109TH CONGRESS 

1ST SESSION H. R. 22

AN ACT

To reform the postal laws of the United States. 

109TH CONGRESS 

1ST SESSION H. R. 22

AN ACT

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, 
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1 SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 

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

3 ‘‘Postal Accountability and Enhancement Act’’. 

4 (b) TABLE OF CONTENTS.—The table of contents for 

5 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. 
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TITLE VI—INSPECTORS GENERAL 

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

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

by the President. 

TITLE VII—EVALUATIONS 

Sec. 701. Universal postal service study. 

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

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

Sec. 704. Greater diversity in Postal Service Executive and administrative 

schedule management positions. 

Sec. 705. Plan for assisting displaced workers. 

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

Sec. 707. Rates for periodicals. 

Sec. 708. Assessment of certain rate deficiencies. 

Sec. 709. 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 

5 amended by striking ‘‘and’’ at the end of paragraph (3), 
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1 by striking the period at the end of paragraph (4) and 

2 inserting a semicolon, and by adding at the end the fol3 lowing: 

4 ‘‘(5) ‘postal service’ means the carriage of let5 ters, printed matter, or mailable packages, including 

6 acceptance, collection, processing, delivery, or other 

7 functions supportive or ancillary thereto; 

8 ‘‘(6) ‘product’ means a postal service with a 

9 distinct cost or market characteristic for which a 

10 rate or rates are, or may reasonably be, applied; 

11 ‘‘(7) ‘rates’, as used with respect to products, 

12 includes fees for postal services; 

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

14 the market-dominant category of mail’ means a 

15 product subject to subchapter I of chapter 36; 

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

17 competitive category of mail’ means a product sub18 ject to subchapter II of chapter 36; 

19 ‘‘(10) ‘Consumer Price Index’ means the Con20 sumer Price Index for All Urban Consumers pub21 lished monthly by the Bureau of Labor Statistics of 

22 the Department of Labor; and 

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

24 subchapters I and VI thereof), means a fiscal year.’’. 
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1 SEC. 102. POSTAL SERVICES. 

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

3 States Code, is amended—

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

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

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

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

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

9 or require that the Postal Service provide any special non10 postal or similar services, except that nothing in this sub11 section shall prevent the Postal Service from providing any 

12 special nonpostal or similar services provided by the Postal 

13 Service as of January 4, 2005.’’. 

14 (b) CONFORMING AMENDMENT.—Section 

15 1402(b)(1)(B)(ii) of the Victims of Crime Act of 1984 (98 

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

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

18 SEC. 103. FINANCIAL TRANSPARENCY. 

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

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

21 through (g) as subsections (e) through (h), respectively, 

22 and by inserting after subsection (c) the following: 

23 ‘‘(d) As an establishment that provides both market24 dominant and competitive products, the Postal Service 

25 shall be subject to a high degree of transparency, including 

26 in its finances and operations, to ensure fair treatment 
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1 of customers of the Postal Service’s market-dominant 

2 products and companies competing with the Postal Serv3 ice’s competitive products.’’. 

4 (b) CONFORMING AMENDMENT.—Section 5001 of 

5 title 39, United States Code, is amended by striking 

6 ‘‘101(e) and (f)’’ and inserting ‘‘101(f) and (g)’’. 

7 TITLE II—MODERN RATE 

8 REGULATION 

9 SEC. 201. PROVISIONS RELATING TO MARKET-DOMINANT 

10 PRODUCTS. 

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

12 States Code, is amended by striking sections 3621 and 

13 3622 and inserting the following: 

14 ‘‘§ 3621. Applicability; definitions 

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

16 with respect to—

17 ‘‘(1)(A) single piece first-class letters (both do18 mestic and international); 

19 ‘‘(B) single piece first-class cards (both domes20 tic and international); and 

21 ‘‘(C) special services; 

22 ‘‘(2) all first-class mail not included under 

23 paragraph (1); 

24 ‘‘(3) periodicals; 

25 ‘‘(4) standard mail; 
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1 ‘‘(5) media mail; 

2 ‘‘(6) library mail; and 

3 ‘‘(7) bound printed matter, 

4 subject to any changes the Postal Regulatory Commission 

5 may make under section 3642. 

6 ‘‘(b) RULE OF CONSTRUCTION.—Mail matter re7 ferred to in subsection (a) shall, for purposes of this sub8 chapter, be considered to have the meaning given to such 

9 mail matter under the mail classification schedule. 

10 ‘‘§ 3622. Modern rate regulation 

11 ‘‘(a) AUTHORITY GENERALLY.—The Postal Regu12 latory Commission shall, within 24 months after the date 

13 of the enactment of this section, by regulation establish 

14 (and may from time to time thereafter by regulation re15 vise) a modern system for regulating rates and classes for 

16 market-dominant products. 

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

18 achieve the following objectives: 

19 ‘‘(1) To establish and maintain a fair and equi20 table schedule for rates and classification. 

21 ‘‘(2) To maximize incentives to reduce costs 

22 and increase efficiency. 

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

24 rates. 
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1 ‘‘(4) To maintain high quality service stand2 ards. 

3 ‘‘(5) To allow the Postal Service pricing flexi4 bility. 

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

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

8 ratemaking process. 

9 ‘‘(c) FACTORS.—In establishing or revising such sys10 tem, the Postal Regulatory Commission shall take into ac11 count—

12 ‘‘(1) the value of the mail service actually pro13 vided each class or type of mail service to both the 

14 sender and the recipient, including but not limited to 

15 the collection, mode of transportation, and priority 

16 of delivery; 

17 ‘‘(2) the direct and indirect postal costs attrib18 utable to each class or type of mail service plus that 

19 portion of all other costs of the Postal Service rea20 sonably assignable to such class or type; 

21 ‘‘(3) the effect of rate increases upon the gen22 eral public, business mail users, and enterprises in 

23 the private sector of the economy engaged in the de24 livery of mail matter other than letters; 
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1 ‘‘(4) the available alternative means of sending 

2 and receiving letters and other mail matter at rea3 sonable costs; 

4 ‘‘(5) the degree of preparation of mail for deliv5 ery into the postal system performed by the mailer 

6 and its effect upon reducing costs to the Postal 

7 Service; 

8 ‘‘(6) simplicity of structure for the entire sched9 ule and simple, identifiable relationships between the 

10 rates or fees charged the various classes of mail for 

11 postal services; 

12 ‘‘(7) the relative value to the people of the 

13 kinds of mail matter entered into the postal system 

14 and the desirability and justification for special clas15 sifications and services of mail; 

16 ‘‘(8) the importance of providing classifications 

17 with extremely high degrees of reliability and speed 

18 of delivery and of providing those that do not re19 quire high degrees of reliability and speed of deliv20 ery; 

21 ‘‘(9) the desirability of special classifications 

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

23 Postal Service;
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1 ‘‘(10) the educational, cultural, scientific, and 

2 informational value to the recipient of mail matter; 

3 and 

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

5 other factors as the Commission deems appropriate. 

6 ‘‘(d) ALLOWABLE PROVISIONS.—The system for reg7 ulating rates and classes for market-dominant products 

8 may include one or more of the following: 

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

10 of incentive regulation. 

11 ‘‘(2) Cost-of-service regulation. 

12 ‘‘(3) Such other form of regulation as the Com13 mission considers appropriate to achieve, consistent 

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

15 ‘‘(e) LIMITATION.—In the administration of this sec16 tion, the Commission shall not permit the average rate in 

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

18 than the comparable increase in the Consumer Price 

19 Index, unless it has, after notice and opportunity for a 

20 public hearing and comment, determined that such in21 crease is reasonable and equitable and necessary to enable 

22 the Postal Service, under best practices of honest, effi23 cient, and economical management, to maintain and con24 tinue the development of postal services of the kind and 

25 quality adapted to the needs of the United States. 
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1 ‘‘(f) TRANSITION RULE.—Until regulations under 

2 this section first take effect, rates and classes for market3 dominant products shall remain subject to modification in 

4 accordance with the provisions of this chapter and section 

5 407, as such provisions were last in effect before the date 

6 of the enactment of this section.’’. 

7 (b) REPEALED SECTIONS.—Sections 3623, 3624, 

8 3625, and 3628 of title 39, United States Code, are re9 pealed. 

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

11 States Code (as in effect after the amendment made by 

12 section 501(a)(2), but before the amendment made by sec13 tion 202) is amended by striking the heading for sub14 chapter II and inserting the following: 

15 ‘‘SUBCHAPTER I—PROVISIONS RELATING TO 

16 MARKET-DOMINANT PRODUCTS’’. 

17 SEC. 202. PROVISIONS RELATING TO COMPETITIVE PROD18 UCTS. 

19 Chapter 36 of title 39, United States Code, is amend20 ed by inserting after section 3629 the following: 

21 ‘‘SUBCHAPTER II—PROVISIONS RELATING TO 

22 COMPETITIVE PRODUCTS 

23 ‘‘§ 3631. Applicability; definitions and updates 

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

25 with respect to—
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1 ‘‘(1) priority mail; 

2 ‘‘(2) expedited mail; 

3 ‘‘(3) mailgrams; 

4 ‘‘(4) international mail; and 

5 ‘‘(5) parcel post, 

6 subject to any changes the Postal Regulatory Commission 

7 may make under section 3642. 

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

9 the term ‘costs attributable’, as used with respect to a 

10 product, means the direct and indirect postal costs attrib11 utable to such product. 

12 ‘‘(c) RULE OF CONSTRUCTION.—Mail matter re13 ferred to in subsection (a) shall, for purposes of this sub14 chapter, be considered to have the meaning given to such 

15 mail matter under the mail classification schedule. 

16 ‘‘§ 3632. Action of the Governors 

17 ‘‘(a) AUTHORITY TO ESTABLISH RATES AND CLASS18 ES.—The Governors shall establish rates and classes for 

19 products in the competitive category of mail in accordance 

20 with the requirements of this subchapter and regulations 

21 promulgated under section 3633. 

22 ‘‘(b) PROCEDURES.—

23 ‘‘(1) IN GENERAL.—Rates and classes shall be 

24 established in writing, complete with a statement of 
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1 explanation and justification, and the date as of 

2 which each such rate or class takes effect. 

3 ‘‘(2) RATES OR CLASSES OF GENERAL APPLICA4 BILITY.—In the case of rates or classes of general 

5 applicability in the Nation as a whole or in any sub6 stantial region of the Nation, the Governors shall 

7 cause each rate and class decision under this section 

8 and the record of the Governors’ proceedings in con9 nection with such decision to be published in the 

10 Federal Register at least 30 days before the effective 

11 date of any new rates or classes. 

12 ‘‘(3) RATES OR CLASSES NOT OF GENERAL AP13 PLICABILITY.—In the case of rates or classes not of 

14 general applicability in the Nation as a whole or in 

15 any substantial region of the Nation, the Governors 

16 shall cause each rate and class decision under this 

17 section and the record of the proceedings in connec18 tion with such decision to be filed with the Postal 

19 Regulatory Commission by such date before the ef20 fective date of any new rates or classes as the Gov21 ernors consider appropriate, but in no case less than 

22 15 days. 

23 ‘‘(4) CRITERIA.—As part of the regulations re24 quired under section 3633, the Postal Regulatory 

25 Commission shall establish criteria for determining 
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1 when a rate or class established under this sub2 chapter is or is not of general applicability in the 

3 Nation as a whole or in any substantial region of the 

4 Nation. 

5 ‘‘(c) TRANSITION RULE.—Until regulations under 

6 section 3633 first take effect, rates and classes for com7 petitive products shall remain subject to modification in 

8 accordance with the provisions of this chapter and section 

9 407, as such provisions were as last in effect before the 

10 date of the enactment of this section. 

11 ‘‘§ 3633. Provisions applicable to rates for competitive 

12 products 

13 ‘‘The Postal Regulatory Commission shall, within 18 

14 months after the date of the enactment of this section, 

15 promulgate (and may from time to time thereafter revise) 

16 regulations—

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

18 products by market-dominant products; 

19 ‘‘(2) to ensure that each competitive product 

20 covers its costs attributable; and 

21 ‘‘(3) to ensure that all competitive products col22 lectively make a reasonable contribution to the insti23 tutional costs of the Postal Service.’’.
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1 SEC. 203. PROVISIONS RELATING TO EXPERIMENTAL AND 

2 NEW PRODUCTS. 

3 Subchapter III of chapter 36 of title 39, United 

4 States Code, is amended to read as follows: 

5 ‘‘SUBCHAPTER III—PROVISIONS RELATING TO 

6 EXPERIMENTAL AND NEW PRODUCTS 

7 ‘‘§ 3641. Market tests of experimental products 

8 ‘‘(a) AUTHORITY.—

9 ‘‘(1) IN GENERAL.—The Postal Service may 

10 conduct market tests of experimental products in ac11 cordance with this section. 

12 ‘‘(2) PROVISIONS WAIVED.—A product shall 

13 not, while it is being tested under this section, be 

14 subject to the requirements of sections 3622, 3633, 

15 or 3642, or regulations promulgated under those 

16 sections. 

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

18 under this section unless it satisfies each of the following: 

19 ‘‘(1) SIGNIFICANTLY DIFFERENT PRODUCT.—

20 The product is, from the viewpoint of the mail users, 

21 significantly different from all products offered by 

22 the Postal Service within the 2-year period preceding 

23 the start of the test. 

24 ‘‘(2) MARKET DISRUPTION.—The introduction 

25 or continued offering of the product will not create 

26 an unfair or otherwise inappropriate competitive ad-
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1 vantage for the Postal Service or any mailer, par2 ticularly in regard to small business concerns (as de3 fined under subsection (h)). 

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

5 Service identifies the product, for the purpose of a 

6 test under this section, as either market dominant or 

7 competitive, consistent with the criteria under sec8 tion 3642(b)(1). Costs and revenues attributable to 

9 a product identified as competitive shall be included 

10 in any determination under section 3633(3) (relating 

11 to provisions applicable to competitive products col12 lectively). 

13 ‘‘(c) NOTICE.—

14 ‘‘(1) IN GENERAL.—At least 30 days before ini15 tiating a market test under this section, the Postal 

16 Service shall file with the Postal Regulatory Com17 mission and publish in the Federal Register a no18 tice—

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

20 Service’s determination that the market test is 

21 covered by this section; and 

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

23 the market test. 

24 ‘‘(2) SAFEGUARDS.—For a competitive experi25 mental product, the provisions of section 504(g) 
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1 shall be available with respect to any information re2 quired to be filed under paragraph (1) to the same 

3 extent and in the same manner as in the case of any 

4 matter described in section 504(g)(1). Nothing in 

5 paragraph (1) shall be considered to permit or re6 quire the publication of any information as to which 

7 confidential treatment is accorded under the pre8 ceding sentence (subject to the same exception as set 

9 forth in section 504(g)(3)). 

10 ‘‘(d) DURATION.—

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

12 under this section may be conducted over a period 

13 of not to exceed 24 months. 

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

15 order to determine the feasibility or desirability of a 

16 product being tested under this section, the Postal 

17 Regulatory Commission may, upon written applica18 tion of the Postal Service (filed not later than 60 

19 days before the date as of which the testing of such 

20 product would otherwise be scheduled to terminate 

21 under paragraph (1)), extend the testing of such 

22 product for not to exceed an additional 12 months. 

23 ‘‘(e) DOLLAR-AMOUNT LIMITATION.—

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

25 under this section only if the total revenues that are 
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1 anticipated, or in fact received, by the Postal Service 

2 from such product do not exceed $10,000,000 na3 tionwide in any year, subject to paragraph (2) and 

4 subsection (g). In carrying out the preceding sen5 tence, the Postal Regulatory Commission may limit 

6 the amount of revenues the Postal Service may ob7 tain from any particular geographic market as nec8 essary to prevent market disruption (as defined in 

9 subsection (b)(2)). 

10 ‘‘(2) EXEMPTION AUTHORITY.—The Postal 

11 Regulatory Commission may, upon written applica12 tion of the Postal Service, exempt the market test 

13 from the limit in paragraph (1) if the total revenues 

14 that are anticipated, or in fact received, by the Post15 al Service from such product do not exceed 

16 $50,000,000 in any year, subject to subsection (g). 

17 In reviewing an application under this paragraph, 

18 the Postal Regulatory Commission shall approve 

19 such application if it determines that—

20 ‘‘(A) the product is likely to benefit the 

21 public and meet an expected demand; 

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

23 the financial stability of the Postal Service; and 

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

25 unfair or otherwise inappropriate competition. 
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1 ‘‘(f) CANCELLATION.—If the Postal Regulatory Com2 mission at any time determines that a market test under 

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

4 to meet one or more of the requirements of this section, 

5 it may order the cancellation of the test involved or take 

6 such other action as it considers appropriate. A determina7 tion under this subsection shall be made in accordance 

8 with such procedures as the Commission shall by regula9 tion prescribe. 

10 ‘‘(g) ADJUSTMENT FOR INFLATION.—For purposes 

11 of each year following the year in which occurs the dead12 line for the Postal Service’s first report to the Postal Reg13 ulatory Commission under section 3652(a), each dollar 

14 amount contained in this section shall be adjusted by the 

15 change in the Consumer Price Index for such year (as de16 termined under regulations of the Commission). 

17 ‘‘(h) DEFINITION OF A SMALL BUSINESS CON18 CERN.—The criteria used in defining small business con19 cerns or otherwise categorizing business concerns as small 

20 business concerns shall, for purposes of this section, be 

21 established by the Postal Regulatory Commission in con22 formance with the requirements of section 3 of the Small 

23 Business Act. 

24 ‘‘(i) EFFECTIVE DATE.—Market tests under this 

25 subchapter may be conducted in any year beginning with 
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1 the first year in which occurs the deadline for the Postal 

2 Service’s first report to the Postal Regulatory Commission 

3 under section 3652(a). 

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

7 ‘‘(a) IN GENERAL.—Upon request of the Postal Serv8 ice or users of the mails, or upon its own initiative, the 

9 Postal Regulatory Commission may change the list of 

10 market-dominant products under section 3621 and the list 

11 of competitive products under section 3631 by adding new 

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

13 transferring products between the lists. 

14 ‘‘(b) CRITERIA.—All determinations by the Postal 

15 Regulatory Commission under subsection (a) shall be 

16 made in accordance with the following criteria: 

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

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

19 Postal Service exercises sufficient market power that 

20 it can effectively set the price of such product sub21 stantially above costs, raise prices significantly, de22 crease quality, or decrease output, without risk of 

23 losing business to other firms offering similar prod24 ucts. The competitive category of products shall con25 sist of all other products. 
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1 ‘‘(2) EXCLUSION OF PRODUCTS COVERED BY

2 POSTAL MONOPOLY.—A product covered by the post3 al monopoly shall not be subject to transfer under 

4 this section from the market-dominant category of 

5 mail. For purposes of the preceding sentence, the 

6 term ‘product covered by the postal monopoly’ 

7 means any product the conveyance or transmission 

8 of which is reserved to the United States under sec9 tion 1696 of title 18, subject to the same exception 

10 as set forth in the last sentence of section 409(e)(1). 

11 ‘‘(3) ADDITIONAL CONSIDERATIONS.—In mak12 ing any decision under this section, due regard shall 

13 be given to—

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

17 ‘‘(B) the views of those who use the prod18 uct involved on the appropriateness of the pro19 posed action; and 

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

22 meaning of section 3641(h)). 

23 ‘‘(c) TRANSFERS OF SUBCLASSES AND OTHER SUB24 ORDINATE UNITS ALLOWABLE.—Nothing in this title 

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

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

3 subordinate units of the class of mail or type of postal 

4 service involved (without regard to satisfaction of min5 imum quantity requirements standing alone). 

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

8 ‘‘(1) NOTIFICATION REQUIREMENT.—The Post9 al Service shall, whenever it requests to add a prod10 uct or transfer a product to a different category, file 

11 with the Postal Regulatory Commission and publish 

12 in the Federal Register a notice setting out the basis 

13 for its determination that the product satisfies the 

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

15 request to add a product or transfer a product to 

16 the competitive category of mail, that the product 

17 meets the regulations promulgated by the Postal 

18 Regulatory Commission pursuant to section 3633. 

19 The provisions of section 504(g) shall be available 

20 with respect to any information required to be filed. 

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

22 Regulatory Commission shall, whenever it changes 

23 the list of products in the market-dominant or com24 petitive category of mail, prescribe new lists of prod25 ucts. The revised lists shall indicate how and when 
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1 any previous lists (including the lists under sections 

2 3621 and 3631) are superseded, and shall be pub3 lished in the Federal Register. 

4 ‘‘(e) NOTIFICATION REQUIREMENT.—The Postal 

5 Regulatory Commission shall, whenever it reaches a con6 clusion that a product or products should be transferred 

7 between the list of market-dominant products under sec8 tion 3621 and the list of competitive products under sec9 tion 3631, immediately notify the appropriate committees 

10 of the Congress. No such transfer may take effect less 

11 than 12 months after such conclusion. 

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

13 3641, no product that involves the carriage of letters, 

14 printed matter, or mailable packages may be offered by 

15 the Postal Service unless it has been assigned to the mar16 ket-dominant or competitive category of mail (as appro17 priate) either—

18 ‘‘(1) under this subchapter; or 

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

20 SEC. 204. REPORTING REQUIREMENTS AND RELATED PRO21 VISIONS. 

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

23 States Code (as in effect before the amendment made by 

24 subsection (b)) is amended by striking the heading for 

25 subchapter IV and inserting the following:
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1 ‘‘SUBCHAPTER V—POSTAL SERVICES, 

2 COMPLAINTS, AND JUDICIAL REVIEW’’. 

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

4 39, United States Code, is amended by inserting after sub5 chapter III the following: 

6 ‘‘SUBCHAPTER IV—REPORTING 

7 REQUIREMENTS AND RELATED PROVISIONS 

8 ‘‘§ 3651. Annual reports by the Commission 

9 ‘‘(a) IN GENERAL.—The Postal Regulatory Commis10 sion shall submit an annual report to the President and 

11 the Congress concerning the operations of the Commission 

12 under this title, including the extent to which regulations 

13 are achieving the objectives under sections 3622 and 3633, 

14 respectively. 

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

16 information required under subsection (a), each report 

17 under this section shall also include, with respect to the 

18 period covered by such report, an estimate of the costs 

19 incurred by the Postal Service in providing—

20 ‘‘(1) postal services to areas of the Nation 

21 where, in the judgment of the Postal Regulatory 

22 Commission, the Postal Service either would not 

23 provide services at all or would not provide such 

24 services in accordance with the requirements of this 

25 title if the Postal Service were not required to pro-
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1 vide prompt, reliable, and efficient services to pa2 trons in all areas and all communities, including as 

3 required under the first sentence of section 101(b); 

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

5 required by this title; and 

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

7 the judgment of the Postal Regulatory Commission, 

8 would not otherwise have been provided by the Post9 al Service but for the requirements of law. 

10 The Commission shall detail the bases for its estimates 

11 and the statutory requirements giving rise to the costs 

12 identified in each report under this section. 

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

14 Postal Service shall provide the Postal Regulatory Com15 mission with such information as may, in the judgment 

16 of the Commission, be necessary in order for the Commis17 sion to prepare its reports under this section. 

18 ‘‘§ 3652. Annual reports to the Commission 

19 ‘‘(a) COSTS, REVENUES, AND RATES.—Except as 

20 provided in subsection (c), the Postal Service shall, no 

21 later than 90 days after the end of each year, prepare and 

22 submit to the Postal Regulatory Commission a report (to23 gether with such nonpublic annex thereto as the Commis24 sion may require under subsection (e))—
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1 ‘‘(1) which shall analyze costs, revenues, and 

2 rates, using such methodologies as the Commission 

3 shall by regulation prescribe, and in sufficient detail 

4 to demonstrate that the rates in effect for all prod5 ucts during such year complied with all applicable 

6 requirements of this title; and 

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

8 product provided in such year, provide—

9 ‘‘(A) market information, including mail 

10 volumes; and 

11 ‘‘(B) measures of the quality of service af12 forded by the Postal Service in connection with 

13 such product, including—

14 ‘‘(i) the service standard applicable to 

15 such product; 

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

17 terms of speed of delivery and reliability) 

18 provided; and 

19 ‘‘(iii) the degree of customer satisfac20 tion with the service provided. 

21 The Inspector General shall regularly audit the data col22 lection systems and procedures utilized in collecting infor23 mation and preparing such report (including any annex 

24 thereto and the information required under subsection 
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•HR 22 EH 

1 (b)). The results of any such audit shall be submitted to 

2 the Postal Service and the Postal Regulatory Commission. 

3 ‘‘(b) INFORMATION RELATING TO WORKSHARE DIS4 COUNTS.—

5 ‘‘(1) IN GENERAL.—The Postal Service shall in6 clude, in each report under subsection (a), the fol7 lowing information with respect to each market-dom8 inant product for which a workshare discount was in 

9 effect during the period covered by such report: 

10 ‘‘(A) The per-item cost avoided by the 

11 Postal Service by virtue of such discount. 

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

13 avoided that the per-item workshare discount 

14 represents. 

15 ‘‘(C) The per-item contribution made to in16 stitutional costs. 

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

18 purposes of this subsection, the term ‘workshare dis19 count’ has the meaning given such term under sec20 tion 3687. 

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

22 (a) and (b) with respect to experimental products offered 

23 through market tests under section 3641 in a year, the 

24 Postal Service—
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1 ‘‘(1) may report summary data on the costs, 

2 revenues, and quality of service by market test; and 

3 ‘‘(2) shall report such data as the Postal Regu4 latory Commission requires. 

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

6 Commission shall have access, in accordance with such 

7 regulations as the Commission shall prescribe, to the 

8 working papers and any other supporting matter of the 

9 Postal Service and the Inspector General in connection 

10 with any information submitted under this section. 

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

12 ‘‘(1) IN GENERAL.—The Postal Regulatory 

13 Commission shall, by regulation, prescribe the con14 tent and form of the public reports (and any non15 public annex and supporting matter relating thereto) 

16 to be provided by the Postal Service under this sec17 tion. In carrying out this subsection, the Commis18 sion shall give due consideration to—

19 ‘‘(A) providing the public with adequate in20 formation to assess the lawfulness of rates 

21 charged;

22 ‘‘(B) avoiding unnecessary or unwarranted 

23 administrative effort and expense on the part of 

24 the Postal Service; and
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1 ‘‘(C) protecting the confidentiality of com2 mercially sensitive information. 

3 ‘‘(2) REVISED REQUIREMENTS.—The Commis4 sion may, on its own motion or on request of an in5 terested party, initiate proceedings (to be conducted 

6 in accordance with regulations that the Commission 

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

8 completeness of Postal Service data required by the 

9 Commission under this subsection whenever it shall 

10 appear that—

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

12 products has become significantly inaccurate or 

13 can be significantly improved; 

14 ‘‘(B) the quality of service data has be15 come significantly inaccurate or can be signifi16 cantly improved; or 

17 ‘‘(C) those revisions are, in the judgment 

18 of the Commission, otherwise necessitated by 

19 the public interest. 

20 ‘‘(f) CONFIDENTIAL INFORMATION.—

21 ‘‘(1) IN GENERAL.—If the Postal Service deter22 mines that any document or portion of a document, 

23 or other matter, which it provides to the Postal Reg24 ulatory Commission in a nonpublic annex under this 

25 section or pursuant to subsection (d) contains infor-
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•HR 22 EH 

1 mation which is described in section 410(c) of this 

2 title, or exempt from public disclosure under section 

3 552(b) of title 5, the Postal Service shall, at the 

4 time of providing such matter to the Commission, 

5 notify the Commission of its determination, in writ6 ing, and describe with particularity the documents 

7 (or portions of documents) or other matter for which 

8 confidentiality is sought and the reasons therefor. 

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

10 matter described in paragraph (1) to which the 

11 Commission gains access under this section shall be 

12 subject to paragraphs (2) and (3) of section 504(g) 

13 in the same way as if the Commission had received 

14 notification with respect to such matter under sec15 tion 504(g)(1). 

16 ‘‘(g) OTHER REPORTS.—The Postal Service shall 

17 submit to the Postal Regulatory Commission, together 

18 with any other submission that it is required to make 

19 under this section in a year, copies of its then most re20 cent—

21 ‘‘(1) comprehensive statement under section 

22 2401(e); 

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

24 ‘‘(3) program performance reports under sec25 tion 2804. 
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1 ‘‘§ 3653. Annual determination of compliance 

2 ‘‘(a) OPPORTUNITY FOR PUBLIC COMMENT.—After 

3 receiving the reports required under section 3652 for any 

4 year, the Postal Regulatory Commission shall promptly 

5 provide an opportunity for comment on such reports by 

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

7 Commission who shall be required to represent the inter8 ests of the general public. 

9 ‘‘(b) DETERMINATION OF COMPLIANCE OR NON10 COMPLIANCE.—Not later than 90 days after receiving the 

11 submissions required under section 3652 with respect to 

12 a year, the Postal Regulatory Commission shall make a 

13 written determination as to—

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

15 such year (for products individually or collectively) 

16 were not in compliance with applicable provisions of 

17 this chapter (or regulations promulgated there18 under); 

19 ‘‘(2) whether any performance goals established 

20 under section 2803 or 2804 for such year were not 

21 met; and 

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

23 failed to meet any service standard during such 

24 year. 
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•HR 22 EH 

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

2 is found under this subsection to have occurred in such 

3 year, the written determination shall be to that effect. 

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

5 year, a timely written determination of noncompliance is 

6 made under subsection (b), the Postal Regulatory Com7 mission shall take appropriate action in accordance with 

8 subsections (c)–(e) of section 3662 (as if a complaint aver9 ring such noncompliance had been duly filed and found 

10 under such section to be justified). 

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

12 determination described in the last sentence of subsection 

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

14 3662, create a rebuttable presumption of compliance by 

15 the Postal Service (with regard to the matters described 

16 in paragraphs (1) through (3) of subsection (b)) during 

17 the year to which such determination relates. 

18 ‘‘§ 3654. Additional financial reporting 

19 ‘‘(a) ADDITIONAL FINANCIAL REPORTING.—

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

21 file with the Postal Regulatory Commission begin22 ning with the first full fiscal year following the effec23 tive date of this section—

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

25 fiscal quarter, a quarterly report containing the 
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•HR 22 EH 

1 information required by the Securities and Ex2 change Commission to be included in quarterly 

3 reports under sections 13 and 15(d) of the Se4 curities Exchange Act of 1934 (15 U.S.C. 78m, 

5 78o(d)) on Form 10-Q, as such Form (or any 

6 successor form) may be revised from time to 

7 time; 

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

9 fiscal year, an annual report containing the in10 formation required by the Securities and Ex11 change Commission to be included in annual re12 ports under such sections on Form 10-K, as 

13 such Form (or any successor form) may be re14 vised from time to time; and 

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

16 and containing the information prescribed in 

17 Form 8-K of the Securities and Exchange Com18 mission, as such Form (or any successor form) 

19 may be revised from time to time. 

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

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

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

23 described in the Securities and Exchange Commis24 sion Forms, and references contained in such Forms 
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•HR 22 EH 

1 to Securities and Exchange Commission regulations 

2 are incorporated herein by reference, as amended. 

3 ‘‘(3) INTERNAL CONTROL REPORT.—For pur4 poses of defining the reports required by paragraph 

5 (1)(B), the Postal Service shall comply with the 

6 rules prescribed by the Securities and Exchange 

7 Commission implementing section 404 of the Sar8 banes-Oxley Act of 2002 (15 U.S.C. 7262), begin9 ning with the annual report for fiscal year 2007. 

10 ‘‘(b) FINANCIAL REPORTING.—

11 ‘‘(1) The reports required by subsection 

12 (a)(1)(B) shall include, with respect to the Postal 

13 Service’s pension and post-retirement health obliga14 tions—

15 ‘‘(A) the funded status of the Postal Serv16 ice’s pension and ––postretirement health obli17 gations; 

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

19 fund balances and obligations and the nature 

20 and cause of any significant changes; 

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

22 ‘‘(D) cost methods and assumptions under23 lying the relevant actuarial valuations; 

24 ‘‘(E) the effect of a one-percentage point 

25 increase in the assumed health care cost trend 
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•HR 22 EH 

1 rate for each future year on the service and in2 terest costs components of net periodic post3 retirement health cost and the accumulated ob4 ligation; 

5 ‘‘(F) actual contributions to and payments 

6 from the funds for the years presented and the 

7 estimated future contributions and payments 

8 for each of the following 5 years; 

9 ‘‘(G) the composition of plan assets re10 flected in the fund balances; and 

11 ‘‘(H) the assumed rate of return on fund 

12 balances and the actual rates of return for the 

13 years presented. 

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

15 year 2007, for purposes of the reports required 

16 under subparagraphs (A) and (B) of subsection 

17 (a)(1), the Postal Service shall include segment re18 porting. 

19 ‘‘(B) The Postal Service shall determine the ap20 propriate segment reporting under subparagraph (A) 

21 after consultation with the Postal Regulatory Com22 mission. 

23 ‘‘(c) TREATMENT.—For purposes of the reports re24 quired by subsection (a)(1)(B), the Postal Service shall 

25 obtain an opinion from an independent auditor on whether 
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•HR 22 EH 

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

2 all material respects, either in relation to the basic finan3 cial statements as a whole or on a stand-alone basis. 

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

5 Commission shall have access to the audit documentation 

6 and any other supporting matter of the Postal Service and 

7 its independent auditor in connection with any information 

8 submitted under this section. 

9 ‘‘(e) REVISED REQUIREMENTS.—The Postal Regu10 latory Commission may, on its own motion or on request 

11 of an interested party, initiate proceedings (to be con12 ducted in accordance with regulations that the Commis13 sion shall prescribe) to improve the quality, accuracy, or 

14 completeness of Postal Service data required under this 

15 section whenever it shall appear that—

16 ‘‘(1) the data have become significantly inac17 curate or can be significantly improved; or 

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

19 Commission, otherwise necessitated by the public in20 terest. 

21 ‘‘(f) CONFIDENTIAL INFORMATION.— 

22 ‘‘(1) IN GENERAL.—If the Postal Service deter23 mines that any document or portion of a document, 

24 or other matter, which it provides to the Postal Reg25 ulatory Commission in a nonpublic annex under this 
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•HR 22 EH 

1 section or pursuant to subsection (d) contains infor2 mation which is described in section 410(c) of this 

3 title, or exempt from public disclosure under section 

4 552(b) of title 5, the Postal Service shall, at the 

5 time of providing such matter to the Commission, 

6 notify the Commission of its determination, in writ7 ing, and describe with particularity the documents 

8 (or portions of documents) or other matter for which 

9 confidentiality is sought and the reasons therefor. 

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

11 matter described in paragraph (1) to which the 

12 Commission gains access under this section shall be 

13 subject to paragraphs (2) and (3) of section 504(g) 

14 in the same way as if the Commission had received 

15 notification with respect to such matter under sec16 tion 504(g)(1).’’. 

17 SEC. 205. COMPLAINTS; APPELLATE REVIEW AND EN18 FORCEMENT. 

19 Chapter 36 of title 39, United States Code, is amend20 ed by striking sections 3662 and 3663 and inserting the 

21 following: 

22 ‘‘§ 3662. Rate and service complaints 

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

24 officer of the Postal Regulatory Commission representing 

25 the interests of the general public) who believe the Postal 
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1 Service is not operating in conformance with the require2 ments of chapter 1, 4, or 6, or this chapter (or regulations 

3 promulgated under any of those chapters) may lodge a 

4 complaint with the Postal Regulatory Commission in such 

5 form and manner as the Commission may prescribe. 

6 ‘‘(b) PROMPT RESPONSE REQUIRED.—

7 ‘‘(1) IN GENERAL.—The Postal Regulatory 

8 Commission shall, within 90 days after receiving a 

9 complaint under subsection (a), either—

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

11 or 

12 ‘‘(B) issue an order dismissing the com13 plaint (together with a statement of the reasons 

14 therefor). 

15 ‘‘(2) TREATMENT OF COMPLAINTS NOT TIMELY

16 ACTED ON.—For purposes of section 3663, any com17 plaint under subsection (a) on which the Commis18 sion fails to act in the time and manner required by 

19 paragraph (1) shall be treated in the same way as 

20 if it had been dismissed pursuant to an order issued 

21 by the Commission on the last day allowable for the 

22 issuance of such order under paragraph (1).

23 ‘‘(c) ACTION REQUIRED IF COMPLAINT FOUND TO

24 BE JUSTIFIED.—If the Postal Regulatory Commission 

25 finds the complaint to be justified, it shall order that the 
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1 Postal Service take such action as the Commission con2 siders appropriate in order to achieve compliance with the 

3 applicable requirements and to remedy the effects of any 

4 noncompliance (such as ordering unlawful rates to be ad5 justed to lawful levels, ordering the cancellation of market 

6 tests, ordering the Postal Service to discontinue providing 

7 loss-making products, or requiring the Postal Service to 

8 make up for revenue shortfalls in competitive products). 

9 ‘‘(d) SUSPENSION AUTHORITY.—The Postal Regu10 latory Commission may suspend implementation of rates 

11 or classifications under section 3632(b)(3) for a limited 

12 period of time pending expedited proceedings under this 

13 section. In evaluating whether circumstances warrant sus14 pension, the Commission shall consider factors such as (1) 

15 whether there is a substantial likelihood that such rate or 

16 classification will violate the requirements of chapter 1, 

17 4, or 6, or this chapter (or regulations promulgated under 

18 any of those chapters), (2) whether any persons would suf19 fer substantial injury, loss, or damage absent a suspen20 sion, (3) whether the Postal Service or any other persons 

21 would suffer substantial injury, loss, or damage under a 

22 suspension, and (4) the public interest. 

23 ‘‘(e) AUTHORITY TO ORDER FINES IN CASES OF DE24 LIBERATE NONCOMPLIANCE.—In addition, in cases of de25 liberate noncompliance by the Postal Service with the re-
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1 quirements of this title, the Postal Regulatory Commission 

2 may order, based on the nature, circumstances, extent, 

3 and seriousness of the noncompliance, a fine (in the 

4 amount specified by the Commission in its order) for each 

5 incidence of noncompliance. Fines resulting from the pro6 vision of competitive products shall be paid out of the 

7 Competitive Products Fund established in section 2011. 

8 All receipts from fines imposed under this subsection shall 

9 be deposited in the general fund of the Treasury of the 

10 United States. 

11 ‘‘§ 3663. Appellate review 

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

13 order or decision of the Postal Regulatory Commission 

14 may, within 30 days after such order or decision becomes 

15 final, institute proceedings for review thereof by filing a 

16 petition in the United States Court of Appeals for the Dis17 trict of Columbia. The court shall review the order or deci18 sion in accordance with section 706 of title 5, and chapter 

19 158 and section 2112 of title 28, on the basis of the record 

20 before the Commission. For purposes of this section, the 

21 term ‘person’ includes the Postal Service. 

22 ‘‘§ 3664. Enforcement of orders 

23 ‘‘The several district courts have jurisdiction specifi24 cally to enforce, and to enjoin and restrain the Postal 
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1 Service from violating, any order issued by the Postal Reg2 ulatory Commission.’’.

3 SEC. 206. WORKSHARE DISCOUNTS. 

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

5 amended by adding after section 3686 (as added by sec6 tion 406) the following:

7 ‘‘§ 3687. Workshare discounts 

8 ‘‘(a) IN GENERAL.—As part of the regulations estab9 lished under section 3622(a), the Postal Regulatory Com10 mission shall establish rules for workshare discounts that 

11 ensure that such discounts do not exceed the cost that the 

12 Postal Service avoids as the result of workshare activity, 

13 unless—

14 ‘‘(1) the discount is—

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

16 a change to an existing postal service, or a new 

17 workshare initiative related to an existing postal 

18 service; and 

19 ‘‘(B) necessary to induce mailer behavior 

20 that furthers the economically efficient oper21 ation of the Postal Service and the portion of 

22 the discount in excess of the cost that the Post23 al Service avoids as a result of the workshare 

24 activity will be phased out over a limited period 

25 of time; 
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1 ‘‘(2) a reduction in the discount would—

2 ‘‘(A) lead to a loss of volume in the af3 fected category or subclass of mail and reduce 

4 the aggregate contribution to the institutional 

5 costs of the Postal Service from the category or 

6 subclass subject to the discount below what it 

7 otherwise would have been if the discount had 

8 not been reduced to costs avoided; 

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

10 rates paid by mailers not able to take advan11 tage of the discount; or 

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

13 Postal Service; 

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

15 avoided—

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

17 and 

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

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

20 subclasses of mail consisting exclusively of mail mat21 ter of educational, cultural, scientific, or informa22 tional value. 

23 ‘‘(b) REPORT.—Whenever the Postal Service estab24 lishes or maintains a workshare discount, the Postal Serv25 ice shall, at the time it publishes the workshare discount 
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•HR 22 EH 

1 rate, submit to the Postal Regulatory Commission a de2 tailed report that—

3 ‘‘(1) explains the Postal Service’s reasons for 

4 establishing or maintaining the rate; 

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

6 other information relied on by the Postal Service to 

7 justify the rate; and 

8 ‘‘(3) certifies that the discount will not ad9 versely affect rates or services provided to users of 

10 postal services who do not take advantage of the dis11 count rate. 

12 ‘‘(c) DEFINITION.—For purposes of this section, the 

13 term ‘workshare discount’ refers to rate discounts pro14 vided to mailers for the presorting, prebarcoding, han15 dling, or transportation of mail, as further defined by the 

16 Postal Regulatory Commission under section 3622(a).’’. 

17 (b) CLERICAL AMENDMENT.—The analysis for chap18 ter 36 of title 39, United States Code (as amended by 

19 section 207) is amended by adding after the item relating 

20 to section 3686 the following:

‘‘3687. Workshare discounts.’’.

21 SEC. 207. CLERICAL AMENDMENT. 

22 Chapter 36 of title 39, United States Code, is amend23 ed by striking the heading and analysis for such chapter 

24 and inserting the following:
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1 ‘‘CHAPTER 36—POSTAL RATES, CLASSES 

2 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.

‘‘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.’’.
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1 TITLE III—PROVISIONS RELAT2 ING TO FAIR COMPETITION 

3 SEC. 301. POSTAL SERVICE COMPETITIVE PRODUCTS 

4 FUND. 

5 (a) PROVISIONS RELATING TO POSTAL SERVICE

6 COMPETITIVE PRODUCTS FUND AND RELATED MAT7 TERS.—

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

9 United States Code, is amended by adding at the 

10 end the following: 

11 ‘‘§ 2011. Provisions relating to competitive products 

12 ‘‘(a) There is established in the Treasury of the 

13 United States a revolving fund, to be called the Postal 

14 Service Competitive Products Fund, which shall be avail15 able to the Postal Service without fiscal year limitation 

16 for the payment of—

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

18 and 

19 ‘‘(2) all other costs incurred by the Postal Serv20 ice, to the extent allocable to competitive products. 

21 For purposes of this subsection, the term ‘costs attrib22 utable’ has the meaning given such term by section 3631. 

23 ‘‘(b) There shall be deposited in the Competitive 

24 Products Fund, subject to withdrawal by the Postal Serv25 ice—
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1 ‘‘(1) revenues from competitive products; 

2 ‘‘(2) amounts received from obligations issued 

3 by the Postal Service under subsection (e); 

4 ‘‘(3) interest and dividends earned on invest5 ments of the Competitive Products Fund; and 

6 ‘‘(4) any other receipts of the Postal Service 

7 (including from the sale of assets), to the extent al8 locable to competitive products. 

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

10 of the Competitive Products Fund are in excess of current 

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

12 it deems advisable by the Secretary of the Treasury in ob13 ligations of, or obligations guaranteed by, the Government 

14 of the United States, and, with the approval of the Sec15 retary, in such other obligations or securities as it deems 

16 appropriate. 

17 ‘‘(d) With the approval of the Secretary of the Treas18 ury, the Postal Service may deposit moneys of the Com19 petitive Products Fund in any Federal Reserve bank, any 

20 depository for public funds, or in such other places and 

21 in such manner as the Postal Service and the Secretary 

22 may mutually agree. 

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

24 2005(a), the Postal Service is authorized to borrow money 

25 and to issue and sell such obligations as it determines nec-
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1 essary to provide for competitive products and deposit 

2 such amounts in the Competitive Products Fund. Any 

3 such borrowings by the Postal Service shall be supported 

4 and serviced by the revenues and receipts from competitive 

5 products and the assets related to the provision of com6 petitive products (as determined under subsection (h) or, 

7 for purposes of any period before accounting practices and 

8 principles under subsection (h) have been established and 

9 applied, the best information available from the Postal 

10 Service, including the audited statements required by sec11 tion 2008(e), but in either case subject to paragraph (5)). 

12 ‘‘(2) The Postal Service may enter into binding cov13 enants with the holders of such obligations, and with the 

14 trustee, if any, under any agreement entered into in con15 nection with the issuance thereof with respect to—

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

17 other funds; 

18 ‘‘(B) application and use of revenues and re19 ceipts of the Competitive Products Fund; 

20 ‘‘(C) stipulations concerning the subsequent 

21 issuance of obligations or the execution of leases or 

22 lease purchases relating to properties of the Postal 

23 Service; and 
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1 ‘‘(D) such other matters as the Postal Service 

2 considers necessary or desirable to enhance the mar3 ketability of such obligations. 

4 ‘‘(3) The obligations issued by the Postal Service 

5 under this section—

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

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

8 amounts; 

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

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

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

12 ‘‘(F) may be redeemable before maturity in 

13 such manner, at such times, and at such redemption 

14 premiums; 

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

16 of claim on the assets of the Postal Service with re17 spect to principal and interest payments; and 

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

19 conditions; 

20 as the Postal Service determines. 

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

22 this subsection—

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

24 bearer or registered instruments, as specified therein 

25 and in any indenture or covenant relating thereto; 
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•HR 22 EH 

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

2 under this section, and such recital shall be conclu3 sive evidence of the regularity of the issuance and 

4 sale of such obligations and of their validity; 

5 ‘‘(C) shall be lawful investments and may be ac6 cepted as security for all fiduciary, trust, and public 

7 funds, the investment or deposit of which shall be 

8 under the authority or control of any officer or agen9 cy of the Government of the United States, and the 

10 Secretary of the Treasury or any other officer or 

11 agency having authority over or control of any such 

12 fiduciary, trust, or public funds, may at any time 

13 sell any of the obligations of the Postal Service ac14 quired under this section; 

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

16 or interest from any taxation now or hereafter im17 posed by any State or local taxing authority; and 

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

19 this title, shall not be obligations of, nor shall pay20 ment of the principal thereof or interest thereon be 

21 guaranteed by, the Government of the United 

22 States, and the obligations shall so plainly state. 

23 ‘‘(5) The Postal Service shall make payments of prin24 cipal, or interest, or both on obligations issued under this 

25 section out of revenues and receipts from competitive 
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•HR 22 EH 

1 products and assets related to the provision of competitive 

2 products (as determined under subsection (h) or, for pur3 poses of any period before accounting practices and prin4 ciples under subsection (h) have been established and ap5 plied, the best information available, including the audited 

6 statements required by section 2008(e)). For purposes of 

7 this subsection, the total assets of the Competitive Prod8 ucts Fund shall be the greater of—

9 ‘‘(A) the assets related to the provision of com10 petitive products; or 

11 ‘‘(B) the percentage of total Postal Service rev12 enues and receipts from competitive products times 

13 the total assets of the Postal Service. 

14 ‘‘(f) The receipts and disbursements of the Competi15 tive Products Fund shall be accorded the same budgetary 

16 treatment as is accorded to receipts and disbursements of 

17 the Postal Service Fund under section 2009a. 

18 ‘‘(g) A judgment against the Postal Service or the 

19 Government of the United States (or settlement of a 

20 claim) shall, to the extent that it arises out of activities 

21 of the Postal Service in the provision of competitive prod22 ucts, be paid out of the Competitive Products Fund. 

23 ‘‘(h)(1) The Secretary of the Treasury, in consulta24 tion with the Postal Service and an independent, certified 

25 public accounting firm and such other advisors as the Sec-
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•HR 22 EH 

1 retary considers appropriate, shall develop recommenda2 tions regarding—

3 ‘‘(A) the accounting practices and principles 

4 that should be followed by the Postal Service with 

5 the objectives of (i) identifying and valuing the as6 sets and liabilities of the Postal Service associated 

7 with providing, and the capital and operating costs 

8 incurred by the Postal Service in providing, competi9 tive products, and (ii) subject to subsection (e)(5), 

10 preventing the subsidization of such products by 

11 market-dominant products; and 

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

13 should be followed in determining the Postal Serv14 ice’s assumed Federal income tax on competitive 

15 products income for any year (within the meaning of 

16 section 3634). 

17 Such recommendations shall be submitted to the Postal 

18 Regulatory Commission no earlier than 6 months, and no 

19 later than 12 months, after the effective date of this sec20 tion. 

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

22 Secretary of the Treasury under paragraph (1), the Com23 mission shall give interested parties, including the Postal 

24 Service, users of the mails, and an officer of the Commis25 sion who shall be required to represent the interests of 
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•HR 22 EH 

1 the general public, an opportunity to present their views 

2 on those recommendations through submission of written 

3 data, views, or arguments, with or without opportunity for 

4 oral presentation, or in such other manner as the Commis5 sion considers appropriate. 

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

7 information received under subparagraph (A), the Com8 mission shall by rule—

9 ‘‘(i) provide for the establishment and applica10 tion of the accounting practices and principles which 

11 shall be followed by the Postal Service; 

12 ‘‘(ii) provide for the establishment and applica13 tion of the substantive and procedural rules de14 scribed in paragraph (1)(B); and 

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

16 Service to the Postal Regulatory Commission of an17 nual and other periodic reports setting forth such in18 formation as the Commission may require. 

19 Final rules under this subparagraph shall be issued not 

20 later than 12 months after the date on which the Sec21 retary of the Treasury makes his submission to the Com22 mission under paragraph (1) (or by such later date as the 

23 Commission and the Postal Service may agree to). The 

24 Commission is authorized to promulgate regulations revis25 ing such rules. 
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•HR 22 EH 

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

2 be submitted at such time and in such form, and shall 

3 include such information, as the Commission by rule re4 quires. The Commission may, on its own motion or on re5 quest of an interested party, initiate proceedings (to be 

6 conducted in accordance with such rules as the Commis7 sion shall prescribe) to improve the quality, accuracy, or 

8 completeness of Postal Service data under such subpara9 graph whenever it shall appear that—

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

11 those reports has become significantly inaccurate or 

12 can be significantly improved; or 

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

14 Commission, otherwise necessitated by the public in15 terest. 

16 ‘‘(D) A copy of each report described in subpara17 graph (B)(iii) shall also be transmitted by the Postal Serv18 ice to the Secretary of the Treasury and the Inspector 

19 General of the United States Postal Service. 

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

21 to the Secretary of the Treasury concerning the operation 

22 of the Competitive Products Fund, in which it shall ad23 dress such matters as risk limitations, reserve balances, 

24 allocation or distribution of moneys, liquidity require25 ments, and measures to safeguard against losses. A copy 
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•HR 22 EH 

1 of its then most recent report under this subsection shall 

2 be included with any other submission that it is required 

3 to make to the Postal Regulatory Commission under sec4 tion 3652(g).’’. 

5 (2) CLERICAL AMENDMENT.—The analysis for 

6 chapter 20 of title 39, United States Code, is 

7 amended by adding after the item relating to section 

8 2010 the following:

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

9 (b) TECHNICAL AND CONFORMING AMENDMENTS.—

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

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

12 at the end of paragraph (1), by redesignating para13 graph (2) as paragraph (3), and by inserting after 

14 paragraph (1) the following: 

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

16 Postal Service Competitive Products Fund estab17 lished by section 2011; and’’. 

18 (2) CAPITAL OF THE POSTAL SERVICE.—Sec19 tion 2002(b) of title 39, United States Code, is 

20 amended by striking ‘‘Fund,’’ and inserting ‘‘Fund 

21 and the balance in the Competitive Products 

22 Fund,’’. 

23 (3) POSTAL SERVICE FUND.—

24 (A) PURPOSES FOR WHICH AVAILABLE.—

25 Section 2003(a) of title 39, United States Code, 
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•HR 22 EH 

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

2 ‘‘title (other than any of the purposes, func3 tions, or powers for which the Competitive 

4 Products Fund is available).’’. 

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

6 39, United States Code, is amended by striking 

7 ‘‘There’’ and inserting ‘‘Except as otherwise 

8 provided in section 2011, there’’. 

9 (4) RELATIONSHIP BETWEEN THE TREASURY

10 AND THE POSTAL SERVICE.—Section 2006 of title 

11 39, United States Code, is amended—

12 (A) in subsection (a), by inserting ‘‘or sec13 tion 2011’’ before ‘‘of this title,’’; 

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

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

16 first sentence and before ‘‘in excess of such 

17 amount.’’ in the second sentence; and 

18 (C) in subsection (c), by inserting ‘‘or sec19 tion 2011(e)(4)(E)’’ before ‘‘of this title,’’. 

20 SEC. 302. ASSUMED FEDERAL INCOME TAX ON COMPETI21 TIVE PRODUCTS INCOME. 

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

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

24 at the end the following: 
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•HR 22 EH 

1 ‘‘§ 3634. Assumed Federal income tax on competitive 

2 products income 

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

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

5 competitive products income’ means the net income 

6 tax that would be imposed by chapter 1 of the Inter7 nal Revenue Code of 1986 on the Postal Service’s 

8 assumed taxable income from competitive products 

9 for the year; and 

10 ‘‘(2) the term ‘assumed taxable income from 

11 competitive products’, with respect to a year, refers 

12 to the amount representing what would be the tax13 able income of a corporation under the Internal Rev14 enue Code of 1986 for the year, if—

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

16 were the activities of the Postal Service allo17 cable under section 2011(h) to competitive 

18 products; and 

19 ‘‘(B) the only assets held by such corpora20 tion were the assets of the Postal Service allo21 cable under section 2011(h) to such activities. 

22 ‘‘(b) COMPUTATION AND TRANSFER REQUIRE23 MENTS.—The Postal Service shall, for each year beginning 

24 with the year in which occurs the deadline for the Postal 

25 Service’s first report to the Postal Regulatory Commission 

26 under section 3652(a)—
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•HR 22 EH 

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

2 on competitive products income for such year; and 

3 ‘‘(2) transfer from the Competitive Products 

4 Fund to the Postal Service Fund the amount of that 

5 assumed tax. 

6 ‘‘(c) DEADLINE FOR TRANSFERS.—Any transfer re7 quired to be made under this section for a year shall be 

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

9 the close of such year.’’. 

10 SEC. 303. UNFAIR COMPETITION PROHIBITED. 

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

12 United States Code, is amended by adding after section 

13 404 the following: 

14 ‘‘§ 404a. Specific Limitations 

15 ‘‘(a) Except as specifically authorized by law, the 

16 Postal Service may not—

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

18 any standard) the effect of which is to preclude com19 petition or establish the terms of competition unless 

20 the Postal Service demonstrates that the regulation 

21 does not create an unfair competitive advantage for 

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

23 the Postal Service; 

24 ‘‘(2) compel the disclosure, transfer, or licens25 ing of intellectual property to any third party (such 
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•HR 22 EH 

1 as patents, copyrights, trademarks, trade secrets, 

2 and proprietary information); or 

3 ‘‘(3) obtain information from a person that pro4 vides (or seeks to provide) any product, and then 

5 offer any product or service that uses or is based in 

6 whole or in part on such information, without the 

7 consent of the person providing that information, 

8 unless substantially the same information is obtained 

9 (or obtainable) from an independent source or is 

10 otherwise obtained (or obtainable). 

11 ‘‘(b) The Postal Regulatory Commission shall pre12 scribe regulations to carry out this section. 

13 ‘‘(c) Any party (including an officer of the Commis14 sion representing the interests of the general public) who 

15 believes that the Postal Service has violated this section 

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

17 (b) CONFORMING AMENDMENTS.—

18 (1) GENERAL POWERS.—Section 401 of title 

19 39, United States Code, is amended by striking 

20 ‘‘The’’ and inserting ‘‘Subject to the provisions of 

21 section 404a, the’’. 

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

23 39, United States Code, is amended by striking 

24 ‘‘Without’’ and inserting ‘‘Subject to the provisions 

25 of section 404a, but otherwise without’’. 
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•HR 22 EH 

1 (c) CLERICAL AMENDMENT.—The analysis for chap2 ter 4 of title 39, United States Code, is amended by insert3 ing after the item relating to section 404 the following:

‘‘404a. Specific limitations.’’.

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

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

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

7 (e) and inserting the following: 

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

9 in paragraphs (2)(A) and (2)(B), respectively, the Postal 

10 Service—

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

12 used in the provisions of law involved; and 

13 ‘‘(B) shall not be immune under any other doc14 trine of sovereign immunity from suit in Federal 

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

16 provisions of law by any officer or employee of the 

17 Postal Service. 

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

19 ‘‘(A) the Act of July 5, 1946 (commonly re20 ferred to as the ‘Trademark Act of 1946’ (15 U.S.C. 

21 1051 and following)); and 

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

23 Trade Commission Act to the extent that such sec24 tion 5 applies to unfair or deceptive acts or prac25 tices. 
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•HR 22 EH 

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

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

3 Postal Service, engages in conduct with respect to any 

4 competitive product, the Postal Service or other Federal 

5 agency (as the case may be)—

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

7 sovereign immunity from suit in Federal court by 

8 any person for any violation of Federal law by such 

9 agency or any officer or employee thereof; and 

10 ‘‘(B) shall be considered to be a person (as de11 fined in subsection (a) of the first section of the 

12 Clayton Act) for purposes of—

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

14 subsection); and 

15 ‘‘(ii) section 5 of the Federal Trade Com16 mission Act to the extent that such section 5 

17 applies to unfair methods of competition. 

18 ‘‘(2) No damages, interest on damages, costs or at19 torney’s fees may be recovered, and no criminal liability 

20 may be imposed, under the antitrust laws (as so defined) 

21 from any officer or employee of the Postal Service, or 

22 other Federal agency acting on behalf of or in concert with 

23 the Postal Service, acting in an official capacity. 
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•HR 22 EH 

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

2 conduct occurring before the date of the enactment of this 

3 subsection. 

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

5 Postal Service shall be constructed or altered, to the max6 imum extent feasible as determined by the Postal Service, 

7 in compliance with one of the nationally recognized model 

8 building codes and with other applicable nationally recog9 nized codes. 

10 ‘‘(2) Each building constructed or altered by the 

11 Postal Service shall be constructed or altered only after 

12 consideration of all requirements (other than procedural 

13 requirements) of zoning laws, land use laws, and applica14 ble environmental laws of a State or subdivision of a State 

15 which would apply to the building if it were not a building 

16 constructed or altered by an establishment of the Govern17 ment of the United States. 

18 ‘‘(3) For purposes of meeting the requirements of 

19 paragraphs (1) and (2) with respect to a building, the 

20 Postal Service shall—

21 ‘‘(A) in preparing plans for the building, con22 sult with appropriate officials of the State or polit23 ical subdivision, or both, in which the building will 

24 be located; 
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•HR 22 EH 

1 ‘‘(B) upon request, submit such plans in a 

2 timely manner to such officials for review by such 

3 officials for a reasonable period of time not exceed4 ing 30 days; and 

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

6 construction or alteration of the building, in accord7 ance with the customary schedule of inspections for 

8 construction or alteration of buildings in the locality, 

9 if such officials provide to the Postal Service—

10 ‘‘(i) a copy of such schedule before con11 struction of the building is begun; and 

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

13 conduct any inspection before conducting such 

14 inspection. 

15 Nothing in this subsection shall impose an obligation on 

16 any State or political subdivision to take any action under 

17 the preceding sentence, nor shall anything in this sub18 section require the Postal Service or any of its contractors 

19 to pay for any action taken by a State or political subdivi20 sion to carry out this subsection (including reviewing 

21 plans, carrying out on-site inspections, issuing building 

22 permits, and making recommendations). 

23 ‘‘(4) Appropriate officials of a State or a political 

24 subdivision of a State may make recommendations to the 

25 Postal Service concerning measures necessary to meet the 
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•HR 22 EH 

1 requirements of paragraphs (1) and (2). Such officials 

2 may also make recommendations to the Postal Service 

3 concerning measures which should be taken in the con4 struction or alteration of the building to take into account 

5 local conditions. The Postal Service shall give due consid6 eration to any such recommendations. 

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

8 officials under paragraph (3), the Postal Service shall es9 tablish procedures for soliciting, assessing, and incor10 porating local community input on real property and land 

11 use decisions. 

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

13 includes the District of Columbia, the Commonwealth of 

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

15 States. 

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

17 legal representation may not be furnished by the Depart18 ment of Justice to the Postal Service in any action, suit, 

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

20 the following: 

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

22 ‘‘(B) Subsection (f) or (g) of section 504 (relat23 ing to administrative subpoenas by the Postal Regu24 latory Commission). 
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•HR 22 EH 

1 ‘‘(C) Section 3663 (relating to appellate re2 view). 

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

4 attorneys to obtain any legal representation that it is pre5 cluded from obtaining from the Department of Justice 

6 under this paragraph. 

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

8 (1), the Department of Justice shall, under section 411, 

9 furnish the Postal Service such legal representation as it 

10 may require, except that, with the prior consent of the 

11 Attorney General, the Postal Service may, in any such cir12 cumstance, employ attorneys by contract or otherwise to 

13 conduct litigation brought by or against the Postal Service 

14 or its officers or employees in matters affecting the Postal 

15 Service. 

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

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

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

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

20 is not otherwise a party, the Commission shall be per21 mitted to appear as a party on its own motion and as 

22 of right. 

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

24 terms and conditions as the Commission and the Attorney 

25 General shall consider appropriate, furnish the Commis-
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•HR 22 EH 

1 sion such legal representation as it may require in connec2 tion with any such action, suit, or proceeding, except that, 

3 with the prior consent of the Attorney General, the Com4 mission may employ attorneys by contract or otherwise for 

5 that purpose. 

6 ‘‘(h) A judgment against the Government of the 

7 United States arising out of activities of the Postal Service 

8 shall be paid by the Postal Service out of any funds avail9 able to the Postal Service, subject to the restriction speci10 fied in section 2011(g).’’. 

11 (b) TECHNICAL AMENDMENT.—Section 409(a) of 

12 title 39, United States Code, is amended by striking ‘‘Ex13 cept as provided in section 3628 of this title,’’ and insert14 ing ‘‘Except as otherwise provided in this title,’’. 

15 SEC. 305. INTERNATIONAL POSTAL ARRANGEMENTS. 

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

17 States Code, is amended to read as follows: 

18 ‘‘§ 407. International postal arrangements 

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

20 ‘‘(1) to promote and encourage communications 

21 between peoples by efficient operation of inter22 national postal services and other international deliv23 ery services for cultural, social, and economic pur24 poses; 
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•HR 22 EH 

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 

5 by private companies may be prohibited by law of 

6 the United States; 

7 ‘‘(3) to promote and encourage a clear distinc8 tion between governmental and operational respon9 sibilities with respect to the provision of inter10 national postal services and other international deliv11 ery services by the Government of the United States 

12 and by intergovernmental organizations of which the 

13 United 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 

18 for formulation, coordination, and oversight of foreign pol19 icy 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 

24 any treaty, convention, or other international agreement 

25 (including those regulating international postal services) 
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•HR 22 EH 

1 if such treaty, convention, or agreement would, with re2 spect to any competitive product, grant an undue or un3 reasonable preference to the Postal Service, a private pro4 vider of international postal or delivery services, or any 

5 other person. 

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

7 paragraph (1), the Secretary of State shall exercise pri8 mary authority for the conduct of foreign policy with re9 spect to international postal services and international de10 livery services, including the determination of United 

11 States positions and the conduct of United States partici12 pation in negotiations with foreign governments and inter13 national bodies. In exercising this authority, the Sec14 retary—

15 ‘‘(A) shall coordinate with other agencies as ap16 propriate, and in particular, shall give full consider17 ation to the authority vested by law or Executive 

18 order in the Postal Regulatory Commission, the De19 partment of Commerce, the Department of Trans20 portation, and the Office of the United States Trade 

21 Representative in this area; 

22 ‘‘(B) shall maintain continuing liaison with 

23 other executive branch agencies concerned with post24 al and delivery services; 
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•HR 22 EH 

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

2 Committee on Government Reform of the House of 

3 Representatives and the Committee on Govern4 mental Affairs of the Senate; 

5 ‘‘(D) shall maintain appropriate liaison with 

6 both representatives of the Postal Service and rep7 resentatives of users and private providers of inter8 national postal services and other international deliv9 ery services to keep informed of their interests and 

10 problems, and to provide such assistance as may be 

11 needed to ensure that matters of concern are 

12 promptly considered by the Department of State or 

13 (if applicable, and to the extent practicable) other 

14 executive branch agencies; and 

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

16 public sector advisory groups as may be established 

17 to advise the Department of State and other execu18 tive branch agencies in connection with international 

19 postal services and international delivery services. 

20 ‘‘(3) The Secretary of State shall establish an advi21 sory committee (within the meaning of the Federal Advi22 sory Committee Act) to perform such functions as the Sec23 retary considers appropriate in connection with carrying 

24 out subparagraphs (A) through (D) of paragraph (2). 
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•HR 22 EH 

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

2 amendment that establishes a rate or classification for a 

3 product subject to subchapter I of chapter 36, the Sec4 retary of State shall request the Postal Regulatory Com5 mission to submit a decision on whether such rate or clas6 sification is consistent with the standards and criteria es7 tablished by the Commission under section 3622. 

8 ‘‘(2) The Secretary shall ensure that each treaty, con9 vention, or amendment concluded under subsection (b) is 

10 consistent with a decision of the Commission adopted 

11 under paragraph (1), except if, or to the extent, the Sec12 retary determines, by written order, that considerations of 

13 foreign policy or national security require modification of 

14 the Commission’s decision. 

15 ‘‘(d) Nothing in this section shall be considered to 

16 prevent the Postal Service from entering into such com17 mercial or operational contracts related to providing inter18 national postal services and other international delivery 

19 services as it deems appropriate, except that—

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

21 a foreign government (whether under authority of 

22 this subsection or otherwise) shall be solely contrac23 tual in nature and may not purport to be inter24 national law; and 
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•HR 22 EH 

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

2 Postal Service and an agency of a foreign govern3 ment shall be transmitted to the Secretary of State 

4 and the Postal Regulatory Commission not later 

5 than the effective date of such contract. 

6 ‘‘(e)(1) With respect to shipments of international 

7 mail that are competitive products within the meaning of 

8 section 3631 that are exported or imported by the Postal 

9 Service, the Bureau of Customs and Border Protection of 

10 the Department of Homeland Security and other appro11 priate Federal agencies shall apply the customs laws of 

12 the United States and all other laws relating to the impor13 tation or exportation of such shipments in the same man14 ner to both shipments by the Postal Service and similar 

15 shipments by private companies. 

16 ‘‘(2) For purposes of this subsection, the term ‘pri17 vate company’ means a private company substantially 

18 owned or controlled by persons who are citizens of the 

19 United States. 

20 ‘‘(3) In exercising the authority pursuant to sub21 section (b) to conclude new treaties, conventions and 

22 amendments related to international postal services and 

23 to renegotiate such treaties, conventions and amendments, 

24 the Secretary of State shall, to the maximum extent prac25 ticable, take such measures as are within the Secretary’s 
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•HR 22 EH 

1 control to encourage the governments of other countries 

2 to make available to the Postal Service and private compa3 nies a range of nondiscriminatory customs procedures that 

4 will fully meet the needs of all types of American shippers. 

5 The Secretary of State shall consult with the United 

6 States Trade Representative and the Commissioner of 

7 Customs, Department of Homeland Security in carrying 

8 out this paragraph. 

9 ‘‘(4) The provisions of this subsection shall take ef10 fect 6 months after the date of the enactment of this sub11 section or such earlier date as the Bureau of Customs and 

12 Border Protection of the Department of Homeland Secu13 rity may determine in writing.’’. 

14 (b) EFFECTIVE DATE.—Notwithstanding any provi15 sion of the amendment made by subsection (a), the au16 thority of the United States Postal Service to establish 

17 the rates of postage or other charges on mail matter con18 veyed between the United States and other countries shall 

19 remain available to the Postal Service until—

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

21 the date as of which the regulations promulgated 

22 under section 3622 of title 39, United States Code 

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

24 (2) with respect to competitive products, the 

25 date as of which the regulations promulgated under 
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•HR 22 EH 

1 section 3633 of title 39, United States Code (as 

2 amended by section 202) take effect. 

3 SEC. 306. REDESIGNATION. 

4 Chapter 36 of title 39, United States Code (as in ef5 fect before the amendment made by section 204(a)) is 

6 amended by striking the heading for subchapter V and in7 serting the following: 

8 ‘‘SUBCHAPTER VI—GENERAL’’. 

9 TITLE IV—GENERAL 

10 PROVISIONS 

11 SEC. 401. QUALIFICATION REQUIREMENTS FOR GOV12 ERNORS. 

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

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

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

16 the following: ‘‘The Governors shall represent the public 

17 interest generally, and at least 4 of the Governors shall 

18 be chosen solely on the basis of their demonstrated ability 

19 in managing organizations or corporations (in either the 

20 public or private sector) of substantial size; for purposes 

21 of this sentence, an organization or corporation shall be 

22 considered to be of substantial size if it employs at least 

23 50,000 employees. The Governors shall not be representa24 tives of specific interests using the Postal Service, and 

25 may be removed only for cause.’’. 
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•HR 22 EH 

1 (b) CONSULTATION REQUIREMENT.—Section 202(a) 

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

3 the end the following: 

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

6 of Governor, the President should consult with the Speak7 er of the House of Representatives, the minority leader 

8 of the House of Representatives, the majority leader of 

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

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

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

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

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

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

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

16 months after the date of the enactment of this para17 graph—

18 ‘‘(i) such office may not, in the case of any per19 son commencing service after that expiration date, 

20 be filled by any person other than an individual cho21 sen from among persons nominated for such office 

22 with the unanimous concurrence of all labor organi23 zations described in section 206(a)(1); and 

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

25 apply under the first sentence of paragraph (1), the 
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•HR 22 EH 

1 term of any person so appointed to such office shall 

2 be 3 years. 

3 ‘‘(B) Except as provided in subparagraph (A), an ap4 pointment under this paragraph shall be made in conform5 ance with all provisions of this section that would other6 wise apply.’’.

7 (d) APPLICABILITY.—The amendment made by sub8 section (a) shall not affect the appointment or tenure of 

9 any person serving as a Governor of the Board of Gov10 ernors of the United States Postal Service pursuant to an 

11 appointment made before the date of the enactment of this 

12 Act, or, except as provided in the amendment made by 

13 subsection (c), any nomination made before that date; 

14 however, when any such office becomes vacant, the ap15 pointment of any person to fill that office shall be made 

16 in accordance with such amendment. The requirement set 

17 forth in the fourth sentence of section 202(a)(1) of title 

18 39, United States Code (as amended by subsection (a)) 

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

20 date of the enactment of this Act. 

21 SEC. 402. OBLIGATIONS. 

22 (a) PURPOSES FOR WHICH OBLIGATIONS MAY BE

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

24 39, United States Code, is amended by striking ‘‘title.’’ 

25 and inserting ‘‘title, other than any of the purposes for 
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1 which the corresponding authority is available to the Post2 al Service under section 2011.’’. 

3 (b) LIMITATION ON NET ANNUAL INCREASE IN OB4 LIGATIONS ISSUED FOR CERTAIN PURPOSES.—The third 

5 sentence of section 2005(a)(1) of title 39, United States 

6 Code, is amended to read as follows: ‘‘In any one fiscal 

7 year, the net increase in the amount of obligations out8 standing issued for the purpose of capital improvements 

9 and the net increase in the amount of obligations out10 standing issued for the purpose of defraying operating ex11 penses of the Postal Service shall not exceed a combined 

12 total of $3,000,000,000.’’ . 

13 (c) LIMITATIONS ON OBLIGATIONS OUTSTANDING.—

14 (1) IN GENERAL.—Subsection (a) of section 

15 2005 of title 39, United States Code, is amended by 

16 adding at the end the following: 

17 ‘‘(3) For purposes of applying the respective limita18 tions under this subsection, the aggregate amount of obli19 gations issued by the Postal Service which are outstanding 

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

21 of obligations outstanding issued by the Postal Service for 

22 the purpose of capital improvements or for the purpose 

23 of defraying operating expenses of the Postal Service in 

24 any fiscal year, shall be determined by aggregating the 

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

2 Service under section 2011.’’. 

3 (2) CONFORMING AMENDMENT.—The second 

4 sentence of section 2005(a)(1) of title 39, United 

5 States Code, is amended by striking ‘‘any such obli6 gations’’ and inserting ‘‘obligations issued by the 

7 Postal Service which may be’’. 

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

9 (1) OBLIGATIONS TO WHICH PROVISIONS

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

11 title 39, United States Code, is amended by striking 

12 ‘‘such obligations,’’ and inserting ‘‘obligations issued 

13 by the Postal Service under this section,’’. 

14 (2) ASSETS, REVENUES, AND RECEIPTS TO

15 WHICH PROVISIONS APPLY.—Subsection (b) of sec16 tion 2005 of title 39, United States Code, is amend17 ed by striking ‘‘(b)’’ and inserting ‘‘(b)(1)’’, and by 

18 adding at the end the following: 

19 ‘‘(2) Notwithstanding any other provision of this sec20 tion—

21 ‘‘(A) the authority to pledge assets of the Post22 al Service under this subsection shall be available 

23 only to the extent that such assets are not related 

24 to the provision of competitive products (as deter25 mined under section 2011(h) or, for purposes of any 
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1 period before accounting practices and principles 

2 under section 2011(h) have been established and ap3 plied, the best information available from the Postal 

4 Service, including the audited statements required 

5 by section 2008(e)); and 

6 ‘‘(B) any authority under this subsection relat7 ing to the pledging or other use of revenues or re8 ceipts of the Postal Service shall be available only to 

9 the extent that they are not revenues or receipts of 

10 the Competitive Products Fund.’’. 

11 SEC. 403. PRIVATE CARRIAGE OF LETTERS. 

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

13 States Code, is amended by striking subsection (b) and 

14 inserting the following: 

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

16 when—

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

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

19 rate then currently charged for the 1st ounce of a 

20 single-piece first class letter; 

‘‘(2) the letter weighs at least 121 21 ⁄2 ounces; or 

22 ‘‘(3) such carriage is within the scope of serv23 ices described by regulations of the Postal Service 

24 (including, in particular, sections 310.1 and 320.2–

25 320.8 of title 39 of the Code of Federal Regulations, 
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1 as in effect on July 1, 2004) that purport to permit 

2 private carriage by suspension of the operation of 

3 this section (as then in effect).

4 ‘‘(c) Any regulations necessary to carry out this sec5 tion shall be promulgated by the Postal Regulatory Com6 mission.’’. 

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

8 on the date as of which the regulations promulgated under 

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

10 by section 202) take effect. 

11 SEC. 404. RULEMAKING AUTHORITY. 

12 Paragraph (2) of section 401 of title 39, United 

13 States Code, is amended to read as follows: 

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

15 and regulations, not inconsistent with this title, as 

16 may be necessary in the execution of its functions 

17 under this title and such other functions as may be 

18 assigned to the Postal Service under any provisions 

19 of law outside of this title;’’. 

20 SEC. 405. NONINTERFERENCE WITH COLLECTIVE BAR21 GAINING AGREEMENTS, ETC. 

22 (a) NONINTERFERENCE WITH COLLECTIVE BAR23 GAINING AGREEMENTS.—Except as provided in section 

24 407, nothing in this Act or any amendment made by this 

25 Act shall restrict, expand, or otherwise affect any of the 
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1 rights, privileges, or benefits of either employees of or 

2 labor organizations representing employees of the United 

3 States Postal Service under chapter 12 of title 39, United 

4 States Code, the National Labor Relations Act, any hand5 book or manual affecting employee labor relations within 

6 the United States Postal Service, or any collective bar7 gaining agreement. 

8 (b) FREE MAILING PRIVILEGES CONTINUE UN9 CHANGED.—Nothing in this Act or any amendment made 

10 by this Act shall affect any free mailing privileges ac11 corded under section 3217 or sections 3403 through 3406 

12 of title 39, United States Code. 

13 SEC. 406. BONUS AND COMPENSATION AUTHORITY. 

14 Subchapter VI of chapter 36 of title 39, United 

15 States Code (as so redesignated by section 306) is amend16 ed by adding at the end the following: 

17 ‘‘§ 3686. Bonus authority 

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

19 one or more programs to provide bonuses or other rewards 

20 to officers and employees of the Postal Service in senior 

21 executive or equivalent positions to achieve the objectives 

22 of this chapter. 

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

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

25 the Postal Service may award a bonus or other re-
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1 ward in excess of the limitation set forth in the last 

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

3 been approved under paragraph (2). Any such award 

4 or bonus may not cause the total compensation of 

5 such officer or employee to exceed the total annual 

6 compensation payable to the Vice President under 

7 section 104 of title 3 as of the end of the calendar 

8 year in which the bonus or award is paid. 

9 ‘‘(2) APPROVAL PROCESS.—If the Postal Serv10 ice wishes to have the authority, under any program 

11 described in subsection (a), to award bonuses or 

12 other rewards in excess of the limitation set forth in 

13 the last sentence of section 1003(a)—

14 ‘‘(A) the Postal Service shall make an ap15 propriate request to the Board of Governors in 

16 such form and manner as the Board requires; 

17 and 

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

19 any such request if it certifies, for the annual 

20 appraisal period involved, that the performance 

21 appraisal system for affected officers and em22 ployees of the Postal Service (as designed and 

23 applied) makes meaningful distinctions based 

24 on relative performance. 
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1 ‘‘(3) REVOCATION AUTHORITY.—If the Board 

2 of Governors finds that a performance appraisal sys3 tem previously approved under paragraph (2)(B) 

4 does not (as designed and applied) make meaningful 

5 distinctions based on relative performance, the 

6 Board may revoke or suspend the authority of the 

7 Postal Service to continue a program approved 

8 under paragraph (2) until such time as appropriate 

9 corrective measures have, in the judgment of the 

10 Board, been taken. 

11 ‘‘(c) EXCEPTIONS FOR CRITICAL POSITIONS.—Not12 withstanding any other provision of law, the Board of Gov13 ernors may allow up to 12 officers or employees of the 

14 Postal Service in critical senior executive or equivalent po15 sitions to receive total compensation in an amount not to 

16 exceed 120 percent of the total annual compensation pay17 able to the Vice President under section 104 of title 3 as 

18 of the end of the calendar year in which such payment 

19 is received. For each exception made under this sub20 section, the Board shall provide written notification to the 

21 Director of the Office of Personnel Management and the 

22 Congress within 30 days after the payment is made setting 

23 forth the name of the officer or employee involved, the 

24 critical nature of his or her duties and responsibilities, and 

25 the basis for determining that such payment is warranted. 
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1 ‘‘(d) INFORMATION FOR INCLUSION IN COMPREHEN2 SIVE STATEMENT.—Included in its comprehensive state3 ment under section 2401(e) for any period shall be—

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

5 or other payment during such period which would 

6 not have been allowable but for the provisions of 

7 subsection (b) or (c); 

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

9 and 

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

11 forth in the last sentence of section 1003(a) was ex12 ceeded as a result of such bonus or other payment. 

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

14 prescribe regulations for the administration of this sec15 tion.’’. 

16 SEC. 407. MEDIATION IN COLLECTIVE-BARGAINING DIS17 PUTES. 

18 (a) IN GENERAL.—Section 1207(b) of title 39, 

19 United States Code, is amended by striking all that follows 

20 ‘‘the Director of the Federal Mediation and Conciliation 

21 Service shall’’ and inserting ‘‘, within 10 days appoint a 

22 mediator of nationwide reputation and professional stat23 ure, and who is also a member of the National Academy 

24 of Arbitrators. The parties shall cooperate with the medi25 ator in an effort to reach an agreement and shall meet 
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1 and negotiate in good faith at such times and places that 

2 the mediator, in consultation with the parties, shall di3 rect.’’. 

4 (b) PROVISIONS RELATING TO ARBITRATION

5 BOARDS.—Section 1207(c) of title 39, United States 

6 Code, is amended—

7 (1) in paragraph (1)—

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

9 (B) by striking ‘‘not members of the fact10 finding panel,’’; and 

11 (C) by striking all that follows ‘‘shall be 

12 made’’ and inserting ‘‘from a list of names pro13 vided by the Director. This list shall consist of 

14 not less than 9 names of arbitrators of nation15 wide reputation and professional stature, who 

16 are also members of the National Academy of 

17 Arbitrators, and whom the Director has deter18 mined are available and willing to serve.’’; and 

19 (2) in paragraph (3), by striking ‘‘factfinding 

20 panel’’ and inserting ‘‘mediation’’. 

21 (c) CONFORMING AMENDMENT.—Section 1207(d) of 

22 title 39, United States Code, is amended by striking ‘‘fact23 finding panel will be established’’ and inserting ‘‘mediator 

24 shall be appointed’’. 
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1 TITLE V—ENHANCED 

2 REGULATORY COMMISSION 

3 SEC. 501. REORGANIZATION AND MODIFICATION OF CER4 TAIN PROVISIONS RELATING TO THE POSTAL 

5 REGULATORY COMMISSION. 

6 (a) TRANSFER AND REDESIGNATION.—Title 39, 

7 United States Code, is amended—

8 (1) by inserting after chapter 4 the following: 

9 ‘‘CHAPTER 5—POSTAL REGULATORY 

10 COMMISSION

‘‘Sec. 

‘‘501. Establishment. 

‘‘502. Commissioners. 

‘‘503. Rules; regulations; procedures. 

‘‘504. Administration.

11 ‘‘§ 501. Establishment 

12 ‘‘The Postal Regulatory Commission is an inde13 pendent establishment of the executive branch of the Gov14 ernment of the United States. 

15 ‘‘§ 502. Commissioners 

16 ‘‘(a) The Postal Regulatory Commission is composed 

17 of 5 Commissioners, appointed by the President, by and 

18 with the advice and consent of the Senate. The Commis19 sioners shall be chosen solely on the basis of their technical 

20 qualifications, professional standing, and demonstrated 

21 expertise in economics, accounting, law, or public adminis22 tration, and may be removed by the President only for 
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1 cause. Each individual appointed to the Commission shall 

2 have the qualifications and expertise necessary to carry 

3 out the responsibilities accorded Commissioners under the 

4 Postal Accountability and Enhancement Act. Not more 

5 than 3 of the Commissioners may be adherents of the 

6 same political party.

7 ‘‘(b) A Commissioner may continue to serve after the 

8 expiration of his term until his successor has qualified, 

9 except that a Commissioner may not so continue to serve 

10 for more than 1 year after the date upon which his term 

11 otherwise would expire under subsection (e). 

12 ‘‘(c) One of the Commissioners shall be designated 

13 as Chairman by, and shall serve in the position of Chair14 man at the pleasure of, the President. 

15 ‘‘(d) The Commissioners shall by majority vote des16 ignate a Vice Chairman of the Commission. The Vice 

17 Chairman shall act as Chairman of the Commission in the 

18 absence of the Chairman. 

19 ‘‘(e) The Commissioners shall serve for terms of 6 

20 years.’’; 

21 (2) in subchapter I of chapter 36 (as in effect 

22 before the amendment made by section 201(c)), by 

23 striking the heading for such subchapter I and all 

24 that follows through section 3602; and 
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1 (3) by redesignating sections 3603 and 3604 as 

2 sections 503 and 504, respectively, and transferring 

3 such sections to the end of chapter 5 (as inserted by 

4 paragraph (1)). 

5 (b) DETERMINATIONS.—Section 503 of title 39, 

6 United States Code, as so redesignated by subsection 

7 (a)(3), is amended by adding at the end the following: 

8 ‘‘Such rules shall include procedures which balance, inter 

9 alia, the need for protecting due process rights and ensur10 ing expeditious decision-making.’’. 

11 (c) APPLICABILITY.—The amendment made by sub12 section (a)(1) shall not affect the appointment or tenure 

13 of any person serving as a Commissioner on the Postal 

14 Regulatory Commission (as so redesignated by section 

15 504) pursuant to an appointment made before the date 

16 of the enactment of this Act or any nomination made be17 fore that date, but, when any such office becomes vacant, 

18 the appointment of any person to fill that office shall be 

19 made in accordance with such amendment. 

20 (d) CLERICAL AMENDMENT.—The analysis for part 

21 I of title 39, United States Code, is amended by inserting 

22 after the item relating to chapter 4 the following:

‘‘5. Postal Regulatory Commission .............................................. 501’’.
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1 SEC. 502. AUTHORITY FOR POSTAL REGULATORY COMMIS2 SION TO ISSUE SUBPOENAS. 

3 Section 504 of title 39, United States Code (as so 

4 redesignated by section 501) is amended by adding at the 

5 end the following: 

6 ‘‘(f)(1) Any Commissioner of the Postal Regulatory 

7 Commission, any administrative law judge appointed by 

8 the Commission under section 3105 of title 5, and any 

9 employee of the Commission designated by the Commis10 sion may administer oaths, examine witnesses, take depo11 sitions, and receive evidence. 

12 ‘‘(2) The Chairman of the Commission, any Commis13 sioner designated by the Chairman, and any administra14 tive law judge appointed by the Commission under section 

15 3105 of title 5 may, with respect to any proceeding con16 ducted by the Commission under this title—

17 ‘‘(A) issue subpoenas requiring the attendance 

18 and presentation of testimony by, or the production 

19 of documentary or other evidence in the possession 

20 of, any covered person; and 

21 ‘‘(B) order the taking of depositions and re22 sponses to written interrogatories by a covered per23 son. 

24 The written concurrence of a majority of the Commis25 sioners then holding office shall, with respect to each sub-
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1 poena under subparagraph (A), be required in advance of 

2 its issuance. 

3 ‘‘(3) In the case of contumacy or failure to obey a 

4 subpoena issued under this subsection, upon application 

5 by the Commission, the district court of the United States 

6 for the district in which the person to whom the subpoena 

7 is addressed resides or is served may issue an order requir8 ing such person to appear at any designated place to tes9 tify or produce documentary or other evidence. Any failure 

10 to obey the order of the court may be punished by the 

11 court as a contempt thereof. 

12 ‘‘(4) For purposes of this subsection, the term ‘cov13 ered person’ means an officer, employee, agent, or con14 tractor of the Postal Service. 

15 ‘‘(g)(1) If the Postal Service determines that any doc16 ument or other matter it provides to the Postal Regulatory 

17 Commission pursuant to a subpoena issued under sub18 section (f), or otherwise at the request of the Commission 

19 in connection with any proceeding or other purpose under 

20 this title, contains information which is described in sec21 tion 410(c) of this title, or exempt from public disclosure 

22 under section 552(b) of title 5, the Postal Service shall, 

23 at the time of providing such matter to the Commission, 

24 notify the Commission, in writing, of its determination 

25 (and the reasons therefor). 
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1 ‘‘(2) Except as provided in paragraph (3), no officer 

2 or employee of the Commission may, with respect to any 

3 information as to which the Commission has been notified 

4 under paragraph (1)—

5 ‘‘(A) use such information for purposes other 

6 than the purposes for which it is supplied; or 

7 ‘‘(B) permit anyone who is not an officer or 

8 employee of the Commission to have access to any 

9 such information. 

10 ‘‘(3)(A) Paragraph (2) shall not prevent the Commis11 sion from publicly disclosing relevant information in fur12 therance of its duties under this title if the Commission 

13 has adopted regulations under section 553 of title 5 that 

14 establish a procedure for according appropriate confiden15 tiality to information identified by the Postal Service 

16 under paragraph (1). In determining the appropriate de17 gree of confidentiality to be accorded information identi18 fied by the Postal Service under paragraph (1), the Com19 mission shall balance the nature and extent of the likely 

20 commercial injury to the Postal Service against the public 

21 interest, as required by section 101(d) of this title for fi22 nancial transparency of a government establishment.

23 ‘‘(B) Paragraph (2) shall not prevent information 

24 from being furnished under any process of discovery estab25 lished under this title in connection with a proceeding 
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1 under this title. The Commission shall, by regulations 

2 based on rule 26(c) of the Federal Rules of Civil Proce3 dure, establish procedures for ensuring appropriate con4 fidentiality for any information furnished under the pre5 ceding sentence.’’. 

6 SEC. 503. APPROPRIATIONS FOR THE POSTAL REGU7 LATORY COMMISSION. 

8 (a) AUTHORIZATION OF APPROPRIATIONS.—Sub9 section (d) of section 504 of title 39, United States Code 

10 (as so redesignated by section 501) is amended to read 

11 as follows: 

12 ‘‘(d) There are authorized to be appropriated, out of 

13 the Postal Service Fund, such sums as may be necessary 

14 for the Postal Regulatory Commission. In requesting an 

15 appropriation under this subsection for a fiscal year, the 

16 Commission shall prepare and submit to the Congress 

17 under section 2009 a budget of the Commission’s ex18 penses, including expenses for facilities, supplies, com19 pensation, and employee benefits.’’. 

20 (b) BUDGET PROGRAM.—

21 (1) IN GENERAL.—The next to last sentence of 

22 section 2009 of title 39, United States Code, is 

23 amended to read as follows: ‘‘The budget program 

24 shall also include separate statements of the 

25 amounts which (1) the Postal Service requests to be 
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1 appropriated under subsections (b) and (c) of section 

2 2401, (2) the Office of Inspector General of the 

3 United States Postal Service requests to be appro4 priated, out of the Postal Service Fund, under sec5 tion 8L(e) of the Inspector General Act of 1978, and 

6 (3) the Postal Regulatory Commission requests to be 

7 appropriated, out of the Postal Service Fund, under 

8 section 504(d) of this title.’’. 

9 (2) CONFORMING AMENDMENT.—Section 

10 2003(e)(1) of title 39, United States Code, is 

11 amended by striking the first sentence and inserting 

12 the following: ‘‘The Fund shall be available for the 

13 payment of (A) all expenses incurred by the Postal 

14 Service in carrying out its functions as provided by 

15 law, subject to the same limitation as set forth in 

16 the parenthetical matter under subsection (a); (B) 

17 all expenses of the Postal Regulatory Commission, 

18 subject to the availability of amounts appropriated 

19 pursuant to section 504(d); and (C) all expenses of 

20 the Office of Inspector General, subject to the avail21 ability of amounts appropriated pursuant to section 

22 8L(e) of the Inspector General Act of 1978.’’. 

23 (c) EFFECTIVE DATE.—
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1 (1) IN GENERAL.—The amendments made by 

2 this section shall apply with respect to fiscal years 

3 beginning on or after October 1, 2005. 

4 (2) SAVINGS PROVISION.—The provisions of 

5 title 39, United States Code, that are amended by 

6 this section shall, for purposes of any fiscal year be7 fore the first fiscal year to which the amendments 

8 made by this section apply, continue to apply in the 

9 same way as if this section had never been enacted. 

10 SEC. 504. REDESIGNATION OF THE POSTAL RATE COMMIS11 SION. 

12 (a) AMENDMENTS TO TITLE 39, UNITED STATES

13 CODE.—Title 39, United States Code, is amended in sec14 tions 404, 503–504 (as so redesignated by section 501), 

15 1001, and 1002 by striking ‘‘Postal Rate Commission’’ 

16 each place it appears and inserting ‘‘Postal Regulatory 

17 Commission’’. 

18 (b) AMENDMENTS TO TITLE 5, UNITED STATES

19 CODE.—Title 5, United States Code, is amended in sec20 tions 104(1), 306(f), 2104(b), 3371(3), 5314 (in the item 

21 relating to Chairman, Postal Rate Commission), 5315 (in 

22 the item relating to Members, Postal Rate Commission), 

23 5514(a)(5)(B), 7342(a)(1)(A), 7511(a)(1)(B)(ii), 

24 8402(c)(1), 8423(b)(1)(B), and 8474(c)(4) by striking 
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1 ‘‘Postal Rate Commission’’ and inserting ‘‘Postal Regu2 latory Commission’’. 

3 (c) AMENDMENT TO THE ETHICS IN GOVERNMENT

4 ACT OF 1978.—Section 101(f)(6) of the Ethics in Govern5 ment Act of 1978 (5 U.S.C. App.) is amended by striking 

6 ‘‘Postal Rate Commission’’ and inserting ‘‘Postal Regu7 latory Commission’’. 

8 (d) AMENDMENT TO THE REHABILITATION ACT OF

9 1973.—Section 501(b) of the Rehabilitation Act of 1973 

10 (29 U.S.C. 791(b)) is amended by striking ‘‘Postal Rate 

11 Office’’ and inserting ‘‘Postal Regulatory Commission’’. 

12 (e) AMENDMENT TO TITLE 44, UNITED STATES

13 CODE.—Section 3502(5) of title 44, United States Code, 

14 is amended by striking ‘‘Postal Rate Commission’’ and in15 serting ‘‘Postal Regulatory Commission’’. 

16 (f) OTHER REFERENCES.—Whenever a reference is 

17 made in any provision of law (other than this Act or a 

18 provision of law amended by this Act), regulation, rule, 

19 document, or other record of the United States to the 

20 Postal Rate Commission, such reference shall be consid21 ered a reference to the Postal Regulatory Commission. 
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1 SEC. 505. OFFICER OF THE POSTAL REGULATORY COMMIS2 SION REPRESENTING THE GENERAL PUBLIC. 

3 (a) IN GENERAL.—Chapter 5 of title 39, United 

4 States Code (as added by this Act) is amended by adding 

5 after section 504 the following: 

6 ‘‘§ 505. Officer of the Postal Regulatory Commission 

7 representing the general public 

8 ‘‘The Postal Regulatory Commission shall designate 

9 an officer of the Postal Regulatory Commission in all pub10 lic proceedings (such as developing rules, regulations, and 

11 procedures) who shall represent the interests of the gen12 eral public.’’. 

13 (b) CLERICAL AMENDMENT.—The analysis for chap14 ter 5 of title 39, United States Code (as amended by sec15 tion 501(a)(1)) is amended by adding after the item relat16 ing to section 504 the following:

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

public.’’.

17 TITLE VI—INSPECTORS 

18 GENERAL 

19 SEC. 601. INSPECTOR GENERAL OF THE POSTAL REGU20 LATORY COMMISSION. 

21 (a) IN GENERAL.—Paragraph (2) of section 8G(a) 

22 of the Inspector General Act of 1978 is amended by insert23 ing ‘‘the Postal Regulatory Commission,’’ after ‘‘the 

24 United States International Trade Commission,’’.
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1 (b) ADMINISTRATION.—Section 504 of title 39, 

2 United States Code (as so redesignated by section 501) 

3 is amended by adding after subsection (g) (as added by 

4 section 502) the following: 

5 ‘‘(h)(1) Notwithstanding any other provision of this 

6 title or of the Inspector General Act of 1978, the authority 

7 to select, appoint, and employ officers and employees of 

8 the Office of Inspector General of the Postal Regulatory 

9 Commission, and to obtain any temporary or intermittent 

10 services of experts or consultants (or an organization of 

11 experts or consultants) for such Office, shall reside with 

12 the Inspector General of the Postal Regulatory Commis13 sion. 

14 ‘‘(2) Except as provided in paragraph (1), any exer15 cise of authority under this subsection shall, to the extent 

16 practicable, be in conformance with the applicable laws 

17 and regulations that govern selections, appointments and 

18 employment, and the obtaining of any such temporary or 

19 intermittent services, within the Postal Regulatory Com20 mission.’’. 

21 (c) DEADLINE.—No later than 180 days after the 

22 date of the enactment of this Act—

23 (1) the first Inspector General of the Postal 

24 Regulatory Commission shall be appointed; and
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1 (2) the Office of Inspector General of the Post2 al Regulatory Commission shall be established. 

3 SEC. 602. INSPECTOR GENERAL OF THE UNITED STATES 

4 POSTAL SERVICE TO BE APPOINTED BY THE 

5 PRESIDENT. 

6 (a) DEFINITIONAL AMENDMENTS TO THE INSPEC7 TOR GENERAL ACT OF 1978.—Section 11 of the Inspector 

8 General Act of 1978 is amended—

9 (1) in paragraph (1)—

10 (A) by striking ‘‘or’’ before ‘‘the President 

11 of the Export-Import Bank;’’ and 

12 (B) by inserting ‘‘or the Governors of the 

13 United States Postal Service (within the mean14 ing of section 102(3) of title 39, United States 

15 Code);’’ after ‘‘the President of the Export-Im16 port Bank;’’; and 

17 (2) in paragraph (2)—

18 (A) by striking ‘‘or’’ before ‘‘the Export19 Import Bank,’’; and 

20 (B) by inserting ‘‘or the United States 

21 Postal Service,’’ after ‘‘the Export-Import 

22 Bank,’’. 

23 (b) SPECIAL PROVISIONS CONCERNING THE UNITED

24 STATES POSTAL SERVICE.—
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1 (1) IN GENERAL.—The Inspector General Act 

2 of 1978 is amended by inserting after section 8K the 

3 following:

4 ‘‘SPECIAL PROVISIONS CONCERNING THE UNITED STATES

5 POSTAL SERVICE

6 ‘‘SEC. 8L. (a) In carrying out the duties and respon7 sibilities specified in this Act, the Inspector General of the 

8 United States Postal Service shall have oversight responsi9 bility for all activities of the Postal Inspection Service, in10 cluding any internal investigation performed by the Postal 

11 Inspection Service. The Chief Postal Inspector shall 

12 promptly report any significant activities being carried out 

13 by the Postal Inspection Service to such Inspector Gen14 eral. The Postmaster General shall promptly report to 

15 such Inspector General all allegations of theft, fraud, or 

16 misconduct by Postal Service officers or employees, and 

17 entities or individuals doing business with the Postal Serv18 ice. 

19 ‘‘(b) In the case of any report that the Governors of 

20 the United States Postal Service (within the meaning of 

21 section 102(3) of title 39, United States Code) are re22 quired to transmit under the second sentence of section 

23 5(d), such sentence shall be applied by deeming the term 

24 ‘appropriate committees of Congress’ to mean the Com25 mittee on Government Reform of the House of Represent-
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1 atives, the Committee on Governmental Affairs of the Sen2 ate, and such other committees or subcommittees of Con3 gress as may be appropriate. 

4 ‘‘(c) Notwithstanding any provision of paragraph (7) 

5 or (8) of section 6(a), the Inspector General of the United 

6 States Postal Service may select, appoint, and employ 

7 such officers and employees as may be necessary for car8 rying out the functions, powers, and duties of the Office 

9 of Inspector General and to obtain the temporary or inter10 mittent services of experts or consultants or an organiza11 tion of experts or consultants, subject to the applicable 

12 laws and regulations that govern such selections, appoint13 ments, and employment, and the obtaining of such serv14 ices, within the United States Postal Service. 

15 ‘‘(d) Nothing in this Act shall restrict, eliminate, or 

16 otherwise adversely affect any of the rights, privileges, or 

17 benefits of employees of the United States Postal Service, 

18 or labor organizations representing employees of the 

19 United States Postal Service, under chapter 12 of title 39, 

20 United States Code, the National Labor Relations Act, 

21 any handbook or manual affecting employee labor rela22 tions with the United States Postal Service, or any collec23 tive bargaining agreement. 

24 ‘‘(e) There are authorized to be appropriated, out of 

25 the Postal Service Fund, such sums as may be necessary 
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1 for the Office of Inspector General of the United States 

2 Postal Service.’’. 

3 (2) RELATED PROVISIONS.—For certain related 

4 provisions, see section 503(b). 

5 (c) EXERCISE OF CERTAIN POWERS.—Section 

6 6(e)(3) of the Inspector General Act of 1978 is amended—

7 (1) by striking ‘‘and the’’ before ‘‘Tennessee 

8 Valley Authority’’; and 

9 (2) by inserting ‘‘, and United States Postal 

10 Service’’ after ‘‘Tennessee Valley Authority’’. 

11 (d) PUBLIC CONTRACTS.—

12 (1) ADDITIONAL PROVISIONS APPLICABLE.—

13 Section 410(b)(5) of title 39, United States Code, is 

14 amended—

15 (A) in subparagraph (A), by striking 

16 ‘‘and’’ after the semicolon; and 

17 (B) by adding after subparagraph (B) the 

18 following: 

19 ‘‘(C) the Anti-Kickback Act of 1986 (41 

20 U.S.C. 51 and following), other than sub21 sections (a) and (b) of 7 and section 8 of that 

22 Act; and

23 ‘‘(D) section 315 of the Federal Property 

24 and Administrative Services Act of 1949 (41 

25 U.S.C. 265) (relating to protecting contractor 
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1 employees from reprisal for disclosure of certain 

2 information);’’. 

3 (2) REGULATIONS ON ALLOWABLE COSTS.—

4 Section 410 of title 39, United States Code, is 

5 amended by adding at the end the following: 

6 ‘‘(e) The Postal Service shall develop and issue pur7 chasing regulations that prohibit contract costs not allow8 able under section 5.2.5 of the United States Postal Serv9 ice Procurement Manual (Publication 41), as in effect on 

10 July 12, 1995.’’. 

11 (e) REPORTS.—Section 3013 of title 39, United 

12 States Code, is amended by striking ‘‘Postmaster Gen13 eral’’ each place it appears and inserting ‘‘Chief Postal 

14 Inspector’’. 

15 (f) TECHNICAL AND CONFORMING AMENDMENTS.—

16 (1) RELATING TO THE INSPECTOR GENERAL

17 ACT OF 1978.—(A) Subsection (a) of section 8G of 

18 the Inspector General Act of 1978 (as amended by 

19 section 601(a)) is further amended—

20 (i) in paragraph (2), by striking ‘‘the Post21 al Regulatory Commission, and the United 

22 States Postal Service;’’ and inserting ‘‘and the 

23 Postal Regulatory Commission;’’ and 

24 (ii) in paragraph (4), by striking ‘‘except 

25 that’’ and all that follows through ‘‘Code);’’ and 
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1 inserting ‘‘except that, with respect to the Na2 tional Science Foundation, such term means the 

3 National Science Board;’’. 

4 (B)(i) Subsection (f) of section 8G of such Act 

5 is repealed. 

6 (ii) Subsection (c) of section 8G of such Act is 

7 amended by striking ‘‘Except as provided under sub8 section (f) of this section, the’’ and inserting ‘‘The’’. 

9 (C) Section 8J of such Act is amended by strik10 ing the matter after ‘‘8D,’’ and before ‘‘of this Act’’ 

11 and inserting ‘‘8E, 8F, 8H, or 8L’’. 

12 (2) RELATING TO TITLE 39, UNITED STATES

13 CODE.—(A) Subsection (e) of section 202 of title 39, 

14 United States Code, is repealed. 

15 (B) Paragraph (4) of section 102 of such title 

16 39 (as amended by section 101) is amended to read 

17 as follows: 

18 ‘‘(4) ‘Inspector General’ means the Inspector 

19 General of the United States Postal Service, ap20 pointed under section 3(a) of the Inspector General 

21 Act of 1978;’’. 

22 (C) The first sentence of section 1003(a) of 

23 such title 39 is amended by striking ‘‘chapters 2 and 

24 12 of this title, section 8G of the Inspector General 

25 Act of 1978, or other provision of law,’’ and insert-
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1 ing ‘‘chapter 2 or 12 of this title, subsection (b) or 

2 (c) of this section, or any other provision of law,’’. 

3 (D) Section 1003(b) of such title 39 is amended 

4 by striking ‘‘respective’’ and inserting ‘‘other’’. 

5 (E) Section 1003(c) of such title 39 is amended 

6 by striking ‘‘included’’ and inserting ‘‘includes’’. 

7 (3) RELATING TO THE ENERGY POLICY ACT OF

8 1992.—Section 160(a) of the Energy Policy Act of 

9 1992 (42 U.S.C. 8262f(a)) is amended (in the mat10 ter before paragraph (1)) by striking all that follows 

11 ‘‘(5 U.S.C. App.)’’ and before ‘‘shall—’’. 

12 (g) EFFECTIVE DATE; TRANSITION PROVISIONS.—

13 (1) EFFECTIVE DATE.—Except as provided in 

14 paragraph (2) or subsection (c), this section and the 

15 amendments made by this section shall take effect 

16 on the date of the enactment of this Act. 

17 (2) TRANSITION PROVISIONS.—

18 (A) PRESIDENTIAL APPOINTMENT AU19 THORITY AVAILABLE IMMEDIATELY.—The au20 thority to appoint an Inspector General of the 

21 United States Postal Service in accordance with 

22 the amendments made by this section shall be 

23 available as of the effective date of this section. 

24 (B) CONTINUATION IN OFFICE.—Pending 

25 the appointment of an Inspector General of the 
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1 United States Postal Service in accordance with 

2 the amendments made by this section, the indi3 vidual serving as the Inspector General of the 

4 United States Postal Service on the day before 

5 the effective date of this section may continue 

6 to serve—

7 (i) in accordance with applicable pro8 visions of the Inspector General Act of 

9 1978 and (except as provided in clause 

10 (ii)) of title 39, United States Code, as last 

11 in effect before the effective date of this 

12 Act; but 

13 (ii) subject to the provisions of such 

14 title 39 as amended by subsection (e) of 

15 this section (deeming any reference to the 

16 ‘‘Inspector General’’ in such provisions, as 

17 so amended, to refer to the individual con18 tinuing to serve under authority of this 

19 subparagraph) and subparagraph (C). 

20 (C) AUTHORIZATION OF APPROPRIA21 TIONS.—

22 (i) IN GENERAL.—Notwithstanding 

23 any other provision of this subsection, sec24 tion 8L(e) of the Inspector General Act of 

25 1978 (as amended by this section) shall be 
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1 effective for purposes of fiscal years begin2 ning on or after October 1, 2005.

3 (ii) SAVINGS PROVISION.—For pur4 poses of the fiscal year ending on Sep5 tember 30, 2005, funding for the Office of 

6 Inspector General of the United States 

7 Postal Service shall be made available in 

8 the same manner as if this Act had never 

9 been enacted. 

10 (D) ELIGIBILITY OF PRIOR INSPECTOR

11 GENERAL.—Nothing in this Act shall prevent 

12 any individual who has served as Inspector 

13 General of the United States Postal Service at 

14 any time before the date of the enactment of 

15 this Act from being appointed to that position 

16 pursuant to the amendments made by this sec17 tion. 

18 TITLE VII—EVALUATIONS 

19 SEC. 701. UNIVERSAL POSTAL SERVICE STUDY. 

20 (a) REPORT BY THE POSTAL SERVICE.—The United 

21 States Postal Service shall, within 12 months after the 

22 date of the enactment of this Act, submit to the President, 

23 the Congress, and the Postal Regulatory Commission, a 

24 written report on universal postal service in the United 
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1 States (hereinafter in this section referred to as ‘‘universal 

2 service’’). Such report shall include at least the following: 

3 (1) A comprehensive review of the history and 

4 development of universal service, including how the 

5 scope and standards of universal service have 

6 evolved over time. 

7 (2) The scope and standards of universal serv8 ice provided under current law (including sections 

9 101 and 403 of title 39, United States Code) and 

10 current rules, regulations, policy statements, and 

11 practices of the Postal Service. 

12 (3) A description of any geographic areas, pop13 ulations, communities, organizations, or other 

14 groups or entities not currently covered by universal 

15 service or that are covered but that are receiving 

16 services deficient in scope or quality or both. 

17 (4) The scope and standards of universal serv18 ice likely to be required in the future in order to 

19 meet the needs and expectations of the American 

20 public, including all types of mail users, based on 

21 such assumptions or alternative sets of assumptions 

22 as the Postal Service considers plausible. 

23 (5) Such recommendations as the Postal Serv24 ice considers appropriate. 
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1 (b) REPORT BY THE POSTAL REGULATORY COMMIS2 SION.—The Postal Regulatory Commission shall, within 

3 12 months after receiving the report of the Postal Service 

4 under subsection (a), submit to the President and the 

5 Congress a written report evaluating the report of the 

6 Postal Service. The report of the Commission shall include 

7 at least the following: 

8 (1) Such comments and observations relating to 

9 the matters addressed in the Postal Service’s report 

10 as the Commission considers appropriate. 

11 (2) An estimate of the cost attributable to the 

12 obligation to provide universal service under prior 

13 and current law, respectively. 

14 (3) An estimate of the likely cost of fulfilling 

15 the obligation to provide universal service under—

16 (A) the assumptions or respective sets of 

17 assumptions of the Postal Service described in 

18 subsection (a)(4); and 

19 (B) such other assumptions or sets of as20 sumptions as the Commission considers plau21 sible. 

22 (4) Such additional topics and recommenda23 tions as the Commission considers appropriate. 
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1 (c) CONSULTATION.—In preparing the reports re2 quired by this section, the Postal Service and the Postal 

3 Regulatory Commission—

4 (1) shall consult with each other, other Federal 

5 agencies, users of the mails, enterprises in the pri6 vate sector engaged in the delivery of mail, and the 

7 general 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, CLASSIFICA15 TION, AND OTHER PROVISIONS. 

16 (a) IN GENERAL.—The Postal Regulatory Commis17 sion shall, at least every 5 years, submit a report to the 

18 President and the Congress concerning—

19 (1) the operation of the amendments made by 

20 the Postal Accountability and Enhancement Act; 

21 and 

22 (2) recommendations for any legislation or 

23 other measures necessary to improve the effective24 ness or efficiency of the postal laws of the United 

25 States. 
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1 (b) POSTAL SERVICE VIEWS.—A report under this 

2 section shall be submitted only after reasonable oppor3 tunity has been afforded to the Postal Service to review 

4 such report and to submit written comments thereon. Any 

5 comments timely received from the Postal Service under 

6 the preceding sentence shall be attached to the report sub7 mitted under subsection (a). 

8 (c) SPECIFIC INFORMATION REQUIRED.—The Postal 

9 Regulatory Commission shall include, as part of at least 

10 its first report under subsection (a), the following: 

11 (1) COST-COVERAGE REQUIREMENT RELATING

12 TO COMPETITIVE PRODUCTS COLLECTIVELY.—With 

13 respect to section 3633 of title 39, United States 

14 Code (as amended by this Act)—

15 (A) a description of how such section has 

16 operated; and 

17 (B) recommendations as to whether or not 

18 such section should remain in effect and, if so, 

19 any suggestions as to how it might be improved. 

20 (2) COMPETITIVE PRODUCTS FUND.—With re21 spect to the Postal Service Competitive Products 

22 Fund (under section 2011 of title 39, United States 

23 Code, as amended by section 301), in consultation 

24 with the Secretary of the Treasury—
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1 (A) a description of how such Fund has 

2 operated; 

3 (B) any suggestions as to how the oper4 ation of such Fund might be improved; and 

5 (C) a description and assessment of alter6 native accounting or financing mechanisms that 

7 might be used to achieve the objectives of such 

8 Fund. 

9 (3) ASSUMED FEDERAL INCOME TAX ON COM10 PETITIVE PRODUCTS FUND.—With respect to section 

11 3634 of title 39, United States Code (as amended by 

12 this Act), in consultation with the Secretary of the 

13 Treasury—

14 (A) a description of how such section has 

15 operated; and 

16 (B) recommendations as to whether or not 

17 such section should remain in effect and, if so, 

18 any suggestions as to how it might be improved. 

19 SEC. 703. STUDY ON EQUAL APPLICATION OF LAWS TO 

20 COMPETITIVE PRODUCTS.

21 (a) IN GENERAL.—The Federal Trade Commission 

22 shall prepare and submit to the President, the Congress, 

23 and the Postal Regulatory Commission, within 1 year 

24 after the date of the enactment of this Act, a comprehen25 sive report identifying Federal and State laws that apply 
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1 differently to the United States Postal Service with re2 spect to the competitive category of mail (within the mean3 ing of section 102 of title 39, United States Code, as 

4 amended by section 101) and private companies providing 

5 similar products. 

6 (b) RECOMMENDATIONS; ADJUSTMENTS.—The Fed7 eral Trade Commission shall include such recommenda8 tions as it considers appropriate for bringing such legal 

9 differences to an end and, in the interim, to account under 

10 section 3633, for the net economic effects provided by 

11 those laws. 

12 (c) CONSULTATION.—In preparing its report, the 

13 Federal Trade Commission shall consult with the United 

14 States Postal Service, the Postal Regulatory Commission, 

15 other Federal agencies, mailers, private companies that 

16 provide delivery services, and the general public, and shall 

17 append to such report any written comments received 

18 under this subsection. 

19 (d) COMPETITIVE PRODUCT RATE REGULATION.—

20 The Postal Regulatory Commission shall take into account 

21 the recommendations of the Federal Trade Commission, 

22 and subsequent events that affect the continuing validity 

23 of the estimate of the net economic effect, in promulgating 

24 or revising the regulations required by section 3633 of title 

25 39, 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 

5 and, within 1 year after the date of the enactment of this 

6 Act, submit to the President and Congress a report con7 cerning the extent to which women and minorities are rep8 resented in supervisory and management positions within 

9 the United States Postal Service. Any data included in the 

10 report shall be presented in the aggregate and by pay level. 

11 (b) PERFORMANCE EVALUATIONS.—The United 

12 States Postal Service shall, as soon as practicable, take 

13 such measures as may be necessary to ensure that, for 

14 purposes of conducting performance appraisals of super15 visory or managerial employees, appropriate consideration 

16 shall be given to meeting affirmative action goals, achiev17 ing equal employment opportunity requirements, and im18 plementation of plans designed to achieve greater diversity 

19 in the workforce. 

20 SEC. 705. PLAN FOR ASSISTING DISPLACED WORKERS. 

21 (a) PLAN.—The United States Postal Service shall, 

22 before the deadline specified in subsection (b), develop and 

23 be prepared to implement, whenever necessary, a com24 prehensive plan under which reemployment assistance 

25 shall be afforded to employees displaced as a result of the 

26 automation or privatization of any of its functions. 
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1 (b) REPORT.—Not later than 1 year after the date 

2 of the enactment of this Act, the United States Postal 

3 Service shall submit to the Board of Governors and to 

4 Congress a written report describing its plan under this 

5 section. 

6 SEC. 706. CONTRACTS WITH WOMEN, MINORITIES, AND 

7 SMALL BUSINESSES. 

8 The Board of Governors shall study and, within 1 

9 year after the date of the enactment of this Act, submit 

10 to the President and the Congress a report concerning the 

11 number and value of contracts and subcontracts the Post12 al Service has entered into with women, minorities, and 

13 small businesses. 

14 SEC. 707. RATES FOR PERIODICALS. 

15 (a) IN GENERAL.—The United States Postal Service, 

16 acting jointly with the Postal Regulatory Commission, 

17 shall study and submit to the President and Congress a 

18 report concerning—

19 (1) the quality, accuracy, and completeness of 

20 the information used by the Postal Service in deter21 mining the direct and indirect postal costs attrib22 utable to periodicals; and 

23 (2) any opportunities that might exist for im24 proving efficiencies in the collection, handling, trans25 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 

4 recommendations for any administrative action or legisla5 tion 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 Gen9 eral of the United States Postal Service shall study and 

10 submit to the President, the Congress, and the United 

11 States Postal Service, a report concerning the administra12 tion of section 3626(k) of title 39, United States Code. 

13 (b) SPECIFIC REQUIREMENTS.—The study and re14 port shall specifically address the adequacy and fairness 

15 of the process by which assessments under section 3626(k) 

16 of title 39, United States Code, are determined and ap17 pealable, including—

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 

22 established for the commencement of proceedings by 

23 the Postal Service thereunder.
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1 SEC. 709. NETWORK OPTIMIZATION. 

2 (a) IN GENERAL.—The Postal Service shall, within 

3 90 days after the end of each fiscal year, prepare and sub4 mit to the Postal Regulatory Commission, the Congress, 

5 and the Board of Governors a written report on the postal 

6 processing, transportation, and distribution networks. 

7 Such report 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, 

16 and 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 

22 Service from taking action to realign or consolidate 

23 facilities. 

24 (4) Such additional topics and recommenda25 tions as the Postal Service considers appropriate. 
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1 (b) TREATMENT AS PERFORMANCE GOALS.—The 

2 Postal Service shall establish and report the matters set 

3 forth in subsection (a) as performance goals in the reports 

4 required by sections 2803 and 2804. 

5 (c) ACTIONS TO BE TAKEN.—The Postal Service 

6 shall take such actions it considers, in its sole discretion, 

7 necessary and appropriate to provide the Nation with a 

8 modern and efficient network for the processing, transpor9 tation, and distribution of mail. Nothing in this section 

10 shall prevent the Postal Service from making such im11 provements in the efficiency and effectiveness of the net12 work as it deems 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 

17 of this Act, the Comptroller General of the United States 

18 shall appoint, in such manner and under such terms as 

19 he in his sole discretion determines appropriate, an inde20 pendent, impartial, and expert research organization 

21 (hereinafter in this section referred to as the ‘‘research 

22 organization’’) to prepare and submit to the President and 

23 to Congress a comprehensive report that evaluates what 

24 business model would best promote an efficient, reliable, 

25 innovative, and viable Postal Service that can meet the 
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1 needs of the Nation and its citizens in the 21st century. 

2 The final report required by this section shall be submitted 

3 within 27 months of the date of the enactment of this Act. 

4 The final report shall identify costs, benefits, and feasible 

5 options, if any, associated with one or more strategies 

6 for—

7 (1) maintaining the Postal Service in its cur8 rent form as an independent establishment in the ex9 ecutive branch of the Government; and 

10 (2) transforming the Postal Service into an or11 dinary corporation, owned wholly by the Govern12 ment, wholly by private shareholders, or partly by 

13 the Government and partly by private shareholders. 

14 (b) PROTECTION OF UNIVERSAL SERVICE.—The re15 search organization may include such recommendations as 

16 it considers appropriate with respect to how the Postal 

17 Service’s business model can be maintained or trans18 formed in an orderly manner that will minimize adverse 

19 effects on all interested parties and assure continued avail20 ability of affordable, universal postal service throughout 

21 the United States (based on the reports required by sec22 tion 701). The research organization shall not consider 

23 any strategy or other course of action that would pose a 

24 significant risk to the continued availability of affordable, 

25 universal postal service throughout the United States. 
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1 (c) ELEMENTS OF REPORT.—

2 (1) TOPICS TO ADDRESS.—The report shall ad3 dress at least the following: 

4 (A) Specification of nature and bases of 

5 one or more sets of reasonable assumptions 

6 about the development of the postal services 

7 market, to the extent that such assumptions 

8 may be necessary or appropriate for each strat9 egy identified by the research organization. 

10 (B) Specification of the nature and bases 

11 of one or more sets of reasonable assumptions 

12 about the development of the regulatory frame13 work for postal services, to the extent that such 

14 assumptions may be necessary or appropriate 

15 for each strategy identified by the research or16 ganization. 

17 (C) Qualitative and, to the extent possible, 

18 quantitative effects that each strategy identified 

19 by the research organization may have on uni20 versal service generally, the Postal Service, 

21 mailers, postal employees, private companies 

22 that provide delivery services, and the general 

23 public. 

24 (D) Financial effects that each strategy 

25 identified by the research organization may 
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1 have on the Postal Service, postal employees, 

2 the Treasury of the United States, and other 

3 affected parties, including the American mailing 

4 consumer. 

5 (E) Feasible and appropriate procedural 

6 steps and timetables for implementing each 

7 strategy identified by the research organization. 

8 (F) Such additional topics as the Comp9 troller General or the research organization 

10 shall consider necessary and appropriate. 

11 (2) MATTERS TO CONSIDER.—For each strat12 egy identified, the research organization shall assess 

13 how each business model might—

14 (A) address the human-capital challenges 

15 facing the Postal Service, including how em16 ployee-management relations within the Postal 

17 Service may be improved; 

18 (B) optimize the postal infrastructure, in19 cluding the best methods for providing retail 

20 services that ensure convenience and access to 

21 customers; 

22 (C) ensure the safety and security of the 

23 mail and of postal employees; 
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1 (D) minimize areas of inefficiency or waste 

2 and improve operations involved in the collec3 tion, processing, or delivery of mail; and 

4 (E) impact other matters that the Comp5 troller General or the research organization de6 termines are relevant to evaluating a viable 

7 long-term business model for the Postal Service. 

8 (3) EXPERIENCES OF OTHER COUNTRIES.—In 

9 preparing the report required by subsection (a), the 

10 research organization shall comprehensively and 

11 quantitatively investigate the experiences of other in12 dustrialized countries that have transformed the na13 tional post office. The research organization shall 

14 undertake such original research as it deems nec15 essary. In each case, the research organization shall 

16 describe as fully as possible the costs and benefits of 

17 transformation of the national post office on all af18 fected parties and shall identify any lessons that for19 eign experience may imply for each strategy identi20 fied by the research organization. 

21 (d) OUTSIDE EXPERTS.—In preparing its study, the 

22 research organization may retain the services of additional 

23 experts and consultants. 

24 (e) CONSULTATION.—In preparing its report, the re25 search organization shall consult fully with the Postal 
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1 Service, the Postal Regulatory Commission, other Federal 

2 agencies, postal employee unions and management asso3 ciations, mailers, private companies that provide delivery 

4 services, and the general public. The research organization 

5 shall include with its final report a copy of all formal writ6 ten comments received under this subsection. 

7 (f) AUTHORIZATION OF APPROPRIATIONS.—There 

8 are authorized to be appropriated from the Postal Service 

9 Fund such sums as may be necessary to carry out this 

10 section.

11 SEC. 711. STUDY ON CERTAIN PROPOSED AMENDMENTS. 

12 The Government Accountability Office shall study 

13 and, within 12 months after the date of the enactment 

14 of this Act, submit to the Congress a report on sections 

15 805 and 807 of H.R. 22 (109th Congress), as introduced. 

16 Such report shall include the following: 

17 (1) A description of the efficiencies of the cur18 rent system under section 5402 of title 39, United 

19 States Code. 

20 (2) The potential for cost savings to the United 

21 States Postal Service if the Postal Service, rather 

22 than the Department of Transportation, were to ad23 minister international mail carriage. 
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1 (3) The potential for harm to domestic air car2 riers and American workers currently employed by 

3 domestic air carriers. 

4 (4) The potential loss of revenue to domestic air 

5 carriers and American workers currently employed 

6 by domestic air carriers. 

7 (5) The process by which the United States 

8 Postal Service would administer any changes in cur9 rent law. 

10 (6) The process by which the Department of 

11 Transportation administers current law. 

12 (7) The potential for change in protection of 

13 national security by carriage by foreign carriers of 

14 international mail to and from the United States. 

15 SEC. 712. DEFINITION. 

16 For purposes of this title, the term ‘‘Board of Gov17 ernors’’ has the meaning given such term by section 102 

18 of title 39, United States Code. 

19 TITLE VIII—MISCELLANEOUS; 

20 TECHNICAL AND CON21 FORMING AMENDMENTS 

22 SEC. 801. EMPLOYMENT OF POSTAL POLICE OFFICERS. 

23 Section 3061 of title 18, United States Code, is 

24 amended by adding at the end the following: 
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1 ‘‘(c)(1) The Postal Service may employ police officers 

2 for duty in connection with the protection of property 

3 owned or occupied by the Postal Service or under the 

4 charge and control of the Postal Service, and persons on 

5 the property, including duty in areas outside the property 

6 to the extent necessary to protect the property and persons 

7 on the property. 

8 ‘‘(2) With respect to such property, such officers shall 

9 have the power to—

10 ‘‘(A) enforce Federal laws and regulations for 

11 the protection of persons and property; 

12 ‘‘(B) carry firearms; and 

13 ‘‘(C) make arrests without a warrant for any 

14 offense against the United States committed in the 

15 presence of the officer or for any felony cognizable 

16 under the laws of the United States if the officer has 

17 reasonable grounds to believe that the person to be 

18 arrested has committed or is committing a felony. 

19 ‘‘(3) With respect to such property, such officers may 

20 have, to such extent as the Postal Service may by regula21 tions prescribe, the power to—

22 ‘‘(A) serve warrants and subpoenas issued 

23 under the authority of the United States; and 

24 ‘‘(B) conduct investigations, on and off the 

25 property in question, of offenses that may have been 
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1 committed against property owned or occupied by 

2 the Postal Service or persons on the property. 

3 ‘‘(4)(A) As to such property, the Postmaster General 

4 may prescribe regulations necessary for the protection and 

5 administration of property owned or occupied by the Post6 al Service and persons on the property. The regulations 

7 may include reasonable penalties, within the limits pre8 scribed in subparagraph (B), for violations of the regula9 tions. The regulations shall be posted and remain posted 

10 in a conspicuous place on the property. 

11 ‘‘(B) A person violating a regulation prescribed under 

12 this subsection shall be fined under this title, imprisoned 

13 for not more than 30 days, or both.’’. 

14 SEC. 802. DATE OF POSTMARK TO BE TREATED AS DATE OF 

15 APPEAL IN CONNECTION WITH THE CLOSING 

16 OR CONSOLIDATION OF POST OFFICES. 

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

18 States Code, is amended by adding at the end the fol19 lowing: 

20 ‘‘(6) For purposes of paragraph (5), any appeal re21 ceived by the Commission shall—

22 ‘‘(A) if sent to the Commission through the 

23 mails, be considered to have been received on the 

24 date of the Postal Service postmark on the envelope 

25 or other cover in which such appeal is mailed; or 
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1 ‘‘(B) if otherwise lawfully delivered to the Com2 mission, be considered to have been received on the 

3 date determined based on any appropriate docu4 mentation or other indicia (as determined under reg5 ulations of the Commission).’’. 

6 (b) EFFECTIVE DATE.—This section and the amend7 ments made by this section shall apply with respect to any 

8 determination to close or consolidate a post office which 

9 is first made available, in accordance with paragraph (3) 

10 of section 404(b) of title 39, United States Code, after 

11 the end of the 3-month period beginning on the date of 

12 the enactment of this Act. 

13 SEC. 803. PROVISIONS RELATING TO BENEFITS UNDER 

14 CHAPTER 81 OF TITLE 5, UNITED STATES 

15 CODE, FOR OFFICERS AND EMPLOYEES OF 

16 THE FORMER POST OFFICE DEPARTMENT. 

17 (a) IN GENERAL.—Section 8 of the Postal Reorga18 nization Act (39 U.S.C. 1001 note) is amended by insert19 ing ‘‘(a)’’ after ‘‘8.’’ and by adding at the end the fol20 lowing: 

21 ‘‘(b) For purposes of chapter 81 of title 5, United 

22 States Code, the Postal Service shall, with respect to any 

23 individual receiving benefits under such chapter as an offi24 cer or employee of the former Post Office Department, 

25 have the same authorities and responsibilities as it has 
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1 with respect to an officer or employee of the Postal Service 

2 receiving such benefits.’’. 

3 (b) EFFECTIVE DATE.—This section and the amend4 ments made by this section shall be effective as of the first 

5 day of the fiscal year in which this Act is enacted. 

6 SEC. 804. OBSOLETE PROVISIONS. 

7 (a) REPEAL.—

8 (1) IN GENERAL.—Chapter 52 of title 39, 

9 United States Code, is repealed. 

10 (2) CONFORMING AMENDMENTS.—(A) Section 

11 5005(a) of title 39, United States Code, is amend12 ed—

13 (i) by striking paragraph (1), and by re14 designating paragraphs (2) through (4) as 

15 paragraphs (1) through (3), respectively; and 

16 (ii) in paragraph (3) (as so designated by 

17 clause (i)), by striking ‘‘(as defined in section 

18 5201(6) of this title)’’. 

19 (B) Section 5005(b) of such title 39 is amended 

20 by striking ‘‘(a)(4)’’ each place it appears and in21 serting ‘‘(a)(3)’’. 

22 (C) Section 5005(c) of such title 39 is amended 

23 by striking ‘‘by carrier or person under subsection 

24 (a)(1) of this section, by contract under subsection 
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1 (a)(4) of this section, or’’ and inserting ‘‘by contract 

2 under subsection (a)(3) of this section or’’. 

3 (b) ELIMINATING RESTRICTION ON LENGTH OF CON4 TRACTS.—(1) Section 5005(b)(1) of title 39, United 

5 States Code, is amended by striking ‘‘(or where the Postal 

6 Service determines that special conditions or the use of 

7 special equipment warrants, not in excess of 6 years)’’ and 

8 inserting ‘‘(or such longer period of time as may be deter9 mined by the Postal Service to be advisable or appro10 priate)’’. 

11 (2) Section 5402(d) of such title 39 is amended by 

12 striking ‘‘for a period of not more than 4 years’’. 

13 (3) Section 5605 of such title 39 is amended by strik14 ing ‘‘for periods of not in excess of 4 years’’. 

15 (c) CLERICAL AMENDMENT.—The analysis for part 

16 V of title 39, United States Code, is amended by repealing 

17 the item relating to chapter 52. 

18 SEC. 805. INVESTMENTS. 

19 Subsection (c) of section 2003 of title 39, United 

20 States Code, is amended—

21 (1) by striking ‘‘(c) If’’ and inserting ‘‘(c)(1) 

22 Except as provided in paragraph (2), if’’; and 

23 (2) by adding at the end the following: 
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1 ‘‘(2)(A) Nothing in this section shall be considered 

2 to authorize any investment in any obligations or securi3 ties of a commercial entity. 

4 ‘‘(B) For purposes of this paragraph, the term ‘com5 mercial entity’ means any corporation, company, associa6 tion, partnership, joint stock company, firm, society, or 

7 other similar entity, as further defined under regulations 

8 prescribed by the Postal Regulatory Commission.’’.

9 SEC. 806. REDUCED RATES. 

10 Section 3626 of title 39, United States Code, is 

11 amended—

12 (1) in subsection (a), by striking all before 

13 paragraph (4) and inserting the following: 

14 ‘‘(a)(1) Except as otherwise provided in this section, 

15 rates of postage for a class of mail or kind of mailer under 

16 former section 4358, 4452(b), 4452(c), 4554(b), or 

17 4554(c) of this title shall be established in accordance with 

18 section 3622. 

19 ‘‘(2) For the purpose of this subsection, the term 

20 ‘regular-rate category’ means any class of mail or kind of 

21 mailer, other than a class or kind referred to in section 

22 2401(c). 

23 ‘‘(3) Rates of postage for a class of mail or kind of 

24 mailer under former section 4358(a) through (c) of this 

25 title shall be established so that postage on each mailing 
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1 of such mail reflects its preferred status as compared to 

2 the postage for the most closely corresponding regular-rate 

3 category mailing.’’; 

4 (2) in subsection (g), by adding at the end the 

5 following: 

6 ‘‘(3) For purposes of this section and former section 

7 4358(a) through (c) of this title, those copies of an issue 

8 of a publication entered within the county in which it is 

9 published, but distributed outside such county on postal 

10 carrier routes originating in the county of publication, 

11 shall be treated as if they were distributed within the 

12 county of publication. 

13 ‘‘(4)(A) In the case of an issue of a publication, any 

14 number of copies of which are mailed at the rates of post15 age for a class of mail or kind of mailer under former 

16 section 4358(a) through (c) of this title, any copies of such 

17 issue which are distributed outside the county of publica18 tion (excluding any copies subject to paragraph (3)) shall 

19 be subject to rates of postage provided for under this para20 graph. 

21 ‘‘(B) The rates of postage applicable to mail under 

22 this paragraph shall be established in accordance with sec23 tion 3622. 

24 ‘‘(C) This paragraph shall not apply with respect to 

25 an issue of a publication unless the total paid circulation 
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1 of such issue outside the county of publication (not count2 ing recipients of copies subject to paragraph (3)) is less 

3 than 5,000.’’; and 

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

5 ‘‘(n) In the administration of this section, matter that 

6 satisfies the circulation standards for requester publica7 tions shall not be excluded from being mailed at the rates 

8 for mail under former section 4358 solely because such 

9 matter is designed primarily for free circulation or for cir10 culation at nominal rates, or fails to meet the require11 ments of former section 4354(a)(5).’’. 

12 SEC. 807. HAZARDOUS MATTER. 

13 (a) NONMAILABILITY GENERALLY.—Section 3001 of 

14 title 39, United States Code, is amended—

15 (1) by redesignating subsection (n) as sub16 section (o); and 

17 (2) by inserting after subsection (m) the fol18 lowing: 

19 ‘‘(n)(1) Except as otherwise authorized by law or reg20 ulations of the Postal Service, hazardous material is non21 mailable. 

22 ‘‘(2) In this subsection, the term ‘hazardous material’ 

23 means a substance or material designated by the Secretary 

24 of Transportation under section 5103(a) of title 49.’’. 
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1 (b) MAILABILITY.—Chapter 30 of title 39, United 

2 States Code, is amended by adding at the end the fol3 lowing: 

4 ‘‘§ 3018. Hazardous material 

5 ‘‘(a) IN GENERAL.—The Postal Service shall pre6 scribe regulations for the safe transportation of hazardous 

7 material in the mail. 

8 ‘‘(b) PROHIBITIONS.—No person may—

9 ‘‘(1) mail or cause to be mailed hazardous ma10 terial that has been declared by statute or Postal 

11 Service regulation to be nonmailable; 

12 ‘‘(2) mail or cause to be mailed hazardous ma13 terial in violation of any statute or Postal Service 

14 regulation restricting the time, place, or manner in 

15 which hazardous material may be mailed; or 

16 ‘‘(3) manufacture, distribute, or sell any con17 tainer, packaging kit, or similar device that—

18 ‘‘(A) is represented, marked, certified, or 

19 sold by such person for use in the mailing of 

20 hazardous material; and 

21 ‘‘(B) fails to conform with any statute or 

22 Postal Service regulation setting forth stand23 ards for a container, packaging kit, or similar 

24 device used for the mailing of hazardous mate25 rial. 
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1 ‘‘(c) CIVIL PENALTY; CLEAN-UP COSTS AND DAM2 AGES.—

3 ‘‘(1) IN GENERAL.—A person who knowingly 

4 violates this section or a regulation prescribed under 

5 this section shall be liable for—

6 ‘‘(A) a civil penalty of at least $250, but 

7 not more than $100,000, for each violation; 

8 ‘‘(B) the costs of any clean-up associated 

9 with each violation; and 

10 ‘‘(C) damages. 

11 ‘‘(2) KNOWING ACTION.—A person acts know12 ingly for purposes of paragraph (1) when—

13 ‘‘(A) the person has actual knowledge of 

14 the facts giving rise to the violation; or 

15 ‘‘(B) a reasonable person acting in the cir16 cumstances and exercising reasonable care 

17 would have had that knowledge. 

18 ‘‘(3) SEPARATE VIOLATIONS.—

19 ‘‘(A) VIOLATIONS OVER TIME.—A separate 

20 violation under this subsection occurs for each 

21 day hazardous material, mailed or caused to be 

22 mailed in noncompliance with this section, is in 

23 the mail. 

24 ‘‘(B) SEPARATE ITEMS.—A separate viola25 tion under this subsection occurs for each item 
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1 containing hazardous material that is mailed or 

2 caused to be mailed in noncompliance with this 

3 section. 

4 ‘‘(d) HEARINGS.—The Postal Service may determine 

5 that a person has violated this section or a regulation pre6 scribed under this section only after notice and an oppor7 tunity for a hearing. Proceedings under this section shall 

8 be conducted in accordance with section 3001(m). 

9 ‘‘(e) PENALTY CONSIDERATIONS.—In determining 

10 the amount of a civil penalty for a violation of this section, 

11 the Postal Service shall consider—

12 ‘‘(1) the nature, circumstances, extent, and 

13 gravity of the violation; 

14 ‘‘(2) with respect to the person who committed 

15 the violation, the degree of culpability, any history of 

16 prior violations, the ability to pay, and any effect on 

17 the ability to continue in business; 

18 ‘‘(3) the impact on Postal Service operations; 

19 and 

20 ‘‘(4) any other matters that justice requires. 

21 ‘‘(f) CIVIL ACTIONS TO COLLECT.—

22 ‘‘(1) IN GENERAL.—In accordance with section 

23 409(d), a civil action may be commenced in an ap24 propriate district court of the United States to col-
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1 lect a civil penalty, clean-up costs, and damages as2 sessed under subsection (c). 

3 ‘‘(2) COMPROMISE.—The Postal Service may 

4 compromise the amount of a civil penalty, clean-up 

5 costs, and damages assessed under subsection (c) be6 fore commencing a civil action with respect to such 

7 civil penalty, clean-up costs, and damages under 

8 paragraph (1). 

9 ‘‘(g) CIVIL JUDICIAL PENALTIES.—

10 ‘‘(1) IN GENERAL.—At the request of the Post11 al Service, the Attorney General may bring a civil 

12 action in an appropriate district court of the United 

13 States to enforce this section or a regulation pre14 scribed under this section. 

15 ‘‘(2) RELIEF.—The court in a civil action under 

16 paragraph (1) may award appropriate relief, includ17 ing a temporary or permanent injunction, civil pen18 alties as determined in accordance with this section, 

19 or punitive damages. 

20 ‘‘(3) CONSTRUCTION.—A civil action under this 

21 subsection shall be in lieu of civil penalties for the 

22 same violation under subsection (c)(1)(A). 

23 ‘‘(h) DEPOSIT OF AMOUNTS COLLECTED.—

24 ‘‘(1) POSTAL SERVICE FUND.—Except as pro25 vided under paragraph (2), amounts collected under 
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1 subsection (c)(1)(B) and (C) shall be deposited into 

2 the Postal Service Fund under section 2003. 

3 ‘‘(2) TREASURY.—Amounts collected under sub4 section (c)(1)(A) and any punitive damages collected 

5 under subsection (c)(1)(C) shall be deposited into 

6 the Treasury of the United States.’’. 

7 (c) CONFORMING AMENDMENTS.—(1) Section 

8 2003(b) of title 39, United States Code, is amended—

9 (A) in paragraph (7), by striking ‘‘and’’ after 

10 the semicolon; 

11 (B) in paragraph (8), by striking ‘‘purposes.’’ 

12 and inserting ‘‘purposes; and’’; and 

13 (C) by adding at the end the following: 

14 ‘‘(9) any amounts collected under section 

15 3018.’’. 

16 (2) The analysis for chapter 30 of title 39, United 

17 States Code, is amended by adding at the end the fol18 lowing:

‘‘3018. Hazardous material.’’.

19 (d) INJURIOUS ARTICLES AS NONMAILABLE.—Sec20 tion 1716(a) of title 18, United States Code, is amended 

21 by inserting after ‘‘explosives,’’ the following: ‘‘hazardous 

22 materials,’’. 
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1 SEC. 808. PROVISIONS RELATING TO COOPERATIVE MAIL2 INGS. 

3 (a) DETERMINATION.—The Postal Regulatory Com4 mission shall examine section E670.5.3 of the Domestic 

5 Mail Manual to determine whether it contains adequate 

6 safeguards to protect against (1) abuses of rates for non7 profit mail and (2) deception of consumers. 

8 (b) REGULATIONS.—If the Postal Regulatory Com9 mission determines that section E670.5.3 of the Domestic 

10 Mail Manual does not contain adequate safeguards as de11 scribed in the preceding subsection, the Commission shall 

12 promulgate such regulations as may be necessary to en13 sure such safeguards. 

14 (c) TIMING.—The Postal Regulatory Commission 

15 shall complete the examination required by subsection (a) 

16 and the promulgation of any necessary regulations re17 quired by subsection (b) within one year after the date 

18 of the enactment of this section.

19 SEC. 809. TECHNICAL AND CONFORMING AMENDMENTS. 

20 (a) REIMBURSEMENT.—Section 3681 of title 39, 

21 United States Code, is amended by striking ‘‘section 

22 3628’’ and inserting ‘‘sections 3662 through 3664’’. 

23 (b) SIZE AND WEIGHT LIMITS.—Section 3682 of title 

24 39, United States Code, is amended to read as follows: 
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1 ‘‘§ 3682. Size and weight limits 

2 ‘‘The Postal Service may establish size and weight 

3 limitations for mail matter in the market-dominant cat4 egory of mail consistent with regulations the Postal Regu5 latory Commission may prescribe under section 3622. The 

6 Postal Service may establish size and weight limitations 

7 for mail matter in the competitive category of mail con8 sistent with its authority under section 3632.’’. 

9 (c) REVENUE FOREGONE, ETC.—Title 39, United 

10 States Code, is amended—

11 (1) in section 503 (as so redesignated by sec12 tion 501), by striking ‘‘this chapter.’’ and inserting 

13 ‘‘this title.’’; and 

14 (2) in section 2401(d), by inserting ‘‘(as last in 

15 effect before enactment of the Postal Accountability 

16 and Enhancement Act)’’ after ‘‘3626(a)’’ and after 

17 ‘‘3626(a)(3)(B)(ii)’’. 

18 (d) APPROPRIATIONS AND REPORTING REQUIRE19 MENTS.—

20 (1) APPROPRIATIONS.—Subsection (e) of sec21 tion 2401 of title 39, United States Code, is amend22 ed—

23 (A) by striking ‘‘Committee on Post Office 

24 and Civil Service’’ each place it appears and in25 serting ‘‘Committee on Government Reform’’; 

26 and 
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1 (B) by striking ‘‘Not later than March 15 

2 of each year,’’ and inserting ‘‘Each year,’’. 

3 (2) REPORTING REQUIREMENTS.—Sections 

4 2803(a) and 2804(a) of title 39, United States 

5 Code, are amended by striking ‘‘2401(g)’’ and in6 serting ‘‘2401(e)’’.

7 (e) AUTHORITY TO FIX RATES AND CLASSES GEN8 ERALLY; REQUIREMENT RELATING TO LETTERS SEALED

9 AGAINST INSPECTION.—Section 404 of title 39, United 

10 States Code (as amended by section 102) is further 

11 amended by redesignating subsections (b) and (c) as sub12 sections (d) and (e), respectively, and by inserting after 

13 subsection (a) the following: 

14 ‘‘(b) Except as otherwise provided, the Governors are 

15 authorized to establish reasonable and equitable classes of 

16 mail and reasonable and equitable rates of postage and 

17 fees for postal services in accordance with the provisions 

18 of chapter 36. Postal rates and fees shall be reasonable 

19 and equitable and sufficient to enable the Postal Service, 

20 under best practices of honest, efficient, and economical 

21 management, to maintain and continue the development 

22 of postal services of the kind and quality adapted to the 

23 needs of the United States. 

24 ‘‘(c) The Postal Service shall maintain one or more 

25 classes of mail for the transmission of letters sealed 
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1 against inspection. The rate for each such class shall be 

2 uniform throughout the United States, its territories, and 

3 possessions. One such class shall provide for the most ex4 peditious handling and transportation afforded mail mat5 ter by the Postal Service. No letter of such a class of do6 mestic origin shall be opened except under authority of 

7 a search warrant authorized by law, or by an officer or 

8 employee of the Postal Service for the sole purpose of de9 termining an address at which the letter can be delivered, 

10 or pursuant to the authorization of the addressee.’’. 

11 (f) LIMITATIONS.—Section 3684 of title 39, United 

12 States Code, is amended by striking all that follows ‘‘any 

13 provision’’ and inserting ‘‘of this title.’’. 

14 (g) MISCELLANEOUS.—Title 39, United States Code, 

15 is amended—

16 (1) in section 1005(d)(2)—

17 (A) by striking ‘‘subsection (g) of section 

18 5532,’’; and 

19 (B) by striking ‘‘8344,’’ and inserting 

20 ‘‘8344’’; 

21 (2) in the analysis for part III, by striking the 

22 item relating to chapter 28 and inserting the fol23 lowing:

‘‘28. Strategic Planning and Performance Management .... 2801’’;

24 (3) in section 3005(a)—
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1 (A) in the matter before paragraph (1), by 

2 striking all that follows ‘‘nonmailable’’ and pre3 cedes ‘‘(h),’’ and inserting ‘‘under section 

4 3001(d),’’; and 

5 (B) in the sentence following paragraph 

6 (3), by striking all that follows ‘‘nonmailable’’ 

7 and precedes ‘‘(h),’’ and inserting ‘‘under such 

8 section 3001(d),’’; 

9 (4) in section 3210(a)(6)(C), by striking the 

10 matter after ‘‘if such mass mailing’’ and before 

11 ‘‘than 60 days’’ and inserting ‘‘is postmarked 

12 fewer’’; and 

13 (5) by striking the heading for section 3627 

14 and inserting the following: 

15 ‘‘§ 3627. Adjusting free rates’’.

16 TITLE IX—POSTAL PENSION 

17 FUNDING REFORM AMEND18 MENTS 

19 SEC. 901. CIVIL SERVICE RETIREMENT SYSTEM. 

20 (a) TERMINATION OF OBLIGATION TO PAY GOVERN21 MENT CONTRIBUTIONS.—Section 8334(a)(1)(B)(ii) of 

22 title 5, United States Code, is amended by striking all that 

23 follows ‘‘be equal to’’ and inserting ‘‘zero.’’. 

24 (b) DETERMINATION AND DISPOSITION OF POSTAL

25 SURPLUS OR SUPPLEMENTAL LIABILITY.—Section 
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1 8348(h) of title 5, United States Code, is amended to read 

2 as follows: 

3 ‘‘(h)(1) For purposes of this subsection, a Postal sur4 plus (or supplemental liability) is the amount, as esti5 mated by the Office, by which—

6 ‘‘(A) the actuarial present value of all future 

7 benefits which are payable from the Fund under this 

8 subchapter to current or former employees of the 

9 United States Postal Service, or their survivors, and 

10 attributable to civilian employment with the Postal 

11 Service, is less than (or greater than) 

12 ‘‘(B) the sum of—

13 ‘‘(i) the actuarial present value of deduc14 tions to be withheld from the future basic pay 

15 of employees of the Postal Service currently 

16 subject to this subchapter pursuant to section 

17 8334; 

18 ‘‘(ii) that portion of the Fund balance, as 

19 of the date such surplus or supplemental liabil20 ity is determined, attributable to payments to 

21 the Fund by the Postal Service and its employ22 ees, plus the earnings on such amounts while in 

23 the Fund; and 

24 ‘‘(iii) any other appropriate amount, as de25 termined by the Office in accordance with gen-
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1 erally accepted actuarial practices and prin2 ciples. 

3 ‘‘(2)(A)(i) Not later than June 15, 2006, the Office 

4 shall determine the Postal surplus or supplemental liabil5 ity as of September 30, 2005. 

6 ‘‘(ii) If a supplemental liability is determined under 

7 this subparagraph for fiscal year 2005, the Office shall 

8 establish an amortization schedule, including a series of 

9 equal annual installments commencing September 30, 

10 2006, which provides for the liquidation of such liability 

11 by September 30, 2043. 

12 ‘‘(iii) If a surplus is determined under this subpara13 graph for fiscal year 2005, the amount of the surplus shall 

14 be transferred to the Postal Service Retiree Health Bene15 fits Fund by June 30, 2006. 

16 ‘‘(B)(i) For each of fiscal years 2006 through 2038, 

17 the Office shall determine the Postal surplus or supple18 mental liability as of the close of such fiscal year, with 

19 each such determination to be made by June 15th of the 

20 following fiscal year. 

21 ‘‘(ii) If a supplemental liability is determined under 

22 this subparagraph for a fiscal year, the Office shall estab23 lish an amortization schedule, including a series of equal 

24 annual installments commencing on September 30 of the 
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1 following fiscal year, which provides for the liquidation of 

2 such liability by September 30, 2043.

3 ‘‘(iii)(I) If a surplus of $500,000,000 or more is de4 termined under this subparagraph for a fiscal year, the 

5 amount of the surplus shall be transferred to the Postal 

6 Service Retiree Health Benefits Fund by June 30th of the 

7 following fiscal year. 

8 ‘‘(II) If a surplus of less than $500,000,000 is deter9 mined under this subparagraph for a fiscal year, the sur10 plus shall remain in the Fund, subject to transfer in a 

11 subsequent fiscal year under subclause (I) or subpara12 graph (C)(iii). 

13 ‘‘(C)(i) Not later than June 15, 2040, the Office shall 

14 determine the Postal surplus or supplemental liability as 

15 of September 30, 2039. 

16 ‘‘(ii) If a supplemental liability is determined under 

17 this subparagraph for fiscal year 2039, the Office shall 

18 establish an amortization schedule, including a series of 

19 equal annual installments commencing September 30, 

20 2040, which provides for the liquidation of such liability 

21 by September 30, 2043. 

22 ‘‘(iii) If a surplus is determined under this subpara23 graph for fiscal year 2039, the amount of the surplus—
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1 ‘‘(I) shall be applied first toward reducing the 

2 amount of any supplemental liability described in 

3 section 8423(b)(1)(B); and 

4 ‘‘(II) to the extent that any portion of such sur5 plus remains after the application of subclause (I), 

6 shall, not later than June 30, 2040, be transferred 

7 to the Postal Service Retiree Health Benefits Fund. 

8 ‘‘(D) An amortization schedule under this para9 graph—

10 ‘‘(i) shall be established in accordance with gen11 erally accepted actuarial practices and principles, 

12 with interest computed at the rate used in the most 

13 recent valuation of the Civil Service Retirement Sys14 tem; 

15 ‘‘(ii) shall supersede any amortization schedule 

16 previously established under this paragraph; and 

17 ‘‘(iii) shall not be taken into account, for pur18 poses of any determination of Postal surplus or sup19 plemental liability, except to the extent of any 

20 amounts under such schedule actually paid. 

21 ‘‘(E)(i) The Postal Service shall pay to the Office the 

22 amounts due under any amortization schedule established 

23 under this paragraph, to the extent not superseded or can24 celed. 
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1 ‘‘(ii) A determination under subparagraph (B)(i) or 

2 (C)(i) that no supplemental liability exists shall cancel any 

3 amortization schedule previously established under this 

4 paragraph, to the extent of any amounts first coming due 

5 after the close of the fiscal year to which such determina6 tion relates. 

7 ‘‘(3) Notwithstanding any other provision of law, in 

8 computing the amount of any payment under any other 

9 subsection of this section that is based on the amount of 

10 the unfunded liability, such payment shall be computed 

11 disregarding that portion of the unfunded liability that the 

12 Office determines will be liquidated by payments under 

13 this subsection. 

14 ‘‘(4) As used in this subsection, ‘Postal Service Re15 tiree Health Benefits Fund’ refers to the Postal Service 

16 Retiree Health Benefits Fund, as established by section 

17 8909a.’’. 

18 (c) PROVISIONS RELATING TO AMOUNTS FOR MILI19 TARY SERVICE.—In the application of paragraph (2) of 

20 section 8348(g) of title 5, United States Code, for fiscal 

21 year 2006, the Office of Personnel Management shall in22 clude, in addition to the amount otherwise computed 

23 under that paragraph, the amounts that would have been 

24 included for fiscal years 2003 through 2005 with respect 

25 to credit for military service of former employees of the 
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1 United States Postal Service if Public Law 108-18 had 

2 not been enacted (including earnings thereon) and the 

3 Secretary of the Treasury shall make the required transfer 

4 to the Civil Service Retirement and Disability Fund based 

5 on that amount. 

6 (d) REVIEW.—

7 (1) IN GENERAL.—Notwithstanding any other 

8 provision of this section, any determination or rede9 termination made by the Office of Personnel Man10 agement under this section shall, upon request of 

11 the United States Postal Service, be subject to re12 view by the Postal Regulatory Commission. The 

13 Commission shall submit a report containing the re14 sults of any such review to the Postal Service, the 

15 Office of Personnel Management, and the Congress. 

16 (2) RESPONSE.—Upon receiving the report of 

17 the Postal Regulatory Commission, the Office of 

18 Personnel Management shall reconsider its deter19 mination or redetermination in light of such report, 

20 and shall make any appropriate adjustments. The 

21 Office shall submit a report containing the results of 

22 its reconsideration to the Commission, the Postal 

23 Service, and the Congress. 
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1 SEC. 902. HEALTH INSURANCE. 

2 (a) IN GENERAL.—Chapter 89 of title 5, United 

3 States Code, is amended—

4 (1) in section 8906(g)(2)(A), by striking ‘‘by 

5 the United States Postal Service.’’ and inserting 

6 ‘‘first from the Postal Service Retiree Health Bene7 fits Fund up to the amount contained therein, with 

8 any remaining amount paid by the United States 

9 Postal Service.’’; 

10 (2) by inserting after section 8909 the fol11 lowing: 

12 ‘‘§ 8909a. Postal Service Retiree Health Benefits Fund 

13 ‘‘(a) There is in the Treasury of the United States 

14 a Postal Service Retiree Health Benefits Fund (herein15 after in this section referred to as the ‘Fund’) which is 

16 administered by the Office of Personnel Management. Any 

17 amounts transferred to the Fund under section 

18 8348(h)(2) shall yield interest at a rate equal to the 

19 weighted average yield of all the investments in the Civil 

20 Service Retirement and Disability Fund as of the date of 

21 transfer. All other investments of amounts in the Fund 

22 shall be made in accordance with subsections (c)–(e) of 

23 section 8348. 

24 ‘‘(b) The Fund is available without fiscal year limita25 tion for payments required by section 8906(g)(2). 
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1 ‘‘(c)(1) Not later than June 30, 2006, and by June 

2 30 of each succeeding year, the Office of Personnel Man3 agement shall compute the net present value of the excess 

4 of future payments required by section 8906(g)(2)(A) for 

5 current and future United States Postal Service annu6 itants over the value of the assets of the Fund as of the 

7 end of the fiscal year ending on September 30 of that year. 

8 The actuarial costing method to be used by the Office and 

9 all actuarial assumptions shall be established by the Office 

10 after consultation with the United States Postal Service 

11 and must be in accordance with generally accepted actu12 arial practices and principles. 

13 ‘‘(2) Not later than September 30, 2006, and by Sep14 tember 30 of each succeeding year, the Office shall com15 pute and the United States Postal Service shall pay into 

16 such Fund—

17 ‘‘(A) the portion of the net present value de18 scribed in paragraph (1) attributable to the current 

19 year’s service of Postal Service employees; and 

20 ‘‘(B) interest on the net present value described 

21 in paragraph (1) for that fiscal year, at the interest 

22 rate used in computing that net present value; 

23 except that the amount otherwise payable by the Postal 

24 Service under the preceding provisions of this paragraph 

25 by not later than September 30, 2006, shall be reduced 
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1 by the total contributions made by the Postal Service 

2 under section 8906(g)(2) and attributable to fiscal year 

3 2006 (as determined by the Office). 

4 ‘‘(3)(A) Any computation or other determination of 

5 the Office under this subsection shall, upon request of the 

6 Postal Service, be subject to review by the Postal Regu7 latory Commission. The Commission shall submit a report 

8 containing the results of any such review to the Postal 

9 Service, the Office of Personnel Management, and the 

10 Congress. 

11 ‘‘(B) Upon receiving the report of the Postal Regu12 latory Commission, the Office of Personnel Management 

13 shall reconsider its computation or other determination in 

14 light of such report, and shall make any appropriate ad15 justments. The Office shall submit a report containing the 

16 results of its reconsideration to the Commission, the Post17 al Service, and the Congress. 

18 ‘‘(4) The Office shall promulgate, after consultation 

19 with the United States Postal Service, any regulations it 

20 deems necessary under this subsection.’’; and 

21 (3) in the analysis by inserting after the item 

22 relating to section 8909 the following:

‘‘8909a. Postal Service Retiree Health Benefits Fund.’’.

23 (b) REVIEW.—

24 (1) IN GENERAL.—Any regulation established 

25 under section 8909a(c)(4) of title 5, United States 
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1 Code (as amended by subsection (a)) shall, upon re2 quest of the Postal Service, be subject to review by 

3 the Postal Regulatory Commission. The Commission 

4 shall submit a report containing the results of any 

5 such review to the Postal Service, the Office of Per6 sonnel Management, and the Congress. 

7 (2) RESPONSE.—Upon receiving the report of 

8 the Postal Regulatory Commission, the Office of 

9 Personnel Management shall reconsider its regula10 tion in light of such report, and shall take such ac11 tion as it considers appropriate. The Office shall 

12 submit a report containing the results of its recon13 sideration to the Commission, the Postal Service, 

14 and the Congress. 

15 SEC. 903. REPEALER. 

16 Section 3 of Public Law 108–18 is repealed. 

17 SEC. 904. ENSURING APPROPRIATE USE OF ESCROW AND 

18 MILITARY SAVINGS. 

19 (a) DEFINITION.—For purposes of this section, the 

20 term ‘‘total savings’’ means, for any fiscal year, the 

21 amount equal to—

22 (1) the amount of contributions that the Postal 

23 Service would otherwise have been required to make 

24 to the Civil Service Retirement and Disability Fund 

25 under subchapter III of chapter 83 of title 5, United 
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1 States Code, for such fiscal year if Public Law 108-

2 18 and this Act had not been enacted, minus

3 (2) the amount of amortization payments (if 

4 any) required under section 8348(h)(2) of title 5, 

5 United States Code, for such fiscal year. 

6 (b) CALCULATIONS.—The following calculations shall 

7 be made for each of fiscal years 2006 through 2015: 

8 (1) Not later than January 31 of the fiscal year 

9 following the fiscal year involved, the Office of Per10 sonnel Management (in consultation with the Postal 

11 Service) shall determine the total savings for the fis12 cal year. 

13 (2) On the date of making its determination 

14 under paragraph (1), the Office shall also determine 

15 (in consultation with the Postal Service) the amount 

16 by which—

17 (A) the amount the Postal Service paid for 

18 that fiscal year into the Postal Service Retiree 

19 Health Benefits Fund in accordance with 

20 8909a(c)(2) of title 5, United States Code, ex21 ceeds (if at all) 

22 (B) the amount of payments made by the 

23 Postal Service for that fiscal year from such 

24 Fund in order to satisfy the requirements of 

25 section 8906(g)(2) of such title 5. 
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1 (c) REQUIREMENTS.—

2 (1) IF THRESHOLD IS MET.—If the amount cal3 culated under subsection (b)(2) for a fiscal year is 

4 greater than or equal to two-thirds of the total sav5 ings in such fiscal year, no further action under this 

6 section is necessary with respect to such fiscal year. 

7 (2) IF THRESHOLD IS NOT MET.—

8 (A) IN GENERAL.—If the amount cal9 culated under subsection (b)(2) for a fiscal year 

10 is less than two-thirds of the total savings in 

11 such fiscal year, the Postal Service shall pay 

12 into the Postal Service Retiree Health Benefits 

13 Fund, by June 30 of the following fiscal year, 

14 an amount equal to the difference. 

15 (B) ALLOWABLE ALTERNATIVE.—

16 (i) IN GENERAL.—Notwithstanding 

17 subparagraph (A), and subject to clause 

18 (ii), the Postal Service may instead use the 

19 amount that it would otherwise be required 

20 to pay into the Postal Service Retiree 

21 Health Benefits Fund for a year (or any 

22 portion thereof) to reduce the postal debt. 

23 (ii) LIMITATION.—Amounts used to 

24 reduce the postal debt under this subpara-
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1 graph may not exceed a total of 

2 $3,000,000,000. 

3 (3) AGGREGATION ALLOWED.—Notwithstanding 

4 paragraph (2), if the amount calculated under sub5 section (b)(2) for a fiscal year is less than two-thirds 

6 of the total savings in such fiscal year, but the sum 

7 of the amounts calculated under subsection (b)(2) 

8 for all fiscal years from 2006 to the fiscal year in9 volved is greater than or equal to two-thirds of the 

10 sum of the total savings for such years, no further 

11 action under this section is necessary with respect to 

12 such fiscal year. 

13 (d) REPORTING REQUIREMENT.—The Office of Per14 sonnel Management shall submit a report containing the 

15 results of its calculations under subsection (b) to the Post16 al Service, the Postal Regulatory Commission, and the 

17 Congress. 

18 (e) WAIVER AUTHORITY.—The requirements of sub19 section (c)(2)(A) may, upon application of the Postal Serv20 ice, be waived by the Postal Regulatory Commission, to 

21 the extent that the Commission determines that such 

22 waiver is reasonable and equitable and necessary to enable 

23 the Postal Service, under best practices of honest, effi24 cient, and economical management, to maintain and con-
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1 tinue the development of postal services of the kind and 

2 quality adapted to the needs of the United States. 

3 SEC. 905. EFFECTIVE DATES. 

4 (a) IN GENERAL.—Except as otherwise provided, this 

5 title shall take effect on October 1, 2005. 

6 (b) GOVERNMENT CONTRIBUTIONS.—Section 901(a) 

7 shall take effect on the first day of the first pay period 

8 beginning on or after October 1, 2005.

Passed the House of Representatives July 26, 2005. 

Attest:

Clerk. 

109TH CONGRESS 

1ST SESSION H. R. 22

AN ACT

To reform the postal laws of the United States.