘‘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. 
45 

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‘‘SUBCHAPTER IV—REPORTING REQUIREMENTS AND RELATED PROVISIONS

‘‘3651. Annual reports by the Commission. 

‘‘3652. Annual reports to the Commission. 

‘‘3653. Annual determination of compliance. 

‘‘3654. Additional financial reporting. 

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

‘‘3661. Postal services. 

‘‘3662. Rate and service complaints. 

‘‘3663. Appellate review. 

‘‘3664. Enforcement of orders. 

‘‘SUBCHAPTER VI—GENERAL

‘‘3681. Reimbursement. 

‘‘3682. Size and weight limits. 

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

‘‘3684. Limitations. 

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

‘‘3686. Bonus authority.’’. 

1 TITLE III—PROVISIONS RELAT2 ING TO FAIR COMPETITION 

3 SEC. 301. POSTAL SERVICE COMPETITIVE PRODUCTS FUND. 

4 (a) PROVISIONS RELATING TO POSTAL SERVICE COM5 PETITIVE PRODUCTS FUND AND RELATED MATTERS.— 

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

7 States Code, is amended by adding at the end the fol8 lowing: 

9 ‘‘§ 2011. Provisions relating to competitive products 

10 ‘‘(a) There is established in the Treasury of the United 

11 States a revolving fund, to be called the Postal Service Com12 petitive Products Fund, which shall be available to the Post13 al Service without fiscal year limitation for the payment 

14 of— 

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

16 and 
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1 ‘‘(2) all other costs incurred by the Postal Serv2 ice, to the extent allocable to competitive products. 

3 For purposes of this subsection, the term ‘costs attributable’ 

4 has the meaning given such term by section 3631. 

5 ‘‘(b) There shall be deposited in the Competitive Prod6 ucts Fund, subject to withdrawal by the Postal Service— 

7 ‘‘(1) revenues from competitive products; 

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

9 the Postal Service under subsection (e); 

10 ‘‘(3) interest and dividends earned on invest11 ments of the Competitive Products Fund; and 

12 ‘‘(4) any other receipts of the Postal Service (in13 cluding from the sale of assets), to the extent allocable 

14 to competitive products. 

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

16 of the Competitive Products Fund are in excess of current 

17 needs, it may request the investment of such amounts as 

18 it deems advisable by the Secretary of the Treasury in obli19 gations of, or obligations guaranteed by, the Government 

20 of the United States, and, with the approval of the Sec21 retary, in such other obligations or securities as it deems 

22 appropriate. 

23 ‘‘(d) With the approval of the Secretary of the Treas24 ury, the Postal Service may deposit moneys of the Competi25 tive Products Fund in any Federal Reserve bank, any de-
47 

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1 pository for public funds, or in such other places and in 

2 such manner as the Postal Service and the Secretary may 

3 mutually agree. 

4 ‘‘(e)(1) Subject to the limitations specified in section 

5 2005(a), the Postal Service is authorized to borrow money 

6 and to issue and sell such obligations as it determines nec7 essary to provide for competitive products and deposit such 

8 amounts in the Competitive Products Fund. Any such bor9 rowings by the Postal Service shall be supported and serv10 iced by the revenues and receipts from competitive products 

11 and the assets related to the provision of competitive prod12 ucts (as determined under subsection (h) or, for purposes 

13 of any period before accounting practices and principles 

14 under subsection (h) have been established and applied, the 

15 best information available from the Postal Service, includ16 ing the audited statements required by section 2008(e), but 

17 in either case subject to paragraph (5)). 

18 ‘‘(2) The Postal Service may enter into binding cov19 enants with the holders of such obligations, and with the 

20 trustee, if any, under any agreement entered into in connec21 tion with the issuance thereof with respect to— 

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

23 other funds; 

24 ‘‘(B) application and use of revenues and re25 ceipts of the Competitive Products Fund; 
48 

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1 ‘‘(C) stipulations concerning the subsequent 

2 issuance of obligations or the execution of leases or 

3 lease purchases relating to properties of the Postal 

4 Service; and 

5 ‘‘(D) such other matters as the Postal Service 

6 considers necessary or desirable to enhance the mar7 ketability of such obligations. 

8 ‘‘(3) The obligations issued by the Postal Service under 

9 this section— 

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

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

12 amounts; 

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

14 ‘‘(D) shall be sold at such prices; 

15 ‘‘(E) shall bear such rates of interest; 

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

17 manner, at such times, and at such redemption pre18 miums; 

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

20 of claim on the assets of the Postal Service with re21 spect to principal and interest payments; and 

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

23 conditions; 

24 as the Postal Service determines. 
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1 ‘‘(4) Obligations issued by the Postal Service under 

2 this subsection— 

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

4 bearer or registered instruments, as specified therein 

5 and in any indenture or covenant relating thereto; 

6 ‘‘(B) shall contain a recital that they are issued 

7 under this section, and such recital shall be conclusive 

8 evidence of the regularity of the issuance and sale of 

9 such obligations and of their validity; 

10 ‘‘(C) shall be lawful investments and may be ac11 cepted as security for all fiduciary, trust, and public 

12 funds, the investment or deposit of which shall be 

13 under the authority or control of any officer or agen14 cy of the Government of the United States, and the 

15 Secretary of the Treasury or any other officer or 

16 agency having authority over or control of any such 

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

18 any of the obligations of the Postal Service acquired 

19 under this section; 

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

21 or interest from any taxation now or hereafter im22 posed by any State or local taxing authority; and 

23 ‘‘(E) except as provided in section 2006(c) of this 

24 title, shall not be obligations of, nor shall payment of 

25 the principal thereof or interest thereon be guaranteed 
50 

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1 by, the Government of the United States, and the obli2 gations shall so plainly state. 

3 ‘‘(5) The Postal Service shall make payments of prin4 cipal, or interest, or both on obligations issued under this 

5 section out of revenues and receipts from competitive prod6 ucts and assets related to the provision of competitive prod7 ucts (as determined under subsection (h) or, for purposes 

8 of any period before accounting practices and principles 

9 under subsection (h) have been established and applied, the 

10 best information available, including the audited state11 ments required by section 2008(e)). For purposes of this 

12 subsection, the total assets of the Competitive Products 

13 Fund shall be the greater of— 

14 ‘‘(A) the assets related to the provision of com15 petitive products; or 

16 ‘‘(B) the percentage of total Postal Service reve17 nues and receipts from competitive products times the 

18 total assets of the Postal Service. 

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

20 Products Fund shall be accorded the same budgetary treat21 ment as is accorded to receipts and disbursements of the 

22 Postal Service Fund under section 2009a. 

23 ‘‘(g) A judgment against the Postal Service or the Gov24 ernment of the United States (or settlement of a claim) 

25 shall, to the extent that it arises out of activities of the Post-
51 

•HR 22 RH 

1 al Service in the provision of competitive products, be paid 

2 out of the Competitive Products Fund. 

3 ‘‘(h)(1) The Secretary of the Treasury, in consultation 

4 with the Postal Service and an independent, certified public 

5 accounting firm and such other advisors as the Secretary 

6 considers appropriate, shall develop recommendations re7 garding— 

8 ‘‘(A) the accounting practices and principles that 

9 should be followed by the Postal Service with the ob10 jectives of (i) identifying and valuing the assets and 

11 liabilities of the Postal Service associated with pro12 viding, and the capital and operating costs incurred 

13 by the Postal Service in providing, competitive prod14 ucts, and (ii) subject to subsection (e)(5), preventing 

15 the subsidization of such products by market-domi16 nant products; and 

17 ‘‘(B) the substantive and procedural rules that 

18 should be followed in determining the Postal Service’s 

19 assumed Federal income tax on competitive products 

20 income for any year (within the meaning of section 

21 3634). 

22 Such recommendations shall be submitted to the Postal Reg23 ulatory Commission no earlier than 6 months, and no later 

24 than 12 months, after the effective date of this section. 
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1 ‘‘(2)(A) Upon receiving the recommendations of the 

2 Secretary of the Treasury under paragraph (1), the Com3 mission shall give interested parties, including the Postal 

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

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

6 public, an opportunity to present their views on those rec7 ommendations through submission of written data, views, 

8 or arguments, with or without opportunity for oral presen9 tation, or in such other manner as the Commission con10 siders appropriate. 

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

12 information received under subparagraph (A), the Commis13 sion shall by rule— 

14 ‘‘(i) provide for the establishment and applica15 tion of the accounting practices and principles which 

16 shall be followed by the Postal Service; 

17 ‘‘(ii) provide for the establishment and applica18 tion of the substantive and procedural rules described 

19 in paragraph (1)(B); and 

20 ‘‘(iii) provide for the submission by the Postal 

21 Service to the Postal Regulatory Commission of an22 nual and other periodic reports setting forth such in23 formation as the Commission may require. 

24 Final rules under this subparagraph shall be issued not 

25 later than 12 months after the date on which the Secretary 
53 

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1 of the Treasury makes his submission to the Commission 

2 under paragraph (1) (or by such later date as the Commis3 sion and the Postal Service may agree to). The Commission 

4 is authorized to promulgate regulations revising such rules. 

5 ‘‘(C) Reports described in subparagraph (B)(iii) shall 

6 be submitted at such time and in such form, and shall in7 clude such information, as the Commission by rule requires. 

8 The Commission may, on its own motion or on request of 

9 an interested party, initiate proceedings (to be conducted 

10 in accordance with such rules as the Commission shall pre11 scribe) to improve the quality, accuracy, or completeness of 

12 Postal Service data under such subparagraph whenever it 

13 shall appear that— 

14 ‘‘(i) the quality of the information furnished in 

15 those reports has become significantly inaccurate or 

16 can be significantly improved; or 

17 ‘‘(ii) those revisions are, in the judgment of the 

18 Commission, otherwise necessitated by the public in19 terest. 

20 ‘‘(D) A copy of each report described in subparagraph 

21 (B)(iii) shall also be transmitted by the Postal Service to 

22 the Secretary of the Treasury and the Inspector General of 

23 the United States Postal Service. 

24 ‘‘(i) The Postal Service shall render an annual report 

25 to the Secretary of the Treasury concerning the operation 
54 

•HR 22 RH 

1 of the Competitive Products Fund, in which it shall address 

2 such matters as risk limitations, reserve balances, allocation 

3 or distribution of moneys, liquidity requirements, and 

4 measures to safeguard against losses. A copy of its then most 

5 recent report under this subsection shall be included with 

6 any other submission that it is required to make to the Post7 al Regulatory Commission under section 3652(g).’’. 

8 (2) CLERICAL AMENDMENT.—The analysis for 

9 chapter 20 of title 39, United States Code, is amended 

10 by adding after the item relating to section 2010 the 

11 following: 

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

12 (b) TECHNICAL AND CONFORMING AMENDMENTS.— 

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

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

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

16 (2) as paragraph (3), and by inserting after para17 graph (1) the following: 

18 ‘‘(2) ‘Competitive Products Fund’ means the 

19 Postal Service Competitive Products Fund established 

20 by section 2011; and’’. 

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

22 2002(b) of title 39, United States Code, is amended 

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

24 balance in the Competitive Products Fund,’’. 

25 (3) POSTAL SERVICE FUND.— 
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1 (A) PURPOSES FOR WHICH AVAILABLE.— 

2 Section 2003(a) of title 39, United States Code, 

3 is amended by striking ‘‘title.’’ and inserting 

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

5 or powers for which the Competitive Products 

6 Fund is available).’’. 

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

8 United States Code, is amended by striking 

9 ‘‘There’’ and inserting ‘‘Except as otherwise pro10 vided in section 2011, there’’. 

11 (4) RELATIONSHIP BETWEEN THE TREASURY

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

13 United States Code, is amended— 

14 (A) in subsection (a), by inserting ‘‘or sec15 tion 2011’’ before ‘‘of this title,’’; 

16 (B) in subsection (b), by inserting ‘‘under 

17 section 2005’’ before ‘‘in such amounts’’ in the 

18 first sentence and before ‘‘in excess of such 

19 amount.’’ in the second sentence; and 

20 (C) in subsection (c), by inserting ‘‘or sec21 tion 2011(e)(4)(E)’’ before ‘‘of this title,’’. 
56 

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1 SEC. 302. 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. 
57 

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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. 303. 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 
58 

•HR 22 RH 

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 product or service that uses or is based in whole 

11 or in part on such information, without the consent 

12 of 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’’ 
59 

•HR 22 RH 

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. 304. 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 Serv16 ice— 

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 com10 petitive product, the Postal Service or other Federal agency 

11 (as the case may be)— 

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

13 sovereign immunity from suit in Federal court by 

14 any person for any violation of Federal law by such 

15 agency or any officer or employee thereof; and 

16 ‘‘(B) shall be considered to be a person (as de17 fined in subsection (a) of the first section of the Clay18 ton Act) for purposes of— 

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

20 subsection); and 

21 ‘‘(ii) section 5 of the Federal Trade Com22 mission Act to the extent that such section 5 ap23 plies to unfair methods of competition. 

24 ‘‘(2) No damages, interest on damages, costs or attor25 ney’s fees may be recovered, and no criminal liability may 
61 

•HR 22 RH 

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

2 any officer or employee of the Postal Service, or other Fed3 eral agency acting on behalf of or in concert with the Postal 

4 Service, acting in an official capacity. 

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

6 conduct occurring before the date of the enactment of this 

7 subsection. 

8 ‘‘(f)(1) Each building constructed or altered by the 

9 Postal Service shall be constructed or altered, to the max10 imum extent feasible as determined by the Postal Service, 

11 in compliance with one of the nationally recognized model 

12 building codes and with other applicable nationally recog13 nized codes. 

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

15 Service shall be constructed or altered only after consider16 ation of all requirements (other than procedural require17 ments) of zoning laws, land use laws, and applicable envi18 ronmental laws of a State or subdivision of a State which 

19 would apply to the building if it were not a building con20 structed or altered by an establishment of the Government 

21 of the United States. 

22 ‘‘(3) For purposes of meeting the requirements of para23 graphs (1) and (2) with respect to a building, the Postal 

24 Service shall— 
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•HR 22 RH 

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

2 with appropriate officials of the State or political 

3 subdivision, or both, in which the building will be lo4 cated; 

5 ‘‘(B) upon request, submit such plans in a time6 ly manner to such officials for review by such officials 

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

8 and 

9 ‘‘(C) permit inspection by such officials during 

10 construction or alteration of the building, in accord11 ance with the customary schedule of inspections for 

12 construction or alteration of buildings in the locality, 

13 if such officials provide to the Postal Service— 

14 ‘‘(i) a copy of such schedule before construc15 tion of the building is begun; and 

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

17 conduct any inspection before conducting such 

18 inspection. 

19 Nothing in this subsection shall impose an obligation on 

20 any State or political subdivision to take any action under 

21 the preceding sentence, nor shall anything in this subsection 

22 require the Postal Service or any of its contractors to pay 

23 for any action taken by a State or political subdivision to 

24 carry out this subsection (including reviewing plans, car-
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•HR 22 RH 

1 rying out on-site inspections, issuing building permits, and 

2 making recommendations). 

3 ‘‘(4) Appropriate officials of a State or a political sub4 division of a State may make recommendations to the Post5 al Service concerning measures necessary to meet the re6 quirements of paragraphs (1) and (2). Such officials may 

7 also make recommendations to the Postal Service con8 cerning measures which should be taken in the construction 

9 or alteration of the building to take into account local con10 ditions. The Postal Service shall give due consideration to 

11 any such recommendations. 

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

13 officials under paragraph (3), the Postal Service shall estab14 lish procedures for soliciting, assessing, and incorporating 

15 local community input on real property and land use deci16 sions. 

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

18 includes the District of Columbia, the Commonwealth of 

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

20 States. 

21 ‘‘(g)(1) Notwithstanding any other provision of law, 

22 legal representation may not be furnished by the Depart23 ment of Justice to the Postal Service in any action, suit, 

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

25 the following: 
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•HR 22 RH 

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

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

3 to administrative subpoenas by the Postal Regulatory 

4 Commission). 

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

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

7 attorneys to obtain any legal representation that it is pre8 cluded from obtaining from the Department of Justice 

9 under this paragraph. 

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

11 (1), the Department of Justice shall, under section 411, fur12 nish the Postal Service such legal representation as it may 

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

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

15 employ attorneys by contract or otherwise to conduct litiga16 tion brought by or against the Postal Service or its officers 

17 or employees in matters affecting the Postal Service. 

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

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

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

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

22 not otherwise a party, the Commission shall be permitted 

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

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

25 terms and conditions as the Commission and the Attorney 
65 

•HR 22 RH 

1 General shall consider appropriate, furnish the Commission 

2 such legal representation as it may require in connection 

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

4 the prior consent of the Attorney General, the Commission 

5 may employ attorneys by contract or otherwise for that pur6 pose. 

7 ‘‘(h) A judgment against the Government of the United 

8 States arising out of activities of the Postal Service shall 

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

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

11 section 2011(g).’’. 

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

13 39, United States Code, is amended by striking ‘‘Except as 

14 provided in section 3628 of this title,’’ and inserting ‘‘Ex15 cept as otherwise provided in this title,’’. 

16 SEC. 305. INTERNATIONAL POSTAL ARRANGEMENTS. 

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

18 States Code, is amended to read as follows: 

19 ‘‘§ 407. International postal arrangements 

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

21 ‘‘(1) to promote and encourage communications 

22 between peoples by efficient operation of international 

23 postal services and other international delivery serv24 ices for cultural, social, and economic purposes; 
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1 ‘‘(2) to promote and encourage unrestricted and 

2 undistorted competition in the provision of inter3 national postal services and other international deliv4 ery services, except where provision of such services by 

5 private companies may be prohibited by law of the 

6 United States; 

7 ‘‘(3) to promote and encourage a clear distinc8 tion between governmental and operational respon9 sibilities with respect to the provision of international 

10 postal services and other international delivery serv11 ices by the Government of the United States and by 

12 intergovernmental organizations of which the United 

13 States is a member; and 

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

15 agreements with other countries to accomplish these 

16 objectives. 

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

18 formulation, coordination, and oversight of foreign policy 

19 related to international postal services and other inter20 national delivery services, and shall have the power to con21 clude treaties, conventions and amendments related to 

22 international postal services and other international deliv23 ery services, except that the Secretary may not conclude any 

24 treaty, convention, or other international agreement (in25 cluding those regulating international postal services) if 
67 

•HR 22 RH 

1 such treaty, convention, or agreement would, with respect 

2 to any competitive product, grant an undue or unreason3 able preference to the Postal Service, a private provider of 

4 international postal or delivery services, or any other per5 son. 

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

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

8 authority for the conduct of foreign policy with respect to 

9 international postal services and international delivery 

10 services, including the determination of United States posi11 tions and the conduct of United States participation in ne12 gotiations with foreign governments and international bod13 ies. In exercising this authority, the Secretary— 

14 ‘‘(A) shall coordinate with other agencies as ap15 propriate, and in particular, shall give full consider16 ation to the authority vested by law or Executive 

17 order in the Postal Regulatory Commission, the De18 partment of Commerce, the Department of Transpor19 tation, and the Office of the United States Trade Rep20 resentative in this area; 

21 ‘‘(B) shall maintain continuing liaison with 

22 other executive branch agencies concerned with postal 

23 and delivery services; 

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

25 Committee on Government Reform of the House of 
68 

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1 Representatives and the Committee on Governmental 

2 Affairs of the Senate; 

3 ‘‘(D) shall maintain appropriate liaison with 

4 both representatives of the Postal Service and rep5 resentatives of users and private providers of inter6 national postal services and other international deliv7 ery services to keep informed of their interests and 

8 problems, and to provide such assistance as may be 

9 needed to ensure that matters of concern are promptly 

10 considered by the Department of State or (if applica11 ble, and to the extent practicable) other executive 

12 branch agencies; and 

13 ‘‘(E) shall assist in arranging meetings of such 

14 public sector advisory groups as may be established to 

15 advise the Department of State and other executive 

16 branch agencies in connection with international 

17 postal services and international delivery services. 

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

19 committee (within the meaning of the Federal Advisory 

20 Committee Act) to perform such functions as the Secretary 

21 considers appropriate in connection with carrying out sub22 paragraphs (A) through (D) of paragraph (2). 

23 ‘‘(c)(1) Before concluding any treaty, convention, or 

24 amendment that establishes a rate or classification for a 

25 product subject to subchapter I of chapter 36, the Secretary 
69 

•HR 22 RH 

1 of State shall request the Postal Regulatory Commission to 

2 submit a decision on whether such rate or classification is 

3 consistent with the standards and criteria established by the 

4 Commission under section 3622. 

5 ‘‘(2) The Secretary shall ensure that each treaty, con6 vention, or amendment concluded under subsection (b) is 

7 consistent with a decision of the Commission adopted under 

8 paragraph (1), except if, or to the extent, the Secretary de9 termines, by written order, that considerations of foreign 

10 policy or national security require modification of the Com11 mission’s decision. 

12 ‘‘(d) Nothing in this section shall be considered to pre13 vent the Postal Service from entering into such commercial 

14 or operational contracts related to providing international 

15 postal services and other international delivery services as 

16 it deems appropriate, except that— 

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

18 a foreign government (whether under authority of this 

19 subsection or otherwise) shall be solely contractual in 

20 nature and may not purport to be international law; 

21 and 

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

23 Postal Service and an agency of a foreign government 

24 shall be transmitted to the Secretary of State and the 
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•HR 22 RH 

1 Postal Regulatory Commission not later than the ef2 fective date of such contract. 

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

4 that are competitive products within the meaning of section 

5 3631 that are exported or imported by the Postal Service, 

6 the Bureau of Customs and Border Protection of the De7 partment of Homeland Security and other appropriate 

8 Federal agencies shall apply the customs laws of the United 

9 States and all other laws relating to the importation or ex10 portation of such shipments in the same manner to both 

11 shipments by the Postal Service and similar shipments by 

12 private companies. 

13 ‘‘(2) For purposes of this subsection, the term ‘private 

14 company’ means a private company substantially owned 

15 or controlled by persons who are citizens of the United 

16 States. 

17 ‘‘(3) In exercising the authority pursuant to subsection 

18 (b) to conclude new treaties, conventions and amendments 

19 related to international postal services and to renegotiate 

20 such treaties, conventions and amendments, the Secretary 

21 of State shall, to the maximum extent practicable, take such 

22 measures as are within the Secretary’s control to encourage 

23 the governments of other countries to make available to the 

24 Postal Service and private companies a range of non25 discriminatory customs procedures that will fully meet the 
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1 needs of all types of American shippers. The Secretary of 

2 State shall consult with the United States Trade Represent3 ative and the Commissioner of Customs, Department of 

4 Homeland Security in carrying out this paragraph. 

5 ‘‘(4) The provisions of this subsection shall take effect 

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

7 or such earlier date as the Bureau of Customs and Border 

8 Protection of the Department of Homeland Security may 

9 determine in writing.’’. 

10 (b) EFFECTIVE DATE.—Notwithstanding any provi11 sion of the amendment made by subsection (a), the author12 ity of the United States Postal Service to establish the rates 

13 of postage or other charges on mail matter conveyed between 

14 the United States and other countries shall remain avail15 able to the Postal Service until— 

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

17 the date as of which the regulations promulgated 

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

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

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

21 as of which the regulations promulgated under section 

22 3633 of title 39, United States Code (as amended by 

23 section 202) take effect. 
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1 SEC. 306. REDESIGNATION. 

2 Chapter 36 of title 39, United States Code (as in effect 

3 before the amendment made by section 204(a)) is amended 

4 by striking the heading for subchapter V and inserting the 

5 following: 

6 ‘‘SUBCHAPTER VI—GENERAL’’. 

7 TITLE IV—GENERAL PROVISIONS 

8 SEC. 401. QUALIFICATION REQUIREMENTS FOR GOV9 ERNORS. 

10 (a) IN GENERAL.—Section 202(a) of title 39, United 

11 States Code, is amended by striking ‘‘(a)’’ and inserting 

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

13 the following: ‘‘The Governors shall represent the public in14 terest generally, and at least 4 of the Governors shall be 

15 chosen solely on the basis of their demonstrated ability in 

16 managing organizations or corporations (in either the pub17 lic or private sector) of substantial size; for purposes of this 

18 sentence, an organization or corporation shall be considered 

19 to be of substantial size if it employs at least 50,000 employ20 ees. The Governors shall not be representatives of specific 

21 interests using the Postal Service, and may be removed only 

22 for cause.’’. 

23 (b) CONSULTATION REQUIREMENT.—Section 202(a) of 

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

25 end the following: 
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1 ‘‘(2) In selecting the individuals described in para2 graph (1) for nomination for appointment to the position 

3 of Governor, the President should consult with the Speaker 

4 of the House of Representatives, the minority leader of the 

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

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

7 (c) RESTRICTION.—Section 202(b) of title 39, United 

8 States Code, is amended by striking ‘‘(b)’’ and inserting 

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

10 ‘‘(2)(A) Notwithstanding any other provision of this 

11 section, in the case of the office of the Governor the term 

12 of which is the first one scheduled to expire at least 4 

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

14 ‘‘(i) such office may not, in the case of any per15 son commencing service after that expiration date, be 

16 filled by any person other than an individual chosen 

17 from among persons nominated for such office with 

18 the unanimous concurrence of all labor organizations 

19 described in section 206(a)(1); and 

20 ‘‘(ii) instead of the term that would otherwise 

21 apply under the first sentence of paragraph (1), the 

22 term of any person so appointed to such office shall 

23 be 3 years. 

24 ‘‘(B) Except as provided in subparagraph (A), an ap25 pointment under this paragraph shall be made in conform-
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1 ance with all provisions of this section that would otherwise 

2 apply.’’. 

3 (d) APPLICABILITY.—The amendment made by sub4 section (a) shall not affect the appointment or tenure of any 

5 person serving as a Governor of the Board of Governors of 

6 the United States Postal Service pursuant to an appoint7 ment made before the date of the enactment of this Act, or, 

8 except as provided in the amendment made by subsection 

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

10 any such office becomes vacant, the appointment of any per11 son to fill that office shall be made in accordance with such 

12 amendment. The requirement set forth in the fourth sentence 

13 of section 202(a)(1) of title 39, United States Code (as 

14 amended by subsection (a)) shall be met beginning not later 

15 than 9 years after the date of the enactment of this Act. 

16 SEC. 402. OBLIGATIONS. 

17 (a) PURPOSES FOR WHICH OBLIGATIONS MAY BE

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

19 39, United States Code, is amended by striking ‘‘title.’’ and 

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

21 the corresponding authority is available to the Postal Serv22 ice under section 2011.’’. 

23 (b) LIMITATION ON NET ANNUAL INCREASE IN OBLI24 GATIONS ISSUED FOR CERTAIN PURPOSES.—The third sen25 tence of section 2005(a)(1) of title 39, United States Code, 
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1 is amended to read as follows: ‘‘In any one fiscal year, the 

2 net increase in the amount of obligations outstanding issued 

3 for the purpose of capital improvements and the net in4 crease in the amount of obligations outstanding issued for 

5 the purpose of defraying operating expenses of the Postal 

6 Service shall not exceed a combined total of 

7 $3,000,000,000.’’ . 

8 (c) LIMITATIONS ON OBLIGATIONS OUTSTANDING.— 

9 (1) IN GENERAL.—Subsection (a) of section 2005 

10 of title 39, United States Code, is amended by adding 

11 at the end the following: 

12 ‘‘(3) For purposes of applying the respective limita13 tions under this subsection, the aggregate amount of obliga14 tions issued by the Postal Service which are outstanding 

15 as of any one time, and the net increase in the amount 

16 of obligations outstanding issued by the Postal Service for 

17 the purpose of capital improvements or for the purpose of 

18 defraying operating expenses of the Postal Service in any 

19 fiscal year, shall be determined by aggregating the relevant 

20 obligations issued by the Postal Service under this section 

21 with the relevant obligations issued by the Postal Service 

22 under section 2011.’’. 

23 (2) CONFORMING AMENDMENT.—The second sen24 tence of section 2005(a)(1) of title 39, United States 

25 Code, is amended by striking ‘‘any such obligations’’ 
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1 and inserting ‘‘obligations issued by the Postal Serv2 ice which may be’’. 

3 (d) AMOUNTS WHICH MAY BE PLEDGED, ETC.— 

4 (1) OBLIGATIONS TO WHICH PROVISIONS

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

6 39, United States Code, is amended by striking ‘‘such 

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

8 Postal Service under this section,’’. 

9 (2) ASSETS, REVENUES, AND RECEIPTS TO

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

11 2005 of title 39, United States Code, is amended by 

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

13 at the end the following: 

14 ‘‘(2) Notwithstanding any other provision of this sec15 tion— 

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

17 Service under this subsection shall be available only 

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

19 provision of competitive products (as determined 

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

21 before accounting practices and principles under sec22 tion 2011(h) have been established and applied, the 

23 best information available from the Postal Service, 

24 including the audited statements required by section 

25 2008(e)); and 
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1 ‘‘(B) any authority under this subsection relat2 ing to the pledging or other use of revenues or receipts 

3 of the Postal Service shall be available only to the ex4 tent that they are not revenues or receipts of the Com5 petitive Products Fund.’’. 

6 SEC. 403. PRIVATE CARRIAGE OF LETTERS. 

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

8 States Code, is amended by striking subsection (b) and in9 serting the following: 

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

11 when— 

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

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

14 rate then currently charged for the 1st ounce of a sin15 gle-piece first class letter; 

‘‘(2) the letter weighs at least 121 16 ⁄2 ounces; or 

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

18 described by regulations of the Postal Service (includ19 ing, in particular, sections 310.1 and 320.2–320.8 of 

20 title 39 of the Code of Federal Regulations, as in ef21 fect on July 1, 2004) that purport to permit private 

22 carriage by suspension of the operation of this section 

23 (as then in effect). 
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1 ‘‘(c) Any regulations necessary to carry out this section 

2 shall be promulgated by the Postal Regulatory Commis3 sion.’’. 

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

5 on the date as of which the regulations promulgated under 

6 section 3633 of title 39, United States Code (as amended 

7 by section 202) take effect. 

8 SEC. 404. RULEMAKING AUTHORITY. 

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

10 Code, is amended to read as follows: 

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

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

13 necessary in the execution of its functions under this 

14 title and such other functions as may be assigned to 

15 the Postal Service under any provisions of law out16 side of this title;’’. 

17 SEC. 405. NONINTERFERENCE WITH COLLECTIVE BAR18 GAINING AGREEMENTS, ETC. 

19 (a) NONINTERFERENCE WITH COLLECTIVE BAR20 GAINING AGREEMENTS.—Except as provided in section 407, 

21 nothing in this Act or any amendment made by this Act 

22 shall restrict, expand, or otherwise affect any of the rights, 

23 privileges, or benefits of either employees of or labor organi24 zations representing employees of the United States Postal 

25 Service under chapter 12 of title 39, United States Code, 
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1 the National Labor Relations Act, any handbook or manual 

2 affecting employee labor relations within the United States 

3 Postal Service, or any collective bargaining agreement. 

4 (b) FREE MAILING PRIVILEGES CONTINUE UN5 CHANGED.—Nothing in this Act or any amendment made 

6 by this Act shall affect any free mailing privileges accorded 

7 under section 3217 or sections 3403 through 3406 of title 

8 39, United States Code. 

9 SEC. 406. BONUS AND COMPENSATION AUTHORITY. 

10 Subchapter VI of chapter 36 of title 39, United States 

11 Code (as so redesignated by section 306) is amended by add12 ing at the end the following: 

13 ‘‘§ 3686. Bonus authority 

14 ‘‘(a) IN GENERAL.—The Postal Service may establish 

15 one or more programs to provide bonuses or other rewards 

16 to officers and employees of the Postal Service in senior ex17 ecutive or equivalent positions to achieve the objectives of 

18 this chapter. 

19 ‘‘(b) LIMITATION ON TOTAL COMPENSATION.— 

20 ‘‘(1) IN GENERAL.—Under any such program, 

21 the Postal Service may award a bonus or other re22 ward in excess of the limitation set forth in the last 

23 sentence of section 1003(a), if such program has been 

24 approved under paragraph (2). Any such award or 

25 bonus may not cause the total compensation of such 
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1 officer or employee to exceed the total annual com2 pensation payable to the Vice President under section 

3 104 of title 3 as of the end of the calendar year in 

4 which the bonus or award is paid. 

5 ‘‘(2) APPROVAL PROCESS.—If the Postal Service 

6 wishes to have the authority, under any program de7 scribed in subsection (a), to award bonuses or other 

8 rewards in excess of the limitation set forth in the last 

9 sentence of section 1003(a)— 

10 ‘‘(A) the Postal Service shall make an ap11 propriate request to the Board of Governors in 

12 such form and manner as the Board requires; 

13 and 

14 ‘‘(B) the Board of Governors shall approve 

15 any such request if it certifies, for the annual 

16 appraisal period involved, that the performance 

17 appraisal system for affected officers and em18 ployees of the Postal Service (as designed and 

19 applied) makes meaningful distinctions based on 

20 relative performance. 

21 ‘‘(3) REVOCATION AUTHORITY.—If the Board of 

22 Governors finds that a performance appraisal system 

23 previously approved under paragraph (2)(B) does not 

24 (as designed and applied) make meaningful distinc25 tions based on relative performance, the Board may 
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1 revoke or suspend the authority of the Postal Service 

2 to continue a program approved under paragraph (2) 

3 until such time as appropriate corrective measures 

4 have, in the judgment of the Board, been taken. 

5 ‘‘(c) EXCEPTIONS FOR CRITICAL POSITIONS.—Not6 withstanding any other provision of law, the Board of Gov7 ernors may allow up to 12 officers or employees of the Post8 al Service in critical senior executive or equivalent posi9 tions to receive total compensation in an amount not to 

10 exceed 120 percent of the total annual compensation pay11 able to the Vice President under section 104 of title 3 as 

12 of the end of the calendar year in which such payment is 

13 received. For each exception made under this subsection, the 

14 Board shall provide written notification to the Director of 

15 the Office of Personnel Management and the Congress with16 in 30 days after the payment is made setting forth the name 

17 of the officer or employee involved, the critical nature of 

18 his or her duties and responsibilities, and the basis for de19 termining that such payment is warranted. 

20 ‘‘(d) INFORMATION FOR INCLUSION IN COMPREHEN21 SIVE STATEMENT.—Included in its comprehensive state22 ment under section 2401(e) for any period shall be— 

23 ‘‘(1) the name of each person receiving a bonus 

24 or other payment during such period which would not 
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1 have been allowable but for the provisions of sub2 section (b) or (c); 

3 ‘‘(2) the amount of the bonus or other payment; 

4 and 

5 ‘‘(3) the amount by which the limitation set 

6 forth in the last sentence of section 1003(a) was ex7 ceeded as a result of such bonus or other payment. 

8 ‘‘(e) REGULATIONS.—The Board of Governors may 

9 prescribe regulations for the administration of this sec10 tion.’’. 

11 SEC. 407. MEDIATION IN COLLECTIVE-BARGAINING DIS12 PUTES. 

13 (a) IN GENERAL.—Section 1207(b) of title 39, United 

14 States Code, is amended by striking all that follows ‘‘the 

15 Director of the Federal Mediation and Conciliation Service 

16 shall’’ and inserting ‘‘, within 10 days appoint a mediator 

17 of nationwide reputation and professional stature, and who 

18 is also a member of the National Academy of Arbitrators. 

19 The parties shall cooperate with the mediator in an effort 

20 to reach an agreement and shall meet and negotiate in good 

21 faith at such times and places that the mediator, in con22 sultation with the parties, shall direct.’’. 

23 (b) PROVISIONS RELATING TO ARBITRATION

24 BOARDS.—Section 1207(c) of title 39, United States Code, 

25 is amended— 
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1 (1) in paragraph (1)— 

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

3 (B) by striking ‘‘not members of the fact4 finding panel,’’; and 

5 (C) by striking all that follows ‘‘shall be 

6 made’’ and inserting ‘‘from a list of names pro7 vided by the Director. This list shall consist of 

8 not less than 9 names of arbitrators of nation9 wide reputation and professional stature, who 

10 are also members of the National Academy of Ar11 bitrators, and whom the Director has determined 

12 are available and willing to serve.’’; and 

13 (2) in paragraph (3), by striking ‘‘factfinding 

14 panel’’ and inserting ‘‘mediation’’. 

15 (c) CONFORMING AMENDMENT.—Section 1207(d) of 

16 title 39, United States Code, is amended by striking ‘‘fact17 finding panel will be established’’ and inserting ‘‘mediator 

18 shall be appointed’’. 

19 TITLE V—ENHANCED 

20 REGULATORY COMMISSION 

21 SEC. 501. REORGANIZATION AND MODIFICATION OF CER22 TAIN PROVISIONS RELATING TO THE POSTAL 

23 REGULATORY COMMISSION. 

24 (a) TRANSFER AND REDESIGNATION.—Title 39, 

25 United States Code, is amended— 
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1 (1) by inserting after chapter 4 the following: 

2 ‘‘CHAPTER 5—POSTAL REGULATORY 

3 COMMISSION 

‘‘Sec. 

‘‘501. Establishment. 

‘‘502. Commissioners. 

‘‘503. Rules; regulations; procedures. 

‘‘504. Administration. 

4 ‘‘§ 501. Establishment 

5 ‘‘The Postal Regulatory Commission is an independent 

6 establishment of the executive branch of the Government of 

7 the United States. 

8 ‘‘§ 502. Commissioners 

9 ‘‘(a) The Postal Regulatory Commission is composed 

10 of 5 Commissioners, appointed by the President, by and 

11 with the advice and consent of the Senate. The Commis12 sioners shall be chosen solely on the basis of their technical 

13 qualifications, professional standing, and demonstrated ex14 pertise in economics, accounting, law, or public adminis15 tration, and may be removed by the President only for 

16 cause. Each individual appointed to the Commission shall 

17 have the qualifications and expertise necessary to carry out 

18 the responsibilities accorded Commissioners under the Post19 al Accountability and Enhancement Act. Not more than 3 

20 of the Commissioners may be adherents of the same political 

21 party. 
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1 ‘‘(b) A Commissioner may continue to serve after the 

2 expiration of his term until his successor has qualified, ex3 cept that a Commissioner may not so continue to serve for 

4 more than 1 year after the date upon which his term other5 wise would expire under subsection (e). 

6 ‘‘(c) One of the Commissioners shall be designated as 

7 Chairman by, and shall serve in the position of Chairman 

8 at the pleasure of, the President. 

9 ‘‘(d) The Commissioners shall by majority vote des10 ignate a Vice Chairman of the Commission. The Vice Chair11 man shall act as Chairman of the Commission in the ab12 sence of the Chairman. 

13 ‘‘(e) The Commissioners shall serve for terms of 6 

14 years.’’; 

15 (2) in subchapter I of chapter 36 (as in effect be16 fore the amendment made by section 201(c)), by strik17 ing the heading for such subchapter I and all that fol18 lows through section 3602; and 

19 (3) by redesignating sections 3603 and 3604 as 

20 sections 503 and 504, respectively, and transferring 

21 such sections to the end of chapter 5 (as inserted by 

22 paragraph (1)). 

23 (b) DETERMINATIONS.—Section 503 of title 39, United 

24 States Code, as so redesignated by subsection (a)(3), is 

25 amended by adding at the end the following: ‘‘Such rules 
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1 shall include procedures which balance, inter alia, the need 

2 for protecting due process rights and ensuring expeditious 

3 decision-making.’’. 

4 (c) APPLICABILITY.—The amendment made by sub5 section (a)(1) shall not affect the appointment or tenure of 

6 any person serving as a Commissioner on the Postal Regu7 latory Commission (as so redesignated by section 504) pur8 suant to an appointment made before the date of the enact9 ment of this Act or any nomination made before that date, 

10 but, when any such office becomes vacant, the appointment 

11 of any person to fill that office shall be made in accordance 

12 with such amendment. 

13 (d) CLERICAL AMENDMENT.—The analysis for part I 

14 of title 39, United States Code, is amended by inserting 

15 after the item relating to chapter 4 the following: 

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

16 SEC. 502. AUTHORITY FOR POSTAL REGULATORY COMMIS17 SION TO ISSUE SUBPOENAS. 

18 Section 504 of title 39, United States Code (as so redes19 ignated by section 501) is amended by adding at the end 

20 the following: 

21 ‘‘(f)(1) Any Commissioner of the Postal Regulatory 

22 Commission, any administrative law judge appointed by 

23 the Commission under section 3105 of title 5, and any em24 ployee of the Commission designated by the Commission 
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1 may administer oaths, examine witnesses, take depositions, 

2 and receive evidence. 

3 ‘‘(2) The Chairman of the Commission, any Commis4 sioner designated by the Chairman, and any administrative 

5 law judge appointed by the Commission under section 3105 

6 of title 5 may, with respect to any proceeding conducted 

7 by the Commission under this title— 

8 ‘‘(A) issue subpoenas requiring the attendance 

9 and presentation of testimony by, or the production 

10 of documentary or other evidence in the possession of, 

11 any covered person; and 

12 ‘‘(B) order the taking of depositions and re13 sponses to written interrogatories by a covered person. 

14 The written concurrence of a majority of the Commissioners 

15 then holding office shall, with respect to each subpoena 

16 under subparagraph (A), be required in advance of its 

17 issuance. 

18 ‘‘(3) In the case of contumacy or failure to obey a sub19 poena issued under this subsection, upon application by the 

20 Commission, the district court of the United States for the 

21 district in which the person to whom the subpoena is ad22 dressed resides or is served may issue an order requiring 

23 such person to appear at any designated place to testify 

24 or produce documentary or other evidence. Any failure to 
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1 obey the order of the court may be punished by the court 

2 as a contempt thereof. 

3 ‘‘(4) For purposes of this subsection, the term ‘covered 

4 person’ means an officer, employee, agent, or contractor of 

5 the Postal Service. 

6 ‘‘(g)(1) If the Postal Service determines that any docu7 ment or other matter it provides to the Postal Regulatory 

8 Commission pursuant to a subpoena issued under sub9 section (f), or otherwise at the request of the Commission 

10 in connection with any proceeding or other purpose under 

11 this title, contains information which is described in section 

12 410(c) of this title, or exempt from public disclosure under 

13 section 552(b) of title 5, the Postal Service shall, at the time 

14 of providing such matter to the Commission, notify the 

15 Commission, in writing, of its determination (and the rea16 sons therefor). 

17 ‘‘(2) Except as provided in paragraph (3), no officer 

18 or employee of the Commission may, with respect to any 

19 information as to which the Commission has been notified 

20 under paragraph (1)— 

21 ‘‘(A) use such information for purposes other 

22 than the purposes for which it is supplied; or 

23 ‘‘(B) permit anyone who is not an officer or em24 ployee of the Commission to have access to any such 

25 information. 
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1 ‘‘(3)(A) Paragraph (2) shall not prevent the Commis2 sion from publicly disclosing relevant information in fur3 therance of its duties under this title if the Commission has 

4 adopted regulations under section 553 of title 5 that estab5 lish a procedure for according appropriate confidentiality 

6 to information identified by the Postal Service under para7 graph (1). In determining the appropriate degree of con8 fidentiality to be accorded information identified by the 

9 Postal Service under paragraph (1), the Commission shall 

10 balance the nature and extent of the likely commercial in11 jury to the Postal Service against the public interest, as 

12 required by section 101(d) of this title for financial trans13 parency of a government establishment. 

14 ‘‘(B) Paragraph (2) shall not prevent information 

15 from being furnished under any process of discovery estab16 lished under this title in connection with a proceeding 

17 under this title. The Commission shall, by regulations based 

18 on rule 26(c) of the Federal Rules of Civil Procedure, estab19 lish procedures for ensuring appropriate confidentiality for 

20 any information furnished under the preceding sentence.’’. 

21 SEC. 503. APPROPRIATIONS FOR THE POSTAL REGULATORY 

22 COMMISSION. 

23 (a) AUTHORIZATION OF APPROPRIATIONS.—Sub24 section (d) of section 504 of title 39, United States Code 
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1 (as so redesignated by section 501) is amended to read as 

2 follows: 

3 ‘‘(d) There are authorized to be appropriated, out of 

4 the Postal Service Fund, such sums as may be necessary 

5 for the Postal Regulatory Commission. In requesting an ap6 propriation under this subsection for a fiscal year, the Com7 mission shall prepare and submit to the Congress under sec8 tion 2009 a budget of the Commission’s expenses, including 

9 expenses for facilities, supplies, compensation, and em10 ployee benefits.’’. 

11 (b) BUDGET PROGRAM.— 

12 (1) IN GENERAL.—The next to last sentence of 

13 section 2009 of title 39, United States Code, is 

14 amended to read as follows: ‘‘The budget program 

15 shall also include separate statements of the amounts 

16 which (1) the Postal Service requests to be appro17 priated under subsections (b) and (c) of section 2401, 

18 (2) the Office of Inspector General of the United 

19 States Postal Service requests to be appropriated, out 

20 of the Postal Service Fund, under section 8L(e) of the 

21 Inspector General Act of 1978, and (3) the Postal 

22 Regulatory Commission requests to be appropriated, 

23 out of the Postal Service Fund, under section 504(d) 

24 of this title.’’. 
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1 (2) CONFORMING AMENDMENT.—Section 

2 2003(e)(1) of title 39, United States Code, is amended 

3 by striking the first sentence and inserting the fol4 lowing: ‘‘The Fund shall be available for the payment 

5 of (A) all expenses incurred by the Postal Service in 

6 carrying out its functions as provided by law, subject 

7 to the same limitation as set forth in the parenthet8 ical matter under subsection (a); (B) all expenses of 

9 the Postal Regulatory Commission, subject to the 

10 availability of amounts appropriated pursuant to sec11 tion 504(d); and (C) all expenses of the Office of In12 spector General, subject to the availability of amounts 

13 appropriated pursuant to section 8L(e) of the Inspec14 tor General Act of 1978.’’. 

15 (c) EFFECTIVE DATE.— 

16 (1) IN GENERAL.—The amendments made by 

17 this section shall apply with respect to fiscal years be18 ginning on or after October 1, 2005. 

19 (2) SAVINGS PROVISION.—The provisions of title 

20 39, United States Code, that are amended by this sec21 tion shall, for purposes of any fiscal year before the 

22 first fiscal year to which the amendments made by 

23 this section apply, continue to apply in the same way 

24 as if this section had never been enacted. 
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1 SEC. 504. REDESIGNATION OF THE POSTAL RATE COMMIS2 SION. 

3 (a) AMENDMENTS TO TITLE 39, UNITED STATES

4 CODE.—Title 39, United States Code, is amended in sec5 tions 404, 503–504 (as so redesignated by section 501), 

6 1001, and 1002 by striking ‘‘Postal Rate Commission’’ each 

7 place it appears and inserting ‘‘Postal Regulatory Commis8 sion’’. 

9 (b) AMENDMENTS TO TITLE 5, UNITED STATES

10 CODE.—Title 5, United States Code, is amended in sections 

11 104(1), 306(f), 2104(b), 3371(3), 5314 (in the item relating 

12 to Chairman, Postal Rate Commission), 5315 (in the item 

13 relating to Members, Postal Rate Commission), 

14 5514(a)(5)(B), 7342(a)(1)(A), 7511(a)(1)(B)(ii), 

15 8402(c)(1), 8423(b)(1)(B), and 8474(c)(4) by striking 

16 ‘‘Postal Rate Commission’’ and inserting ‘‘Postal Regu17 latory Commission’’. 

18 (c) AMENDMENT TO THE ETHICS IN GOVERNMENT ACT

19 OF 1978.—Section 101(f)(6) of the Ethics in Government 

20 Act of 1978 (5 U.S.C. App.) is amended by striking ‘‘Postal 

21 Rate Commission’’ and inserting ‘‘Postal Regulatory Com22 mission’’. 

23 (d) AMENDMENT TO THE REHABILITATION ACT OF

24 1973.—Section 501(b) of the Rehabilitation Act of 1973 (29 

25 U.S.C. 791(b)) is amended by striking ‘‘Postal Rate Office’’ 

26 and inserting ‘‘Postal Regulatory Commission’’. 
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1 (e) AMENDMENT TO TITLE 44, UNITED STATES

2 CODE.—Section 3502(5) of title 44, United States Code, is 

3 amended by striking ‘‘Postal Rate Commission’’ and insert4 ing ‘‘Postal Regulatory Commission’’. 

5 (f) OTHER REFERENCES.—Whenever a reference is 

6 made in any provision of law (other than this Act or a 

7 provision of law amended by this Act), regulation, rule, doc8 ument, or other record of the United States to the Postal 

9 Rate Commission, such reference shall be considered a ref10 erence to the Postal Regulatory Commission. 

11 SEC. 505. OFFICER OF THE POSTAL REGULATORY COMMIS12 SION REPRESENTING THE GENERAL PUBLIC. 

13 (a) IN GENERAL.—Chapter 5 of title 39, United States 

14 Code (as added by this Act) is amended by adding after 

15 section 504 the following: 

16 ‘‘§ 505. Officer of the Postal Regulatory Commission 

17 representing the general public 

18 ‘‘The Postal Regulatory Commission shall designate an 

19 officer of the Postal Regulatory Commission in all public 

20 proceedings (such as developing rules, regulations, and pro21 cedures) who shall represent the interests of the general pub22 lic.’’. 

23 (b) CLERICAL AMENDMENT.—The analysis for chapter 

24 5 of title 39, United States Code (as amended by section 
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1 501(a)(1)) is amended by adding after the item relating to 

2 section 504 the following: 

‘‘505. Officer of the Postal Regulatory Commission representing the general public.’’. 

3 TITLE VI—INSPECTORS 

4 GENERAL 

5 SEC. 601. INSPECTOR GENERAL OF THE POSTAL REGU6 LATORY COMMISSION. 

7 (a) IN GENERAL.—Paragraph (2) of section 8G(a) of 

8 the Inspector General Act of 1978 is amended by inserting 

9 ‘‘the Postal Regulatory Commission,’’ after ‘‘the United 

10 States International Trade Commission,’’. 

11 (b) ADMINISTRATION.—Section 504 of title 39, United 

12 States Code (as so redesignated by section 501) is amended 

13 by adding after subsection (g) (as added by section 502) 

14 the following: 

15 ‘‘(h)(1) Notwithstanding any other provision of this 

16 title or of the Inspector General Act of 1978, the authority 

17 to select, appoint, and employ officers and employees of the 

18 Office of Inspector General of the Postal Regulatory Com19 mission, and to obtain any temporary or intermittent serv20 ices of experts or consultants (or an organization of experts 

21 or consultants) for such Office, shall reside with the Inspec22 tor General of the Postal Regulatory Commission. 

23 ‘‘(2) Except as provided in paragraph (1), any exercise 

24 of authority under this subsection shall, to the extent prac-
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1 ticable, be in conformance with the applicable laws and reg2 ulations that govern selections, appointments and employ3 ment, and the obtaining of any such temporary or intermit4 tent services, within the Postal Regulatory Commission.’’. 

5 (c) DEADLINE.—No later than 180 days after the date 

6 of the enactment of this Act— 

7 (1) the first Inspector General of the Postal Reg8 ulatory Commission shall be appointed; and 

9 (2) the Office of Inspector General of the Postal 

10 Regulatory Commission shall be established. 

11 SEC. 602. INSPECTOR GENERAL OF THE UNITED STATES 

12 POSTAL SERVICE TO BE APPOINTED BY THE 

13 PRESIDENT. 

14 (a) DEFINITIONAL AMENDMENTS TO THE INSPECTOR

15 GENERAL ACT OF 1978.—Section 11 of the Inspector Gen16 eral Act of 1978 is amended— 

17 (1) in paragraph (1)— 

18 (A) by striking ‘‘or’’ before ‘‘the President of 

19 the Export-Import Bank;’’ and 

20 (B) by inserting ‘‘or the Governors of the 

21 United States Postal Service (within the mean22 ing of section 102(3) of title 39, United States 

23 Code);’’ after ‘‘the President of the Export-Im24 port Bank;’’; and 

25 (2) in paragraph (2)— 
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1 (A) by striking ‘‘or’’ before ‘‘the Export-Im2 port Bank,’’; and 

3 (B) by inserting ‘‘or the United States Post4 al Service,’’ after ‘‘the Export-Import Bank,’’. 

5 (b) SPECIAL PROVISIONS CONCERNING THE UNITED

6 STATES POSTAL SERVICE.— 

7 (1) IN GENERAL.—The Inspector General Act of 

8 1978 is amended by inserting after section 8K the fol9 lowing: 

10 ‘‘SPECIAL PROVISIONS CONCERNING THE UNITED STATES

11 POSTAL SERVICE

12 ‘‘SEC. 8L. (a) In carrying out the duties and respon13 sibilities specified in this Act, the Inspector General of the 

14 United States Postal Service shall have oversight responsi15 bility for all activities of the Postal Inspection Service, in16 cluding any internal investigation performed by the Postal 

17 Inspection Service. The Chief Postal Inspector shall 

18 promptly report any significant activities being carried out 

19 by the Postal Inspection Service to such Inspector General. 

20 The Postmaster General shall promptly report to such In21 spector General all allegations of theft, fraud, or misconduct 

22 by Postal Service officers or employees, and entities or indi23 viduals doing business with the Postal Service. 

24 ‘‘(b) In the case of any report that the Governors of 

25 the United States Postal Service (within the meaning of 
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1 section 102(3) of title 39, United States Code) are required 

2 to transmit under the second sentence of section 5(d), such 

3 sentence shall be applied by deeming the term ‘appropriate 

4 committees of Congress’ to mean the Committee on Govern5 ment Reform of the House of Representatives, the Com6 mittee on Governmental Affairs of the Senate, and such 

7 other committees or subcommittees of Congress as may be 

8 appropriate. 

9 ‘‘(c) Notwithstanding any provision of paragraph (7) 

10 or (8) of section 6(a), the Inspector General of the United 

11 States Postal Service may select, appoint, and employ such 

12 officers and employees as may be necessary for carrying out 

13 the functions, powers, and duties of the Office of Inspector 

14 General and to obtain the temporary or intermittent serv15 ices of experts or consultants or an organization of experts 

16 or consultants, subject to the applicable laws and regula17 tions that govern such selections, appointments, and em18 ployment, and the obtaining of such services, within the 

19 United States Postal Service. 

20 ‘‘(d) Nothing in this Act shall restrict, eliminate, or 

21 otherwise adversely affect any of the rights, privileges, or 

22 benefits of employees of the United States Postal Service, 

23 or labor organizations representing employees of the United 

24 States Postal Service, under chapter 12 of title 39, United 

25 States Code, the National Labor Relations Act, any hand-
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1 book or manual affecting employee labor relations with the 

2 United States Postal Service, or any collective bargaining 

3 agreement. 

4 ‘‘(e) There are authorized to be appropriated, out of 

5 the Postal Service Fund, such sums as may be necessary 

6 for the Office of Inspector General of the United States Post7 al Service.’’. 

8 (2) RELATED PROVISIONS.—For certain related 

9 provisions, see section 503(b). 

10 (c) EXERCISE OF CERTAIN POWERS.—Section 6(e)(3) 

11 of the Inspector General Act of 1978 is amended— 

12 (1) by striking ‘‘and the’’ before ‘‘Tennessee Val13 ley Authority’’; and 

14 (2) by inserting ‘‘, and United States Postal 

15 Service’’ after ‘‘Tennessee Valley Authority’’. 

16 (d) PUBLIC CONTRACTS.— 

17 (1) ADDITIONAL PROVISIONS APPLICABLE.—Sec18 tion 410(b)(5) of title 39, United States Code, is 

19 amended— 

20 (A) in subparagraph (A), by striking ‘‘and’’ 

21 after the semicolon; and 

22 (B) by adding after subparagraph (B) the 

23 following: 
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1 ‘‘(C) the Anti-Kickback Act of 1986 (41 

2 U.S.C. 51 and following), other than subsections 

3 (a) and (b) of 7 and section 8 of that Act; and 

4 ‘‘(D) section 315 of the Federal Property 

5 and Administrative Services Act of 1949 (41 

6 U.S.C. 265) (relating to protecting contractor 

7 employees from reprisal for disclosure of certain 

8 information);’’. 

9 (2) REGULATIONS ON ALLOWABLE COSTS.—Sec10 tion 410 of title 39, United States Code, is amended 

11 by adding at the end the following: 

12 ‘‘(e) The Postal Service shall develop and issue pur13 chasing regulations that prohibit contract costs not allow14 able under section 5.2.5 of the United States Postal Service 

15 Procurement Manual (Publication 41), as in effect on July 

16 12, 1995.’’. 

17 (e) REPORTS.—Section 3013 of title 39, United States 

18 Code, is amended by striking ‘‘Postmaster General’’ each 

19 place it appears and inserting ‘‘Chief Postal Inspector’’. 

20 (f) TECHNICAL AND CONFORMING AMENDMENTS.— 

21 (1) RELATING TO THE INSPECTOR GENERAL ACT

22 OF 1978.—(A) Subsection (a) of section 8G of the In23 spector General Act of 1978 (as amended by section 

24 601(a)) is further amended— 
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1 (i) in paragraph (2), by striking ‘‘the Post2 al Regulatory Commission, and the United 

3 States Postal Service;’’ and inserting ‘‘and the 

4 Postal Regulatory Commission;’’ and 

5 (ii) in paragraph (4), by striking ‘‘except 

6 that’’ and all that follows through ‘‘Code);’’ and 

7 inserting ‘‘except that, with respect to the Na8 tional Science Foundation, such term means the 

9 National Science Board;’’. 

10 (B)(i) Subsection (f) of section 8G of such Act is 

11 repealed. 

12 (ii) Subsection (c) of section 8G of such Act is 

13 amended by striking ‘‘Except as provided under sub14 section (f) of this section, the’’ and inserting ‘‘The’’. 

15 (C) Section 8J of such Act is amended by strik16 ing the matter after ‘‘8D,’’ and before ‘‘of this Act’’ 

17 and inserting ‘‘8E, 8F, 8H, or 8L’’. 

18 (2) RELATING TO TITLE 39, UNITED STATES

19 CODE.—(A) Subsection (e) of section 202 of title 39, 

20 United States Code, is repealed. 

21 (B) Paragraph (4) of section 102 of such title 39 

22 (as amended by section 101) is amended to read as 

23 follows: 

24 ‘‘(4) ‘Inspector General’ means the Inspector 

25 General of the United States Postal Service, ap-
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1 pointed under section 3(a) of the Inspector General 

2 Act of 1978;’’. 

3 (C) The first sentence of section 1003(a) of such 

4 title 39 is amended by striking ‘‘chapters 2 and 12 

5 of this title, section 8G of the Inspector General Act 

6 of 1978, or other provision of law,’’ and inserting 

7 ‘‘chapter 2 or 12 of this title, subsection (b) or (c) of 

8 this section, or any other provision of law,’’. 

9 (D) Section 1003(b) of such title 39 is amended 

10 by striking ‘‘respective’’ and inserting ‘‘other’’. 

11 (E) Section 1003(c) of such title 39 is amended 

12 by striking ‘‘included’’ and inserting ‘‘includes’’. 

13 (3) RELATING TO THE ENERGY POLICY ACT OF

14 1992.—Section 160(a) of the Energy Policy Act of 

15 1992 (42 U.S.C. 8262f(a)) is amended (in the matter 

16 before paragraph (1)) by striking all that follows ‘‘(5 

17 U.S.C. App.)’’ and before ‘‘shall—’’. 

18 (g) EFFECTIVE DATE; TRANSITION PROVISIONS.— 

19 (1) EFFECTIVE DATE.—Except as provided in 

20 paragraph (2) or subsection (c), this section and the 

21 amendments made by this section shall take effect on 

22 the date of the enactment of this Act. 

23 (2) TRANSITION PROVISIONS.— 

24 (A) PRESIDENTIAL APPOINTMENT AUTHOR25 ITY AVAILABLE IMMEDIATELY.—The authority to 
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1 appoint an Inspector General of the United 

2 States Postal Service in accordance with the 

3 amendments made by this section shall be avail4 able as of the effective date of this section. 

5 (B) CONTINUATION IN OFFICE.—Pending 

6 the appointment of an Inspector General of the 

7 United States Postal Service in accordance with 

8 the amendments made by this section, the indi9 vidual serving as the Inspector General of the 

10 United States Postal Service on the day before 

11 the effective date of this section may continue to 

12 serve— 

13 (i) in accordance with applicable pro14 visions of the Inspector General Act of 1978 

15 and (except as provided in clause (ii)) of 

16 title 39, United States Code, as last in effect 

17 before the effective date of this Act; but 

18 (ii) subject to the provisions of such 

19 title 39 as amended by subsection (e) of this 

20 section (deeming any reference to the ‘‘In21 spector General’’ in such provisions, as so 

22 amended, to refer to the individual con23 tinuing to serve under authority of this sub24 paragraph) and subparagraph (C). 
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1 (C) AUTHORIZATION OF APPROPRIA2 TIONS.— 

3 (i) IN GENERAL.—Notwithstanding 

4 any other provision of this subsection, sec5 tion 8L(e) of the Inspector General Act of 

6 1978 (as amended by this section) shall be 

7 effective for purposes of fiscal years begin8 ning on or after October 1, 2005. 

9 (ii) SAVINGS PROVISION.—For pur10 poses of the fiscal year ending on September 

11 30, 2005, funding for the Office of Inspector 

12 General of the United States Postal Service 

13 shall be made available in the same manner 

14 as if this Act had never been enacted. 

15 (D) ELIGIBILITY OF PRIOR INSPECTOR GEN16 ERAL.—Nothing in this Act shall prevent any 

17 individual who has served as Inspector General 

18 of the United States Postal Service at any time 

19 before the date of the enactment of this Act from 

20 being appointed to that position pursuant to the 

21 amendments made by this section. 

22 TITLE VII—EVALUATIONS 

23 SEC. 701. UNIVERSAL POSTAL SERVICE STUDY. 

24 (a) REPORT BY THE POSTAL SERVICE.—The United 

25 States Postal Service shall, within 12 months after the date 
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1 of the enactment of this Act, submit to the President, the 

2 Congress, and the Postal Regulatory Commission, a written 

3 report on universal postal service in the United States 

4 (hereinafter in this section referred to as ‘‘universal serv5 ice’’). Such report shall include at least the following: 

6 (1) A comprehensive review of the history and 

7 development of universal service, including how the 

8 scope and standards of universal service have evolved 

9 over time. 

10 (2) The scope and standards of universal service 

11 provided under current law (including sections 101 

12 and 403 of title 39, United States Code) and current 

13 rules, regulations, policy statements, and practices of 

14 the Postal Service. 

15 (3) A description of any geographic areas, popu16 lations, communities, organizations, or other groups 

17 or entities not currently covered by universal service 

18 or that are covered but that are receiving services de19 ficient in scope or quality or both. 

20 (4) The scope and standards of universal service 

21 likely to be required in the future in order to meet the 

22 needs and expectations of the American public, in23 cluding all types of mail users, based on such assump24 tions or alternative sets of assumptions as the Postal 

25 Service considers plausible. 
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1 (5) Such recommendations as the Postal Service 

2 considers appropriate. 

3 (b) REPORT BY THE POSTAL REGULATORY COMMIS4 SION.—The Postal Regulatory Commission shall, within 12 

5 months after receiving the report of the Postal Service under 

6 subsection (a), submit to the President and the Congress a 

7 written report evaluating the report of the Postal Service. 

8 The report of the Commission shall include at least the fol9 lowing: 

10 (1) Such comments and observations relating to 

11 the matters addressed in the Postal Service’s report as 

12 the Commission considers appropriate. 

13 (2) An estimate of the cost attributable to the ob14 ligation to provide universal service under prior and 

15 current law, respectively. 

16 (3) An estimate of the likely cost of fulfilling the 

17 obligation to provide universal service under— 

18 (A) the assumptions or respective sets of as19 sumptions of the Postal Service described in sub20 section (a)(4); and 

21 (B) such other assumptions or sets of as22 sumptions as the Commission considers plau23 sible. 

24 (4) Such additional topics and recommendations 

25 as the Commission considers appropriate. 
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1 (c) CONSULTATION.—In preparing the reports required 

2 by this section, the Postal Service and the Postal Regulatory 

3 Commission— 

4 (1) shall consult with each other, other Federal 

5 agencies, users of the mails, enterprises in the private 

6 sector engaged in the delivery of mail, and the general 

7 public; and 

8 (2) shall address in their respective reports any 

9 written comments received under this section. 

10 (d) CLARIFYING PROVISION.—Nothing in this section 

11 shall be considered to relate to any services that are not 

12 postal services (within the meaning of section 102 of title 

13 39, United States Code, as amended by section 101). 

14 SEC. 702. ASSESSMENTS OF RATEMAKING, CLASSIFICATION, 

15 AND OTHER PROVISIONS. 

16 (a) IN GENERAL.—The Postal Regulatory Commission 

17 shall, at least every 5 years, submit a report to the President 

18 and the Congress concerning— 

19 (1) the operation of the amendments made by the 

20 Postal Accountability and Enhancement Act; and 

21 (2) recommendations for any legislation or other 

22 measures necessary to improve the effectiveness or effi23 ciency of the postal laws of the United States. 

24 (b) POSTAL SERVICE VIEWS.—A report under this sec25 tion shall be submitted only after reasonable opportunity 
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1 has been afforded to the Postal Service to review such report 

2 and to submit written comments thereon. Any comments 

3 timely received from the Postal Service under the preceding 

4 sentence shall be attached to the report submitted under sub5 section (a). 

6 (c) SPECIFIC INFORMATION REQUIRED.—The Postal 

7 Regulatory Commission shall include, as part of at least 

8 its first report under subsection (a), the following: 

9 (1) COST-COVERAGE REQUIREMENT RELATING TO

10 COMPETITIVE PRODUCTS COLLECTIVELY.—With re11 spect to section 3633 of title 39, United States Code 

12 (as amended by this Act)— 

13 (A) a description of how such section has 

14 operated; and 

15 (B) recommendations as to whether or not 

16 such section should remain in effect and, if so, 

17 any suggestions as to how it might be improved. 

18 (2) COMPETITIVE PRODUCTS FUND.—With re19 spect to the Postal Service Competitive Products Fund 

20 (under section 2011 of title 39, United States Code, 

21 as amended by section 301), in consultation with the 

22 Secretary of the Treasury— 

23 (A) a description of how such Fund has op24 erated; 
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1 (B) any suggestions as to how the operation 

2 of such Fund might be improved; and 

3 (C) a description and assessment of alter4 native accounting or financing mechanisms that 

5 might be used to achieve the objectives of such 

6 Fund. 

7 (3) ASSUMED FEDERAL INCOME TAX ON COM8 PETITIVE PRODUCTS FUND.—With respect to section 

9 3634 of title 39, United States Code (as amended by 

10 this Act), in consultation with the Secretary of the 

11 Treasury— 

12 (A) a description of how such section has 

13 operated; and 

14 (B) recommendations as to whether or not 

15 such section should remain in effect and, if so, 

16 any suggestions as to how it might be improved. 

17 SEC. 703. STUDY ON EQUAL APPLICATION OF LAWS TO COM18 PETITIVE PRODUCTS. 

19 (a) IN GENERAL.—The Federal Trade Commission 

20 shall prepare and submit to the President, the Congress, 

21 and the Postal Regulatory Commission, within 1 year after 

22 the date of the enactment of this Act, a comprehensive report 

23 identifying Federal and State laws that apply differently 

24 to the United States Postal Service with respect to the com25 petitive category of mail (within the meaning of section 102 
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1 of title 39, United States Code, as amended by section 101) 

2 and private companies providing similar products. 

3 (b) RECOMMENDATIONS; ADJUSTMENTS.—The Federal 

4 Trade Commission shall include such recommendations as 

5 it considers appropriate for bringing such legal differences 

6 to an end and, in the interim, to account under section 

7 3633, for the net economic effects provided by those laws. 

8 (c) CONSULTATION.—In preparing its report, the Fed9 eral Trade Commission shall consult with the United States 

10 Postal Service, the Postal Regulatory Commission, other 

11 Federal agencies, mailers, private companies that provide 

12 delivery services, and the general public, and shall append 

13 to such report any written comments received under this 

14 subsection. 

15 (d) COMPETITIVE PRODUCT RATE REGULATION.—The 

16 Postal Regulatory Commission shall take into account the 

17 recommendations of the Federal Trade Commission, and 

18 subsequent events that affect the continuing validity of the 

19 estimate of the net economic effect, in promulgating or re20 vising the regulations required by section 3633 of title 39, 

21 United States Code. 
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1 SEC. 704. GREATER DIVERSITY IN POSTAL SERVICE EXECU2 TIVE AND ADMINISTRATIVE SCHEDULE MAN3 AGEMENT POSITIONS. 

4 (a) STUDY.—The Board of Governors shall study and, 

5 within 1 year after the date of the enactment of this Act, 

6 submit to the President and Congress a report concerning 

7 the extent to which women and minorities are represented 

8 in supervisory and management positions within the 

9 United States Postal Service. Any data included in the re10 port shall be presented in the aggregate and by pay level. 

11 (b) PERFORMANCE EVALUATIONS.—The United States 

12 Postal Service shall, as soon as practicable, take such meas13 ures as may be necessary to ensure that, for purposes of 

14 conducting performance appraisals of supervisory or mana15 gerial employees, appropriate consideration shall be given 

16 to meeting affirmative action goals, achieving equal em17 ployment opportunity requirements, and implementation of 

18 plans designed to achieve greater diversity in the workforce. 

19 SEC. 705. PLAN FOR ASSISTING DISPLACED WORKERS. 

20 (a) PLAN.—The United States Postal Service shall, be21 fore the deadline specified in subsection (b), develop and 

22 be prepared to implement, whenever necessary, a com23 prehensive plan under which reemployment assistance shall 

24 be afforded to employees displaced as a result of the automa25 tion or privatization of any of its functions. 
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1 (b) REPORT.—Not later than 1 year after the date of 

2 the enactment of this Act, the United States Postal Service 

3 shall submit to the Board of Governors and to Congress a 

4 written report describing its plan under this section. 

5 SEC. 706. CONTRACTS WITH WOMEN, MINORITIES, AND 

6 SMALL BUSINESSES. 

7 The Board of Governors shall study and, within 1 year 

8 after the date of the enactment of this Act, submit to the 

9 President and the Congress a report concerning the number 

10 and value of contracts and subcontracts the Postal Service 

11 has entered into with women, minorities, and small busi12 nesses. 

13 SEC. 707. RATES FOR PERIODICALS. 

14 (a) IN GENERAL.—The United States Postal Service, 

15 acting jointly with the Postal Regulatory Commission, shall 

16 study and submit to the President and Congress a report 

17 concerning— 

18 (1) the quality, accuracy, and completeness of the 

19 information used by the Postal Service in deter20 mining the direct and indirect postal costs attrib21 utable to periodicals; and 

22 (2) any opportunities that might exist for im23 proving efficiencies in the collection, handling, trans24 portation, or delivery of periodicals by the Postal 
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1 Service, including any pricing incentives for mailers 

2 that might be appropriate. 

3 (b) RECOMMENDATIONS.—The report shall include rec4 ommendations for any administrative action or legislation 

5 that might be appropriate. 

6 SEC. 708. ASSESSMENT OF CERTAIN RATE DEFICIENCIES. 

7 (a) IN GENERAL.—Within 12 months after the date 

8 of the enactment of this Act, the Office of Inspector General 

9 of the United States Postal Service shall study and submit 

10 to the President, the Congress, and the United States Postal 

11 Service, a report concerning the administration of section 

12 3626(k) of title 39, United States Code. 

13 (b) SPECIFIC REQUIREMENTS.—The study and report 

14 shall specifically address the adequacy and fairness of the 

15 process by which assessments under section 3626(k) of title 

16 39, United States Code, are determined and appealable, in17 cluding— 

18 (1) whether the Postal Regulatory Commission 

19 or any other body outside the Postal Service should 

20 be assigned a role; and 

21 (2) whether a statute of limitations should be es22 tablished for the commencement of proceedings by the 

23 Postal Service thereunder. 
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1 SEC. 709. NETWORK OPTIMIZATION. 

2 (a) IN GENERAL.—The Postal Service shall, within 90 

3 days after the end of each fiscal year, prepare and submit 

4 to the Postal Regulatory Commission, the Congress, and the 

5 Board of Governors a written report on the postal proc6 essing, transportation, and distribution networks. Such re7 port shall include at least the following: 

8 (1) An account of actions taken during the pre9 ceding fiscal year to improve the efficiency and effec10 tiveness of the processing, transportation, and dis11 tribution networks, while preserving the timely deliv12 ery of postal services. 

13 (2) An account of— 

14 (A) actions taken to identify any excess ca15 pacity within the processing, transportation, and 

16 distribution networks; and 

17 (B) actions taken to implement savings 

18 through realignment or consolidation of facili19 ties. 

20 (3) Identification of statutory or regulatory ob21 stacles that prevented or will prevent the Postal Serv22 ice from taking action to realign or consolidate facili23 ties. 

24 (4) Such additional topics and recommendations 

25 as the Postal Service considers appropriate. 
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1 (b) TREATMENT AS PERFORMANCE GOALS.—The Post2 al Service shall establish and report the matters set forth 

3 in subsection (a) as performance goals in the reports re4 quired by sections 2803 and 2804. 

5 (c) ACTIONS TO BE TAKEN.—The Postal Service shall 

6 take such actions it considers, in its sole discretion, nec7 essary and appropriate to provide the Nation with a mod8 ern and efficient network for the processing, transportation, 

9 and distribution of mail. Nothing in this section shall pre10 vent the Postal Service from making such improvements in 

11 the efficiency and effectiveness of the network as it deems 

12 appropriate. 

13 SEC. 710. ASSESSMENT OF FUTURE BUSINESS MODEL OF 

14 THE POSTAL SERVICE. 

15 (a) APPOINTMENT OF RESEARCH ORGANIZATION.— 

16 Not later than 90 days after the date of the enactment of 

17 this Act, the Comptroller General of the United States shall 

18 appoint, in such manner and under such terms as he in 

19 his sole discretion determines appropriate, an independent, 

20 impartial, and expert research organization (hereinafter in 

21 this section referred to as the ‘‘research organization’’) to 

22 prepare and submit to the President and to Congress a com23 prehensive report that evaluates what business model would 

24 best promote an efficient, reliable, innovative, and viable 

25 Postal Service that can meet the needs of the Nation and 
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1 its citizens in the 21st century. The final report required 

2 by this section shall be submitted within 27 months of the 

3 date of the enactment of this Act. The final report shall 

4 identify costs, benefits, and feasible options, if any, associ5 ated with one or more strategies for— 

6 (1) maintaining the Postal Service in its current 

7 form as an independent establishment in the executive 

8 branch of the Government; and 

9 (2) transforming the Postal Service into an ordi10 nary corporation, owned wholly by the Government, 

11 wholly by private shareholders, or partly by the Gov12 ernment and partly by private shareholders. 

13 (b) PROTECTION OF UNIVERSAL SERVICE.—The re14 search organization may include such recommendations as 

15 it considers appropriate with respect to how the Postal 

16 Service’s business model can be maintained or transformed 

17 in an orderly manner that will minimize adverse effects on 

18 all interested parties and assure continued availability of 

19 affordable, universal postal service throughout the United 

20 States (based on the reports required by section 701). The 

21 research organization shall not consider any strategy or 

22 other course of action that would pose a significant risk 

23 to the continued availability of affordable, universal postal 

24 service throughout the United States. 

25 (c) ELEMENTS OF REPORT.— 
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1 (1) TOPICS TO ADDRESS.—The report shall ad2 dress at least the following: 

3 (A) Specification of nature and bases of one 

4 or more sets of reasonable assumptions about the 

5 development of the postal services market, to the 

6 extent that such assumptions may be necessary 

7 or appropriate for each strategy identified by the 

8 research organization. 

9 (B) Specification of the nature and bases of 

10 one or more sets of reasonable assumptions about 

11 the development of the regulatory framework for 

12 postal services, to the extent that such assump13 tions may be necessary or appropriate for each 

14 strategy identified by the research organization. 

15 (C) Qualitative and, to the extent possible, 

16 quantitative effects that each strategy identified 

17 by the research organization may have on uni18 versal service generally, the Postal Service, mail19 ers, postal employees, private companies that 

20 provide delivery services, and the general public. 

21 (D) Financial effects that each strategy 

22 identified by the research organization may have 

23 on the Postal Service, postal employees, the 

24 Treasury of the United States, and other affected 
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1 parties, including the American mailing con2 sumer. 

3 (E) Feasible and appropriate procedural 

4 steps and timetables for implementing each 

5 strategy identified by the research organization. 

6 (F) Such additional topics as the Comp7 troller General or the research organization shall 

8 consider necessary and appropriate. 

9 (2) MATTERS TO CONSIDER.—For each strategy 

10 identified, the research organization shall assess how 

11 each business model might— 

12 (A) address the human-capital challenges 

13 facing the Postal Service, including how em14 ployee-management relations within the Postal 

15 Service may be improved; 

16 (B) optimize the postal infrastructure, in17 cluding the best methods for providing retail 

18 services that ensure convenience and access to 

19 customers; 

20 (C) ensure the safety and security of the 

21 mail and of postal employees; 

22 (D) minimize areas of inefficiency or waste 

23 and improve operations involved in the collec24 tion, processing, or delivery of mail; and 
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1 (E) impact other matters that the Comp2 troller General or the research organization de3 termines are relevant to evaluating a viable long4 term business model for the Postal Service. 

5 (3) EXPERIENCES OF OTHER COUNTRIES.—In 

6 preparing the report required by subsection (a), the 

7 research organization shall comprehensively and 

8 quantitatively investigate the experiences of other in9 dustrialized countries that have transformed the na10 tional post office. The research organization shall un11 dertake such original research as it deems necessary. 

12 In each case, the research organization shall describe 

13 as fully as possible the costs and benefits of trans14 formation of the national post office on all affected 

15 parties and shall identify any lessons that foreign ex16 perience may imply for each strategy identified by 

17 the research organization. 

18 (d) OUTSIDE EXPERTS.—In preparing its study, the 

19 research organization may retain the services of additional 

20 experts and consultants. 

21 (e) CONSULTATION.—In preparing its report, the re22 search organization shall consult fully with the Postal Serv23 ice, the Postal Regulatory Commission, other Federal agen24 cies, postal employee unions and management associations, 

25 mailers, private companies that provide delivery services, 
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1 and the general public. The research organization shall in2 clude with its final report a copy of all formal written com3 ments received under this subsection. 

4 (f) AUTHORIZATION OF APPROPRIATIONS.—There are 

5 authorized to be appropriated from the Postal Service Fund 

6 such sums as may be necessary to carry out this section. 

7 SEC. 711. STUDY ON CERTAIN PROPOSED AMENDMENTS. 

8 The Government Accountability Office shall study and, 

9 within 12 months after the date of the enactment of this 

10 Act, submit to the Congress a report on sections 805 and 

11 807 of H.R. 22 (109th Congress), as introduced. Such report 

12 shall include the following: 

13 (1) A description of the efficiencies of the current 

14 system under section 5402 of title 39, United States 

15 Code. 

16 (2) The potential for cost savings to the United 

17 States Postal Service if the Postal Service, rather 

18 than the Department of Transportation, were to ad19 minister international mail carriage. 

20 (3) The potential for harm to domestic air car21 riers and American workers currently employed by 

22 domestic air carriers. 

23 (4) The potential loss of revenue to domestic air 

24 carriers and American workers currently employed by 

25 domestic air carriers. 
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1 (5) The process by which the United States Post2 al Service would administer any changes in current 

3 law. 

4 (6) The process by which the Department of 

5 Transportation administers current law. 

6 (7) The potential for change in protection of na7 tional security by carriage by foreign carriers of 

8 international mail to and from the United States. 

9 SEC. 712. DEFINITION. 

10 For purposes of this title, the term ‘‘Board of Gov11 ernors’’ has the meaning given such term by section 102 

12 of title 39, United States Code. 

13 TITLE VIII—MISCELLANEOUS; 

14 TECHNICAL AND CON15 FORMING AMENDMENTS 

16 SEC. 801. EMPLOYMENT OF POSTAL POLICE OFFICERS. 

17 Section 3061 of title 18, United States Code, is amend18 ed by adding at the end the following: 

19 ‘‘(c)(1) The Postal Service may employ police officers 

20 for duty in connection with the protection of property 

21 owned or occupied by the Postal Service or under the charge 

22 and control of the Postal Service, and persons on the prop23 erty, including duty in areas outside the property to the 

24 extent necessary to protect the property and persons on the 

25 property. 
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1 ‘‘(2) With respect to such property, such officers shall 

2 have the power to— 

3 ‘‘(A) enforce Federal laws and regulations for the 

4 protection of persons and property; 

5 ‘‘(B) carry firearms; and 

6 ‘‘(C) make arrests without a warrant for any of7 fense against the United States committed in the 

8 presence of the officer or for any felony cognizable 

9 under the laws of the United States if the officer has 

10 reasonable grounds to believe that the person to be ar11 rested has committed or is committing a felony. 

12 ‘‘(3) With respect to such property, such officers may 

13 have, to such extent as the Postal Service may by regula14 tions prescribe, the power to— 

15 ‘‘(A) serve warrants and subpoenas issued under 

16 the authority of the United States; and 

17 ‘‘(B) conduct investigations, on and off the prop18 erty in question, of offenses that may have been com19 mitted against property owned or occupied by the 

20 Postal Service or persons on the property. 

21 ‘‘(4)(A) As to such property, the Postmaster General 

22 may prescribe regulations necessary for the protection and 

23 administration of property owned or occupied by the Postal 

24 Service and persons on the property. The regulations may 

25 include reasonable penalties, within the limits prescribed 
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1 in subparagraph (B), for violations of the regulations. The 

2 regulations shall be posted and remain posted in a con3 spicuous place on the property. 

4 ‘‘(B) A person violating a regulation prescribed under 

5 this subsection shall be fined under this title, imprisoned 

6 for not more than 30 days, or both.’’. 

7 SEC. 802. DATE OF POSTMARK TO BE TREATED AS DATE OF 

8 APPEAL IN CONNECTION WITH THE CLOSING 

9 OR CONSOLIDATION OF POST OFFICES. 

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

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

12 ‘‘(6) For purposes of paragraph (5), any appeal re13 ceived by the Commission shall— 

14 ‘‘(A) if sent to the Commission through the 

15 mails, be considered to have been received on the date 

16 of the Postal Service postmark on the envelope or 

17 other cover in which such appeal is mailed; or 

18 ‘‘(B) if otherwise lawfully delivered to the Com19 mission, be considered to have been received on the 

20 date determined based on any appropriate docu21 mentation or other indicia (as determined under reg22 ulations of the Commission).’’. 

23 (b) EFFECTIVE DATE.—This section and the amend24 ments made by this section shall apply with respect to any 

25 determination to close or consolidate a post office which is 
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1 first made available, in accordance with paragraph (3) of 

2 section 404(b) of title 39, United States Code, after the end 

3 of the 3-month period beginning on the date of the enact4 ment of this Act. 

5 SEC. 803. PROVISIONS RELATING TO BENEFITS UNDER 

6 CHAPTER 81 OF TITLE 5, UNITED STATES 

7 CODE, FOR OFFICERS AND EMPLOYEES OF 

8 THE FORMER POST OFFICE DEPARTMENT. 

9 (a) IN GENERAL.—Section 8 of the Postal Reorganiza10 tion Act (39 U.S.C. 1001 note) is amended by inserting 

11 ‘‘(a)’’ after ‘‘8.’’ and by adding at the end the following: 

12 ‘‘(b) For purposes of chapter 81 of title 5, United 

13 States Code, the Postal Service shall, with respect to any 

14 individual receiving benefits under such chapter as an offi15 cer or employee of the former Post Office Department, have 

16 the same authorities and responsibilities as it has with re17 spect to an officer or employee of the Postal Service receiv18 ing such benefits.’’. 

19 (b) EFFECTIVE DATE.—This section and the amend20 ments made by this section shall be effective as of the first 

21 day of the fiscal year in which this Act is enacted. 

22 SEC. 804. OBSOLETE PROVISIONS. 

23 (a) REPEAL.— 

24 (1) IN GENERAL.—Chapter 52 of title 39, United 

25 States Code, is repealed. 
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1 (2) CONFORMING AMENDMENTS.—(A) Section 

2 5005(a) of title 39, United States Code, is amended— 

3 (i) by striking paragraph (1), and by redes4 ignating paragraphs (2) through (4) as para5 graphs (1) through (3), respectively; and 

6 (ii) in paragraph (3) (as so designated by 

7 clause (i)), by striking ‘‘(as defined in section 

8 5201(6) of this title)’’. 

9 (B) Section 5005(b) of such title 39 is amended 

10 by striking ‘‘(a)(4)’’ each place it appears and insert11 ing ‘‘(a)(3)’’. 

12 (C) Section 5005(c) of such title 39 is amended 

13 by striking ‘‘by carrier or person under subsection 

14 (a)(1) of this section, by contract under subsection 

15 (a)(4) of this section, or’’ and inserting ‘‘by contract 

16 under subsection (a)(3) of this section or’’. 

17 (b) ELIMINATING RESTRICTION ON LENGTH OF CON18 TRACTS.—(1) Section 5005(b)(1) of title 39, United States 

19 Code, is amended by striking ‘‘(or where the Postal Service 

20 determines that special conditions or the use of special 

21 equipment warrants, not in excess of 6 years)’’ and insert22 ing ‘‘(or such longer period of time as may be determined 

23 by the Postal Service to be advisable or appropriate)’’. 

24 (2) Section 5402(d) of such title 39 is amended by 

25 striking ‘‘for a period of not more than 4 years’’. 
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1 (3) Section 5605 of such title 39 is amended by strik2 ing ‘‘for periods of not in excess of 4 years’’. 

3 (c) CLERICAL AMENDMENT.—The analysis for part V 

4 of title 39, United States Code, is amended by repealing 

5 the item relating to chapter 52. 

6 SEC. 805. INVESTMENTS. 

7 Subsection (c) of section 2003 of title 39, United States 

8 Code, is amended— 

9 (1) by striking ‘‘(c) If’’ and inserting ‘‘(c)(1) Ex10 cept as provided in paragraph (2), if’’; and 

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

12 ‘‘(2)(A) Nothing in this section shall be considered to 

13 authorize any investment in any obligations or securities 

14 of a commercial entity. 

15 ‘‘(B) For purposes of this paragraph, the term ‘com16 mercial entity’ means any corporation, company, associa17 tion, partnership, joint stock company, firm, society, or 

18 other similar entity, as further defined under regulations 

19 prescribed by the Postal Regulatory Commission.’’. 

20 SEC. 806. REDUCED RATES. 

21 Section 3626 of title 39, United States Code, is amend22 ed— 

23 (1) in subsection (a), by striking all before para24 graph (4) and inserting the following: 
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1 ‘‘(a)(1) Except as otherwise provided in this section, 

2 rates of postage for a class of mail or kind of mailer under 

3 former section 4358, 4452(b), 4452(c), 4554(b), or 4554(c) 

4 of this title shall be established in accordance with section 

5 3622. 

6 ‘‘(2) For the purpose of this subsection, the term ‘reg7 ular-rate category’ means any class of mail or kind of mail8 er, other than a class or kind referred to in section 2401(c). 

9 ‘‘(3) Rates of postage for a class of mail or kind of 

10 mailer under former section 4358(a) through (c) of this title 

11 shall be established so that postage on each mailing of such 

12 mail reflects its preferred status as compared to the postage 

13 for the most closely corresponding regular-rate category 

14 mailing.’’; 

15 (2) in subsection (g), by adding at the end the 

16 following: 

17 ‘‘(3) For purposes of this section and former section 

18 4358(a) through (c) of this title, those copies of an issue 

19 of a publication entered within the county in which it is 

20 published, but distributed outside such county on postal 

21 carrier routes originating in the county of publication, shall 

22 be treated as if they were distributed within the county of 

23 publication. 

24 ‘‘(4)(A) In the case of an issue of a publication, any 

25 number of copies of which are mailed at the rates of postage 
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1 for a class of mail or kind of mailer under former section 

2 4358(a) through (c) of this title, any copies of such issue 

3 which are distributed outside the county of publication (ex4 cluding any copies subject to paragraph (3)) shall be subject 

5 to rates of postage provided for under this paragraph. 

6 ‘‘(B) The rates of postage applicable to mail under this 

7 paragraph shall be established in accordance with section 

8 3622. 

9 ‘‘(C) This paragraph shall not apply with respect to 

10 an issue of a publication unless the total paid circulation 

11 of such issue outside the county of publication (not counting 

12 recipients of copies subject to paragraph (3)) is less than 

13 5,000.’’; and 

14 (3) by adding at the end the following: 

15 ‘‘(n) In the administration of this section, matter that 

16 satisfies the circulation standards for requester publications 

17 shall not be excluded from being mailed at the rates for mail 

18 under former section 4358 solely because such matter is de19 signed primarily for free circulation or for circulation at 

20 nominal rates, or fails to meet the requirements of former 

21 section 4354(a)(5).’’. 

22 SEC. 807. HAZARDOUS MATTER. 

23 (a) NONMAILABILITY GENERALLY.—Section 3001 of 

24 title 39, United States Code, is amended— 
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1 (1) by redesignating subsection (n) as subsection 

2 (o); and 

3 (2) by inserting after subsection (m) the fol4 lowing: 

5 ‘‘(n)(1) Except as otherwise authorized by law or regu6 lations of the Postal Service, hazardous material is non7 mailable. 

8 ‘‘(2) In this subsection, the term ‘hazardous material’ 

9 means a substance or material designated by the Secretary 

10 of Transportation under section 5103(a) of title 49.’’. 

11 (b) MAILABILITY.—Chapter 30 of title 39, United 

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

13 ‘‘§ 3018. Hazardous material 

14 ‘‘(a) IN GENERAL.—The Postal Service shall prescribe 

15 regulations for the safe transportation of hazardous mate16 rial in the mail. 

17 ‘‘(b) PROHIBITIONS.—No person may— 

18 ‘‘(1) mail or cause to be mailed hazardous mate19 rial that has been declared by statute or Postal Serv20 ice regulation to be nonmailable; 

21 ‘‘(2) mail or cause to be mailed hazardous mate22 rial in violation of any statute or Postal Service reg23 ulation restricting the time, place, or manner in 

24 which hazardous material may be mailed; or 
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1 ‘‘(3) manufacture, distribute, or sell any con2 tainer, packaging kit, or similar device that— 

3 ‘‘(A) is represented, marked, certified, or 

4 sold by such person for use in the mailing of 

5 hazardous material; and 

6 ‘‘(B) fails to conform with any statute or 

7 Postal Service regulation setting forth standards 

8 for a container, packaging kit, or similar device 

9 used for the mailing of hazardous material. 

10 ‘‘(c) CIVIL PENALTY; CLEAN-UP COSTS AND DAM11 AGES.— 

12 ‘‘(1) IN GENERAL.—A person who knowingly vio13 lates this section or a regulation prescribed under this 

14 section shall be liable for— 

15 ‘‘(A) a civil penalty of at least $250, but 

16 not more than $100,000, for each violation; 

17 ‘‘(B) the costs of any clean-up associated 

18 with each violation; and 

19 ‘‘(C) damages. 

20 ‘‘(2) KNOWING ACTION.—A person acts know21 ingly for purposes of paragraph (1) when— 

22 ‘‘(A) the person has actual knowledge of the 

23 facts giving rise to the violation; or 
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1 ‘‘(B) a reasonable person acting in the cir2 cumstances and exercising reasonable care would 

3 have had that knowledge. 

4 ‘‘(3) SEPARATE VIOLATIONS.— 

5 ‘‘(A) VIOLATIONS OVER TIME.—A separate 

6 violation under this subsection occurs for each 

7 day hazardous material, mailed or caused to be 

8 mailed in noncompliance with this section, is in 

9 the mail. 

10 ‘‘(B) SEPARATE ITEMS.—A separate viola11 tion under this subsection occurs for each item 

12 containing hazardous material that is mailed or 

13 caused to be mailed in noncompliance with this 

14 section. 

15 ‘‘(d) HEARINGS.—The Postal Service may determine 

16 that a person has violated this section or a regulation pre17 scribed under this section only after notice and an oppor18 tunity for a hearing. Proceedings under this section shall 

19 be conducted in accordance with section 3001(m). 

20 ‘‘(e) PENALTY CONSIDERATIONS.—In determining the 

21 amount of a civil penalty for a violation of this section, 

22 the Postal Service shall consider— 

23 ‘‘(1) the nature, circumstances, extent, and grav24 ity of the violation; 
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1 ‘‘(2) with respect to the person who committed 

2 the violation, the degree of culpability, any history of 

3 prior violations, the ability to pay, and any effect on 

4 the ability to continue in business; 

5 ‘‘(3) the impact on Postal Service operations; 

6 and 

7 ‘‘(4) any other matters that justice requires. 

8 ‘‘(f) CIVIL ACTIONS TO COLLECT.— 

9 ‘‘(1) IN GENERAL.—In accordance with section 

10 409(d), a civil action may be commenced in an ap11 propriate district court of the United States to collect 

12 a civil penalty, clean-up costs, and damages assessed 

13 under subsection (c). 

14 ‘‘(2) COMPROMISE.—The Postal Service may 

15 compromise the amount of a civil penalty, clean-up 

16 costs, and damages assessed under subsection (c) be17 fore commencing a civil action with respect to such 

18 civil penalty, clean-up costs, and damages under 

19 paragraph (1). 

20 ‘‘(g) CIVIL JUDICIAL PENALTIES.— 

21 ‘‘(1) IN GENERAL.—At the request of the Postal 

22 Service, the Attorney General may bring a civil ac23 tion in an appropriate district court of the United 

24 States to enforce this section or a regulation pre25 scribed under this section. 
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1 ‘‘(2) RELIEF.—The court in a civil action under 

2 paragraph (1) may award appropriate relief, includ3 ing a temporary or permanent injunction, civil pen4 alties as determined in accordance with this section, 

5 or punitive damages. 

6 ‘‘(3) CONSTRUCTION.—A civil action under this 

7 subsection shall be in lieu of civil penalties for the 

8 same violation under subsection (c)(1)(A). 

9 ‘‘(h) DEPOSIT OF AMOUNTS COLLECTED.— 

10 ‘‘(1) POSTAL SERVICE FUND.—Except as pro11 vided under paragraph (2), amounts collected under 

12 subsection (c)(1)(B) and (C) shall be deposited into 

13 the Postal Service Fund under section 2003. 

14 ‘‘(2) TREASURY.—Amounts collected under sub15 section (c)(1)(A) and any punitive damages collected 

16 under subsection (c)(1)(C) shall be deposited into the 

17 Treasury of the United States.’’. 

18 (c) CONFORMING AMENDMENTS.—(1) Section 2003(b) 

19 of title 39, United States Code, is amended— 

20 (A) in paragraph (7), by striking ‘‘and’’ after 

21 the semicolon; 

22 (B) in paragraph (8), by striking ‘‘purposes.’’ 

23 and inserting ‘‘purposes; and’’; and 

24 (C) by adding at the end the following: 

25 ‘‘(9) any amounts collected under section 3018.’’. 
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1 (2) The analysis for chapter 30 of title 39, United 

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

‘‘3018. Hazardous material.’’. 

3 (d) INJURIOUS ARTICLES AS NONMAILABLE.—Section 

4 1716(a) of title 18, United States Code, is amended by in5 serting after ‘‘explosives,’’ the following: ‘‘hazardous mate6 rials,’’. 

7 SEC. 808. PROVISIONS RELATING TO COOPERATIVE MAIL8 INGS. 

9 (a) DETERMINATION.—The Postal Regulatory Com10 mission shall examine section E670.5.3 of the Domestic 

11 Mail Manual to determine whether it contains adequate 

12 safeguards to protect against (1) abuses of rates for non13 profit mail and (2) deception of consumers. 

14 (b) REGULATIONS.—If the Postal Regulatory Commis15 sion determines that section E670.5.3 of the Domestic Mail 

16 Manual does not contain adequate safeguards as described 

17 in the preceding subsection, the Commission shall promul18 gate such regulations as may be necessary to ensure such 

19 safeguards. 

20 (c) TIMING.—The Postal Regulatory Commission shall 

21 complete the examination required by subsection (a) and 

22 the promulgation of any necessary regulations required by 

23 subsection (b) within one year after the date of the enact24 ment of this section. 
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1 SEC. 809. TECHNICAL AND CONFORMING AMENDMENTS. 

2 (a) REIMBURSEMENT.—Section 3681 of title 39, 

3 United States Code, is amended by striking ‘‘section 3628’’ 

4 and inserting ‘‘sections 3662 through 3664’’. 

5 (b) SIZE AND WEIGHT LIMITS.—Section 3682 of title 

6 39, United States Code, is amended to read as follows: 

7 ‘‘§ 3682. Size and weight limits 

8 ‘‘The Postal Service may establish size and weight lim9 itations for mail matter in the market-dominant category 

10 of mail consistent with regulations the Postal Regulatory 

11 Commission may prescribe under section 3622. The Postal 

12 Service may establish size and weight limitations for mail 

13 matter in the competitive category of mail consistent with 

14 its authority under section 3632.’’. 

15 (c) REVENUE FOREGONE, ETC.—Title 39, United 

16 States Code, is amended— 

17 (1) in section 503 (as so redesignated by section 

18 501), by striking ‘‘this chapter.’’ and inserting ‘‘this 

19 title.’’; and 

20 (2) in section 2401(d), by inserting ‘‘(as last in 

21 effect before enactment of the Postal Accountability 

22 and Enhancement Act)’’ after ‘‘3626(a)’’ and after 

23 ‘‘3626(a)(3)(B)(ii)’’. 

24 (d) APPROPRIATIONS AND REPORTING REQUIRE25 MENTS.— 
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1 (1) APPROPRIATIONS.—Subsection (e) of section 

2 2401 of title 39, United States Code, is amended— 

3 (A) by striking ‘‘Committee on Post Office 

4 and Civil Service’’ each place it appears and in5 serting ‘‘Committee on Government Reform’’; 

6 and 

7 (B) by striking ‘‘Not later than March 15 of 

8 each year,’’ and inserting ‘‘Each year,’’. 

9 (2) REPORTING REQUIREMENTS.—Sections 

10 2803(a) and 2804(a) of title 39, United States Code, 

11 are amended by striking ‘‘2401(g)’’ and inserting 

12 ‘‘2401(e)’’. 

13 (e) AUTHORITY TO FIX RATES AND CLASSES GEN14 ERALLY; REQUIREMENT RELATING TO LETTERS SEALED

15 AGAINST INSPECTION.—Section 404 of title 39, United 

16 States Code (as amended by section 102) is further amended 

17 by redesignating subsections (b) and (c) as subsections (d) 

18 and (e), respectively, and by inserting after subsection (a) 

19 the following: 

20 ‘‘(b) Except as otherwise provided, the Governors are 

21 authorized to establish reasonable and equitable classes of 

22 mail and reasonable and equitable rates of postage and fees 

23 for postal services in accordance with the provisions of 

24 chapter 36. Postal rates and fees shall be reasonable and 

25 equitable and sufficient to enable the Postal Service, under 
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1 best practices of honest, efficient, and economical manage2 ment, to maintain and continue the development of postal 

3 services of the kind and quality adapted to the needs of the 

4 United States. 

5 ‘‘(c) The Postal Service shall maintain one or more 

6 classes of mail for the transmission of letters sealed against 

7 inspection. The rate for each such class shall be uniform 

8 throughout the United States, its territories, and posses9 sions. One such class shall provide for the most expeditious 

10 handling and transportation afforded mail matter by the 

11 Postal Service. No letter of such a class of domestic origin 

12 shall be opened except under authority of a search warrant 

13 authorized by law, or by an officer or employee of the Postal 

14 Service for the sole purpose of determining an address at 

15 which the letter can be delivered, or pursuant to the author16 ization of the addressee.’’. 

17 (f) LIMITATIONS.—Section 3684 of title 39, United 

18 States Code, is amended by striking all that follows ‘‘any 

19 provision’’ and inserting ‘‘of this title.’’. 

20 (g) MISCELLANEOUS.—Title 39, United States Code, 

21 is amended— 

22 (1) in section 1005(d)(2)— 

23 (A) by striking ‘‘subsection (g) of section 

24 5532,’’; and 
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1 (B) by striking ‘‘8344,’’ and inserting 

2 ‘‘8344’’; 

3 (2) in the analysis for part III, by striking the 

4 item relating to chapter 28 and inserting the fol5 lowing: 

‘‘28. Strategic Planning and Performance Management .... 2801’’; 

6 (3) in section 3005(a)— 

7 (A) in the matter before paragraph (1), by 

8 striking all that follows ‘‘nonmailable’’ and pre9 cedes ‘‘(h),’’ and inserting ‘‘under section 

10 3001(d),’’; and 

11 (B) in the sentence following paragraph (3), 

12 by striking all that follows ‘‘nonmailable’’ and 

13 precedes ‘‘(h),’’ and inserting ‘‘under such section 

14 3001(d),’’; 

15 (4) in section 3210(a)(6)(C), by striking the 

16 matter after ‘‘if such mass mailing’’ and before ‘‘than 

17 60 days’’ and inserting ‘‘is postmarked fewer’’; and 

18 (5) by striking the heading for section 3627 and 

19 inserting the following: 
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1 ‘‘§ 3627. Adjusting free rates’’. 

2 TITLE IX—POSTAL PENSION 

3 FUNDING REFORM AMEND4 MENTS 

5 SEC. 901. CIVIL SERVICE RETIREMENT SYSTEM. 

6 (a) TERMINATION OF OBLIGATION TO PAY GOVERN7 MENT CONTRIBUTIONS.—Section 8334(a)(1)(B)(ii) of title 

8 5, United States Code, is amended by striking all that fol9 lows ‘‘be equal to’’ and inserting ‘‘zero.’’. 

10 (b) DETERMINATION AND DISPOSITION OF POSTAL

11 SURPLUS OR SUPPLEMENTAL LIABILITY.—Section 8348(h) 

12 of title 5, United States Code, is amended to read as follows: 

13 ‘‘(h)(1) For purposes of this subsection, a Postal sur14 plus (or supplemental liability) is the amount, as estimated 

15 by the Office, by which— 

16 ‘‘(A) the actuarial present value of all future 

17 benefits which are payable from the Fund under this 

18 subchapter to current or former employees of the 

19 United States Postal Service, or their survivors, and 

20 attributable to civilian employment with the Postal 

21 Service, is less than (or greater than) 

22 ‘‘(B) the sum of— 

23 ‘‘(i) the actuarial present value of deduc24 tions to be withheld from the future basic pay of 

25 employees of the Postal Service currently subject 

26 to this subchapter pursuant to section 8334; 
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1 ‘‘(ii) that portion of the Fund balance, as of 

2 the date such surplus or supplemental liability is 

3 determined, attributable to payments to the 

4 Fund by the Postal Service and its employees, 

5 plus the earnings on such amounts while in the 

6 Fund; and 

7 ‘‘(iii) any other appropriate amount, as de8 termined by the Office in accordance with gen9 erally accepted actuarial practices and prin10 ciples. 

11 ‘‘(2)(A)(i) Not later than June 15, 2006, the Office 

12 shall determine the Postal surplus or supplemental liability 

13 as of September 30, 2005. 

14 ‘‘(ii) If a supplemental liability is determined under 

15 this subparagraph for fiscal year 2005, the Office shall es16 tablish an amortization schedule, including a series of equal 

17 annual installments commencing September 30, 2006, 

18 which provides for the liquidation of such liability by Sep19 tember 30, 2043. 

20 ‘‘(iii) If a surplus is determined under this subpara21 graph for fiscal year 2005, the amount of the surplus shall 

22 be transferred to the Postal Service Retiree Health Benefits 

23 Fund by June 30, 2006. 

24 ‘‘(B)(i) For each of fiscal years 2006 through 2038, 

25 the Office shall determine the Postal surplus or supple-
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1 mental liability as of the close of such fiscal year, with each 

2 such determination to be made by June 15th of the following 

3 fiscal year. 

4 ‘‘(ii) If a supplemental liability is determined under 

5 this subparagraph for a fiscal year, the Office shall establish 

6 an amortization schedule, including a series of equal an7 nual installments commencing on September 30 of the fol8 lowing fiscal year, which provides for the liquidation of 

9 such liability by September 30, 2043. 

10 ‘‘(iii)(I) If a surplus of $500,000,000 or more is deter11 mined under this subparagraph for a fiscal year, the 

12 amount of the surplus shall be transferred to the Postal 

13 Service Retiree Health Benefits Fund by June 30th of the 

14 following fiscal year. 

15 ‘‘(II) If a surplus of less than $500,000,000 is deter16 mined under this subparagraph for a fiscal year, the sur17 plus shall remain in the Fund, subject to transfer in a sub18 sequent fiscal year under subclause (I) or subparagraph 

19 (C)(iii). 

20 ‘‘(C)(i) Not later than June 15, 2040, the Office shall 

21 determine the Postal surplus or supplemental liability as 

22 of September 30, 2039. 

23 ‘‘(ii) If a supplemental liability is determined under 

24 this subparagraph for fiscal year 2039, the Office shall es25 tablish an amortization schedule, including a series of equal 
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1 annual installments commencing September 30, 2040, 

2 which provides for the liquidation of such liability by Sep3 tember 30, 2043. 

4 ‘‘(iii) If a surplus is determined under this subpara5 graph for fiscal year 2039, the amount of the surplus— 

6 ‘‘(I) shall be applied first toward reducing the 

7 amount of any supplemental liability described in 

8 section 8423(b)(1)(B); and 

9 ‘‘(II) to the extent that any portion of such sur10 plus remains after the application of subclause (I), 

11 shall, not later than June 30, 2040, be transferred to 

12 the Postal Service Retiree Health Benefits Fund. 

13 ‘‘(D) An amortization schedule under this para14 graph— 

15 ‘‘(i) shall be established in accordance with gen16 erally accepted actuarial practices and principles, 

17 with interest computed at the rate used in the most 

18 recent valuation of the Civil Service Retirement Sys19 tem; 

20 ‘‘(ii) shall supersede any amortization schedule 

21 previously established under this paragraph; and 

22 ‘‘(iii) shall not be taken into account, for pur23 poses of any determination of Postal surplus or sup24 plemental liability, except to the extent of any 

25 amounts under such schedule actually paid. 
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1 ‘‘(E)(i) The Postal Service shall pay to the Office the 

2 amounts due under any amortization schedule established 

3 under this paragraph, to the extent not superseded or can4 celed. 

5 ‘‘(ii) A determination under subparagraph (B)(i) or 

6 (C)(i) that no supplemental liability exists shall cancel any 

7 amortization schedule previously established under this 

8 paragraph, to the extent of any amounts first coming due 

9 after the close of the fiscal year to which such determination 

10 relates. 

11 ‘‘(3) Notwithstanding any other provision of law, in 

12 computing the amount of any payment under any other 

13 subsection of this section that is based on the amount of 

14 the unfunded liability, such payment shall be computed dis15 regarding that portion of the unfunded liability that the 

16 Office determines will be liquidated by payments under this 

17 subsection. 

18 ‘‘(4) As used in this subsection, ‘Postal Service Retiree 

19 Health Benefits Fund’ refers to the Postal Service Retiree 

20 Health Benefits Fund, as established by section 8909a.’’. 

21 (c) PROVISIONS RELATING TO AMOUNTS FOR MILI22 TARY SERVICE.—In the application of paragraph (2) of sec23 tion 8348(g) of title 5, United States Code, for fiscal year 

24 2006, the Office of Personnel Management shall include, in 

25 addition to the amount otherwise computed under that 
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1 paragraph, the amounts that would have been included for 

2 fiscal years 2003 through 2005 with respect to credit for 

3 military service of former employees of the United States 

4 Postal Service if Public Law 108-18 had not been enacted 

5 (including earnings thereon) and the Secretary of the Treas6 ury shall make the required transfer to the Civil Service 

7 Retirement and Disability Fund based on that amount. 

8 (d) REVIEW.— 

9 (1) IN GENERAL.—Notwithstanding any other 

10 provision of this section, any determination or rede11 termination made by the Office of Personnel Manage12 ment under this section shall, upon request of the 

13 United States Postal Service, be subject to review by 

14 the Postal Regulatory Commission. The Commission 

15 shall submit a report containing the results of any 

16 such review to the Postal Service, the Office of Per17 sonnel Management, and the Congress. 

18 (2) RESPONSE.—Upon receiving the report of the 

19 Postal Regulatory Commission, the Office of Per20 sonnel Management shall reconsider its determination 

21 or redetermination in light of such report, and shall 

22 make any appropriate adjustments. The Office shall 

23 submit a report containing the results of its reconsid24 eration to the Commission, the Postal Service, and the 

25 Congress. 
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1 SEC. 902. HEALTH INSURANCE. 

2 (a) IN GENERAL.—Chapter 89 of title 5, United States 

3 Code, is amended— 

4 (1) in section 8906(g)(2)(A), by striking ‘‘by the 

5 United States Postal Service.’’ and inserting ‘‘first 

6 from the Postal Service Retiree Health Benefits Fund 

7 up to the amount contained therein, with any re8 maining amount paid by the United States Postal 

9 Service.’’; 

10 (2) by inserting after section 8909 the following: 

11 ‘‘§ 8909a. Postal Service Retiree Health Benefits Fund 

12 ‘‘(a) There is in the Treasury of the United States a 

13 Postal Service Retiree Health Benefits Fund (hereinafter in 

14 this section referred to as the ‘Fund’) which is administered 

15 by the Office of Personnel Management. Any amounts 

16 transferred to the Fund under section 8348(h)(2) shall yield 

17 interest at a rate equal to the weighted average yield of all 

18 the investments in the Civil Service Retirement and Dis19 ability Fund as of the date of transfer. All other investments 

20 of amounts in the Fund shall be made in accordance with 

21 subsections (c)–(e) of section 8348. 

22 ‘‘(b) The Fund is available without fiscal year limita23 tion for payments required by section 8906(g)(2). 

24 ‘‘(c)(1) Not later than June 30, 2006, and by June 

25 30 of each succeeding year, the Office of Personnel Manage26 ment shall compute the net present value of the excess of 
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1 future payments required by section 8906(g)(2)(A) for cur2 rent and future United States Postal Service annuitants 

3 over the value of the assets of the Fund as of the end of 

4 the fiscal year ending on September 30 of that year. The 

5 actuarial costing method to be used by the Office and all 

6 actuarial assumptions shall be established by the Office 

7 after consultation with the United States Postal Service and 

8 must be in accordance with generally accepted actuarial 

9 practices and principles. 

10 ‘‘(2) Not later than September 30, 2006, and by Sep11 tember 30 of each succeeding year, the Office shall compute 

12 and the United States Postal Service shall pay into such 

13 Fund— 

14 ‘‘(A) the portion of the net present value de15 scribed in paragraph (1) attributable to the current 

16 year’s service of Postal Service employees; and 

17 ‘‘(B) interest on the net present value described 

18 in paragraph (1) for that fiscal year, at the interest 

19 rate used in computing that net present value; 

20 except that the amount otherwise payable by the Postal 

21 Service under the preceding provisions of this paragraph 

22 by not later than September 30, 2006, shall be reduced by 

23 the total contributions made by the Postal Service under 

24 section 8906(g)(2) and attributable to fiscal year 2006 (as 

25 determined by the Office). 
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1 ‘‘(3)(A) Any computation or other determination of the 

2 Office under this subsection shall, upon request of the Postal 

3 Service, be subject to review by the Postal Regulatory Com4 mission. The Commission shall submit a report containing 

5 the results of any such review to the Postal Service, the Of6 fice of Personnel Management, and the Congress. 

7 ‘‘(B) Upon receiving the report of the Postal Regu8 latory Commission, the Office of Personnel Management 

9 shall reconsider its computation or other determination in 

10 light of such report, and shall make any appropriate adjust11 ments. The Office shall submit a report containing the re12 sults of its reconsideration to the Commission, the Postal 

13 Service, and the Congress. 

14 ‘‘(4) The Office shall promulgate, after consultation 

15 with the United States Postal Service, any regulations it 

16 deems necessary under this subsection.’’; and 

17 (3) in the analysis by inserting after the item re18 lating to section 8909 the following: 

‘‘8909a. Postal Service Retiree Health Benefits Fund.’’. 

19 (b) REVIEW.— 

20 (1) IN GENERAL.—Any regulation established 

21 under section 8909a(c)(4) of title 5, United States 

22 Code (as amended by subsection (a)) shall, upon re23 quest of the Postal Service, be subject to review by the 

24 Postal Regulatory Commission. The Commission shall 

25 submit a report containing the results of any such re-
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1 view to the Postal Service, the Office of Personnel 

2 Management, and the Congress. 

3 (2) RESPONSE.—Upon receiving the report of the 

4 Postal Regulatory Commission, the Office of Per5 sonnel Management shall reconsider its regulation in 

6 light of such report, and shall take such action as it 

7 considers appropriate. The Office shall submit a re8 port containing the results of its reconsideration to 

9 the Commission, the Postal Service, and the Congress. 

10 SEC. 903. REPEALER. 

11 Section 3 of Public Law 108–18 is repealed. 

12 SEC. 904. ENSURING APPROPRIATE USE OF ESCROW AND 

13 MILITARY SAVINGS. 

14 (a) DEFINITION.—For purposes of this section, the 

15 term ‘‘total savings’’ means, for any fiscal year, the amount 

16 equal to— 

17 (1) the amount of contributions that the Postal 

18 Service would otherwise have been required to make 

19 to the Civil Service Retirement and Disability Fund 

20 under subchapter III of chapter 83 of title 5, United 

21 States Code, for such fiscal year if Public Law 108- 

22 18 and this Act had not been enacted, minus 

23 (2) the amount of amortization payments (if 

24 any) required under section 8348(h)(2) of title 5, 

25 United States Code, for such fiscal year. 
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1 (b) CALCULATIONS.—The following calculations shall 

2 be made for each of fiscal years 2006 through 2015: 

3 (1) Not later than January 31 of the fiscal year 

4 following the fiscal year involved, the Office of Per5 sonnel Management (in consultation with the Postal 

6 Service) shall determine the total savings for the fiscal 

7 year. 

8 (2) On the date of making its determination 

9 under paragraph (1), the Office shall also determine 

10 (in consultation with the Postal Service) the amount 

11 by which— 

12 (A) the amount the Postal Service paid for 

13 that fiscal year into the Postal Service Retiree 

14 Health Benefits Fund in accordance with 

15 8909a(c)(2) of title 5, United States Code, ex16 ceeds (if at all) 

17 (B) the amount of payments made by the 

18 Postal Service for that fiscal year from such 

19 Fund in order to satisfy the requirements of sec20 tion 8906(g)(2) of such title 5. 

21 (c) REQUIREMENTS.— 

22 (1) IF THRESHOLD IS MET.—If the amount cal23 culated under subsection (b)(2) for a fiscal year is 

24 greater than or equal to two-thirds of the total savings 
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1 in such fiscal year, no further action under this sec2 tion is necessary with respect to such fiscal year. 

3 (2) IF THRESHOLD IS NOT MET.— 

4 (A) IN GENERAL.—If the amount calculated 

5 under subsection (b)(2) for a fiscal year is less 

6 than two-thirds of the total savings in such fiscal 

7 year, the Postal Service shall pay into the Postal 

8 Service Retiree Health Benefits Fund, by June 

9 30 of the following fiscal year, an amount equal 

10 to the difference. 

11 (B) ALLOWABLE ALTERNATIVE.— 

12 (i) IN GENERAL.—Notwithstanding 

13 subparagraph (A), and subject to clause (ii), 

14 the Postal Service may instead use the 

15 amount that it would otherwise be required 

16 to pay into the Postal Service Retiree 

17 Health Benefits Fund for a year (or any 

18 portion thereof) to reduce the postal debt. 

19 (ii) LIMITATION.—Amounts used to re20 duce the postal debt under this subpara21 graph may not exceed a total of 

22 $3,000,000,000. 

23 (3) AGGREGATION ALLOWED.—Notwithstanding 

24 paragraph (2), if the amount calculated under sub25 section (b)(2) for a fiscal year is less than two-thirds 
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1 of the total savings in such fiscal year, but the sum 

2 of the amounts calculated under subsection (b)(2) for 

3 all fiscal years from 2006 to the fiscal year involved 

4 is greater than or equal to two-thirds of the sum of 

5 the total savings for such years, no further action 

6 under this section is necessary with respect to such 

7 fiscal year. 

8 (d) REPORTING REQUIREMENT.—The Office of Per9 sonnel Management shall submit a report containing the 

10 results of its calculations under subsection (b) to the Postal 

11 Service, the Postal Regulatory Commission, and the Con12 gress. 

13 (e) WAIVER AUTHORITY.—The requirements of sub14 section (c)(2)(A) may, upon application of the Postal Serv15 ice, be waived by the Postal Regulatory Commission, to the 

16 extent that the Commission determines that such waiver is 

17 reasonable and equitable and necessary to enable the Postal 

18 Service, under best practices of honest, efficient, and eco19 nomical management, to maintain and continue the devel20 opment of postal services of the kind and quality adapted 

21 to the needs of the United States. 

22 SEC. 905. EFFECTIVE DATES. 

23 (a) IN GENERAL.—Except as otherwise provided, this 

24 title shall take effect on October 1, 2005. 
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1 (b) GOVERNMENT CONTRIBUTIONS.—Section 901(a) 

2 shall take effect on the first day of the first pay period be3 ginning on or after October 1, 2005. 
Union Calendar No. 55 

109TH CONGRESS 

1ST SESSION H. R. 22 

[Report No. 109–66, Part I] 

A BILL 

To reform the postal laws of the United States. 

MAY 27, 2005 

The Committee on the Judiciary discharged; committed 

the Union and ordered to be printed to the Committee of the Whole House on the State of