I

106TH CONGRESS

1ST SESSION H. R. 22

To modernize the postal laws of the United States.

IN THE HOUSE OF REPRESENTATIVES

JANUARY 6, 1999

Mr. MCHUGH (for himself and Mr. BURTON of Indiana) introduced the following bill; which was referred to the Committee on Government Reform,

and in addition to the Committee on the Judiciary, for a period to be

subsequently determined by the Speaker, in each case for consideration

of such provisions as fall within the jurisdiction of the committee concerned

A BILL

To modernize the postal laws of the United States.

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

3 SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

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

5 ‘‘Postal Modernization Act of 1999’’.

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

7 this Act is as follows:

Sec. 1. Short title; table of contents.

TITLE I—REDESIGNATION OF THE BOARD OF GOVERNORS, THE

POSTMASTER GENERAL, AND THE POSTAL RATE COMMISSION

Sec. 101. Redesignation of the Board of Governors.
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Sec. 102. Redesignation of the Postmaster General.

Sec. 103. Redesignation of the Postal Rate Commission.

Sec. 104. Other references.

TITLE II—NEW SYSTEM RELATING TO POSTAL RATES, CLASSES,

AND SERVICES

Subtitle A—In General

Sec. 201. Establishment.

Sec. 202. Amendments to chapter 36.

Sec. 203. Postal Service Competitive Products Fund.

Sec. 204. USPS Corporation.

Sec. 205. Postal and nonpostal products.

Subtitle B—Related Provisions

Sec. 211. Authority for Postal Regulatory Commission to issue subpoenas.

Sec. 212. Qualification requirements for Commissioners and Directors.

Sec. 213. Appropriations for the Commission.

Sec. 214. Change-of-address order involving a commercial mail receiving agency.

Sec. 215. Rates for mail under former section 4358.

TITLE III—GENERAL AUTHORITY

Sec. 301. Rulemaking authority.

Sec. 302. General duties.

Sec. 303. Employment of postal police officers.

Sec. 304. Date of postmark to be treated as date of appeal in connection with

the closing or consolidation of post offices.

Sec. 305. Unfair competition prohibited.

Sec. 306. International postal arrangements.

Sec. 307. Suits by and against the Postal Service.

TITLE IV—MISCELLANEOUS PROVISIONS RELATING TO THE

BUDGET AND APPROPRIATIONS PROCESS

Sec. 401. Provisions relating to benefits under chapter 81 of title 5, United

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

Sec. 402. Technical and conforming amendments.

TITLE V—PROVISIONS RELATING TO TRANSPORTATION,

CARRIAGE, OR DELIVERY OF MAIL

Sec. 501. Obsolete provisions.

Sec. 502. Expanded contracting authority.

Sec. 503. Private carriage of letters.

Sec. 504. Repeal of section 5403.

TITLE VI—STUDIES

Sec. 601. Employee-management relations.

Sec. 602. Recommendations on universal postal services.

Sec. 603. Study on equal application of laws to competitive products.

Sec. 604. Greater diversity in Postal Service executive and administrative

schedule management positions.
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Sec. 605. Plan for assisting displaced workers.

Sec. 606. Contracts with women, minorities, and small businesses.

TITLE VII—INSPECTORS GENERAL

Sec. 701. Inspector General of the Postal Regulatory Commission.

Sec. 702. Inspector General of the United States Postal Service to be appointed

by the President.

TITLE VIII—LAW ENFORCEMENT

Subtitle A—Amendments to Title 39, United States Code

Sec. 801. Make Federal assault statutes applicable to postal contract employees.

Sec. 802. Sexually oriented advertising.

Sec. 803. Allow Postal Service to retain asset forfeiture recoveries.

Sec. 804. Hazardous matter.

Subtitle B—Other Provisions

Sec. 811. Stalking Federal officers and employees.

Sec. 812. Nonmailability of controlled substances.

Sec. 813. Enhanced penalties.

Sec. 814. Postal burglary provisions.

Sec. 815. Mail, money, or other property of the United States.

1 TITLE I—REDESIGNATION OF

2 THE BOARD OF GOVERNORS,

3 THE POSTMASTER GENERAL,

4 AND THE POSTAL RATE COM5 MISSION

6 SEC. 101. REDESIGNATION OF THE BOARD OF GOVERNORS.

7 (a) AMENDMENTS TO TITLE 39, UNITED STATES

8 CODE.—Title 39, United States Code, is amended—

9 (1) in sections 102, 202, 204, 205, 402, 414,

10 1005, 3604, 3621, 3623, 3624, 3625, 3628, 3641,

11 and 3684, in the analysis for chapter 2 (in the items

12 relating to sections 202 and 205, respectively), and

13 in the analysis for chapter 36 (in the item relating
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1 to section 3625) by striking ‘‘Governors’’ each place

2 it appears and inserting ‘‘Directors’’; and

3 (2) in sections 202, 205, and 1002 by striking

4 ‘‘Governor’’ each place it appears and inserting ‘‘Di5 rector’’.

6 (b) AMENDMENT TO THE FEDERAL SALARY ACT OF

7 1967.—Section 225(f)(E) of the Federal Salary Act of

8 1967 (2 U.S.C. 356(E)) is amended by striking ‘‘Gov9 ernors of the Board of Governors of the United States

10 Postal Service’’ and inserting ‘‘Directors of the Board of

11 Directors of the United States Postal Service’’.

12 (c) AMENDMENTS TO TITLE 5, UNITED STATES

13 CODE.—Title 5, United States Code, is amended in sec14 tions 8344(e) and 8468(c) by striking ‘‘Governor of the

15 Board of Governors of the United States Postal Service’’

16 and inserting ‘‘Director of the Board of Directors of the

17 United States Postal Service’’.

18 (d) AMENDMENTS TO THE ETHICS IN GOVERNMENT

19 ACT OF 1978.—The Ethics in Government Act of 1978

20 (5 U.S.C. App.) is amended—

21 (1) in section 101(f)(6) by striking ‘‘Governor

22 of the Board of Governors of the United States

23 Postal Service’’ and inserting ‘‘Director of the Board

24 of Directors of the United States Postal Service’’;

25 and
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1 (2) in sections 103(c) and 106(b)(6) by striking

2 ‘‘Governors of the Board of Governors of the United

3 States Postal Service’’ and inserting ‘‘Directors of

4 the Board of Directors of the United States Postal

5 Service’’.

6 (e) AMENDMENTS TO TITLE 18, UNITED STATES

7 CODE.—Title 18, United States Code, is amended in sec8 tions 1735 and 3061 by striking ‘‘Governors’’ each place

9 it appears and inserting ‘‘Directors’’.

10 SEC. 102. REDESIGNATION OF THE POSTMASTER GENERAL.

11 (a) AMENDMENTS TO TITLE 39, UNITED STATES

12 CODE.—Section 102 of title 39, United States Code, is

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

14 by striking the period at the end of paragraph (4) and

15 inserting ‘‘; and’’, and by adding at the end the following:

16 ‘‘(5) ‘Postmaster General’ means the Post17 master General and Chief Executive Officer of the

18 United States Postal Service appointed under sec19 tion 202(a) of this title.’’.

20 (b) AMENDMENTS TO THE ETHICS IN GOVERNMENT

21 ACT OF 1978.—The Ethics in Government Act of 1978

22 (5 U.S.C. App.) is amended in sections 101(f)(6), 103(c),

23 and 106(b)(6) by striking ‘‘Postmaster General’’ and in24 serting ‘‘Postmaster General and Chief Executive Officer

25 of the United States Postal Service’’.
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1 (c) AMENDMENTS TO TITLE 18, UNITED STATES

2 CODE.—Title 18, United States Code, is amended in sec3 tions 501, 1703, 1704, and 1709 by striking ‘‘Postmaster

4 General’’ each place it appears and inserting ‘‘Postmaster

5 General and Chief Executive Officer of the United States

6 Postal Service’’.

7 SEC. 103. REDESIGNATION OF THE POSTAL RATE COMMIS8 SION.

9 (a) AMENDMENTS TO TITLE 39, UNITED STATES

10 CODE.—Title 39, United States Code, is amended in sec11 tions 404, 1001, 1002, 2003, 3601, 3602, 3603, 3604,

12 3622, 3623, 3624, 3625, 3628, 3641, and 3661, in the

13 analysis for chapter 36 (in the item relating to subchapter

14 I), and in the heading for subchapter I of chapter 36 by

15 striking ‘‘Postal Rate Commission’’ each place it appears

16 and inserting ‘‘Postal Regulatory Commission’’.

17 (b) AMENDMENTS TO TITLE 5, UNITED STATES

18 CODE.—Title 5, United States Code, is amended in sec19 tions 104(1), 306(f), 2104(b), 3371(3), 5314 (in the item

20 relating to Chairman, Postal Rate Commission), 5315 (in

21 the item relating to Members, Postal Rate Commission),

22 5514(a)(5)(B), 7342(a)(1)(A), 7511(a)(1)(B)(ii),

23 8402(c)(1), 8423(b)(1)(B), and 8474(c)(4) by striking

24 ‘‘Postal Rate Commission’’ and inserting ‘‘Postal Regu25 latory Commission’’.
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1 (c) AMENDMENT TO THE ETHICS IN GOVERNMENT

2 ACT OF 1978.—Section 101(f)(6) of the Ethics in Govern3 ment Act of 1978 (5 U.S.C. App.) is amended by striking

4 ‘‘Postal Rate Commission’’ and inserting ‘‘Postal Regu5 latory Commission’’.

6 (d) AMENDMENT TO THE REHABILITATION ACT OF

7 1973.—Section 501(b) of the Rehabilitation Act of 1973

8 (29 U.S.C. 791(b)) is amended by striking ‘‘Postal Rate

9 Office’’ and inserting ‘‘Postal Regulatory Commission’’.

10 (e) AMENDMENT TO TITLE 44, UNITED STATES

11 CODE.—Section 3502(5) of title 44, United States Code,

12 is amended by striking ‘‘Postal Rate Commission’’ and in13 serting ‘‘Postal Regulatory Commission’’.

14 SEC. 104. OTHER REFERENCES.

15 (a) BOARD OF GOVERNORS, ETC.—Whenever ref16 erence is made in any provision of law (other than this

17 Act or a provision of law amended by this Act), regulation,

18 rule, document, or other record of the United States to

19 the Board of Governors of the United States Postal Serv20 ice (or any Governor or Governors thereof), such reference

21 shall be considered a reference to the Board of Directors

22 of the United States Postal Service (or any Director or

23 Directors thereof, as appropriate).

24 (b) POSTMASTER GENERAL.—Whenever reference is

25 made in any provision of law (other than this Act or a
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1 provision of law amended by this Act), regulation, rule,

2 document, or other record of the United States to the

3 Postmaster General, such reference shall be considered a

4 reference to the Postmaster General and Chief Executive

5 Officer of the United States Postal Service.

6 (c) POSTAL RATE COMMISSION.—Whenever reference

7 is made in any provision of law (other than this Act or

8 a provision of law amended by this Act), regulation, rule,

9 document, or other record of the United States to the

10 Postal Rate Commission, such reference shall be consid11 ered a reference to the Postal Regulatory Commission.

12 TITLE II—NEW SYSTEM RELAT13 ING TO POSTAL RATES,

14 CLASSES, AND SERVICES

15 Subtitle A—In General

16 SEC. 201. ESTABLISHMENT.

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

18 amended by adding after chapter 36 the following:

19 ‘‘CHAPTER 37—NEW SYSTEM FOR ESTABLISHING

20 POSTAL RATES, CLASSES, AND SERVICES

‘‘SUBCHAPTER I—DEFINITIONS

‘‘Sec.

‘‘3701. Definitions.

‘‘3702. Free mailing privileges unaffected.

‘‘SUBCHAPTER II—BASELINE RATES

‘‘3721. Determination of baseline rates.

‘‘3722. Provisions relating to reduced-rate categories of mail.

‘‘3723. Automatic termination of any rate case that may be pending.
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‘‘SUBCHAPTER III—RATES FOR PRODUCTS IN THE

NONCOMPETITIVE CATEGORY OF MAIL

‘‘3731. Applicability; definitions.

‘‘3732. Limitations on rates.

‘‘3733. Adjustment factor.

‘‘3734. Action of the Board.

‘‘SUBCHAPTER IV—RATES FOR PRODUCTS IN THE COMPETITIVE

CATEGORY OF MAIL

‘‘3741. Applicability; definition.

‘‘3742. Action of the Board.

‘‘3743. Provisions applicable to competitive products individually.

‘‘3744. Provisions applicable to competitive products collectively.

‘‘SUBCHAPTER V—MARKET TESTS OF EXPERIMENTAL PRODUCTS

‘‘3751. Market tests of experimental noncompetitive products.

‘‘3752. Market tests of experimental competitive products.

‘‘3753. Large-scale market tests.

‘‘3754. Adjustment for inflation.

‘‘3755. Conversion to permanence.

‘‘3756. Effective date.

‘‘SUBCHAPTER VI—PROVISIONS RELATING TO THE

INTRODUCTION AND CATEGORIZATION OF PRODUCTS

‘‘3761. Criteria for the identification of noncompetitive and competitive products.

‘‘3762. New noncompetitive products.

‘‘3763. New competitive products.

‘‘3764. Transfers of products between categories of mail.

‘‘3765. Transition provisions for new or transferred noncompetitive products.

‘‘SUBCHAPTER VII—REPORTING REQUIREMENTS AND RELATED

PROVISIONS

‘‘3771. Annual reports by the Commission.

‘‘3772. Annual reports to the Commission.

‘‘3773. Annual determination of compliance.

‘‘3774. Other reports.

1 ‘‘SUBCHAPTER I—DEFINITIONS

2 ‘‘§ 3701. Definitions

3 ‘‘For purposes of this chapter:

4 ‘‘(1) PRODUCT.—The term ‘product’ means a

5 class of mail or type of postal service, including—

6 ‘‘(A) a subclass or other similar subordi7 nate unit thereof; and
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1 ‘‘(B) the next level of subordinate units

2 thereof (below the first level of subordinate

3 units, as referred to in subparagraph (A)).

4 ‘‘(2) RATE.—The term ‘rate’, as used with re5 spect to any products, includes fees for postal serv6 ices.

7 ‘‘(3) PRODUCT IN THE NONCOMPETITIVE CAT8 EGORY OF MAIL.—The term ‘product in the non9 competitive category of mail’ or ‘noncompetitive

10 product’ means a product subject to subchapter III.

11 ‘‘(4) PRODUCT IN THE COMPETITIVE CATEGORY

12 OF MAIL.—The term ‘product in the competitive cat13 egory of mail’ or ‘competitive product’ means a

14 product subject to subchapter IV.

15 ‘‘(5) CONSUMER PRICE INDEX.—The term

16 ‘Consumer Price Index’ means the Consumer Price

17 Index for All Urban Consumers published monthly

18 by the Bureau of Labor Statistics of the Depart19 ment of Labor.

20 ‘‘(6) YEAR.—The term ‘year’ means a fiscal

21 year.

22 ‘‘§ 3702. Free mailing privileges unaffected

23 ‘‘Nothing in this chapter shall be considered to affect

24 any free mailing privileges accorded under any of sections

25 3217 or 3403 through 3406.
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1 ‘‘SUBCHAPTER II—BASELINE RATES

2 ‘‘§ 3721. Determination of baseline rates

3 ‘‘(a) REQUIREMENT THAT A RATEMAKING REQUEST

4 BE MADE.—The Postal Service shall, during the 18-

5 month period beginning on the date of enactment of this

6 chapter, submit a request under section 3622 for a rec7 ommended decision by the Postal Regulatory Commission

8 on rates for all products in the noncompetitive category

9 of mail and all products in the competitive category of

10 mail.

11 ‘‘(b) POLICIES AND CRITERIA.—The request under

12 subsection (a) shall be made in accordance with the same

13 policies and criteria as would otherwise apply in the case

14 of a request made under section 3622, except that—

15 ‘‘(1) in applying section 3621, any determina16 tion of total estimated costs of the Postal Service

17 shall be made without including any provision for

18 contingencies; and

19 ‘‘(2) to the extent that any class of mail or kind

20 of mailer under section 3626(a) is involved, such re21 quest shall be made in conformance with the re22 quirements of section 3722.

23 ‘‘(c) PROCEDURES FOR CONSIDERATION.—

24 ‘‘(1) IN GENERAL.—Except as otherwise pro25 vided in subsection (b) or any other provision of this
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1 subchapter, the request made under subsection (a)

2 shall be considered and acted on in the same way as

3 any other request made under section 3622.

4 ‘‘(2) ADDITIONAL AUTHORITY.—For purposes

5 of the request made under subsection (a), section

6 3622(b) shall be applied as if it had been amended

7 by inserting after ‘the policies of this title’ the fol8 lowing: ‘(including the second sentence of section

9 3621)’.

10 ‘‘(d) EFFECTIVE DATE OF ANY RATES ESTAB11 LISHED PURSUANT TO REQUEST.—All rates established

12 pursuant to the request made under subsection (a) shall

13 take effect as of the same date, determined in accordance

14 with applicable provisions of chapter 36, but in no event

15 later than the last day of the 18-month period beginning

16 on the date on which such request is made.

17 ‘‘(e) DEFINITION OF BASELINE RATES.—

18 ‘‘(1) IN GENERAL.—Subject to section 3722(c),

19 for purposes of this title, the baseline rate for each

20 product shall be the rate in effect for such product

21 as of the applicable date under paragraph (2), irre22 spective of whether—

23 ‘‘(A) any rate change is in fact requested

24 for such product under subsection (a);
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1 ‘‘(B) ratemaking proceedings are in fact

2 completed by such date; or

3 ‘‘(C) the rate in effect for such product as

4 of such date is a permanent or temporary one.

5 ‘‘(2) DATE AS OF WHICH BASELINE RATES ARE

6 TO BE DETERMINED.—The applicable date under

7 this paragraph shall be—

8 ‘‘(A) the date as of which any baseline

9 rates, established pursuant to the request made

10 under subsection (a), are to take effect in ac11 cordance with subsection (d); or

12 ‘‘(B) if subparagraph (A) does not apply

13 (whether because proceedings under chapter 36

14 are not completed before the deadline under

15 subsection (d) or otherwise), the last day of the

16 18-month period referred to in subsection (d).

17 ‘‘§ 3722. Provisions relating to reduced-rate cat18 egories of mail

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

20 terms ‘costs attributable’ and ‘regular-rate category’ have

21 the same meanings as are given them by section 3626(a).

22 ‘‘(b) REQUIREMENT.—

23 ‘‘(1) IN GENERAL.—Notwithstanding any other

24 provision of this title (but subject to paragraph (3)),

25 the rate established under this chapter for a product
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1 within a reduced-rate category of mail (as referred

2 to in section 3721(b)(2)), including the baseline rate

3 therefor (if applicable), may not exceed—

4 ‘‘(A) in the case of a competitive product,

5 the rate described in paragraph (2); or

6 ‘‘(B) in the case of a noncompetitive prod7 uct, the lesser of—

8 ‘‘(i) the rate described in paragraph

9 (2); or

10 ‘‘(ii) the highest rate allowable for

11 such product under subsection (c) or (d) of

12 section 3732, whichever is less.

13 ‘‘(2) RATE DESCRIBED.—The rate described in

14 this paragraph is, with respect to any product, the

15 rate that would then be in effect for such product

16 if established under section 3626(a) in conformance

17 with the requirement that—

18 ‘‘(A) the estimated costs attributable (ex19 pressed on a per-unit basis) used in establishing

20 such rate, not exceed

21 ‘‘(B) the estimated costs attributable

22 (similarly expressed) used in establishing the

23 rate that is to be concurrently in effect for the

24 same product within the most closely cor25 responding regular-rate category.
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1 ‘‘(3) NONCOMPETITIVE PRODUCT MINIMUM.—

2 Nothing in this subsection shall be considered to

3 waive the limitation set forth in section 3732(b) (re4 lating to the minimum rate required for a non5 competitive product).

6 ‘‘(c) SELF-EXECUTING CORRECTION MECHANISM.—

7 If the baseline rate for a product would not otherwise be

8 in compliance with subsection (b), such rate shall be re9 duced by the minimum amount necessary in order to

10 achieve compliance.

11 ‘‘§ 3723. Automatic termination of any rate case that

12 may be pending

13 ‘‘To the extent that any proceedings relating to a re14 quest made under section 3622 before the date of enact15 ment of this chapter remain pending as of such date of

16 enactment, any further action taken in connection with

17 such request shall be null and void.

18 ‘‘SUBCHAPTER III—RATES FOR PRODUCTS IN

19 THE NONCOMPETITIVE CATEGORY OF MAIL

20 ‘‘§ 3731. Applicability; definitions

21 ‘‘(a) APPLICABILITY.—This subchapter applies with

22 respect to the products in the first, second, third, and

23 fourth baskets of products, respectively.

24 ‘‘(b) DEFINITIONS.—For purposes of this sub25 chapter:
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1 ‘‘(1) FIRST BASKET OF PRODUCTS.—The term

2 ‘first basket of products’ means—

3 ‘‘(A) single-piece first-class letters (both

4 domestic and international);

5 ‘‘(B) single-piece first-class cards (both do6 mestic and international);

7 ‘‘(C) single-piece parcels (both domestic

8 and international); and

9 ‘‘(D) special services.

10 ‘‘(2) SECOND BASKET OF PRODUCTS.—The

11 term ‘second basket of products’ means all first-class

12 mail not in the first basket of products.

13 ‘‘(3) THIRD BASKET OF PRODUCTS.—The term

14 ‘third basket of products’ means periodicals.

15 ‘‘(4) FOURTH BASKET OF PRODUCTS.—The

16 term ‘fourth basket of products’ means standard

17 mail (except for parcel post).

18 ‘‘(c) RULE OF CONSTRUCTION.—

19 ‘‘(1) IN GENERAL.—Except as provided in para20 graph (2), mail matter referred to in paragraphs (1)

21 through (4) of subsection (b) shall, for purposes of

22 such paragraphs, be considered to have the respec23 tive meanings given them under the mail classifica24 tion schedule (as defined by section 3623) as of the

25 effective date of this chapter.
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1 ‘‘(2) UPDATES.—The Postal Regulatory Com2 mission shall, whenever any relevant change occurs

3 (whether pursuant to a product transfer under sec4 tion 3764, the reclassification of a product under

5 section 3623, or the introduction of a new non6 competitive product under section 3762), prescribe

7 new lists of products within the respective baskets

8 described in subsection (b). The revised lists shall

9 indicate how and when any previous lists (including

10 under subsection (b)) are superseded, and shall be

11 published in the Federal Register.

12 ‘‘§ 3732. Limitations on rates

13 ‘‘(a) IN GENERAL.—Except as otherwise provided in

14 this subchapter, the rate in effect for a noncompetitive

15 product may not, during any year in a ratemaking cycle

16 (as defined in section 3733(a))—

17 ‘‘(1) be less than the minimum rate required

18 for such product in such year, as determined under

19 subsection (b);

20 ‘‘(2) be greater than the maximum rate allow21 able for such product in such year, as determined

22 under subsection (c); or

23 ‘‘(3) be changed by a percentage that would

24 cause such rate to fall outside of the range allowable
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1 for such product in such year, as determined under

2 subsection (d).

3 Nothing in paragraph (3) shall be considered to authorize

4 the establishment of any rate less than the minimum rate

5 required under paragraph (1) or greater than the maxi6 mum rate allowable under paragraph (2).

7 ‘‘(b) MINIMUM RATE REQUIRED.—For purposes of

8 this section, the minimum rate required for a product in

9 a year is the minimum rate which, if kept in effect for

10 such product throughout the year (or, if implemented after

11 the start of the year, throughout the remainder of the

12 year, but taking into account all revenues from such prod13 uct that are attributable to earlier periods in the same

14 year) will be sufficient to ensure that such product will

15 bear the direct and indirect postal costs attributable to

16 such product for such year.

17 ‘‘(c) MAXIMUM RATE ALLOWABLE.—

18 ‘‘(1) IN GENERAL.—For purposes of this sec19 tion, the maximum rate allowable for a product in

20 a year shall be equal to the rate determined by in21 creasing or decreasing (as applicable)—

22 ‘‘(A) the maximum rate allowable for such

23 product under this subsection in the year pre24 ceding the year for which the maximum rate al-
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1 lowable is being determined (disregarding any

2 rounding rules), by

3 ‘‘(B) the percentage adjustment applicable

4 for the year for which the maximum rate allow5 able is being determined, as determined under

6 paragraph (2).

7 ‘‘(2) PERCENTAGE ADJUSTMENT APPLICA8 BLE.—For purposes of this section, the percentage

9 adjustment applicable shall, for any year, be equal

10 to—

11 ‘‘(A) the change in the Consumer Price

12 Index for such year, adjusted by

13 ‘‘(B) the adjustment factor for such year.

14 ‘‘(3) DEFINITIONS.—For purposes of this sec15 tion:

16 ‘‘(A) CHANGE IN THE CONSUMER PRICE

17 INDEX.—The change in the Consumer Price

18 Index for a year shall be equal to the percent19 age (expressed as a positive value, a negative

20 value, or zero, as the case may be) by which the

21 Consumer Price Index for the preceding year

22 differs from the Consumer Price Index for the

23 second preceding year.

24 ‘‘(B) CONSUMER PRICE INDEX FOR A

25 YEAR.—The Consumer Price Index for a year is
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1 the average of the Consumer Price Index for

2 the 12-month period ending on June 30th of

3 such year.

4 ‘‘(C) ADJUSTMENT FACTOR.—The adjust5 ment factor for any year shall be determined in

6 accordance with section 3733.

7 ‘‘(4) SPECIAL RULE.—For purposes of deter8 mining the maximum rate allowable for any particu9 lar product during the first year of the first rate10 making cycle, paragraph (1)(A) shall be applied by

11 substituting ‘the baseline rate for such product’ for

12 ‘the maximum rate allowable for such product under

13 this subsection in the year preceding the year for

14 which the maximum rate allowable is being deter15 mined (disregarding any rounding rules)’.

16 ‘‘(5) ROUNDING RULE.—The maximum rate al17 lowable for a product within the first basket of prod18 ucts shall be equal to the rate determined for such

19 product under this subsection (disregarding this

20 paragraph), rounded to the nearest cent (rounding

1 21 ⁄2 of a cent to the next higher cent).

22 ‘‘(d) RANGE ALLOWABLE.—For purposes of this sec23 tion, the range allowable for a product in any year is the

24 range delimited by—
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1 ‘‘(1) a maximum rate equal to the rate deter2 mined by increasing or decreasing (as applicable)—

3 ‘‘(A) the rate last in effect for such prod4 uct before the start of such year, by

5 ‘‘(B) the percentage equal to the percent6 age adjustment applicable with respect to such

7 product for such year, plus 2 percent; and

8 ‘‘(2) a minimum rate equal to the rate deter9 mined by increasing or decreasing (as applicable)—

10 ‘‘(A) the rate last in effect for such prod11 uct before the start of such year, by

12 ‘‘(B) the percentage equal to the percent13 age adjustment applicable with respect to such

14 product for such year, minus 2 percent.

15 For purposes of applying paragraphs (1)(B) and (2)(B)

16 in any year, the Board of Directors may, in a manner con17 sistent with the policies of this title and the requirements

18 of this subchapter, establish a single percentage which

19 shall be lower than, and which shall be substituted for,

20 the percentage adjustment applicable that would otherwise

21 be applied under both of those paragraphs in such year.

22 Such single percentage shall be the same for every product

23 in the noncompetitive category.

24 ‘‘§ 3733. Adjustment factor

25 ‘‘(a) DEFINITION OF RATEMAKING CYCLE.—
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1 ‘‘(1) IN GENERAL.—For purposes of this title,

2 the term ‘ratemaking cycle’ means—

3 ‘‘(A) the 5-year period beginning on the

4 first day of the second year beginning after the

5 date as of which the baseline rates are deter6 mined under section 3721(e)(2); and

7 ‘‘(B) each 5-year period beginning on the

8 day after the last day of the immediately pre9 ceding 5-year period under this subsection.

10 ‘‘(2) EARLIER COMMENCEMENT DATE.—The

11 Postal Regulatory Commission may advance the

12 commencement date of the first ratemaking cycle to

13 the date which occurs 1 year earlier than the date

14 that would otherwise apply under subparagraph

15 (1)(A), but only if that earlier date does not precede

16 the date as of which all requirements of this section

17 have been completed with respect to such cycle.

18 ‘‘(b) PROCEDURES FOR DETERMINING ADJUSTMENT

19 FACTOR.—

20 ‘‘(1) COMMENCEMENT OF PROCEEDINGS.—

21 ‘‘(A) IN GENERAL.—Except as provided in

22 subparagraph (B), the Postal Regulatory Com23 mission shall, beginning in September of the

24 second year before the start of each ratemaking

25 cycle, provide the opportunity for a hearing on
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1 the record under sections 556 and 557 of title

2 5 to the Postal Service, users of the mails, and

3 an officer of the Commission who shall be re4 quired to represent the interests of the general

5 public, with respect to the adjustment factor to

6 be established for the upcoming ratemaking

7 cycle.

8 ‘‘(B) EXCEPTION.—For purposes of the

9 first hearing under this subsection, proceedings

10 shall be commenced during the second month

11 beginning on or after the date as of which the

12 baseline rates are determined under section

13 3721(e)(2).

14 ‘‘(2) RULES OF PROCEEDINGS.—In order to

15 conduct its proceedings with utmost expedition con16 sistent with procedural fairness to the parties, the

17 Commission may (without limitation) adopt rules

18 which provide for—

19 ‘‘(A) the advance submission of written di20 rect testimony;

21 ‘‘(B) the conduct of prehearing conferences

22 to define issues, and for other purposes to in23 sure orderly and expeditious proceedings;

24 ‘‘(C) discovery both from the Postal Serv25 ice and the parties to the proceedings;
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1 ‘‘(D) limitation of testimony; and

2 ‘‘(E) the conduct of the entire proceedings

3 off the record with the consent of the parties.

4 ‘‘(3) PRINTING AND NOTICE REQUIREMENTS.—

5 The Commission’s decision and the record of the

6 Commission’s hearings shall be made generally avail7 able at the time the decision is issued and shall be

8 printed and made available for sale by the Public

9 Printer within 10 days following the day the decision

10 is issued.

11 ‘‘(4) TIMING.—

12 ‘‘(A) IN GENERAL.—Except as provided in

13 subparagraph (B), all actions required of the

14 Commission under this section, including those

15 required under paragraph (3), shall be com16 pleted by the end of the year preceding the

17 commencement of the ratemaking cycle to

18 which the decision relates.

19 ‘‘(B) EXCEPTION.—In any case in which

20 the Commission determines that the Postal

21 Service has unreasonably delayed any proceed22 ings under this section by failing to respond

23 within a reasonable time to any lawful order of

24 the Commission, the Commission may extend
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1 the deadline described in subparagraph (A) by

2 one day for each day of such delay.

3 ‘‘(C) EFFECT OF DELAY ON RATEMAKING

4 AUTHORITY.—No rate change for any non5 competitive product may take effect during any

6 period of delay. For purposes of the preceding

7 sentence, the term ‘period of delay’ means, in

8 the circumstance described in subparagraph

9 (B), the period beginning on the day following

10 the original deadline (as described in subpara11 graph (A)) and ending on the date of the new

12 deadline (as determined under subparagraph

13 (B)).

14 ‘‘(c) REQUIREMENTS RELATING TO THE ESTABLISH15 MENT OF ADJUSTMENT FACTOR.—

16 ‘‘(1) IN GENERAL.—An adjustment factor shall

17 be established in accordance with—

18 ‘‘(A) the policies of this title; and

19 ‘‘(B) the best evidence of likely Postal

20 Service productivity, and of specific sources of

21 cost savings to the Postal Service, during the

22 ratemaking cycle to which an adjustment factor

23 is to apply.

24 ‘‘(2) REQUIREMENT THAT ADJUSTMENT FAC25 TOR BE A NEGATIVE VALUE OR ZERO.—
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1 ‘‘(A) IN GENERAL.—Except as provided in

2 subparagraph (B), an adjustment factor may be

3 no greater than zero.

4 ‘‘(B) EXCEPTIONS.—A positive adjustment

5 factor may be established only upon a written

6 determination by the Postal Regulatory Com7 mission that an exception to subparagraph (A)

8 is necessary—

9 ‘‘(i) because of any new and signifi10 cant statutorily imposed funding obliga11 tions not fully funded through appropria12 tions; or

13 ‘‘(ii) because postal revenues during

14 the upcoming ratemaking cycle would oth15 erwise be insufficient to enable the Postal

16 Service, under best practices of honest, ef17 ficient, and economical management, to

18 maintain and continue the development of

19 postal services of the kind and quality

20 adapted to the needs of the United States.

21 A determination under clause (ii) shall take into

22 account costs anticipated by the Postal Service

23 for the period of time involved, such as wages,

24 benefits, and transportation costs, consistent

25 with the provisions of subsection (g).
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1 ‘‘(d) SAME ADJUSTMENT FACTOR TO BE UNI2 FORMLY APPLIED TO ALL PRODUCTS.—For purposes of

3 each year in a ratemaking cycle, the same adjustment fac4 tor shall apply—

5 ‘‘(1) to all baskets under section 3731; and

6 ‘‘(2) to all products within each such basket.

7 ‘‘(e) HOW AN ADJUSTMENT FACTOR IS TO BE EX8 PRESSED AND APPLIED.—

9 ‘‘(1) HOW AN ADJUSTMENT FACTOR IS TO BE

10 EXPRESSED.—An adjustment factor established

11 under this section shall be expressed as a percent12 age.

13 ‘‘(2) HOW AN ADJUSTMENT FACTOR IS TO BE

14 APPLIED.—To adjust a change in the Consumer

15 Price Index by an adjustment factor, the magnitude

16 of the adjustment factor shall—

17 ‘‘(A) if the adjustment factor is a positive

18 value, be added to the change in the Consumer

19 Price Index; or

20 ‘‘(B) if the adjustment factor is a negative

21 value, be subtracted from the change in the

22 Consumer Price Index.

23 ‘‘(f) EXIGENT CIRCUMSTANCES.—

24 ‘‘(1) IN GENERAL.—Notwithstanding subsection

25 (d), upon a majority vote of the members of the
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1 Board of Directors then holding office, the Postal

2 Service may request the Postal Regulatory Commis3 sion to render a decision on changing the adjust4 ment factor to be applied during the then current

5 ratemaking cycle (after having previously been es6 tablished under this section for such cycle).

7 ‘‘(2) CONDITIONS.—A request made under

8 paragraph (1) may be granted only upon a written

9 determination by the Commission that the change

10 requested is justified by one or more of the same

11 reasons as would justify the establishment of a posi12 tive adjustment factor (as set forth in subsection

13 (c)(2)(B)).

14 ‘‘(3) EFFECT; DURATION.—A change granted

15 under this subsection—

16 ‘‘(A) shall supersede the adjustment factor

17 that would otherwise apply under this section

18 (with appropriate changes to the respective lim19 itations under paragraphs (2) and (3) of section

20 3732(a)); and

21 ‘‘(B) shall remain in effect for the rest of

22 the ratemaking cycle involved, subject to para23 graph (5).

24 ‘‘(4) EXPEDITED CONSIDERATION.—A request

25 made under paragraph (1) shall be acted on under
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1 this section in the same manner as if initiated under

2 subsection (b)(1), except that a decision on any such

3 request shall be rendered not later than 6 months

4 after the date on which the request is made.

5 ‘‘(5) FREQUENCY.—Nothing in this section

6 shall be considered to limit the number of times this

7 subsection may be invoked during a ratemaking

8 cycle.

9 ‘‘(g) POSTAL REGULATORY COMMISSION NOT TO

10 INTERFERE WITH COLLECTIVE BARGAINING.—It is the

11 sense of the Congress that nothing in this section should

12 restrict, expand, or otherwise affect any of the rights,

13 privileges, or benefits of either employees of the United

14 States Postal Service, or labor organizations representing

15 employees of the United States Postal Service, under

16 chapter 12 of this title, the National Labor Relations Act,

17 any handbook or manual affecting employee labor rela18 tions within the United States Postal Service, or any col19 lective bargaining agreement.

20 ‘‘§ 3734. Action of the Board

21 ‘‘(a) AUTHORITY TO ESTABLISH RATES.—The

22 Board of Directors, with the written concurrence of a ma23 jority of all of the members of the Board then holding

24 office, shall establish rates for products in the noncompeti-
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1 tive category of mail in accordance with the requirements

2 of this subchapter and the policies of this title.

3 ‘‘(b) PROCEDURES.—

4 ‘‘(1) IN GENERAL.—Rates shall be established

5 in writing, complete with a statement of explanation

6 and justification.

7 ‘‘(2) PUBLICATION.—The Board shall cause

8 each such decision (complete with the accompanying

9 statement) and the record of the Board’s proceed10 ings to be published in the Federal Register at least

11 45 days before the rate or rates to which they per12 tain are to take effect.

13 ‘‘(c) LIMITATIONS ON AUTHORITY.—

14 ‘‘(1) IN GENERAL.—Except as provided in para15 graph (2)—

16 ‘‘(A) FREQUENCY.—Ratemaking authority

17 under this section may not be exercised more

18 than once for purposes of any year.

19 ‘‘(B) UNIFORM EFFECTIVE DATE.—All

20 changes in rates pursuant to this section in a

21 year shall take effect on the same date.

22 ‘‘(2) EXCEPTION FOR CHANGE DUE TO EXI23 GENT CIRCUMSTANCES.—

24 ‘‘(A) IN GENERAL.—If the maximum rate

25 allowable for a product in a year changes pur-
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1 suant to a request granted under section

2 3733(f), then, in the event that ratemaking au3 thority under this section was previously exer4 cised with respect to such product for such

5 year, such rate may be modified, not more than

6 once more in such year, based on the change in

7 the maximum rate allowable (and the cor8 responding change in the range allowable).

9 ‘‘(B) UNIFORM EFFECTIVE DATE.—All

10 changes in rates pursuant to this paragraph

11 shall, to the extent based on the same set of

12 changes (as referred to in subparagraph (A)),

13 take effect beginning on the same date.

14 ‘‘SUBCHAPTER IV—RATES FOR PRODUCTS IN

15 THE COMPETITIVE CATEGORY OF MAIL

16 ‘‘§ 3741. Applicability; definition

17 ‘‘(a) APPLICABILITY.—This subchapter applies with

18 respect to—

19 ‘‘(1) priority mail;

20 ‘‘(2) expedited mail;

21 ‘‘(3) mailgrams;

22 ‘‘(4) international mail; and

23 ‘‘(5) parcel post;
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1 except that this subchapter does not apply with respect

2 to any product then currently in the noncompetitive cat3 egory of mail.

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

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

6 product, means the direct and indirect postal costs attrib7 utable to such product.

8 ‘‘(c) RULE OF CONSTRUCTION.—

9 ‘‘(1) IN GENERAL.—Except as provided in para10 graph (2), mail matter referred to in paragraphs (1)

11 through (5) of subsection (a) shall, for purposes of

12 such paragraphs, be considered to have the respec13 tive meanings given them under the mail classifica14 tion schedule (as defined by section 3623) as of the

15 effective date of this chapter.

16 ‘‘(2) UPDATES.—The Postal Regulatory Com17 mission shall, whenever any relevant change occurs

18 (whether pursuant to a product transfer under sec19 tion 3764 or an action taken under section 3763),

20 prescribe new lists of the products to which this sub21 chapter applies. The revised lists shall indicate how

22 and when any previous lists (including under sub23 section (a)) are superseded, and shall be published

24 in the Federal Register.
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1 ‘‘§ 3742. Action of the Board

2 ‘‘(a) AUTHORITY TO ESTABLISH RATES.—The

3 Board of Directors, with the written concurrence of a ma4 jority of all of the members of the Board then holding

5 office, shall establish rates for products in the competitive

6 category of mail in accordance with the requirements of

7 this subchapter and the policies of this title.

8 ‘‘(b) PROCEDURES.—Section 3734(b) shall apply

9 with respect to rates and decisions under this section, ex10 cept that for purposes of this section, section 3734(b) shall

11 be applied by substituting ‘by such date before the effec12 tive date of any new rates as the Board considers appro13 priate’ for ‘at least 45 days before the rate or rates to

14 which they pertain are to take effect’.

15 ‘‘(c) EFFECTIVE DATE.—

16 ‘‘(1) IN GENERAL.—Except as provided in para17 graph (2), the ratemaking provisions of this sub18 chapter shall be effective beginning with the rates to

19 be established for the first year beginning on or

20 after the date as of which the baseline rates are de21 termined under section 3721(e)(2).

22 ‘‘(2) EXCEPTION.—The ratemaking provisions

23 of this subchapter shall, with respect to all inter24 national mail as to which this subchapter applies, be

25 effective beginning on the date as of which the base26 line rates are determined under section 3721(e)(2),
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1 subject (until the entirety of this subchapter be2 comes effective in accordance with paragraph (1))

3 only to the requirement under section 3743(a).

4 ‘‘§ 3743. Provisions applicable to competitive prod5 ucts individually

6 ‘‘(a) IN GENERAL.—Rates for products in the com7 petitive category of mail shall be established in a manner

8 such that each such product shall bear the costs attrib9 utable to such product in such year.

10 ‘‘(b) TREATMENT OF SHORTFALLS.—If revenues de11 rived from a competitive product in any year are not suffi12 cient to meet the costs attributable to such product for

13 such year, the shortfall shall be made up in accordance

14 with section 3744(c)(1).

15 ‘‘(c) MANDATORY DISCONTINUANCE OF LOSS-MAK16 ING PRODUCTS.—

17 ‘‘(1) IN GENERAL.—If a competitive product

18 persistently fails to cover the costs attributable to

19 such product, the Postal Regulatory Commission

20 may, in accordance with procedures which the Com21 mission shall prescribe and after considering all rel22 evant circumstances, order the Postal Service to dis23 continue such product permanently.

24 ‘‘(2) PROCEDURES.—The procedures prescribed

25 to carry out this subsection—
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1 ‘‘(A) shall provide the opportunity for a

2 hearing on the record under sections 556 and

3 557 of title 5 to the Postal Service, users of the

4 mail, and an officer of the Commission who

5 shall be required to represent the interests of

6 the general public;

7 ‘‘(B) may include rules of proceedings that

8 provide for any procedure or other matter listed

9 under section 3733(b)(2); and

10 ‘‘(C) shall require that any final decision

11 be accompanied by a statement setting forth

12 the reasons therefor.

13 ‘‘§ 3744. Provisions applicable to competitive prod14 ucts collectively

15 ‘‘(a) COST-COVERAGE REQUIREMENT.—

16 ‘‘(1) IN GENERAL.—Rates for competitive prod17 ucts shall be established in a manner such that the

18 cost-coverage ratio for all competitive products (col19 lectively) shall, for each year to which this sub20 chapter applies (as referred to in section 3742(c)),

21 be at least equal to the cost-coverage ratio for such

22 year for all competitive and noncompetitive products

23 (collectively).
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1 ‘‘(2) COST-COVERAGE RATIO.—For purposes of

2 this section, the term ‘cost-coverage ratio’ means,

3 for the products and year involved, the ratio that—

4 ‘‘(A) total revenues from those products in

5 such year, bears to

6 ‘‘(B) total costs attributable to those prod7 ucts in such year.

8 ‘‘(b) ADJUSTMENT FOR SPECIAL CIRCUMSTANCES.—

9 The Postal Regulatory Commission may, by rule, and in

10 order to ensure that ratios under this section appro11 priately compensate for any significant and objective dif12 ferences in the nature and composition of costs attrib13 utable to competitive and noncompetitive products, respec14 tively, provide for the exclusion of such costs attributable

15 as the Commission considers to be uniquely or dispropor16 tionately associated with either category of products.

17 ‘‘(c) SPECIAL RULES TO MAKE UP FOR CERTAIN

18 SHORTFALLS.—

19 ‘‘(1) SUBTRACTION TO MAKE UP FOR ANY

20 SHORTFALL DESCRIBED IN SECTION 3743(b).—In

21 any year in which a shortfall described in section

22 3743(b) occurs in the case of any competitive prod23 uct, an amount equal to the amount of such shortfall

24 shall, for purposes of determining whether the re25 quirement under subsection (a) has been satisfied in
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1 such year, be subtracted from total revenues derived

2 from all competitive products (collectively) in such

3 year. Nothing in the preceding sentence shall be con4 sidered to permit or require that the same amount

5 be concurrently subtracted from total revenues de6 rived from competitive and noncompetitive products

7 (collectively).

8 ‘‘(2) SUBTRACTION TO MAKE UP FOR ANY

9 SHORTFALL IN CONTRIBUTIONS TOWARD INSTITU10 TIONAL COSTS IN A PREVIOUS YEAR.—If, in any

11 year, the requirement under subsection (a) is not

12 met (determined applying the provisions of sub13 section (b), paragraph (1), and this paragraph based

14 on any failure to satisfy subsection (a) in the pre15 vious year), the difference between the total revenues

16 considered to have been derived from competitive

17 products in the year involved (determined applying

18 such provisions), and the minimum amount of total

19 revenues from competitive products which would

20 have been required in order to satisfy subsection (a)

21 (determined applying such provisions), shall, for pur22 poses of determining whether the requirement under

23 subsection (a) is met in the following year, be sub24 tracted from total revenues derived from competitive

25 products (collectively) in such following year. Noth-
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1 ing in the preceding sentence shall be considered to

2 permit or require that the same amount be concur3 rently subtracted from total revenues derived from

4 competitive and noncompetitive products (collec5 tively).

6 ‘‘(d) PHASEIN AUTHORITY.—If necessary in order to

7 afford the Postal Service an opportunity to increase effi8 ciency to competitive market levels, the Postal Regulatory

9 Commission may, by written determination made as part

10 of its first adjustment factor case under section 3733, pro11 vide for the phasein of subsection (a) over the course of

12 the first ratemaking cycle. If the Commission grants relief

13 under this subsection, it shall review the continuing need

14 for and the extent of such relief annually.

15 ‘‘SUBCHAPTER V—MARKET TESTS OF

16 EXPERIMENTAL PRODUCTS

17 ‘‘§ 3751. Market tests of experimental noncompetitive

18 products

19 ‘‘(a) AUTHORITY.—

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

21 conduct market tests of experimental noncompetitive

22 products in accordance with this section.

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

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

25 subject to the requirements of section 3623 (relating
39

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1 to mail classification), section 3732 (relating to limi2 tations on rates), or section 3762 (relating to new

3 noncompetitive products).

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

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

6 ‘‘(1) SIGNIFICANTLY DIFFERENT PRODUCT.—

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

8 significantly different from all products offered by

9 the Postal Service within the 2-year period preceding

10 the start of the test.

11 ‘‘(2) DOLLAR-AMOUNT LIMITATION.—The total

12 revenues that are anticipated, or in fact received, by

13 the Postal Service from such product do not exceed

14 $10,000,000 in any year, subject to section 3754.

15 ‘‘(3) MARKET DISRUPTION.—The introduction

16 or continued offering of the product will not cause

17 unreasonable market disruption (either for competi18 tive or noncompetitive products).

19 ‘‘(4) CORRECT CATEGORIZATION.—The testing

20 of the product under this section is consistent with

21 the criteria under section 3761(b)(2).

22 ‘‘(c) NOTICE.—At least 30 days before initiating a

23 market test under this section, the Postal Service shall

24 file with the Postal Regulatory Commission and publish

25 in the Federal Register a notice setting out the basis for
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1 the Postal Service’s determination that the market test is

2 covered by this section and describing the nature and

3 scope of the market test.

4 ‘‘(d) DURATION.—

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

6 under this section may be conducted over a period

7 of not to exceed 24 months.

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

9 order to determine the feasibility or desirability of a

10 product being tested under this section, the Postal

11 Regulatory Commission may, upon written applica12 tion of the Postal Service (filed not later than 60

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

14 product would otherwise be scheduled to terminate

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

16 product for not to exceed an additional 12 months.

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

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

20 to meet one or more of the conditions set forth in sub21 section (b), it may issue any order that would be allowable

22 under section 3662(c)(6). A determination under this sub23 section shall be made in accordance with such procedures

24 as the Commission shall by regulation prescribe.
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1 ‘‘§ 3752. Market tests of experimental competitive

2 products

3 ‘‘(a) AUTHORITY.—

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

5 conduct market tests of experimental competitive

6 products in accordance with this section.

7 ‘‘(2) PROVISIONS WAIVED.—Any noncompliance

8 with section 3743(a) (relating to costs-attributable

9 requirement) on the part of a product shall not, if

10 it occurs while such product is being tested under

11 this section, be taken into account for purposes of

12 any sanction or other action that might otherwise be

13 permitted or required under any of the following:

14 ‘‘(A) Section 3662(c)(3) (relating to order15 ing the adjustment of rates to lawful levels pur16 suant to a rate complaint).

17 ‘‘(B) Section 3743(c) (relating to manda18 tory discontinuance of loss-making products).

19 ‘‘(C) Section 3773(e) (relating to use of

20 profits).

21 ‘‘(3) PROVISIONS NOT WAIVED.—Nothing in

22 this section shall be considered to permit or require

23 the exclusion of any costs or revenues that are at24 tributable to a product that is being tested under

25 this section from any determination under section
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1 3744 (relating to provisions applicable to competitive

2 products collectively).

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

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

5 ‘‘(1) SIGNIFICANTLY DIFFERENT PRODUCT.—

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

7 significantly different from all products offered by

8 the Postal Service within the 2-year period preceding

9 the start of the test.

10 ‘‘(2) DOLLAR-AMOUNT LIMITATION.—The total

11 revenues that are anticipated, or in fact received, by

12 the Postal Service from such product do not exceed

13 $10,000,000 in any year, subject to section 3754.

14 ‘‘(3) MARKET DISRUPTION.—The introduction

15 or continued offering of the product will not cause

16 unreasonable market disruption (either for competi17 tive or noncompetitive products).

18 ‘‘(4) CORRECT CATEGORIZATION.—The testing

19 of the product under this section is consistent with

20 the criteria under section 3761(b)(2).

21 ‘‘(c) NOTICE.—

22 ‘‘(1) IN GENERAL.—At least 30 days before ini23 tiating a market test under this section, the Postal

24 Service shall file with the Postal Regulatory Com25 mission and publish in the Federal Register a notice
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1 setting out the basis for the Postal Service’s deter2 mination that the market test is covered by this sec3 tion and describing the nature and scope of the mar4 ket test.

5 ‘‘(2) SAFEGUARDS.—The provisions of section

6 3604(g) shall be available with respect to any infor7 mation required to be filed under paragraph (1) to

8 the same extent and in the same manner as in the

9 case of any matter described in section 3604(g)(1).

10 Nothing in paragraph (1) shall be considered to per11 mit or require the publication of any information as

12 to which confidential treatment is accorded under

13 the preceding sentence (subject to the same excep14 tion as set forth in section 3604(g)(3)).

15 ‘‘(d) DURATION.—

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

17 under this section may be conducted over a period

18 of not to exceed 24 months.

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

20 order to determine the feasibility or desirability of a

21 product being tested under this section, the Postal

22 Regulatory Commission may, upon written applica23 tion of the Postal Service (filed not later than 60

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

25 product would otherwise be scheduled to terminate
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1 under paragraph (1)), extend the testing of such

2 product for not to exceed an additional 12 months.

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

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

6 to meet one or more of the conditions set forth in sub7 section (b), it may issue any order that would be allowable

8 under section 3662(c)(6). A determination under this sub9 section shall be made in accordance with such procedures

10 as the Commission shall by regulation prescribe.

11 ‘‘§ 3753. Large-scale market tests

12 ‘‘(a) AUTHORITY.—The Postal Service may, in ac13 cordance with this section, conduct—

14 ‘‘(1) market tests involving any experimental

15 noncompetitive product that would be allowable

16 under section 3751 but for subsection (b)(2) thereof;

17 and

18 ‘‘(2) market tests involving any experimental

19 competitive product that would be allowable under

20 section 3752 but for subsection (b)(2) thereof.

21 ‘‘(b) CONDITION.—Notwithstanding any other provi22 sion of this section, a product may not be tested under

23 this section unless the total revenues that are anticipated,

24 or in fact received, by the Postal Service from such prod-
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1 uct do not exceed $100,000,000 in any year, subject to

2 section 3754.

3 ‘‘(c) PROVISIONS WAIVED.—Section 3751(a)(2) shall

4 apply with respect to an experimental noncompetitive

5 product being tested under this section, and section

6 3752(a)(2) shall apply with respect to an experimental

7 competitive product being tested under this section, as if

8 such test were instead being conducted section 3751 or

9 3752, as the case may be.

10 ‘‘(d) REGULATIONS.—The Postal Regulatory Com11 mission shall by regulation establish rules for the conduct

12 of market tests under this section, including rules for the

13 termination of any such test. In adopting rules under this

14 subsection, the Commission shall consider such matters

15 as—

16 ‘‘(1) the Postal Service’s interest in the develop17 ment and testing of new products with a minimum

18 of regulatory impediments; and

19 ‘‘(2) the public interest in preventing unfair or

20 disruptive competition.

21 ‘‘(e) DURATION.—

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

23 under this section may be conducted over a period

24 of not to exceed 24 months.
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1 ‘‘(2) EXTENSION AUTHORITY.—If necessary in

2 order to determine the feasibility or desirability of a

3 product being tested under this section, the Postal

4 Regulatory Commission may, upon written applica5 tion of the Postal Service (filed not later than 60

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

7 product would otherwise be scheduled to terminate

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

9 product for not to exceed an additional 12 months.

10 ‘‘§ 3754. Adjustment for inflation

11 ‘‘In the case of a year following the first year in which

12 any testing under this subchapter is permitted, the dollar

13 amount contained in sections 3751(b)(2), 3752(b)(2), and

14 3753(b), respectively, shall be adjusted at the same time

15 and by the same percentage adjustment as the maximum

16 rates allowable for noncompetitive products are adjusted

17 pursuant to 3732(c) (but deeming the adjustment factor

18 under paragraph (2)(B) thereof to be zero for purposes

19 of this section).

20 ‘‘§ 3755. Conversion to permanence

21 ‘‘A request to have an experimental product under

22 this chapter converted to a permanent one—

23 ‘‘(1) shall be made and acted on in conformance

24 with applicable provisions of subchapter VI; and

25 ‘‘(2) shall be made by the Postal Service.
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1 ‘‘§ 3756. Effective date

2 ‘‘Market tests under this subchapter may be con3 ducted in any year beginning with the first year beginning

4 on or after the date as of which the baseline rates are

5 determined under section 3721(e)(2).

6 ‘‘SUBCHAPTER VI—PROVISIONS RELATING TO

7 THE INTRODUCTION AND CATEGORIZATION

8 OF PRODUCTS

9 ‘‘§ 3761. Criteria for the identification of noncompeti10 tive and competitive products

11 ‘‘(a) IN GENERAL.—Except as provided in sub12 chapter V, no product may be offered until such product

13 has been assigned to the noncompetitive or competitive

14 category of mail, whichever is appropriate (and, if a non15 competitive product, its proper basket).

16 ‘‘(b) CRITERIA.—

17 ‘‘(1) IN GENERAL.—Determinations as to the

18 category of mail to which any particular product

19 should be assigned (whether in connection with a

20 new product under section 3762 or 3763, the pro21 posed transfer of a product under section 3764, or

22 the proposed reclassification of an existing product

23 under subchapter II of chapter 36) shall be made in

24 conformance with paragraph (2).

25 ‘‘(2) CHARACTERISTICS BY CATEGORY.—The

26 noncompetitive category of products shall embrace
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1 all products in the sale of which the Postal Service

2 exercises sufficient market power that it can effec3 tively set the price of such product substantially

4 above costs or raise prices significantly without risk

5 of losing business to other firms offering similar

6 products, or that it can effectively set the price

7 below competitive costs to forestall entry by new

8 competitors or to eliminate existing competitors. The

9 competitive category of products shall embrace all

10 other products.

11 ‘‘(c) INITIAL AND UPDATED LISTS.—The respective

12 products which, as of any particular date, are within the

13 noncompetitive or competitive category of mail (and any

14 particular basket, if applicable) shall be as identified

15 under sections 3731 and 3741.

16 ‘‘§ 3762. New noncompetitive products

17 ‘‘(a) REQUEST.—The Postal Service—

18 ‘‘(1) may from time to time request that the

19 Postal Regulatory Commission submit a rec20 ommended decision on the classification for a new

21 noncompetitive product; and

22 ‘‘(2) shall, as part of any request made under

23 paragraph (1) (other than in the case of a trans24 ferred product), also request a recommended deci-
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1 sion on the baseline rate for such product for pur2 poses of section 3765.

3 ‘‘(b) HEARINGS.—In response to any request made

4 by the Postal Service under this section, the Postal Regu5 latory Commission shall promptly initiate a proceeding in

6 accordance with the procedures set out in section 3624.

7 ‘‘(c) FACTORS AND RECOMMENDED DECISION.—The

8 Postal Regulatory Commission shall make a recommended

9 decision on (1) the baseline rate for the new product based

10 on the factors set out in section 3622(b), and (2) the clas11 sification for the new product based on the factors and

12 requirements under section 3623(b). Such recommended

13 decision shall be submitted to the Directors for action in

14 accordance with section 3625, and subject to review in ac15 cordance with section 3628(a).

16 ‘‘§ 3763. New competitive products

17 ‘‘(a) AUTHORITY.—The Postal Service may, in ac18 cordance with this section, offer a new competitive product

19 and, with respect to competitive products only, otherwise

20 make changes in the mail classification schedule.

21 ‘‘(b) CONDITIONS.—An action under this section may

22 not be taken unless it satisfies each of the following:

23 ‘‘(1) CRITERIA.—To the extent that the classi24 fication of a product is involved, the action would be
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1 consistent with the criteria under section

2 3761(b)(2).

3 ‘‘(2) COSTS ATTRIBUTABLE.—To the extent

4 that the establishment of a rate for a competitive

5 product is involved, the requirement under section

6 3743(a) would be met.

7 ‘‘(c) NOTICE.—

8 ‘‘(1) IN GENERAL.—At least 30 days before it

9 offers a new competitive product or otherwise makes

10 any change in the mail classification schedule under

11 this section, the Postal Service shall file with the

12 Postal Regulatory Commission and publish in the

13 Federal Register a notice setting out the basis for

14 the Postal Service’s determination that the product

15 satisfies each of the conditions under subsection (b).

16 ‘‘(2) SAFEGUARDS.—The provisions of section

17 3604(g) shall be available with respect to any infor18 mation required to be filed under paragraph (1) to

19 the same extent and in the same manner as in the

20 case of any matter described in section 3604(g)(1).

21 Nothing in paragraph (1) shall be considered to per22 mit or require the publication of any information as

23 to which confidential treatment is accorded under

24 the preceding sentence (subject to the same excep25 tion as set forth in section 3604(g)(3)).
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1 ‘‘(d) CANCELLATION.—If the Postal Regulatory

2 Commission determines that an action proposed to be

3 taken under this section fails to meet either of the condi4 tions set forth in subsection (b), the Commission shall, be5 fore the proposed action is scheduled to be taken or to

6 commence (as applicable), order that the proposed action

7 be canceled. A determination under this subsection shall

8 be made in accordance with such procedures as the Com9 mission shall by regulation prescribe.

10 ‘‘§ 3764. Transfers of products between categories of

11 mail

12 ‘‘(a) IN GENERAL.—Upon request of the Postal Serv13 ice or users of the mails, or upon its own initiative, the

14 Postal Regulatory Commission may, after proceedings

15 conducted in conformity with subsection (d), transfer 1

16 or more products—

17 ‘‘(1) from the noncompetitive category of mail

18 to the competitive category of mail; or

19 ‘‘(2) from the competitive category of mail to

20 the noncompetitive category of mail.

21 ‘‘(b) CRITERIA.—

22 ‘‘(1) IN GENERAL.—A decision under this sec23 tion shall be made in accordance with the policies of

24 this title and the criteria set forth in section

25 3761(b)(2).
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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 noncompetitive 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, under section 1696 of title 18, is reserved

9 to the United States, subject to the same exception

10 as set forth in the last sentence of section 409(d)(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; and

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

20 ‘‘(c) TRANSFERS OF SUBCLASSES AND OTHER SUB21 ORDINATE OR FURTHER SUBORDINATE UNITS ALLOW22 ABLE.—Nothing in this title shall be considered to prevent

23 transfers under this section from being made by reason

24 of the fact that they would involve only some (but not all)

25 of the subclasses or other subordinate or further subordi-
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1 nate units of the class of mail or type of postal service

2 involved.

3 ‘‘(d) REQUIREMENTS.—Proceedings required to be

4 conducted in accordance with this subsection—

5 ‘‘(1) shall provide the opportunity for a hearing

6 on the record under sections 556 and 557 of title 5

7 to the Postal Service, users of the mail, and an offi8 cer of the Postal Regulatory Commission who shall

9 be required to represent the interests of the general

10 public;

11 ‘‘(2) may include rules of proceedings that pro12 vide for any procedure or other matter listed under

13 section 3733(b)(2); and

14 ‘‘(3) shall require that any final decision be ac15 companied by a statement setting forth the reasons

16 therefor.

17 Paragraph (3) of section 3733(b) (relating to printing and

18 notice requirements) shall apply with respect to each Com19 mission decision and related record of Commission hear20 ings under this section.

21 ‘‘§ 3765. Transition provisions for new or transferred

22 noncompetitive products

23 ‘‘(a) IN GENERAL.—In the case of a product that be24 comes assigned to the noncompetitive category of mail

25 under section 3762 or that is transferred from the com-
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1 petitive to the noncompetitive category of mail under sec2 tion 3764—

3 ‘‘(1) the maximum rate initially allowable for

4 such product after that assignment or transfer shall

5 be determined in accordance with subsection (b);

6 and

7 ‘‘(2) the initial range allowable for such product

8 after that assignment or transfer shall be deter9 mined in accordance with subsection (c).

10 ‘‘(b) MAXIMUM RATE INITIALLY ALLOWABLE.—The

11 maximum rate allowable during the first year in which a

12 product subject to this subsection is offered shall be deter13 mined in a manner similar to the special rule under section

14 3732(c)(4), subject to the following:

15 ‘‘(1) TRANSFERRED PRODUCTS.—In the case of

16 any product that becomes a noncompetitive product

17 pursuant to a transfer under section 3764, the rate

18 last in effect for such product (before the effective

19 date of its transfer) shall be treated as its ‘baseline

20 rate’.

21 ‘‘(2) OTHER PRODUCTS.—In the case of any

22 product assigned to the noncompetitive category of

23 mail pursuant to section 3762, the ‘baseline rate’ for

24 such product shall be determined under subchapter
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1 II of chapter 36 pursuant to the request made under

2 section 3762(a)(2) with respect thereto.

3 (c) RANGE INITIALLY ALLOWABLE.—The range al4 lowable during the first year in which a product subject

5 to this subsection is offered shall be determined in accord6 ance with section 3732(d), deeming the rate determined

7 for such product under subsection (b) of this section to

8 be the rate specified by paragraphs (1)(A) and (2)(A) of

9 section 3732(d).

10 ‘‘SUBCHAPTER VII—REPORTING

11 REQUIREMENTS AND RELATED PROVISIONS

12 ‘‘§ 3771. Annual reports by the Commission

13 ‘‘(a) IN GENERAL.—The Postal Regulatory Commis14 sion shall render an annual report to the President and

15 the Congress concerning the operations of the Commission

16 under this title.

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

18 information required under subsection (a), each report

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

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

21 incurred by the Postal Service in providing—

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

23 where, in the judgment of the Postal Regulatory

24 Commission, the Postal Service either would not

25 provide services at all or would not provide such
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1 services in accordance with the requirements of this

2 title if the Postal Service were not required to pro3 vide prompt, reliable, and efficient services to pa4 trons in all areas and all communities, including as

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

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

7 required by this title; and

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

9 the judgment of the Postal Regulatory Commission,

10 would not otherwise have been provided by the Post11 al Service but for the requirements of law.

12 The Commission shall detail the bases for its estimates

13 and the statutory requirements giving rise to the costs

14 identified in each report under this section.

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

16 Postal Service shall provide the Postal Regulatory Com17 mission with such information as may, in the judgment

18 of the Commission, be necessary in order for the Commis19 sion to prepare its reports under this section.

20 ‘‘§ 3772. Annual reports to the Commission

21 ‘‘(a) COSTS, REVENUES, AND RATES.—

22 ‘‘(1) IN GENERAL.—Except as provided in sub23 section (c), the Postal Service shall, no later than 90

24 days after the end of each year, prepare and submit

25 to the Postal Regulatory Commission a report (to-
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1 gether with such nonpublic annex thereto as the

2 Commission may require under subsection (e)) ana3 lyzing costs, revenues, and rates in sufficient detail

4 to demonstrate that the rates in effect for all prod5 ucts during such year (including, for purposes of

6 section 3744, rates for all competitive products col7 lectively) complied with all applicable requirements

8 of this title.

9 ‘‘(2) AUDITING REQUIREMENT.—Before submit10 ting a report (and any annex thereto) under para11 graph (1), the Postal Service shall have the informa12 tion contained in such report (and annex) audited by

13 the Inspector General. The results of any such audit

14 shall be submitted along with the report to which it

15 pertains.

16 ‘‘(b) QUALITY OF SERVICES.—Except as provided in

17 subsection (c), the Postal Service shall, no later than 90

18 days after the end of each year, prepare and submit to

19 the Postal Regulatory Commission a report (together with

20 such nonpublic annex thereto as the Commission may re21 quire under subsection (e)) which shall, for each non22 competitive product provided in such year, provide—

23 ‘‘(1) market information, including mail vol24 umes; and
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1 ‘‘(2) measures of the speed and reliability of

2 postal service, including—

3 ‘‘(A) the service standard applicable to

4 such product;

5 ‘‘(B) the actual level of service (described

6 in terms of speed of delivery and reliability)

7 provided; and

8 ‘‘(C) the degree of customer satisfaction

9 with the service provided.

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

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

12 through market tests under subchapter V in a year—

13 ‘‘(1) the Postal Service may, to the extent that

14 a test under section 3751 or 3752 is involved, report

15 summary data on the costs, revenues, and quality of

16 service by market test; and

17 ‘‘(2) the Postal Service shall, to the extent that

18 a test under section 3753 is involved, report such

19 data as the Postal Regulatory Commission requires.

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

21 Commission shall have access, in accordance with such

22 regulations as the Commission shall prescribe, to the

23 working papers and any other supporting matter of the

24 Postal Service and the Inspector General in connection

25 with any information submitted under this section.
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1 ‘‘(e) CONTENT AND FORM OF REPORTS.—

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

3 Commission shall, by regulation, prescribe the con4 tent and form of the public reports (and any non5 public annex and supporting matter relating thereto)

6 to be provided by the Postal Service under this sec7 tion. In carrying out this subsection, the Commis8 sion shall give due consideration to—

9 ‘‘(A) providing the public with adequate in10 formation to assess the lawfulness of rates

11 charged;

12 ‘‘(B) avoiding unnecessary or unwarranted

13 administrative effort and expense on the part of

14 the Postal Service; and

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

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

20 in accordance with regulations that the Commission

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

22 completeness of postal service data required by the

23 Commission under this subsection whenever it shall

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

2 postal products has become significantly inac3 curate or can be significantly improved;

4 ‘‘(B) the quality of service data has be5 come significantly inaccurate or can be signifi6 cantly improved; or

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

8 the Commission, otherwise necessitated by the

9 public interest.

10 ‘‘(f) CONFIDENTIAL INFORMATION.—

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

13 or other matter, which it provides to the Postal Reg14 ulatory Commission in a nonpublic annex under this

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

17 title, or exempt from public disclosure under section

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

19 time of providing such matter to the Commission,

20 notify the Commission of its determination, in writ21 ing, and describe with particularity the documents

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

23 confidentiality is sought and the reasons therefor.

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

25 matter described in paragraph (1) to which the
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1 Commission gains access under this section shall be

2 subject to paragraphs (2) and (3) of section 3604(g)

3 in the same way as if the Commission had received

4 notification with respect to such matter under sec5 tion 3604(g)(1).

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

7 submit to the Postal Regulatory Commission, together

8 with any other submission that it is required to make

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

10 recent—

11 ‘‘(1) comprehensive statement under section

12 2401(e);

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

14 ‘‘(3) program performance reports under sec15 tion 2804.

16 ‘‘§ 3773. Annual determination of compliance

17 ‘‘(a) PROFITS DEFINED.—For purposes of this sec18 tion, the term ‘profits’, with respect to a year, means the

19 amount by which—

20 ‘‘(1) total revenues of the Postal Service attrib21 utable to such year, exceeds

22 ‘‘(2) total costs of the Postal Service (including

23 institutional costs) attributable to such year,

24 as determined based on the report under section 3772(a)

25 for such year.
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1 ‘‘(b) OPPORTUNITY FOR PUBLIC COMMENT.—After

2 receiving the reports required under section 3772 for any

3 year, the Postal Regulatory Commission shall promptly

4 provide an opportunity for comment on such reports by

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

6 Commission who shall be required to represent the inter7 ests of the general public.

8 ‘‘(c) DETERMINATION OF COMPLIANCE.—Not later

9 than 90 days after receiving the submissions required

10 under section 3772 with respect to a year, the Postal Reg11 ulatory Commission shall make a written determination as

12 to whether—

13 ‘‘(1) any rates or fees in effect during such year

14 (for products individually or collectively) were not in

15 compliance with applicable provisions of this title;

16 ‘‘(2) any performance goals established under

17 section 2803 or 2804 for such year were not met;

18 and

19 ‘‘(3) any noncompetitive product failed to meet

20 any service standard during such year.

21 ‘‘(d) IF NO NONCOMPLIANCE IS FOUND.—If, for a

22 year, no instance of noncompliance is determined under

23 subsection (c) (or no determination under subsection (c)

24 is timely made), then, up to 100 percent of the profits
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1 attributable to such year (if any) may be used by the Post2 al Service for the purposes described in subsection (f).

3 ‘‘(e) IF ANY NONCOMPLIANCE IS FOUND.—If, for a

4 year, a timely determination of noncompliance is made

5 under subsection (c)—

6 ‘‘(1)(A) the Postal Regulatory Commission may

7 order, based on the nature, circumstances, extent,

8 and seriousness of the noncompliance, that a specific

9 percentage (not to exceed 50 percent) of the profits

10 attributable to such year (if any) be set aside for the

11 purposes described in subsection (g); and

12 ‘‘(B) the remainder (or any portion) of those

13 profits may be used by the Postal Service for the

14 purposes described in subsection (f); and

15 ‘‘(2) the Commission may, in the case of any

16 violation as to which a remedy could be ordered by

17 the Commission under section 3662(c), order any

18 such remedy under this section.

19 ‘‘(f) BONUSES.—

20 ‘‘(1) IN GENERAL.—The Postal Service shall es21 tablish a program under which cash bonuses may be

22 paid to officers and employees of the Postal Service

23 out of any profits which are available for that pur24 pose.

25 ‘‘(2) REQUIREMENTS.—Under the program—
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1 ‘‘(A) bonuses may be paid to officers and

2 employees of the Postal Service under criteria

3 which shall be fair and equitable;

4 ‘‘(B) the sole source of funding shall be

5 any profits from any year, subject to the appli6 cation of subsection (e)(1) with respect to such

7 year; and

8 ‘‘(C) bonuses shall not be precluded (in

9 whole or in part) by the limitation on com10 pensation under the last sentence of section

11 1003(a) in a year, if—

12 ‘‘(i) total profits attributable to the

13 preceding year, exceed

14 ‘‘(ii) the amount equal to 1 percent of

15 total revenues of the Postal Service attrib16 utable to such preceding year.

17 ‘‘(3) DISCRETIONARY NATURE OF PROGRAM.—

18 Nothing in this section shall be considered to create

19 any entitlement to receive bonuses or to require that

20 any portion of the profits from any year be used for

21 bonuses in excess of whatever amount the Postal

22 Service, in its sole discretion, considers appropriate.

23 ‘‘(4) CONSIDERATIONS RELATING TO THE POR24 TION OF PROFITS TO BE AVAILABLE FOR BO25 NUSES.—In any decision relating to what portion of
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1 the available profits from any year shall be made

2 available or used for bonuses under this subsection,

3 there shall be taken into consideration—

4 ‘‘(A) the obligation on the part of the

5 Postal Service to provide efficient and economi6 cal postal services in accordance with this title;

7 and

8 ‘‘(B) the question of what portion of those

9 profits (if any) should be used—

10 ‘‘(i) to retire debts or other obliga11 tions of the Postal Service;

12 ‘‘(ii) to limit future increases in postal

13 rates or fees for products in the non14 competitive category of mail; or

15 ‘‘(iii) to carry out any other purpose.

16 ‘‘(g) DEDICATION OF FUNDS TOWARD REDUCING

17 RATES AND FEES.—

18 ‘‘(1) IN GENERAL.—Any amounts ordered to be

19 set aside under subsection (e)(1)(A) may not be

20 used for any purpose other than to defray increases

21 in future rates and fees for products in the non22 competitive category of mail or to reduce the rates

23 and fees already in effect for such products.

24 ‘‘(2) COMPLIANCE.—Whenever an order under

25 paragraph (1)(A) or (2) of subsection (e) is issued,
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1 the Postal Service shall include in its next com2 prehensive statement under section 2401(e) (and

3 each subsequent statement thereunder until such

4 order has been fully complied with) a statement as

5 to—

6 ‘‘(A) what measures have been or will be

7 implemented in order to comply with the order,

8 including the schedule in accordance with which

9 any amounts set aside pursuant to an order

10 issued under subsection (e)(1)(A) shall be used

11 or made available for the purposes described in

12 paragraph (1); and

13 ‘‘(B) if (or to the extent that) an order

14 under subsection (e)(1)(A) is involved—

15 ‘‘(i) the amount of savings actually

16 passed on to mailers during the reporting

17 period (whether through reduced rates and

18 fees or otherwise), as compared to the

19 amount of savings scheduled to have been

20 passed on to mailers during such period;

21 and

22 ‘‘(ii) to the extent that the amount of

23 savings actually passed on to mailers is

24 less than the amount scheduled to have

25 been passed on to mailers during a report-
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1 ing period, what measures (if any) have

2 been or will be implemented to reconcile

3 the difference.

4 ‘‘(3) NONREDUNDANT INFORMATION.—Nothing

5 in paragraph (2) shall be considered to require that

6 the same information be reported if included in a

7 previous report under this subsection.

8 ‘‘(h) REPORTING REQUIREMENT RELATING TO BO9 NUSES.—Included in its comprehensive statement under

10 section 2401(e) for any period shall be—

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

12 during such period which would not have been allow13 able but for the provisions of subsection (f)(2)(C);

14 ‘‘(2) the amount of the bonus; and

15 ‘‘(3) the amount by which the limitation re16 ferred to in subsection (f)(2)(C) was exceeded as a

17 result of such bonus.

18 ‘‘§ 3774. Other reports

19 ‘‘The Postal Regulatory Commission shall, at least

20 every 6 years, render a report to the President and the

21 Congress concerning—

22 ‘‘(1) the operation of the system consisting of

23 chapter 36 and this chapter; and
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1 ‘‘(2) recommendations for any legislation or

2 other measures necessary to improve the effective3 ness or efficiency of that system.’’.

4 (b) CLERICAL AMENDMENT.—The table of chapters

5 for part IV of title 39, United States Code, is amended

6 by adding at the end the following:

‘‘37. New System for Establishing Postal Rates, Classes,

and Services ............................................................. 3701’’.

7 SEC. 202. AMENDMENTS TO CHAPTER 36.

8 (a) AUTHORITY TO FIX RATES AND CLASSES.—Sec9 tion 3621 of title 39, United States Code, is amended—

10 (1) in the first sentence by striking ‘‘this chap11 ter’’ and inserting ‘‘this chapter and chapter 37’’;

12 and

13 (2) by repealing the last 2 sentences.

14 (b) RATES AND FEES.—

15 (1) IN GENERAL.—The first sentence of section

16 3622(a) of title 39, United States Code, is amended

17 to read as follows: ‘‘Whenever necessary in order to

18 provide for the establishment of any baseline rate

19 needed for purposes of section 3762(a) (relating to

20 certain new noncompetitive products), the Postal

21 Service shall request the Postal Regulatory Commis22 sion to submit a recommended decision on changes

23 in a rate or rates of postage or in a fee or fees for
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1 postal services in accordance with the policies of this

2 title and applicable provisions of chapter 37.’’.

3 (2) CONFORMING AMENDMENTS.—Such section

4 3622(a) is further amended—

5 (A) by striking ‘‘(a)’’ and inserting

6 ‘‘(a)(1)’’; and

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

8 ‘‘(2) A request under this subsection may not be sub9 mitted except in the circumstance described in paragraph

10 (1).’’.

11 (c) MAIL CLASSIFICATION.—

12 (1) REPEAL.—Section 3623 of title 39, United

13 States Code, is amended by striking subsection (a)

14 and by redesignating subsections (b) through (d) as

15 subsections (a) through (c), respectively.

16 (2) MODIFIED AUTHORITY.—Subsection (a) of

17 section 3623 of title 39, United States Code, as so

18 redesignated by paragraph (1), is amended to read

19 as follows:

20 ‘‘(a) The Postal Service may from time to time re21 quest that the Postal Regulatory Commission submit, or

22 the Commission may submit to the Directors on its own

23 initiative, a recommended decision on changes in the mail

24 classification schedule for noncompetitive products (within

25 the meaning of subchapter III of chapter 37).’’.
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1 (d) RECOMMENDED DECISIONS OF COMMISSION.—

2 Subsection (c) of section 3624 of title 39, United States

3 Code, is amended—

4 (1) in paragraph (1) by striking ‘‘a request

5 under section 3622 of this title for a recommended

6 decision by the Commission on changes in a rate or

7 rates of postage or in a fee or fees for postal serv8 ices’’ and inserting ‘‘a request under section 3623

9 for a recommended decision by the Commission on

10 changes in the mail classification schedule or a re11 quest under section 3762 for a recommended deci12 sion by the Commission on the baseline rate and

13 classification for a new noncompetitive product,’’;

14 and

15 (2) in paragraph (2) by striking ‘‘3622’’ and in16 serting ‘‘3623 or 3762 (as applicable)’’.

17 (e) APPELLATE REVIEW.—

18 (1) APPEALABILITY OF ADJUSTMENT FACTOR

19 AND PRODUCT TRANSFER DECISIONS.—The first

20 sentence of section 3628 of title 39, United States

21 Code, is amended—

22 (A) by striking ‘‘A decision’’ and inserting

23 ‘‘(a) A decision’’;

24 (B) by inserting before ‘‘may be appealed’’

25 the following: ‘‘on a request made under section
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1 3623 or 3762, and any final decision by the

2 Commission under section 3733 or 3764,’’; and

3 (C) by striking ‘‘3624(a) of this title’’ and

4 inserting ‘‘3624(a), 3733(b), 3762(b), or

5 3764(d) (as the case may be)’’.

6 (2) APPEALS FROM ALL OTHER FINAL ORDERS

7 OF THE COMMISSION.—

8 (A) TITLE 39 AMENDMENT.—Section 3628

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

10 adding at the end the following:

11 ‘‘(b) Any proceeding to enjoin, set aside, annul, or

12 suspend any order of the Postal Regulatory Commission

13 (except any order appealable under subsection (a)) shall

14 be brought as provided by and in the manner prescribed

15 in chapter 158 of title 28.’’.

16 (B) TITLE 28 AMENDMENTS.—

17 (i) DEFINITIONS.—Subparagraph (A)

18 of section 2341(3) of title 28, United

19 States Code, is amended by inserting ‘‘the

20 Postal Regulatory Commission,’’ after ‘‘the

21 Federal Maritime Commission,’’.

22 (ii) ORDERS APPEALABLE.—Section

23 2342 of title 28, United States Code, is

24 amended by striking ‘‘and’’ at the end of

25 paragraph (6), by striking the period at
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1 the end of paragraph (7) and inserting ‘‘;

2 and’’, and by adding at the end the follow3 ing:

4 ‘‘(8) all final orders of the Postal Regulatory

5 Commission made reviewable by section 3628(b) of

6 title 39.’’.

7 (3) CONFORMING AMENDMENTS.—Sections

8 3625 and 3681 of title 39, United States Code, are

9 amended by striking ‘‘3628’’ each place it appears

10 and inserting ‘‘3628(a)’’.

11 (f) TEMPORARY RATES AND CLASSES.—

12 (1) NEGOTIATED SERVICE AGREEMENTS.—Sec13 tion 3641 of title 39, United States Code, is amend14 ed to read as follows:

15 ‘‘§ 3641. Negotiated service agreements

16 ‘‘(a) The Postal Service may enter into negotiated

17 service agreements with users of postal services in accord18 ance with this section. A negotiated service agreement

19 under this section shall—

20 ‘‘(1) pertain exclusively to products in the non21 competitive category of mail (within the meaning of

22 subchapter III of chapter 37);

23 ‘‘(2) require that the contracting mail user per24 form mail preparation, processing, transportation,

25 administration, or other functions that are in addi-
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1 tion to or greater than those required of mailers

2 under provisions of the mail classification schedule

3 established pursuant to section 3623(b);

4 ‘‘(3) provide for the payment by the contracting

5 mail user of liquidated damages to the Postal Serv6 ice for nonperformance or breach of any of the ma7 terial terms of the agreement, including any mini8 mum volume commitments; the amount of such liq9 uidated damages shall not be less than the difference

10 between postage and fees paid by such mail user

11 pursuant to the agreement and the amounts such

12 user would have paid under the otherwise applicable

13 schedule of rates and fees;

14 ‘‘(4) be for a term of not to exceed 3 years; and

15 ‘‘(5) provide that such agreement, and any

16 amendment or renewal thereof, shall not become ef17 fective until approved by the Postal Regulatory

18 Commission, and is subject to the cancellation au19 thority of the Commission under section 3662(c).

20 ‘‘(b) Within 1 year after this subsection takes effect,

21 the Postal Regulatory Commission shall adopt rules for

22 the consideration of negotiated service agreements be23 tween the Postal Service and users of postal services,

24 which meet the requirements of subsections (c) and (d).
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1 ‘‘(c) Upon receipt of a proposed negotiated service

2 agreement entered into by the Postal Service under sub3 section (a), or any amendment or renewal thereof, the

4 Postal Regulatory Commission shall render a decision

5 upon review of the agreement, after notice and oppor6 tunity for comment by interested parties in accordance

7 with section 553 of title 5, pursuant to the regulations

8 adopted by the Commission under subsection (b). The

9 Commission shall approve and recommend implementation

10 of a proposed negotiated service agreement (or any

11 amendment or renewal thereof) unless, on the basis of the

12 written data, views, and arguments received, it finds, with13 in 90 days after receipt of the proposed agreement,

14 amendment, or renewal (subject to the same type of day15 for-day extension as set forth in section 3733(b)(4)(B) for

16 failure by the Postal Service to respond to any lawful

17 order of the Commission), that—

18 ‘‘(1) the proposed agreement (or amendment or

19 renewal, as applicable)—

20 ‘‘(A) does not satisfy the conditions and

21 requirements of subsection (a);

22 ‘‘(B) precludes or materially hinders simi23 larly situated mail users from entering into

24 agreements with the Postal Service on the
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1 same, or substantially the same, terms and con2 ditions; or

3 ‘‘(C) cannot reasonably be expected to re4 sult in net benefits to the operation of a nation5 wide postal system;

6 ‘‘(2) the Postal Service is unwilling or unable to

7 enter into such negotiated service agreements with

8 other similarly situated mail users; or

9 ‘‘(3) rates and fees payable during the term of

10 the proposed negotiated service agreement are not

11 reasonably calculated to yield to the Postal Service

12 total revenues that equal or exceed the sum of—

13 ‘‘(A) the direct and indirect postal costs

14 attributable to services performed by the Postal

15 Service under the agreement; and

16 ‘‘(B) a portion of all other costs of the

17 Postal Service that are equal, on an average

18 unit basis, to the portion of such costs reason19 ably assignable to the classification or classi20 fications of mail service most similar to the

21 services performed under the agreement.

22 ‘‘(d) Whenever it disapproves a proposed negotiated

23 service agreement, the Postal Regulatory Commission

24 shall provide written notice to that effect, together with

25 the reasons therefor.
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1 ‘‘(e) Any decision to approve or disapprove a pro2 posed negotiated service agreement (or amendment or re3 newal, as applicable) shall be subject to judicial review in

4 accordance with section 3628(b).

5 ‘‘(f) Nothing in subsections (a) through (e) shall be

6 considered to limit or otherwise affect any authority avail7 able to the Postal Service under section 3763.’’.

8 (2) CONFORMING AMENDMENT.—The table of

9 sections at the beginning of chapter 36 of title 39,

10 United States Code, is amended by striking the item

11 relating to section 3641 and inserting the following:

‘‘3641. Negotiated service agreements.’’.

12 (g) RATE AND SERVICE COMPLAINTS.—Section 3662

13 of title 39, United States Code, is amended to read as

14 follows:

15 ‘‘§ 3662. Rate and service complaints

16 ‘‘(a) Interested parties (including an officer of the

17 Postal Regulatory Commission representing the interests

18 of the general public) who believe the Postal Service is

19 charging rates which do not conform to the policies set

20 out in this title, who believe that the Postal Service is not

21 providing postal service in accordance with the policies of

22 this title, or who believe that the Postal Service is other23 wise not acting in conformance with the policies of this

24 title, may lodge a complaint with the Postal Regulatory
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1 Commission in such form and in such manner as it may

2 prescribe.

3 ‘‘(b)(1) The Postal Regulatory Commission shall,

4 within 90 days after receiving a complaint under sub5 section (a), either—

6 ‘‘(A) begin proceedings on such complaint in

7 conformity with section 3764(d)(1); or

8 ‘‘(B) issue an order dismissing the complaint

9 (together with a statement of the reasons therefor).

10 ‘‘(2) For purposes of section 3628(b), any complaint

11 under subsection (a) on which the Commission fails to act

12 in the time and manner required by paragraph (1) shall

13 be treated in the same way as if it had been dismissed

14 pursuant to an order issued by the Commission on the

15 last day allowable for the issuance of such order under

16 paragraph (1).

17 ‘‘(c) If the Postal Regulatory Commission finds the

18 complaint to be justified, it shall—

19 ‘‘(1) in a classification matter covered by sec20 tion 3623 or 3762, after proceedings in conformity

21 with section 3624, issue a recommended decision

22 which shall be acted upon in accordance with the

23 provisions of section 3625;

24 ‘‘(2) in a matter involving a violation of any

25 limitation under section 3732 (relating to limitations
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1 on rates for noncompetitive products), order the un2 lawful rates to be adjusted to lawful levels and the

3 taking of such other action as it deems appropriate;

4 ‘‘(3) in a matter involving a violation of section

5 3743(a) (relating to costs-attributable requirement

6 for competitive products) or section 3763(b) (relat7 ing to conditions to be met by new competitive prod8 ucts), order the unlawful rates to be adjusted to law9 ful levels and the taking of such other action as it

10 deems appropriate;

11 ‘‘(4) in a matter involving a violation of section

12 3641, order the payment of liquidated damages in

13 accordance with the provisions included in the agree14 ment involved pursuant to the requirements of sec15 tion 3641(a)(3) or the cancellation of such agree16 ment;

17 ‘‘(5) in a matter involving a violation of section

18 403(c), order the taking of such action as it deems

19 appropriate;

20 ‘‘(6) in a matter involving a violation of any

21 provision of subchapter V of chapter 37 (relating to

22 market tests of experimental products), order the

23 cancellation of the testing involved or the taking of

24 such other action as it deems appropriate;
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1 ‘‘(7) in a matter involving a violation of section

2 404a, order the rescission of any regulation involved

3 or the taking of such action as it deems appropriate;

4 ‘‘(8) in a matter involving a violation of section

5 2012(f) (relating to the minimum amount to be

6 charged by the Postal Service for goods or services

7 provided to any corporation established under sec8 tion 2012), order that the Postal Service increase its

9 prices to at least the minimum levels required;

10 ‘‘(9) in a matter involving the Postal Service’s

11 providing a nonpostal product that is not permitted

12 under paragraph (6) of section 404(a), order that

13 the Postal Service cease providing such product; and

14 ‘‘(10) in a matter not otherwise covered by any

15 of the preceding provisions of this subsection, render

16 a public report thereon.

17 ‘‘(d) In addition, in cases of deliberate noncompliance

18 with the requirements of this title, the Postal Regulatory

19 Commission may order, based on the nature, cir20 cumstances, extent, and seriousness of the noncompliance,

21 a fine (in the amount specified by the Commission in its

22 order) for each incidence of noncompliance. Fines result23 ing from the provision of competitive products (within the

24 meaning of subchapter IV of chapter 37) shall be paid

25 out of the Competitive Products Fund established in sec-
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1 tion 2011. All receipts from fines imposed under this sub2 section shall be deposited in the general fund of the Treas3 ury of the United States.’’.

4 (h) LIMITATIONS.—Section 3684 of title 39, United

5 States Code, is amended—

6 (1) by inserting ‘‘and no provision of chapter

7 37’’ after ‘‘no provision of this chapter’’; and

8 (2) by striking ‘‘any provision of section 3682

9 or 3683 or chapter 30, 32, or 34 of this title.’’ and

10 inserting ‘‘any provision of this title.’’.

11 (i) REDUCED RATES.—Effective as of the date of en12 actment of this Act, subclause (VI) of section

13 3626(a)(3)(B)(ii) of title 39, United States Code, is

14 amended to read as follows:

15 ‘‘(VI) one-half (or less, as the Postal Service

16 may prescribe), for any fiscal year after fiscal year

17 1998.’’.

18 (j) REGULATIONS OF THE COMMISSION.—Effective

19 as of the date of enactment of this Act, section 3603 of

20 title 39, United States Code, is amended by striking ‘‘this

21 chapter.’’ and inserting ‘‘this title.’’.

22 (k) EFFECTIVE DATE.—Except as provided in sub23 section (i) or (j), this section and the amendments made

24 by this section shall become effective on the date as of

25 which the baseline rates are determined under section
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1 3721(e)(2) of title 39, United States Code (as amended

2 by section 201).

3 SEC. 203. POSTAL SERVICE COMPETITIVE PRODUCTS

4 FUND.

5 (a) ESTABLISHMENT.—

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

7 United States Code, is amended by adding at the

8 end the following:

9 ‘‘§ 2011. Postal Service Competitive Products Fund

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

11 United States a revolving fund to be called the Postal

12 Service Competitive Products Fund which shall be avail13 able to the Postal Service without fiscal-year limitation for

14 the payment of all attributable costs, institutional costs,

15 and other expenses incurred by the Postal Service in pro16 viding competitive products.

17 ‘‘(b) There shall be deposited in the Postal Service

18 Competitive Products Fund, subject to withdrawal by the

19 Postal Service—

20 ‘‘(1) revenues from competitive products;

21 ‘‘(2) amounts received from obligations issued

22 by the Postal Service under this section;

23 ‘‘(3) interest which may be earned on invest24 ments of the Postal Service Competitive Products

25 Fund; and
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1 ‘‘(4) any amounts transferred from the Postal

2 Service Fund under subsection (j).

3 ‘‘(c) The receipts and disbursements of the Postal

4 Service Competitive Products Fund shall be accorded the

5 same budgetary treatment as is accorded to receipts and

6 disbursements of the Postal Service Fund under section

7 2009a.

8 ‘‘(d)(1) If the Postal Service determines that the

9 moneys of the Postal Service Competitive Products Fund

10 are in excess of current needs, it may invest such amounts

11 as it deems advisable in any of the following:

12 ‘‘(A) A corporation established under section

13 2012.

14 ‘‘(B) Such other investments as it considers ap15 propriate.

16 ‘‘(2)(A) Nothing in paragraph (1)(B) shall be consid17 ered to constitute authority for the Postal Service to invest

18 in the obligations or securities of, or to make any other

19 investment with respect to, a commercial entity.

20 ‘‘(B) For purposes of this paragraph, the term ‘com21 mercial entity’ means any corporation, company, associa22 tion, partnership, joint stock company, firm, society, or

23 other similar entity, as further defined under regulations

24 prescribed by the Postal Regulatory Commission.
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1 ‘‘(e) The Postal Service, in its sole discretion, may

2 provide that amounts which would otherwise be deposited

3 in the Postal Service Competitive Products Fund shall in4 stead be directly deposited in a Federal Reserve bank or

5 a depository for public funds selected by the Postal Serv6 ice, and may provide for transfers of amounts under this

7 subsection between or among such accounts and the Post8 al Service Competitive Products Fund.

9 ‘‘(f) A judgment against the Postal Service or the

10 Government of the United States arising out of activities

11 of the Postal Service in the provision of competitive prod12 ucts (as determined under regulations which the Postal

13 Regulatory Commission shall prescribe, in consultation

14 with the Postal Service) shall be paid out of the Postal

15 Service Competitive Products Fund.

16 ‘‘(g)(1) Subject to the limitations specified in section

17 2005(a) (applied in accordance with paragraph (2)), the

18 Postal Service is authorized to borrow money and to issue

19 and sell such obligations as it determines necessary to pro20 vide for competitive products and deposit such amounts

21 in the Postal Service Competitive Products Fund, except

22 that the Postal Service may pledge only the assets of the

23 Postal Service Competitive Products Fund and pledge and

24 use its revenues and receipts for the payment of the prin25 cipal of or interest on such obligations, for the purchase
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1 or redemption thereof, and for other purposes incidental

2 thereto, including creation of reserve, sinking, and other

3 funds which may be similarly pledged and used, to such

4 extent and in such manner as it deems necessary or desir5 able.

6 ‘‘(2) For purposes of applying any limitation under

7 section 2005(a), the aggregate amount of obligations

8 issued by the Postal Service which are outstanding at any

9 given time, and the net increase in the amount of obliga10 tions outstanding issued by the Postal Service for the pur11 pose of capital improvements or for the purpose of defray12 ing operating expenses of the Postal Service in any fiscal

13 year, shall be determined by aggregating all outstanding

14 obligations so issued by the Postal Service under section

15 2005 with all outstanding obligations so issued by the

16 Postal Service under this section.

17 ‘‘(h) The Postal Service may enter into binding cov18 enants with the holders of such obligations, and with the

19 trustee, if any, under any agreement entered into in con20 nection with the issuance thereof with respect to the estab21 lishment of reserve, sinking, and other funds, application

22 and use of revenues and receipts of the Postal Service

23 Competitive Products Fund, stipulations concerning the

24 subsequent issuance of obligations or the execution of

25 leases or lease purchases relating to properties of the Post-
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1 al Service and such other matters as the Postal Service

2 deems necessary or desirable to enhance the marketability

3 of such obligations.

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

5 this section shall—

6 ‘‘(1) not be purchased by the Secretary of the

7 Treasury;

8 ‘‘(2) not be exempt either as to principal or in9 terest from any taxation now or hereafter imposed

10 by any State or local taxing authority;

11 ‘‘(3) not be obligations of, nor shall payment of

12 the principal thereof or interest thereon be guaran13 teed by, the Government of the United States, and

14 the obligations shall so plainly state; and

15 ‘‘(4) notwithstanding the provisions of the Fed16 eral Financing Bank Act of 1973 or any other provi17 sion of law (except as may be specifically provided

18 by reference to this paragraph in any Act enacted

19 after this paragraph takes effect), not be eligible for

20 purchase by, or commitment to purchase by, or sale

21 or issuance to, the Federal Financing Bank.

22 ‘‘(j) The Postal Service shall, on the first day of the

23 first year beginning on or after the date as of which the

24 baseline rates are determined under section 3721(e)(2),

25 transfer from the Postal Service Fund to the Postal Serv-
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1 ice Competitive Products Fund an amount that, as deter2 mined by the Postal Regulatory Commission (after notice

3 and opportunity for comment by interested parties in ac4 cordance with section 553 of title 5), fairly reflects the

5 net value of assets and liabilities which may be attributed

6 wholly or primarily to competitive products.

7 ‘‘(k) The Postal Service shall render an annual report

8 to the Secretary of the Treasury concerning the operation

9 of the Postal Service Competitive Products Fund, in which

10 it shall address such matters as risk limitations, reserve

11 balances, allocation or distribution of moneys, liquidity re12 quirements, and measures to safeguard against losses. A

13 copy of its then most recent report under this subsection

14 shall be included together with any other submission that

15 it is required to make to the Postal Regulatory Commis16 sion under section 3772(g).

17 ‘‘(l) For purposes of this section, the term ‘competi18 tive product’ has the meaning given such term by section

19 3701.’’.

20 (2) CLERICAL AMENDMENT.—The table of sec21 tions at the beginning of chapter 20 of title 39,

22 United States Code, is amended by adding after the

23 item relating to section 2010 the following:

‘‘2011. Postal Service Competitive Products Fund.’’.

24 (b) TECHNICAL AND CONFORMING AMENDMENTS.—
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1 (1) CAPITAL OF THE POSTAL SERVICE.—Sec2 tion 2002(b) of title 39, United States Code, is

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

4 and the balance in the Postal Service Competitive

5 Products Fund,’’.

6 (2) POSTAL SERVICE FUND.—

7 (A) PURPOSES FOR WHICH AVAILABLE.—

8 (i) IN GENERAL.—Section 2003(a) of

9 title 39, United States Code, is amended

10 by striking ‘‘title.’’ and inserting ‘‘title

11 (other than any of the purposes, functions,

12 or powers for which the Postal Service

13 Competitive Products Fund is available).’’.

14 (ii) CONFORMING AMENDMENT.—Sec15 tion 2003(e)(1) of title 39, United States

16 Code, is amended by inserting after ‘‘as

17 provided by law’’ the following: ‘‘(subject

18 to the same limitation as set forth in the

19 parenthetical matter under subsection

20 (a))’’.

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

22 39, United States Code, is amended by striking

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

24 provided in section 2011, there’’.
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1 (3) INVESTMENTS.—Subsection (c) of section

2 2003 of title 39, United States Code, is amended—

3 (A) by striking ‘‘(c) If’’ and inserting

4 ‘‘(c)(1) Except as provided in paragraph (2),

5 if’’; and

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

7 ‘‘(2) Nothing in this subsection shall be considered

8 to authorize any investment in any obligations or securi9 ties of a commercial entity (as defined by section

10 2011(d)(2)(B)), including any corporation established

11 under section 2012.’’.

12 (4) OBLIGATIONS.—

13 (A) PURPOSES FOR WHICH ISSUANCE IS

14 ALLOWED.—The first sentence of section

15 2005(a)(1) of title 39, United States Code, is

16 amended by striking ‘‘title.’’ and inserting ‘‘title

17 (other than any of the purposes for which the

18 corresponding authority is available to the Post19 al Service under section 2011).’’.

20 (B) SPECIAL RULE FOR APPLYING LIMITA21 TIONS.—Paragraph (1) of section 2005(a) of

22 title 39, United States Code, is amended by

23 adding at the end the following: ‘‘The limita24 tions under the second and third sentences of
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1 this subsection shall be applied in accordance

2 with section 2011(g)(2).’’.

3 (5) RELATIONSHIP BETWEEN THE TREASURY

4 AND THE POSTAL SERVICE.—Section 2006(c) of title

5 39, United States Code, is amended by inserting

6 ‘‘under section 2005’’ before ‘‘shall be obligations’’.

7 SEC. 204. USPS CORPORATION.

8 (a) ESTABLISHMENT.—Chapter 20 of title 39,

9 United States Code, is amended by adding after section

10 2011 (as added by section 203) the following:

11 ‘‘§ 2012. USPS Corporation

12 ‘‘(a) The Board of Directors may establish a private

13 for-profit corporation under the laws of a State to be

14 known as the USPS Corporation or such other corporate

15 name as may be duly adopted by the Corporation. The

16 Board of Directors may serve as incorporators of the Cor17 poration and take all steps necessary to establish the Cor18 poration, including the filing of articles of incorporation

19 consistent with the provisions of this section.

20 ‘‘(b)(1) The Corporation shall not be an agency, in21 strumentality, or establishment of the United States, a

22 Government corporation, or a Government-controlled cor23 poration. Except as provided in this section, the Corpora24 tion shall not be considered part of the Postal Service. Fi25 nancial obligations of the Corporation shall not be obliga-
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1 tions of, or guaranteed as to principal or interest by, the

2 Postal Service or the United States, and the obligations

3 shall so plainly state. No action shall be allowable against

4 the United States based on actions of the Corporation.

5 ‘‘(2) The receipts and disbursements of the Corpora6 tion shall be accorded the same budgetary treatment as

7 is accorded to receipts and disbursements of the Postal

8 Service Fund under section 2009a.

9 ‘‘(c) The Corporation is authorized to issue and have

10 outstanding, in such amounts as it shall determine, shares

11 of capital stock, without par value, which shall carry vot12 ing rights and be eligible for dividends. Such shares may

13 be purchased only by the Postal Service Competitive Prod14 ucts Fund, in such amounts as the Board of Directors

15 of the Postal Service may deem appropriate.

16 ‘‘(d) Notwithstanding any provision of State law, the

17 articles of incorporation and bylaws of the Corporation

18 shall provide that its board of directors shall be named

19 by the Board of Directors of the Postal Service. The re20 strictions on postgovernment employment set out in sec21 tion 207 of title 18 shall not apply to the acts of an indi22 vidual taken in carrying out official duties as a director,

23 officer, or employee of the Corporation if the individual

24 was an officer or employee of the Postal Service (including

25 a Director) continuously for a period of 12 months or
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1 longer during the 24 months prior to employment with

2 the Corporation.

3 ‘‘(e) The Corporation shall have all of the powers con4 ferred upon it under the laws of the State or States in

5 which it is incorporated. The Corporation is specifically

6 authorized—

7 ‘‘(1) to offer any postal or nonpostal product

8 (other than a product covered by the postal monop9 oly, as defined in section 3764(b)(2));

10 ‘‘(2) acquire shares of individual private compa11 nies; and

12 ‘‘(3) participate in joint ventures with individ13 ual private companies.

14 ‘‘(f) The Corporation may purchase goods and serv15 ices from the Postal Service, except that the Corporation

16 must pay the Postal Service the same amount for such

17 goods or services as would be paid by similarly situated

18 mailers or, if the goods or services are not offered to the

19 public by the Postal Service, amounts which represent fair

20 market value.

21 ‘‘(g)(1) Insofar as the Corporation offers postal prod22 ucts which depend in substantial part on the services of

23 the Postal Service, the Postal Service shall, to the extent

24 deemed appropriate by the Postal Regulatory Commission

25 (and subject to such requirements as the Commission may
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1 specify as to form and content), include details of the ac2 tivities of the Corporation (including sufficient informa3 tion to demonstrate that the requirements of subsection

4 (f) are being complied with) in the annual reports to the

5 Commission required by section 3772.

6 ‘‘(2) In the event that, based on its review of the in7 formation submitted to it by the Postal Service under

8 paragraph (1), the Commission determines that the re9 quirements of subsection (f) are not being complied with,

10 the Commission may issue any order allowable under sub11 section (c)(8) or (d) of section 3662.

12 ‘‘(h) As used in this section, the term ‘State’ includes

13 the District of Columbia.’’.

14 (b) CLERICAL AMENDMENT.—The table of sections

15 at the beginning of chapter 20 of title 39, United States

16 Code, is amended by adding after the item relating to sec17 tion 2011 (as added by section 203) the following:

‘‘2012. USPS Corporation.’’.

18 (c) EFFECTIVE DATE.—No authority under section

19 2012 of title 39, United States Code (as amended by this

20 section) shall be available until the first day of the first

21 year beginning on or after the date as of which the base22 line rates are determined under section 3721(e)(2).

23 SEC. 205. POSTAL AND NONPOSTAL PRODUCTS.

24 (a) IN GENERAL.—Section 102 of title 39, United

25 States Code, as amended by section 102(a) of this Act,
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1 is amended by striking ‘‘and’’ at the end of paragraph (4),

2 by striking the period at the end of paragraph (5) and

3 inserting a semicolon, and by adding at the end the follow4 ing:

5 ‘‘(6) ‘postal product’ refers to any service that

6 provides for the physical delivery of letters, printed

7 matter, or packages weighing up to 70 pounds, in8 cluding physical acceptance, collection, sorting, or

9 transportation services ancillary thereto; and

10 ‘‘(7) ‘nonpostal product’ means any product or

11 service offered by the Postal Service (or that could

12 have been offered by the Postal Service under sec13 tion 404(a)(6), as last in effect before the date of

14 enactment of the Postal Modernization Act of 1999)

15 that is not a postal product.’’.

16 (b) SPECIFIC POWERS.—

17 (1) IN GENERAL.—Paragraph (6) of section

18 404(a) of title 39, United States Code, is amended

19 to read as follows:

20 ‘‘(6)(A) to continue providing or to abolish any

21 nonpostal product first offered by the Postal Service

22 to the general public before January 1, 1994 (with

23 any nonpostal products not offered by the Postal

24 Service to the general public before January 1,

25 1994, to be provided by means of a private corpora-
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1 tion organized under section 2012, if at all, instead

2 of the Postal Service); and

3 ‘‘(B) with respect to any nonpostal products

4 first offered by the Postal Service to the general

5 public during the period beginning on January 1,

6 1994, and ending on the date of enactment of the

7 Postal Modernization Act of 1999, to continue to

8 offer such products, but only—

9 ‘‘(i) subject to clause (ii), until such prod10 ucts are transferred to the private postal cor11 poration (referred to in subparagraph (A)) in

12 accordance with such schedule and procedures

13 as the Postal Regulatory Commission shall by

14 regulation prescribe; or

15 ‘‘(ii) until the first day of the first year of

16 the first ratemaking cycle (within the meaning

17 of section 3733(a)), if the transfer described in

18 clause (i) has not been completed by such

19 date.’’.

20 (2) DEADLINE.—The regulations required

21 under section 404(a)(6)(B) of title 39, United States

22 Code, as amended by this subsection, shall be pre23 scribed in time to become effective by the commence24 ment of the first proceedings under section 3733 of
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1 title 39, United States Code (relating to adjustment

2 factors), as added by section 201.

3 Subtitle B—Related Provisions

4 SEC. 211. AUTHORITY FOR POSTAL REGULATORY COMMIS5 SION TO ISSUE SUBPOENAS.

6 Section 3604 of title 39, United States Code, is

7 amended by adding at the end the following:

8 ‘‘(f)(1) Any Commissioner of the Postal Regulatory

9 Commission, any administrative law judge appointed by

10 the Commission under section 3105 of title 5, and any

11 employee of the Commission designated by the Commis12 sion may administer oaths, examine witnesses, take depo13 sitions, and receive evidence.

14 ‘‘(2) The Chairman of the Commission, any Commis15 sioner designated by the Chairman, and any administra16 tive law judge appointed by the Commission under section

17 3105 of title 5 may, with respect to any proceeding con18 ducted by the Commission under this title—

19 ‘‘(A) issue subpoenas requiring the attendance

20 and presentation of testimony of any individual, and

21 the production of documentary or other evidence,

22 from any place in the United States, any territory

23 or possession of the United States, the Common24 wealth of Puerto Rico, or the District of Columbia;

25 and
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1 ‘‘(B) order the taking of depositions and re2 sponses to written interrogatories.

3 The written concurrence of a majority of the Commis4 sioners then holding office shall, with respect to each sub5 poena under subparagraph (A), be required in advance of

6 its issuance.

7 ‘‘(3) In the case of contumacy or failure to obey a

8 subpoena issued under this subsection, upon application

9 by the Commission, the district court of the United States

10 for the district in which the person to whom the subpoena

11 is addressed resides or is served may issue an order requir12 ing such person to appear at any designated place to tes13 tify or produce documentary or other evidence. Any failure

14 to obey the order of the court may be punished by the

15 court as a contempt thereof.

16 ‘‘(g)(1) If the Postal Service determines that any doc17 ument or other matter it provides to the Postal Regulatory

18 Commission pursuant to a subpoena issued under sub19 section (f), or otherwise at the request of the Commission

20 in connection with any proceeding or other purpose under

21 this chapter or chapter 37, contains information which is

22 described in section 410(c) of this title, or exempt from

23 public disclosure under section 552(b) of title 5, the Postal

24 Service shall, at the time of providing such matter to the
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1 Commission, notify the Commission, in writing, of its de2 termination (and the reasons therefor).

3 ‘‘(2) No officer or employee of the Commission may,

4 with respect to any information as to which the Commis5 sion has been notified under paragraph (1)—

6 ‘‘(A) use such information for purposes other

7 than the purposes for which it is supplied; or

8 ‘‘(B) permit anyone who is not an officer or

9 employee of the Commission to have access to any

10 such information.

11 ‘‘(3) Paragraph (2) shall not prevent information

12 from being furnished under any process of discovery estab13 lished under this title in connection with a proceeding

14 under this chapter or chapter 37 which is conducted in

15 accordance with sections 556 and 557 of title 5. The Com16 mission shall, by regulations based on rule 26(c) of the

17 Federal Rules of Civil Procedure, establish procedures for

18 ensuring appropriate confidentiality for any information

19 furnished under the preceding sentence.’’.

20 SEC. 212. QUALIFICATION REQUIREMENTS FOR COMMIS21 SIONERS AND DIRECTORS.

22 (a) COMMISSIONERS.—Section 3601(a) of title 39,

23 United States Code, is amended by striking the third sen24 tence and inserting the following: ‘‘The Commissioners

25 shall be chosen solely on the basis of their technical quali-
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1 fications, professional standing, and demonstrated exper2 tise in economics, accounting, law, or public administra3 tion, and may be removed by the President only for

4 cause.’’.

5 (b) DIRECTORS.—

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

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

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

9 sentence and inserting the following: ‘‘The Directors

10 shall represent the public interest generally, and

11 shall be chosen solely on the basis of their dem12 onstrated ability in managing organizations or cor13 porations, in either the public or the private sector,

14 similar in size or scope to the Postal Service. The

15 Directors shall not be representatives of specific in16 terests using the Postal Service, and may be re17 moved only for cause.’’.

18 (2) CONSULTATION REQUIREMENT.—Sub19 section (a) of section 202 of title 39, United States

20 Code, is amended by adding at the end the follow21 ing:

22 ‘‘(2) In selecting the individuals described in para23 graph (1) for nomination for appointment to the position

24 of Director, the President should consult with the Speaker

25 of the House of Representatives, the minority leader of
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1 the House of Representatives, the majority leader of the

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

3 (3) RESTRICTION.—Subsection (b) of section

4 202 of title 39, United States Code, is amended by

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

6 at the end the following:

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

8 section, in the case of the office of the Director the term

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

10 months after the date of enactment of this paragraph—

11 ‘‘(i) such office may not, in the case of any per12 son commencing service after that expiration date,

13 be filled by any person other than an individual cho14 sen from among persons nominated for such office

15 with the unanimous concurrence of all labor organi16 zations described in section 206(a)(1); and

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

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

19 term of any person so appointed to such office shall

20 be 3 years.

21 ‘‘(B) Except as provided in subparagraph (A), an ap22 pointment under this paragraph shall be made in conform23 ance with all provisions of this section that would other24 wise apply.’’.
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1 (c) APPLICABILITY.—Nothing in this section shall af2 fect the tenure of any individual serving as a Commis3 sioner on the Postal Regulatory Commission or a Director

4 of the Board of Directors of the United States Postal

5 Service pursuant to an appointment made before the date

6 of enactment of this Act, or, except as provided in the

7 amendment made by subsection (b)(3), any nomination

8 made before such date of enactment.

9 SEC. 213. APPROPRIATIONS FOR THE COMMISSION.

10 (a) AUTHORIZATION OF APPROPRIATIONS.—Sub11 section (d) of section 3604 of title 39, United States Code,

12 is amended to read as follows:

13 ‘‘(d) There are authorized to be appropriated, out of

14 the Postal Service Fund, such sums as may be necessary

15 for the Postal Regulatory Commission. In requesting an

16 appropriation under this subsection for a fiscal year, the

17 Commission shall prepare and submit to the Congress

18 under section 2009 a budget of the Commission’s ex19 penses, including expenses for facilities, supplies, com20 pensation, and employee benefits.’’.

21 (b) BUDGET PROGRAM.—

22 (1) IN GENERAL.—The next to last sentence of

23 section 2009 of title 39, United States Code, is

24 amended to read as follows: ‘‘The budget program

25 shall also include separate statements of the
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1 amounts which (1) the Postal Service requests to be

2 appropriated under subsections (b) and (c) of section

3 2401, (2) the Office of Inspector General of the

4 United States Postal Service requests to be appro5 priated, out of the Postal Service Fund, under sec6 tion 8G(f) of the Inspector General Act of 1978, and

7 (3) the Postal Regulatory Commission requests to be

8 appropriated, out of the Postal Service Fund, under

9 section 3604(d) of this title.’’.

10 (2) CONFORMING AMENDMENT.—Section

11 2003(e)(1) of title 39, United States Code, is

12 amended by striking the matter before the second

13 sentence and inserting the following:

14 ‘‘(e)(1) The Fund shall be available for the payment

15 of all expenses incurred by the Postal Service in carrying

16 out its functions as provided by law and—

17 ‘‘(A) subject to the availability of amounts ap18 propriated pursuant to section 3604(d), all of the

19 expenses of the Postal Regulatory Commission; and

20 ‘‘(B) subject to the availability of amounts ap21 propriated pursuant to section 8G(f) of the Inspec22 tor General Act of 1978, all of the expenses of the

23 Office of Inspector General.’’.

24 (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, 1999.

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. 214. CHANGE-OF-ADDRESS ORDER INVOLVING A COM11 MERCIAL MAIL RECEIVING AGENCY.

12 (a) IN GENERAL.—Subchapter V of chapter 36 of

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

14 end the following:

15 ‘‘§ 3686. Change-of-address order involving a commer16 cial mail receiving agency

17 ‘‘(a) For the purpose of this section, the term ‘com18 mercial mail receiving agency’ or ‘CMRA’ means a private

19 business that acts as the mail receiving agent for specific

20 clients.

21 ‘‘(b) Upon termination of an agency relationship be22 tween an addressee and a commercial mail receiving

23 agency—
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1 ‘‘(1) the addressee or, if authorized to do so,

2 the CMRA may file a change-of-address order with

3 the Postal Service with respect to such addressee;

4 ‘‘(2) a change-of-address order so filed shall, to

5 the extent practicable, be given full force and effect;

6 and

7 ‘‘(3) any mail for the addressee that is delivered

8 to the CMRA after the filing of an appropriate order

9 under this subsection shall be subject to subsection

10 (c).

11 ‘‘(c) Mail described in subsection (b)(3) shall, if

12 marked for forwarding and remailed by the CMRA, be for13 warded by the Postal Service in the same manner as, and

14 subject to the same terms and conditions (including limita15 tions on the period of time for which a change-of-address

16 order shall be given effect) as apply to, mail forwarded

17 directly by the Postal Service to the addressee.’’.

18 (b) CLERICAL AMENDMENT.—The table of sections

19 at the beginning of chapter 36 of title 39, United States

20 Code, is amended by adding after the item relating to sec21 tion 3685 the following:

‘‘3686. Change-of-address order involving a commercial mail receiving agency.’’.

22 SEC. 215. RATES FOR MAIL UNDER FORMER SECTION 4358.

23 Section 3626 of title 39, United States Code, is

24 amended by adding at the end the following:
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1 ‘‘(n) In the administration of this section, matter that

2 satisfies the circulation standards for requester publica3 tions shall not be excluded from being mailed at the rates

4 for mail under former section 4358 solely because such

5 matter is designed primarily for free circulation or for cir6 culation at nominal rates, or fails to meet the require7 ments of former section 4354(a)(5).’’.

8 TITLE III—GENERAL AUTHORITY

9 SEC. 301. RULEMAKING AUTHORITY.

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

11 States Code, is amended to read as follows:

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

13 and regulations, not inconsistent with this title, as

14 may be necessary in the execution of its functions

15 under this title;’’.

16 SEC. 302. GENERAL DUTIES.

17 Section 403(c) of title 39, United States Code, is

18 amended—

19 (1) by inserting ‘‘domestic or international’’

20 after ‘‘users of the’’; and

21 (2) by striking ‘‘user.’’ and inserting ‘‘user, ex22 cept that this subsection shall not apply to competi23 tive products (as defined in chapter 37).’’.
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1 SEC. 303. EMPLOYMENT OF POSTAL POLICE OFFICERS.

2 Section 404 of title 39, United States Code, is

3 amended by adding at the end the following:

4 ‘‘(c)(1) The Postal Service may employ guards for all

5 buildings and areas owned or occupied by the Postal Serv6 ice or under the charge and control of the Postal Service,

7 and such guards shall have, with respect to such property,

8 the powers of special policemen provided by the first sec9 tion of the Act cited in paragraph (2), and, as to such

10 property, the Postmaster General (or his designee) may

11 take any action that the Administrator of General Services

12 (or his designee) may take under section 2 or 3 of such

13 Act, attaching thereto penalties under the authority and

14 within the limits provided in section 4 of such Act.

15 ‘‘(2) The Act cited in this paragraph is the Act of

16 June 1, 1948 (62 Stat. 281), commonly known as the Pro17 tection of Public Property Act.’’.

18 SEC. 304. DATE OF POSTMARK TO BE TREATED AS DATE OF

19 APPEAL IN CONNECTION WITH THE CLOSING

20 OR CONSOLIDATION OF POST OFFICES.

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

22 States Code, is amended by adding at the end the follow23 ing:

24 ‘‘(6) For purposes of paragraph (5), any appeal re25 ceived by the Commission shall—
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1 ‘‘(A) if sent to the Commission through the

2 mails, be considered to have been received on the

3 date of the Postal Service postmark on the envelope

4 or other cover in which such appeal is mailed; or

5 ‘‘(B) if otherwise lawfully delivered to the Com6 mission, be considered to have been received on the

7 date determined based on any appropriate docu8 mentation or other indicia (as determined under reg9 ulations of the Commission).’’.

10 (b) EFFECTIVE DATE.—This section and the amend11 ments made by this section shall apply with respect to any

12 determination to close or consolidate a post office which

13 is first made available, in accordance with paragraph (3)

14 of section 404(b) of title 39, United States Code, after

15 the end of the 3-month period beginning on the date of

16 enactment of this Act.

17 SEC. 305. UNFAIR COMPETITION PROHIBITED.

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

19 United States Code, is amended by adding after section

20 404 the following:

21 ‘‘§ 404a. Specific limitations

22 ‘‘(a) In providing products and services and in estab23 lishing classifications, rates, and fees under this title, the

24 Postal Service, any corporation established under section

25 2012, and any other entity funded, in whole or in part,
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1 by the Postal Service, shall not, directly or indirectly, ex2 cept as specifically authorized by law—

3 ‘‘(1) provide any postal or nonpostal product or

4 service, with respect to which the Postal Service or

5 any such corporation or entity (as the case may be),

6 precludes competition or otherwise establishes the

7 terms of competition through regulation (including

8 standard-setting), licensing, or policy-setting;

9 ‘‘(2)(A) establish any regulation (including any

10 standard) the effect of which is (or would be) to cre11 ate a monopoly or any competitive advantage for

12 itself, any such corporation or entity, or any other

13 person; or

14 ‘‘(B) enter into any agreement, establish any

15 policy, or take any other action (not covered by sub16 paragraph (A)), the effect of which is (or would be)

17 to create a monopoly or any other unlawful competi18 tive advantage for itself, any such corporation or en19 tity, or any other person;

20 ‘‘(3) regulate competition or engage in any reg21 ulatory or enforcement activity with respect to ac22 tions or practices that are subject to the antitrust

23 laws;

24 ‘‘(4) obtain information from a person that pro25 vides, or seeks to provide, a postal or nonpostal
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1 product or service, and subsequently disclose that in2 formation, or offer any product or service that uses

3 or is based in whole or in part on that information,

4 without the consent of the person providing that in5 formation, unless substantially the same information

6 is obtained from an independent source or is other7 wise obtained by the Postal Service, corporation, or

8 other entity (as the case may be) in a manner not

9 inconsistent with this paragraph; or

10 ‘‘(5) compel the disclosure, transfer, or licens11 ing of intellectual property (such as patents, copy12 rights, trademarks, trade secrets, and proprietary in13 formation).

14 ‘‘(b)(1) For purposes of this section, the term ‘anti15 trust laws’ has the meaning given such term in subsection

16 (a) of the first section of the Clayton Act (15 U.S.C.

17 12(a)), but includes section 5 of the Federal Trade Com18 mission Act (15 U.S.C. 45) to the extent that such section

19 5 applies to unfair methods of competition.

20 ‘‘(2) Nothing in this section shall be construed as lim21 iting the scope or effect of intellectual property rights rec22 ognized under the laws of the United States.

23 ‘‘(c) The Postal Regulatory Commission shall pre24 scribe regulations to carry out the purposes of this sec25 tion.’’.
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1 (b) CLERICAL AMENDMENT.—The table of sections

2 at the beginning of chapter 4 of title 39, United States

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

‘‘404a. Specific limitations.’’.

4 SEC. 306. INTERNATIONAL POSTAL ARRANGEMENTS.

5 (a) INTERNATIONAL POSTAL ARRANGEMENTS.—

6 (1) IN GENERAL.—Section 407 of title 39,

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

8 ‘‘§ 407. International postal arrangements

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

10 ‘‘(1) to promote and encourage communications

11 between peoples by efficient operation of inter12 national postal services and other international deliv13 ery services for cultural, social, and economic pur14 poses;

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

16 undistorted competition in the provision of inter17 national postal services and other international deliv18 ery services, except where provision of such services

19 by private companies may be prohibited by law of

20 the United States;

21 ‘‘(3) to promote and encourage a clear distinc22 tion between governmental and operational respon23 sibilities with respect to the provision of inter24 national postal services and other international deliv25 ery services by the Government of the United States
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1 and by intergovernmental organizations of which the

2 United States is a member; and

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

4 agreements with other countries to accomplish these

5 objectives.

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

7 for formulation, coordination, and oversight of foreign pol8 icy related to international postal services and other inter9 national delivery services, except that the Secretary may

10 not negotiate or conclude any treaty, convention, or other

11 international agreement (including those regulating inter12 national postal services) if such treaty, convention, or

13 agreement would, with respect to any competitive product

14 (as that term is defined in chapter 37), grant an undue

15 or unreasonable preference to the Postal Service, a private

16 provider of international postal or delivery services, or any

17 other person.

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

19 paragraph (1), the Secretary of State shall—

20 ‘‘(A) exercise primary authority for the conduct

21 of foreign policy with respect to international postal

22 services and international delivery services, including

23 the determination of United States positions and the

24 conduct of United States participation in negotia25 tions with foreign governments and international
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1 bodies; in exercising this responsibility, the Secretary

2 shall coordinate with other agencies as appropriate,

3 and in particular, shall give full consideration to the

4 authority vested by law or Executive order in the

5 Postal Regulatory Commission, the Department of

6 Commerce, the Department of Transportation, and

7 the Office of the United States Trade Representative

8 in this area;

9 ‘‘(B) maintain continuing liaison with other ex10 ecutive branch agencies concerned with postal and

11 delivery services;

12 ‘‘(C) maintain continuing liaison with the Com13 mittee on Government Reform and Oversight of the

14 House of Representatives and the Committee on

15 Governmental Affairs of the Senate;

16 ‘‘(D) maintain appropriate liaison with rep17 resentatives of the Postal Service to keep informed

18 of its interests and problems, and to provide such

19 assistance as may be needed to ensure that matters

20 of concern to the Postal Service are promptly consid21 ered by the Department of State or (if applicable,

22 and to the extent practicable) other executive branch

23 agencies;

24 ‘‘(E) maintain appropriate liaison with rep25 resentatives of users and private providers of inter-
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1 national postal services and other international deliv2 ery services to keep informed of their interests and

3 problems, and to provide such assistance as may be

4 needed to ensure that matters of concern are

5 promptly considered by the Department of State or

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

7 executive branch agencies; and

8 ‘‘(F) assist in arranging meetings of such pub9 lic sector advisory groups as may be established to

10 advise the Department of State and other executive

11 branch agencies in connection with international

12 postal services and international delivery services.

13 ‘‘(c) Nothing in this section shall be considered to

14 prevent the Postal Service from entering into such com15 mercial or operational contracts related to providing inter16 national postal services and other international delivery

17 services as it deems appropriate, except that—

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

19 a foreign government (whether under authority of

20 this subsection or otherwise) must be solely contrac21 tual in nature and may not purport to be inter22 national law; and

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

24 Postal Service and an agency of a foreign govern25 ment shall be transmitted to the Secretary of State
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1 and the Postal Regulatory Commission not later

2 than the effective date of such contract.

3 ‘‘(d)(1) With respect to shipments of international

4 mail within the meaning of section 3741 that are exported

5 or imported by the Postal Service—

6 ‘‘(A) the Postal Service shall not tender ex7 ported shipments to governmental authorities of any

8 other country for clearance and importation except

9 in accordance with procedures and laws which are

10 equally applicable to similar shipments transmitted

11 by private companies; and

12 ‘‘(B)(i) subject to clause (ii), the Customs Serv13 ice and other appropriate Federal agencies shall

14 apply the customs laws of the United States and all

15 other laws relating to the importation or exportation

16 of such shipments in the same manner to both ship17 ments by the Postal Service and similar shipments

18 by private companies; and

19 ‘‘(ii) the Customs Service and other Federal

20 agencies shall deny shipments imported by the Post21 al Service from a foreign country access to special

22 customs procedures established in accordance with

23 international postal or customs agreements for ship24 ments by postal authorities of other countries unless

25 that foreign country makes available such special
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1 customs procedures both to shipments to such coun2 try from the United States by the Postal Service and

3 similar shipments to such country from the United

4 States by private companies.

5 ‘‘(2)(A) The provisions of paragraph (1)(B)(i) shall

6 take effect beginning on the date of enactment of this sub7 section.

8 ‘‘(B) The provisions of subparagraphs (A) and (B)(ii)

9 of paragraph (1) shall take effect beginning 5 years after

10 the date of enactment of this subsection.

11 ‘‘(C) The Secretary of State shall, to the maximum

12 extent practicable, take such measures as are within the

13 control of the Secretary—

14 ‘‘(i) to complete the renegotiation of any trea15 ties, conventions, or other international agreements

16 (including those regulating international postal serv17 ices), and

18 ‘‘(ii) to encourage the governments of other

19 countries to make any changes in their laws (consist20 ent with the policies carried out by the provisions re21 ferred to in subparagraph (B)),

22 which may be necessary in order to facilitate the timely

23 implementation of the provisions that are subject to sub24 paragraph (B). The Secretary of State shall consult with
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1 the United States Trade Representative and the Commis2 sioner of Customs in carrying out this subparagraph.

3 ‘‘(3) For purposes of this subsection, the term ‘pri4 vate company’ means a private company substantially

5 owned or controlled by persons who are citizens of the

6 United States.’’.

7 (2) EFFECTIVE DATE.—Notwithstanding para8 graph (1), the authority of the United States Postal

9 Service to establish the rates of postage or other

10 charges on mail matter conveyed between the United

11 States and other countries shall remain available to

12 the Postal Service until the date as of which the

13 baseline rates are determined under section

14 3721(e)(2) of title 39, United States Code (as

15 amended by section 201).

16 (b) TRADE-IN-SERVICES PROGRAM.—The second sen17 tence of paragraph (5) of section 306(a) of the Trade and

18 Tariff Act of 1984 (19 U.S.C. 2114b(5)) is amended by

19 inserting ‘‘postal and delivery services,’’ after ‘‘transpor20 tation,’’.

21 SEC. 307. SUITS BY AND AGAINST THE POSTAL SERVICE.

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

23 States Code, is amended by striking subsections (c)

24 through (e) and inserting the following:
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1 ‘‘(c) For purposes of the Act of July 5, 1946 (com2 monly referred to as the ‘Trademark Act of 1946’ (15

3 U.S.C. 1051 and following)), the Postal Service shall be

4 considered to be a ‘person’, as used in that Act, and shall

5 not be immune under any other doctrine of sovereign im6 munity from suit in Federal court by any person for any

7 violation of that Act by any officer or employee of the

8 Postal Service.

9 ‘‘(d)(1) To the extent that the Postal Service, or

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

11 the Postal Service, engages in conduct with respect to any

12 service which is not reserved to the United States under

13 section 1696 of title 18, the Postal Service or other Fed14 eral agency—

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

16 sovereign immunity from suit in Federal court by

17 any person for any violation of law by such agency

18 or any officer or employee thereof;

19 ‘‘(B) shall not be considered a ‘Federal agency’

20 for purposes of section 1346(b) and chapter 171 of

21 title 28, and shall be liable for actions in tort in the

22 same manner as a private company; and

23 ‘‘(C) shall be considered to be a person (as de24 fined in subsection (a) of the first section of the

25 Clayton Act (15 U.S.C. 12(a)) for purposes of—
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1 ‘‘(i) the antitrust laws (as defined in sub2 section (a) of the first section of the Clayton

3 Act (15 U.S.C. 12(a)); and

4 ‘‘(ii) section 5 of the Federal Trade Com5 mission Act (15 U.S.C. 45) to the extent that

6 such section 5 applies to unfair methods of

7 competition.

8 For purposes of the preceding sentence, any private car9 riage of mail allowable by virtue of section 601 shall not

10 be considered a service reserved to the United States

11 under section 1696 of title 18.

12 ‘‘(2) This subsection shall not apply with respect to

13 conduct occurring before the date of enactment of this

14 subsection.

15 ‘‘(e)(1) Motor vehicles owned or leased by the Postal

16 Service that are primarily and regularly used for the

17 transport or delivery of products in the competitive cat18 egory of mail shall be subject to Federal and State laws

19 and regulations associated with the parking and operation

20 of such motor vehicles, to the same extent and in the same

21 manner as if they were owned or leased by a private com22 pany.

23 ‘‘(2) Any motor vehicle owned or leased by the Postal

24 Service that is primarily and regularly used for the trans25 port or delivery of products in the competitive category
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1 of mail shall be clearly identified as such by appropriate

2 symbol or other marking.

3 ‘‘(3) This subsection shall become effective on the

4 first day of the first ratemaking cycle.

5 ‘‘(4) For purposes of this subsection—

6 ‘‘(A) the terms ‘product in the competitive cat7 egory of mail’ and ‘ratemaking cycle’ have the mean8 ings given them by chapter 37; and

9 ‘‘(B) the term ‘State’ includes the District of

10 Columbia, the Commonwealth of Puerto Rico, and a

11 territory or possession of the United States.

12 ‘‘(f)(1) The Postal Service shall comply with—

13 ‘‘(A) any zoning, planning, and land use regula14 tions applicable to State or local public entities; and

15 ‘‘(B) any building codes applicable to State or

16 local public entities.

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

18 has the meaning given such term by subsection (e).

19 ‘‘(g)(1) The Postal Service shall employ attorneys by

20 contract or otherwise to conduct litigation on its behalf

21 in any litigation arising, in whole or in part, under any

22 of the following:

23 ‘‘(A) Subsection (c), (d), or (e) of section 409

24 (relating to application of certain laws to the Postal

25 Service).
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1 ‘‘(B) Subsection (f) or (g) of section 3604 (re2 lating to administrative subpoenas by the Postal

3 Regulatory Commission).

4 ‘‘(C) Subsection (a) or (b) of section 3628 (re5 lating to appeals from decisions of the Commission

6 and the Directors).

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

17 United States arising out of activities of the Postal Service

18 shall be paid by the Postal Service out of any funds avail19 able to the Postal Service, subject to the restriction speci20 fied in section 2011(f).’’.

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

22 title 39, United States Code, is amended by striking ‘‘Ex23 cept as provided in section 3628 of this title,’’ and insert24 ing ‘‘Except as otherwise provided in this title,’’.
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1 TITLE IV—MISCELLANEOUS

2 PROVISIONS RELATING TO

3 THE BUDGET AND APPRO4 PRIATIONS PROCESS

5 SEC. 401. PROVISIONS RELATING TO BENEFITS UNDER

6 CHAPTER 81 OF TITLE 5, UNITED STATES

7 CODE, FOR OFFICERS AND EMPLOYEES OF

8 THE FORMER POST OFFICE DEPARTMENT.

9 (a) IN GENERAL.—Section 8 of the Postal Reorga10 nization Act (39 U.S.C. 1001 note) is amended by insert11 ing ‘‘(a)’’ after ‘‘8.’’ and by adding at the end the follow12 ing:

13 ‘‘(b) For purposes of chapter 81 of title 5, United

14 States Code, the Postal Service shall, with respect to any

15 individual receiving benefits under such chapter as an offi16 cer or employee of the former Post Office Department,

17 have the same authorities and responsibilities as it has

18 with respect to an officer or employee of the Postal Service

19 receiving such benefits.’’.

20 (b) EFFECTIVE DATE.—This section and the amend21 ments made by this section shall take effect on October

22 1, 1998.

23 SEC. 402. TECHNICAL AND CONFORMING AMENDMENTS.

24 (a) APPROPRIATIONS.—Subsection (e) of section

25 2401 of title 39, United States Code, is amended—
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1 (1) by striking ‘‘Committee on Post Office and

2 Civil Service’’ each place it appears and inserting

3 ‘‘Committee on Government Reform and Oversight’’;

4 (2) by striking ‘‘and the Committees on Appro5 priations of the Senate and the House of Represent6 atives’’; and

7 (3) by striking ‘‘Not later than March 15 of

8 each year,’’ and inserting ‘‘Each year,’’.

9 (b) TECHNICAL CORRECTION.—Sections 2803(a) and

10 2804(a) of title 39, United States Code, are amended by

11 striking ‘‘2401(g)’’ and inserting ‘‘2401(e)’’.

12 TITLE V—PROVISIONS RELAT13 ING TO TRANSPORTATION,

14 CARRIAGE, OR DELIVERY OF

15 MAIL

16 SEC. 501. OBSOLETE PROVISIONS.

17 (a) REPEAL.—Chapter 52 of title 39, United States

18 Code, is repealed.

19 (b) CONFORMING AMENDMENTS.—Section 5005(a)

20 of title 39, United States Code, is amended—

21 (1) by repealing paragraph (1); and

22 (2) in paragraph (4) by striking ‘‘(as defined in

23 section 5201(6) of this title)’’.

24 (c) ELIMINATING RESTRICTION ON LENGTH OF CON25 TRACTS.—(1) Section 5005(b)(1) of title 39, United
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1 States Code, is amended by striking ‘‘(or where the Postal

2 Service determines that special conditions or the use of

3 special equipment warrants, not in excess of 6 years)’’ and

4 inserting ‘‘(or such length of time as may be determined

5 by the Postal Service to be advisable or appropriate)’’.

6 (2) Section 5402(c) of such title 39 is amended by

7 striking ‘‘for a period of not more than 4 years’’.

8 (3) Section 5605 of such title 39 is amended by strik9 ing ‘‘for periods of not in excess of 4 years’’.

10 (d) CLERICAL AMENDMENT.—The table of chapters

11 for part V of title 39, United States Code, is amended

12 by repealing the item relating to chapter 52.

13 SEC. 502. EXPANDED CONTRACTING AUTHORITY.

14 Subsection (d) of section 5402 of title 39, United

15 States Code, is amended to read as follows:

16 ‘‘(d) Notwithstanding the provisions of subsections

17 (a) through (c), the Postal Service may contract for the

18 transportation of mail by aircraft, except as provided in

19 subsections (f) and (g).’’.

20 SEC. 503. PRIVATE CARRIAGE OF LETTERS.

21 (a) REPEAL OF SUSPENSION AUTHORITY.—Sub22 section (b) of section 601 of title 39, United States Code,

23 is repealed.
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1 (b) PRIVATE CARRIAGE.—Section 601 of title 39,

2 United States Code, is amended by striking subsection (a)

3 and inserting the following:

4 ‘‘(a) A letter may be carried out of the mails when—

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

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

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

8 single-piece first-class letter;

‘‘(2) the letter weighs at least 12 1 9 ⁄2 ounces;

10 ‘‘(3) such carriage is within the scope of serv11 ices described by regulations of the United States

12 Postal Service (as in effect on July 1, 1998) that

13 purport to permit private carriage by suspension of

14 the operation of this subsection (as then in effect);

15 or

16 ‘‘(4) the requirements of subsection (b) are

17 met.

18 ‘‘(b) A letter shall be considered to satisfy the re19 quirements of this subsection if—

20 ‘‘(1) it is enclosed in an envelope;

21 ‘‘(2) the amount of postage which would have

22 been charged on the letter if it had been sent by

23 mail is paid by stamps, or postage meter stamps, on

24 the envelope;

25 ‘‘(3) the envelope is properly addressed;
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1 ‘‘(4) the envelope is so sealed that the letter

2 cannot be taken from it without defacing the enve3 lope;

4 ‘‘(5) any stamps on the envelope are canceled in

5 ink by the sender; and

6 ‘‘(6) the date of the letter, of its transmission

7 or receipt by the carrier is endorsed on the envelope

8 in ink.’’.

9 (c) EFFECTIVE DATE.—This section shall take effect

10 as of the first day of the first year beginning on or after

11 the date as of which the baseline rates are determined

12 under section 3721(e)(2).

13 SEC. 504. REPEAL OF SECTION 5403.

14 (a) IN GENERAL.—Section 5403 of title 39, United

15 States Code, is repealed.

16 (b) CLERICAL AMENDMENT.—The table of sections

17 for chapter 54 of title 39, United States Code, is amended

18 by repealing the item relating to section 5403.

19 TITLE VI—STUDIES

20 SEC. 601. EMPLOYEE-MANAGEMENT RELATIONS.

21 (a) INDEPENDENT STUDY REQUIRED.—The Board

22 of Directors shall, by contract, provide for the National

23 Academy of Public Administration to conduct an inde24 pendent study as to how employee-management relations

25 within the United States Postal Service may be improved.
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1 (b) SPECIFIC REQUIREMENTS.—Under the contract,

2 the Academy shall be required—

3 (1) to involve the labor, supervisory, and mana4 gerial organizations of the Postal Service in develop5 ing the design and specific objectives of the study;

6 (2) to consult periodically with representatives

7 of the Postal Service, and of those labor, super8 visory, and managerial organizations, on the

9 progress of the study; and

10 (3) to provide opportunity for those labor, su11 pervisory, and managerial organizations to review

12 and submit written comments on the final report.

13 (c) FINAL REPORT.—

14 (1) IN GENERAL.—The Academy shall, not later

15 than 12 months after the date on which the contract

16 for the study under this section is entered into, sub17 mit its final report to the President, the Congress,

18 the Postal Service, and the labor, supervisory, and

19 managerial organizations of the Postal Service.

20 (2) CONTENTS.—The report shall contain the

21 findings, conclusions, and recommendations of the

22 Academy on all matters required to be addressed by

23 the study, and shall also include all written com24 ments submitted to the Academy under subsection

25 (b)(3).
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1 (d) COOPERATION.—The Board of Directors shall

2 take appropriate measures to ensure that all components

3 of the Postal Service cooperate fully with the Academy in

4 the conduct of its study under this section.

5 (e) DEFINITION.—For purposes of this section, the

6 term ‘‘Board of Directors’’ has the meaning given such

7 term by section 102 of title 39, United States Code (as

8 amended by section 101 of this Act).

9 SEC. 602. RECOMMENDATIONS ON UNIVERSAL POSTAL

10 SERVICES.

11 (a) IN GENERAL.—Chapter 28 of title 39, United

12 States Code, is amended by adding at the end the follow13 ing:

14 ‘‘§ 2806. Universal postal services

15 ‘‘(a)(1) Within 1 month after the date of enactment

16 of this section, the Postal Service shall begin conducting

17 a study the purpose of which shall be to develop rec18 ommendations as to the appropriate scope and standards

19 for universal postal services to be assured by the Govern20 ment of the United States consistent with its obligations

21 under sections 101 and 403.

22 ‘‘(2) The Postal Service shall, within 18 months

23 thereafter, complete its study and submit a written report

24 to the President, the Congress, and the Postal Regulatory
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1 Commission setting forth its recommendations under this

2 section and the reasons therefor.

3 ‘‘(3) The Postal Service shall solicit and include as

4 part of its report the written views and suggestions of any

5 persons who may be affected by or interested in any mat6 ter as to which the study pertains.

7 ‘‘(4) The conduct of the study and the drafting of

8 the report required under this section shall, consistent

9 with section 2805 (relating to inherently Governmental

10 functions), be performed only by employees of the Postal

11 Service.

12 ‘‘(b)(1) The recommendations submitted by the Post13 al Service under this section shall include recommenda14 tions concerning a universal service definition for each

15 class of delivery services the continuous provision of which

16 must, in the view of the Postal Service, be assured in order

17 to fulfill the obligations set out in sections 101 and 403.

18 ‘‘(2) In developing its recommendations under this

19 subsection with respect to any given class of delivery serv20 ices, the Postal Service shall take into consideration the

21 development of new technologies and the evolution of al22 ternative means of meeting the public interest objectives

23 set out in this title.

24 ‘‘(c) Each universal service definition recommended

25 by the Postal Service under this section shall include the
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1 specification of minimum standards of service to be at2 tained, consistent with the following:

3 ‘‘(1) Standards of reliability, speed, frequency,

4 and quality of service shall be established so as to

5 meet the needs of users and consumers of universal

6 services generally.

7 ‘‘(2) Universal services should be available at

8 just, reasonable, and affordable rates sufficient to

9 enable universal services to be provided under best

10 practices of honest, efficient, and economical man11 agement.

12 ‘‘(3) Persons in all regions of the Nation, in13 cluding low-income persons and those located in

14 rural, insular, and high-cost areas, should have ac15 cess to universal postal services that are reasonably

16 comparable to those provided in urban areas and

17 that are available at appropriate rates. As provided

18 in section 101(b), no small post office of the Postal

19 Service shall be closed solely by reason of operating

20 at a deficit.

21 ‘‘(4) In providing universal services, the Postal

22 Service shall not, except as specifically authorized in

23 this title, make any undue or unreasonable discrimi24 nation among users, including other providers of

25 postal services.
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1 ‘‘(5) Universal services shall be maintained

2 without interruption and without abrupt and sub3 stantial changes in rates or quality of service.

4 ‘‘(6) Standards for universal service should

5 avoid distortions in the competition between postal

6 operators and between commercial purchasers of

7 postal services to the extent consistent with fulfilling

8 the obligations set out in sections 101 and 403.

9 ‘‘(7) Universal service definitions for the State

10 of Alaska shall take into account the special condi11 tions and needs of that State.

12 ‘‘(8) Universal services shall be provided con13 sistent with such other principles as the Postal Serv14 ice determines are necessary and appropriate for the

15 protection of the public interest, convenience, and

16 necessity, and the requirements of this title.

17 ‘‘(d) In addition to the principles set out in subsection

18 (c), the Postal Service shall take into account special re19 quirements for certain classes of postal services under this

20 title, including requirements for uniform, reduced, or free

21 rates.’’.

22 (b) CLERICAL AMENDMENT.—The table of sections

23 for chapter 28 of title 39, United States Code, is amended

24 by adding at the end the following:

‘‘2806. Universal postal services.’’.
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1 SEC. 603. STUDY ON EQUAL APPLICATION OF LAWS TO

2 COMPETITIVE PRODUCTS.

3 (a) IN GENERAL.—The Department of Justice shall

4 prepare and submit to the President and Congress, within

5 1 year after the date of enactment of this Act, a com6 prehensive report identifying Federal and State laws that

7 apply differently to products of the United States Postal

8 Service in the competitive category of mail (as that term

9 is defined in chapter 37 of title 39, United States Code,

10 as amended by this Act) and similar products provided

11 by private companies.

12 (b) RECOMMENDATIONS.—The Department of Jus13 tice shall include such recommendations as it considers ap14 propriate for bringing such legal discrimination to an end.

15 (c) CONSULTATION.—In preparing its report, the De16 partment of Justice shall consult with the United States

17 Postal Service, the Postal Regulatory Commission, other

18 Federal agencies, mailers, private companies that provide

19 delivery services, and the general public, and shall append

20 to such report any written comments received under this

21 subsection.

22 SEC. 604. GREATER DIVERSITY IN POSTAL SERVICE EXECU23 TIVE AND ADMINISTRATIVE SCHEDULE MAN24 AGEMENT POSITIONS.

25 (a) STUDY.—The Board of Directors shall study and,

26 within 1 year after the date of enactment of this Act, sub-
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1 mit to the President and Congress a report concerning the

2 extent to which women and minorities are represented in

3 supervisory and management positions within the United

4 States Postal Service. Any data included in the report

5 shall be presented in the aggregate and by pay level.

6 (b) PERFORMANCE EVALUATIONS.—The United

7 States Postal Service shall, as soon as practicable, take

8 such measures as may be necessary to ensure that, for

9 purposes of conducting performance appraisals of super10 visory or managerial employees, appropriate consideration

11 shall be given to meeting affirmative action goals, achiev12 ing equal employment opportunity requirements, and im13 plementation of plans designed to achieve greater diversity

14 in the workforce.

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

16 term ‘‘Board of Directors’’ has the meaning given such

17 term by section 102 of title 39, United States Code (as

18 amended by section 101 of this Act).

19 SEC. 605. PLAN FOR ASSISTING DISPLACED WORKERS.

20 (a) PLAN.—The United States Postal Service shall,

21 before the deadline specified in subsection (b), develop and

22 be prepared to implement, whenever necessary, a com23 prehensive plan under which reemployment assistance

24 shall be afforded to employees displaced as a result of the

25 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 enactment of this Act, the United States Postal Service

3 shall submit to its Board of Directors (within the meaning

4 of section 102 of title 39, United States Code, as amended

5 by section 101 of this Act) and Congress a written report

6 describing its plan under this section.

7 SEC. 606. CONTRACTS WITH WOMEN, MINORITIES, AND

8 SMALL BUSINESSES.

9 The Board of Directors of the United States Postal

10 Service shall study and, within 1 year after the date of

11 enactment of this Act, submit to the President and the

12 Congress a report concerning the number and value of

13 contracts and subcontracts the Postal Service has entered

14 into with women, minorities, and small businesses.

15 TITLE VII—INSPECTORS

16 GENERAL

17 SEC. 701. INSPECTOR GENERAL OF THE POSTAL REGU18 LATORY COMMISSION.

19 (a) IN GENERAL.—Paragraph (2) of section 8G(a)

20 of the Inspector General Act of 1978 is amended by insert21 ing ‘‘the Postal Regulatory Commission,’’ after ‘‘the

22 United States International Trade Commission,’’.

23 (b) ADMINISTRATION.—Section 3604 of title 39,

24 United States Code, is amended by adding after sub25 section (g) (as added by section 211) the following:
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1 ‘‘(h)(1) Notwithstanding any other provision of this

2 title or of the Inspector General Act of 1978, the authority

3 to select, appoint, and employ officers and employees of

4 the Office of Inspector General of the Postal Regulatory

5 Commission, and to obtain any temporary or intermittent

6 services of experts or consultants (or an organization of

7 experts or consultants) for such Office, shall reside with

8 the Inspector General of the Postal Regulatory Commis9 sion.

10 ‘‘(2) Except as provided in paragraph (1), any exer11 cise of authority under this subsection shall, to the extent

12 practicable, be in conformance with the applicable laws

13 and regulations that govern selections, appointments and

14 employment, and the obtaining of any such temporary or

15 intermittent services, within the Postal Regulatory Com16 mission.’’.

17 (c) DEADLINE.—No later than 180 days after the

18 date of enactment of this Act—

19 (1) the first Inspector General of the Postal

20 Regulatory Commission shall be appointed; and

21 (2) the Office of Inspector General of the Post22 al Regulatory Commission shall be established.
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1 SEC. 702. INSPECTOR GENERAL OF THE UNITED STATES

2 POSTAL SERVICE TO BE APPOINTED BY THE

3 PRESIDENT.

4 (a) DEFINITIONAL AMENDMENTS TO THE INSPEC5 TOR GENERAL ACT OF 1978.—Section 11 of the Inspector

6 General Act of 1978 is amended—

7 (1) in paragraph (1)—

8 (A) by striking ‘‘and’’ before ‘‘the chief ex9 ecutive officer of the Resolution Trust Corpora10 tion’’;

11 (B) by striking ‘‘and’’ before ‘‘the Chair12 person of the Federal Deposit Insurance Cor13 poration’’;

14 (C) by striking ‘‘or’’ before ‘‘the Commis15 sioner of Social Security, Social Security Ad16 ministration’’; and

17 (D) by inserting ‘‘or the Postmaster Gen18 eral and Chief Executive Officer of the United

19 States Postal Service;’’ after ‘‘Social Security

20 Administration;’’; and

21 (2) in paragraph (2)—

22 (A) by striking ‘‘or’’ before ‘‘the Veterans’

23 Administration’’;

24 (B) by striking ‘‘or’’ before ‘‘the Social Se25 curity Administration’’; and
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1 (C) by inserting ‘‘or the United States

2 Postal Service;’’ after ‘‘Social Security Adminis3 tration;’’.

4 (b) SPECIAL PROVISIONS CONCERNING THE UNITED

5 STATES POSTAL SERVICE.—

6 (1) IN GENERAL.—The Inspector General Act

7 of 1978 is amended—

8 (A) by redesignating sections 8G (as

9 amended by section 701(a)) and 8H as sections

10 8H and 8I, respectively; and

11 (B) by inserting after section 8F the fol12 lowing:

13 ‘‘SPECIAL PROVISIONS CONCERNING THE UNITED STATES

14 POSTAL SERVICE

15 ‘‘SEC. 8G. (a) Notwithstanding the last two sentences

16 of section 3(a), the Inspector General of the United States

17 Postal Service shall report to and be under the general

18 supervision of the Postmaster General, but shall not re19 port to, or be subject to supervision by, any other officer

20 or employee of the United States Postal Service or its

21 Board of Directors. No such officer or employee (including

22 the Postmaster General) or member of such Board shall

23 prevent or prohibit the Inspector General from initiating,

24 carrying out, or completing any audit or investigation, or

25 from issuing any subpoena during the course of any audit

26 or investigation.
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1 ‘‘(b) In carrying out the duties and responsibilities

2 specified in this Act, the Inspector General of the United

3 States Postal Service shall have oversight responsibility

4 for all activities of the Postal Inspection Service, including

5 any internal investigation performed by the Postal Inspec6 tion Service. The Chief Postal Inspector shall promptly re7 port the significant activities being carried out by the

8 Postal Inspection Service to such Inspector General.

9 ‘‘(c) Any report required to be transmitted by the

10 Postmaster General to the appropriate committees or sub11 committees of the Congress under section 5(d) shall also

12 be transmitted, within the 7-day period specified under

13 such section, to the Committee on Government Reform

14 and Oversight of the House of Representatives and the

15 Committee on Governmental Affairs of the Senate.

16 ‘‘(d) Notwithstanding any provision of paragraph (7)

17 or (8) of section 6(a), the Inspector General of the United

18 States Postal Service may select, appoint, and employ

19 such officers and employees as may be necessary for carry20 ing out the functions, powers and duties of the Office of

21 Inspector General and to obtain the temporary or inter22 mittent services of experts or consultants or an organiza23 tion of experts or consultants, subject to the applicable

24 laws and regulations that govern such selections, appoint-
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1 ments, and employment, and the obtaining of such serv2 ices, within the United States Postal Service.

3 ‘‘(e) Nothing in this Act shall restrict, eliminate, or

4 otherwise adversely affect any of the rights, privileges, or

5 benefits of employees of the United States Postal Service,

6 or labor organizations representing employees of the

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

8 United States Code, the National Labor Relations Act,

9 any handbook or manual affecting employee labor rela10 tions with the United States Postal Service, or any collec11 tive bargaining agreement.

12 ‘‘(f) There are authorized to be appropriated, out of

13 the Postal Service Fund, such sums as may be necessary

14 for the Office of Inspector General of the United States

15 Postal Service.

16 ‘‘(g) As used in this section, ‘Postmaster General’,

17 ‘Board of Directors’, and ‘Board’ each has the meaning

18 given it by section 102 of title 39, United States Code.’’.

19 (2) RELATED PROVISIONS.—

For certain related provisions, see section 213(b).

20 (c) AUDITS OF THE POSTAL SERVICE.—

21 (1) AUDITS.—Subsection (e) of section 2008 of

22 title 39, United States Code, is amended to read as

23 follows:

24 ‘‘(e)(1) At least once each year beginning with the

25 fiscal year commencing after the date of enactment of the
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1 Postal Modernization Act of 1999, the financial state2 ments of the Postal Service (including those used in deter3 mining and establishing postal rates) shall be audited by

4 the Inspector General or by an independent external audi5 tor selected by the Inspector General.

6 ‘‘(2) Audits under this section shall be conducted in

7 accordance with applicable generally accepted government

8 auditing standards.

9 ‘‘(3) Upon completion of the audit required by this

10 subsection, the person who audits the statement shall sub11 mit a report on the audit to the Postmaster General.’’.

12 (2) RESULTS OF INSPECTOR GENERAL’S AUDIT

13 TO BE INCLUDED IN ANNUAL REPORT.—Section

14 2402 of title 39, United States Code, is amended by

15 inserting after the first sentence the following:

16 ‘‘Each report under this section shall include, for the

17 most recent fiscal year for which a report under sec18 tion 2008(e) is available (unless previously transmit19 ted under the following sentence), a copy of such re20 port.’’.

21 (3) COORDINATION PROVISIONS.—Subsection

22 (d) of section 2008 of title 39, United States Code,

23 is amended—
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1 (A) by striking ‘‘(d) Nothing’’ and insert2 ing ‘‘(d)(1) Except as provided in paragraph

3 (2), nothing’’; and

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

5 ‘‘(2) An audit or report under paragraph (1) may not

6 be obtained without the prior written approval of the In7 spector General.’’.

8 (4) SAVINGS PROVISION.—For purposes of any

9 fiscal year preceding the first fiscal year commenc10 ing after the date of enactment of this Act, the pro11 visions of title 39, United States Code, shall be ap12 plied as if the amendments made by this subsection

13 had never been enacted.

14 (d) REPORTS.—

15 (1) IN GENERAL.—Section 3013 of title 39,

16 United States Code, is amended—

17 (A) in the first sentence by striking ‘‘Post18 master General’’ and inserting ‘‘Chief Postal

19 Inspector’’;

20 (B) by striking ‘‘Board’’ each place it ap21 pears and inserting ‘‘Inspector General’’;

22 (C) in the third sentence by striking ‘‘Each

23 such report shall be submitted within sixty days

24 after the close of the reporting period involved’’

25 and inserting ‘‘Each such report shall be sub-
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1 mitted within 1 month (or such shorter length

2 of time as the Inspector General may specify)

3 after the close of the reporting period involved’’;

4 and

5 (D) by striking the last sentence and in6 serting the following:

7 ‘‘The information in a report submitted under this section

8 to the Inspector General with respect to a reporting period

9 shall be included as part of the semiannual report pre10 pared by the Inspector General under section 5 of the In11 spector General Act of 1978 for the same reporting period.

12 Nothing in this section shall be considered to permit or

13 require that any report by the Chief Postal Inspector

14 under this section include any information relating to ac15 tivities of the Inspector General.’’.

16 (2) EFFECTIVE DATE.—This subsection shall

17 take effect on the first day of the first semiannual

18 reporting period beginning on or after the date of

19 enactment of this Act and shall apply with respect

20 to semiannual reporting periods beginning on or

21 after the effective date of this subsection.

22 (3) SAVINGS PROVISION.—For purposes of any

23 semiannual reporting period preceding the first

24 semiannual reporting period referred to in para25 graph (2), the provisions of title 39, United States
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1 Code, shall continue to apply as if the amendments

2 made by this subsection had not been enacted.

3 (e) TECHNICAL AND CONFORMING AMENDMENTS.—

4 (1) RELATING TO THE INSPECTOR GENERAL

5 ACT OF 1978.—(A) Subsection (a) of section 8H of

6 the Inspector General Act of 1978 (as amended by

7 section 701 and redesignated by subsection (b) of

8 this section) is further amended—

9 (i) in paragraph (2) by striking ‘‘the Post10 al Regulatory Commission, and the United

11 States Postal Service;’’ and inserting ‘‘and the

12 Postal Regulatory Commission;’’ and

13 (ii) in paragraph (4) by striking ‘‘except

14 that’’ and all that follows through ‘‘Code);’’ and

15 inserting ‘‘except that, with respect to the Na16 tional Science Foundation, such term means the

17 National Science Board;’’.

18 (B)(i) Subsection (f) of section 8H of such Act

19 (as so redesignated) is repealed.

20 (ii) Subsection (c) of section 8H of such

21 Act (as so redesignated) is amended by striking

22 ‘‘Except as provided under subsection (f) of this

23 section, the’’ and inserting ‘‘The’’.
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1 (2) RELATING TO TITLE 39, UNITED STATES

2 CODE.—(A) Subsection (e) of section 202 of title 39,

3 United States Code, is repealed.

4 (B) Paragraph (4) of section 102 of such title

5 39, as amended by sections 102(a) and 205(a) of

6 this Act, is amended to read as follows:

7 ‘‘(4) ‘Inspector General’ means the Inspector

8 General of the United States Postal Service, ap9 pointed under section 3(a) of the Inspector General

10 Act of 1978;’’.

11 (C) The first sentence of section 1003(a) of

12 such title 39 is amended by striking ‘‘chapters 2 and

13 12 of this title, section 8G of the Inspector General

14 Act of 1978, or other provision of law,’’ and insert15 ing ‘‘chapter 2 or 12 of this title, subsection (b) or

16 (c) of section 1003 of this title, or any other provi17 sion of law,’’.

18 (D) Subsection (b) of section 1003 of such title

19 39 is amended by striking ‘‘respective’’ and inserting

20 ‘‘other’’.

21 (E) Subsection (c) of section 1003 of such title

22 39 is amended by striking ‘‘included’’ and inserting

23 ‘‘includes’’.

24 (f) EFFECTIVE DATE; ELIGIBILITY OF PRIOR IN25 SPECTOR GENERAL.—
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1 (1) EFFECTIVE DATE.—

2 (A) IN GENERAL.—Except as provided in

3 subparagraph (B) or in subsection (c) or (d),

4 this section and the amendments made by this

5 section shall take effect on the date of enact6 ment of this Act.

7 (B) SPECIAL RULES.—

8 (i) IN GENERAL.—Except as provided

9 in clause (ii), if the position of Inspector

10 General of the United States Postal Serv11 ice is occupied on the date of enactment of

12 this Act (other than by an individual serv13 ing due to a vacancy arising in that posi14 tion before the expiration of his or her

15 predecessor’s term), then, until January 5,

16 2004, or, if earlier, the date on which such

17 individual ceases to serve in that position,

18 title 39, United States Code, shall be ap19 plied as if the amendments made by this

20 section had not been enacted.

21 (ii) AUTHORIZATION OF APPROPRIA22 TIONS.—

23 (I) IN GENERAL.—Notwithstand24 ing any other provision of this para25 graph, subsection (f) of section 8G of
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1 the Inspector General Act of 1978 (as

2 amended by this section) shall be ef3 fective for purposes of fiscal years be4 ginning on or after October 1, 1999.

5 (II) SAVINGS PROVISION.—For

6 purposes of the fiscal year ending on

7 September 30, 1999, funding for the

8 Office of Inspector General of the

9 United States Postal Service shall be

10 made available in the same manner as

11 if this Act had never been enacted.

12 (2) ELIGIBILITY OF PRIOR INSPECTOR GEN13 ERAL.—Nothing in this Act shall prevent any indi14 vidual who has served as Inspector General of the

15 United States Postal Service at any time before the

16 date of enactment of this Act from being appointed

17 to that position pursuant to the amendments made

18 by this section.

19 TITLE VIII—LAW ENFORCEMENT

20 Subtitle A—Amendments to

21 Title 39, United States Code

22 SEC. 801. MAKE FEDERAL ASSAULT STATUTES APPLICABLE

23 TO POSTAL CONTRACT EMPLOYEES.

24 Section 1008 of title 39, United States Code, is

25 amended—
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1 (1) in subsection (a) by inserting ‘‘or entrusted

2 with mail under contract with the Postal Service’’

3 after ‘‘mail’’; and

4 (2) in subsection (b) by inserting ‘‘an employee

5 of the Postal Service for the purposes of sections

6 111 and 1114 of title 18, and’’ after ‘‘deemed’’.

7 SEC. 802. SEXUALLY ORIENTED ADVERTISING.

8 (a) CIVIL PENALTY.—Section 3011 of title 39,

9 United States Code, is amended—

10 (1) by redesignating subsections (b) through (e)

11 as subsections (c) through (f), respectively; and

12 (2) by inserting after subsection (a) the follow13 ing:

14 ‘‘(b)(1) Upon a finding by the court that a sexually

15 oriented advertisement has been mailed in violation of sec16 tion 3010(b), the court may assess, on whoever made the

17 mailing or caused it to be made, a civil penalty of not

18 less than $500 and not more than $1,500 for each viola19 tion. Each piece of mail sent in violation of section

20 3010(b) shall constitute a separate violation.

21 ‘‘(2) For purposes of this subsection—

22 ‘‘(A) receipt of a sexually oriented advertise23 ment after the recipient’s name and address have

24 been listed (as described in section 3010(b)) for at

25 least 60 days shall create a rebuttable presumption
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1 that such advertisement was mailed more than 30

2 days after that individual’s name and address be3 came so listed; and

4 ‘‘(B) receipt in the mail of a sexually oriented

5 advertisement addressed to ‘Occupant’ or ‘Resident’

6 (or any other term permitted by Postal Service

7 standards on simplified addressing) at the recipient’s

8 address, or which is specifically addressed to the re9 cipient, but with an inconsequential error or vari10 ation in the recipient’s name or address, shall, for

11 purposes of applying the mailing prohibition of sec12 tion 3010(b), create a rebuttable presumption that

13 such advertisement was mailed to such recipient.

14 ‘‘(3) Any penalty assessed under paragraph (1) shall

15 be paid to the Postal Service for deposit in the Postal

16 Service Fund established by section 2003.’’.

17 (b) REPEAL.—

18 (1) IN GENERAL.—Section 3008 of title 39,

19 United States Code, and the item relating to such

20 section in the table of sections at the beginning of

21 chapter 30 of such title, are repealed.

22 (2) CONFORMING AMENDMENTS.—(A) Sub23 section (f) of section 3011 of such title 39 (as so re24 designated by subsection (a)) is amended by striking
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1 ‘‘section 3006, 3007, or 3008’’ and inserting ‘‘sec2 tion 3006 or 3007’’.

3 (B) Section 1737 of title 18, United States

4 Code, is amended—

5 (i) in subsection (a) by striking ‘‘3008 or’’;

6 and

7 (ii) in subsection (b) by striking ‘‘3008(a)

8 or’’.

9 (c) EFFECTIVE DATE.—This section and the amend10 ments made by this section shall take effect 90 days after

11 the date of the enactment of this Act. The amendments

12 made by this section shall be treated as if they had never

13 been enacted for purposes of any mailing made or caused

14 to be made before this section takes effect.

15 SEC. 803. ALLOW POSTAL SERVICE TO RETAIN ASSET FOR16 FEITURE RECOVERIES.

17 Paragraph (7) of section 2003(b) of title 39, United

18 States Code, is amended to read as follows:

19 ‘‘(7) amounts (including proceeds from the sale

20 of forfeited items) from any civil forfeiture con21 ducted by the Postal Service and from any forfeiture

22 resulting from an investigation in which the Postal

23 Service has primary responsibility, except that noth24 ing in this paragraph shall preclude the Postal Serv25 ice, on such terms as it may determine, from sharing
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1 such amounts with any Federal, State, or local law

2 enforcement agency which participated in any of the

3 acts which led to the seizure or forfeiture of the

4 property; and’’.

5 SEC. 804. HAZARDOUS MATTER.

6 (a) CIVIL PENALTY.—Chapter 30 of title 39, United

7 States Code, is amended by adding at the end the follow8 ing:

9 ‘‘§ 3016. Civil penalty for prohibited mailing and defi10 cient packaging of hazardous matter

11 ‘‘(a) For the purposes of this section—

12 ‘‘(1) the term ‘parcel’ includes any kind of

13 package, envelope, container, or other piece of mail;

14 ‘‘(2) the term ‘manner’ includes the preparation

15 and packaging of a piece of mail;

16 ‘‘(3) a person shall be considered to have acted

17 knowingly if—

18 ‘‘(A) such person had actual knowledge of

19 the facts giving rise to the violation; or

20 ‘‘(B) a reasonable person acting in the

21 same circumstances and exercising due care

22 would have had such knowledge; and

23 ‘‘(4) the term ‘hazardous matter’ has the mean24 ing given such term by section 1716 of title 18.

25 ‘‘(b) Any person—
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1 ‘‘(1) who knowingly mails or causes to be

2 mailed any parcel, the contents of which constitute

3 or include any hazardous matter which has been de4 clared by statute or Postal Service regulation to be

5 nonmailable under any circumstances;

6 ‘‘(2) who knowingly mails or causes to be

7 mailed a parcel in violation of any statute or Postal

8 Service regulation restricting the time, place, or

9 manner in which hazardous matter may be mailed;

10 or

11 ‘‘(3) who knowingly manufactures, distributes,

12 or sells any container, packaging kit, or similar de13 vice that—

14 ‘‘(A) is represented, marked, certified, or

15 sold by such person for use in the mailing of

16 any hazardous matter; and

17 ‘‘(B) fails to conform with any statute or

18 Postal Service regulation setting forth stand19 ards for containers, packaging kits, or similar

20 devices used for the mailing of hazardous mat21 ter;

22 shall be liable to the Postal Service for a civil penalty in

23 an amount not to exceed $25,000 per violation.

24 ‘‘(c) The Postal Service may enforce this section by

25 commencing a civil action in accordance with section
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1 409(d). The action may be brought in the district court

2 of the United States for the district in which the defend3 ant resides or any district in which the defendant conducts

4 business or in which a violation of this section was discov5 ered.

6 ‘‘(d) In determining the amount of any civil penalty

7 to be assessed under this section, the district court—

8 ‘‘(1) shall treat as a separate violation—

9 ‘‘(A) each parcel mailed or caused to be

10 mailed as described in paragraph (1) or (2) of

11 subsection (b); and

12 ‘‘(B) each container, packaging kit, or

13 similar device manufactured, distributed, or

14 sold as described in subsection (b)(3); and

15 ‘‘(2) shall take into account—

16 ‘‘(A) the nature, circumstances, extent,

17 and gravity of each violation committed; and

18 ‘‘(B) with respect to the person found to

19 have committed such violation, the degree of

20 culpability, any history of prior offenses, ability

21 to pay, effect on ability to continue to do busi22 ness, and such other matters as justice may re23 quire.
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1 ‘‘(e) All penalties collected under authority of this

2 section shall be paid into the Postal Service Fund estab3 lished by section 2003.’’.

4 (b) CLERICAL AMENDMENT.—The table of sections

5 at the beginning of chapter 30 of title 39, United States

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

‘‘3016. Civil penalty for prohibited mailing and deficient packaging of hazardous

matter.’’.

7 Subtitle B—Other Provisions

8 SEC. 811. STALKING FEDERAL OFFICERS AND EMPLOYEES.

9 (a) IN GENERAL.—Chapter 41 of title 18, United

10 States Code, is amended by adding at the end the follow11 ing:

12 ‘‘§ 881. Stalking Federal and postal officers and em13 ployees

14 ‘‘(a) Whoever—

15 ‘‘(1) repeatedly engages in conduct (including

16 maintaining a visual or physical proximity or com17 municating a verbal or written threat) directed at

18 another person who is or was an officer or

19 employee—

20 ‘‘(A) in the executive, legislative, or judicial

21 branch of the Federal Government; or

22 ‘‘(B) in the United States Postal Service;

23 while such other person is engaged in official duties

24 or on account of such duties;
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1 ‘‘(2) knows that such conduct is likely to place

2 that other person in reasonable fear of sexual bat3 tery, bodily injury, or death; and

4 ‘‘(3) thereby induces such fear in that other

5 person;

6 shall be punished as provided in subsection (b) of this sec7 tion.

8 ‘‘(b)(1) The punishment for an offense under sub9 section (a) is—

10 ‘‘(A) in the case of a first conviction under such

11 subsection—

12 ‘‘(i) if, during the commission of the of13 fense, the offender uses a deadly or dangerous

14 weapon, a fine under this title or imprisonment

15 for not more than 10 years, or both;

16 ‘‘(ii) if the offense violates a protective

17 order, a fine under this title or imprisonment

18 for not more than 5 years, or both; and

19 ‘‘(iii) in any other case, a fine under this

20 title or imprisonment for not more than 3

21 years, or both; and

22 ‘‘(B) in the case of a second or subsequent con23 viction under such subsection, a fine under this title

24 or imprisonment for not more than 15 years, or

25 both.
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1 ‘‘(2) If a sentence of probation is imposed for an of2 fense under this section, the court shall require the de3 fendant to undergo appropriate psychiatric, psychological,

4 or social counselling.

5 ‘‘(c)(1) Whoever is aggrieved by a violation of this

6 section may, in a civil action, obtain appropriate relief

7 from the person engaging in that violation. Such relief

8 may include compensatory and punitive damages, and in9 junctive or declaratory relief, and shall include reasonable

10 attorney’s fees.

11 ‘‘(2) If—

12 ‘‘(A) the court issues an injunction under this

13 subsection;

14 ‘‘(B) the person against whom the injunction is

15 issued is an officer or employee in the executive

16 branch of the Federal Government or in the United

17 States Postal Service; and

18 ‘‘(C) there is a nexus between the enjoined con19 duct and such person’s office or employment;

20 the court may order that the person be suspended or sum21 marily discharged from such office or employment.

22 ‘‘(d) As used in this section, the term ‘protective

23 order’ means any court order that requires an individual—

24 ‘‘(1) to refrain from behavior prohibited by sub25 section (a); or
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1 ‘‘(2) to refrain from contact with the person

2 who subsequently is a victim of the offense under

3 such subsection that is committed by that individ4 ual.’’.

5 (b) CLERICAL AMENDMENT.—The table of sections

6 at the beginning of chapter 41 of title 18, United States

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

‘‘881. Stalking Federal and postal officers and employees.’’.

8 SEC. 812. NONMAILABILITY OF CONTROLLED SUBSTANCES.

9 Section 1716 of title 18, United States Code, is

10 amended by adding at the end the following:

11 ‘‘Whoever knowingly deposits for mailing or delivery,

12 or knowingly causes to be delivered by mail, according to

13 the direction thereon, or at any place at which it is di14 rected to be delivered by the person to whom it is ad15 dressed, unless in accordance with the rules and regula16 tions authorized to be prescribed by the Postal Service,

17 any controlled substance, as that term is defined for the

18 purposes of the Controlled Substances Act, shall, if the

19 distribution of a like amount of such substance is a felony

20 under such Act, be fined under this title or imprisoned

21 not more than 5 years, or both.’’.

22 SEC. 813. ENHANCED PENALTIES.

23 Pursuant to its authority under section 994 of title

24 28, United States Code, the United States Sentencing

25 Commission shall amend its sentencing guidelines to—
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1 (1) appropriately enhance penalties in cases in

2 which a defendant is convicted of stealing or de3 stroying a quantity of undelivered United States

4 mail, in violation of sections 1702, 1703, 1708,

5 1709, 2114, or 2115 of title 18, United States Code;

6 and

7 (2) establish that the intended loss in a theft of

8 an access device as defined in section 1029(e)(1) of

9 title 18, United States Code, shall be based on the

10 credit line of the access device or the actual unau11 thorized charges, whichever amount is greater.

12 SEC. 814. POSTAL BURGLARY PROVISIONS.

13 (a) LARCENY INVOLVING POST OFFICE BOXES AND

14 POSTAL STAMP VENDING MACHINES.—Section 2115 of

15 title 18, United States Code, is amended—

16 (1) by striking ‘‘or’’ before ‘‘any building’’;

17 (2) by inserting ‘‘or any post office box or post18 al products vending machine,’’ after ‘‘used in whole

19 or in part as a post office,’’; and

20 (3) by inserting ‘‘or in such box or machine,’’

21 after ‘‘so used’’.

22 (b) RECEIPT, POSSESSION, CONCEALMENT, OR DIS23 POSITION OF PROPERTY.—Section 2115 of title 18,

24 United States Code, is amended—

25 (1) by inserting ‘‘(a)’’ before ‘‘Whoever’’; and
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1 (2) by adding at the end the following:

2 ‘‘(b) Whoever receives, possesses, conceals, or dis3 poses of any mail matter, money, or other property of the

4 United States, that has been obtained in violation of this

5 section, knowing the same to have been unlawfully ob6 tained, shall be fined under this title or imprisoned not

7 more than 5 years, or both.’’.

8 SEC. 815. MAIL, MONEY, OR OTHER PROPERTY OF THE

9 UNITED STATES.

10 (a) ENHANCED PENALTY FOR ROBBERY.—Sub11 section (a) of section 2114 of title 18, United States Code,

12 is amended to read as follows:

13 ‘‘(a) ASSAULT.—Whoever assaults any person having

14 lawful charge, control, or custody of any mail matter or

15 of any money or other property of the United States, with

16 intent to rob, steal, or purloin such mail matter, money,

17 or other property of the United States, or robs or attempts

18 to rob any such person of mail matter, or of any money,

19 or other property of the United States, shall, for the first

20 offense, be imprisoned not more than 10 years or fined

21 under this title, or both. If, in effecting or attempting to

22 effect such robbery the defendant wounds the person hav23 ing custody of such mail, money, or other property of the

24 United States, or puts that person’s life in jeopardy by

25 the use of a dangerous weapon, or the offense is a subse-
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1 quent offense under this subsection, the defendant shall

2 be imprisoned not more than 25 years or fined under this

3 title, or both. If the death of any person results from the

4 offense under this subsection, the defendant shall be pun5 ished by death or life imprisonment.’’.

6 (b) ATTEMPT OFFENSES.—

7 (1) The second paragraph of section 501 of title

8 18, United States Code, is amended by striking

9 ‘‘uses or sells,’’ and inserting ‘‘uses or sells or at10 tempts to use or sell,’’.

11 (2) Section 1711 of title 18, United States

12 Code, is amended by inserting ‘‘attempts to loan,

13 use, pledge, hypothecate, or convert to this own

14 use,’’ after ‘‘converts to his own use,’’.

Æ