```

[Congressional Bills 113th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4174 Introduced in House (IH)]

113th CONGRESS
  2d Session
                                H. R. 4174

To amend title 39, United States Code, to modernize and improve Alaska 
                  bypass freight mail transportation.

_______________________________________________________________________

                    IN THE HOUSE OF REPRESENTATIVES

                             March 6, 2014

  Mr. Issa (for himself and Mr. Farenthold) introduced the following 
 bill; which was referred to the Committee on Oversight and Government 
                                 Reform

_______________________________________________________________________

                                 A BILL

 
To amend title 39, United States Code, to modernize and improve Alaska 
                  bypass freight mail transportation.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Alaska Bypass Modernization Act of 
2014''.

SEC. 2. ALASKA BYPASS MAIL TRANSPORTATION.

    (a) In General.--Section 5402 of title 39, United States Code, is 
amended--
            (1) in the section heading by striking ``Contracts for 
        transportation of mail by air'' and inserting ``Alaska bypass 
        mail transportation'';
            (2) in subsection (a)--
                    (A) by striking paragraphs (2), (7), and (9); and
                    (B) by redesignating paragraphs (3), (4), (5), (6), 
                (8), (10), (11), (12), (13), (14), (15), (16), (17), 
                (18), (19), (20), (21), (22), (23), (24), and (25) as 
                paragraphs (2) through (22), respectively;
            (3) by striking subsections (b) through (f);
            (4) by redesignating subsections (g) through (s) as 
        subsections (c) through (o), respectively;
            (5) by inserting after subsection (a) the following:
    ``(b) Efficient Transport of Alaska Bypass Mail.--In selecting a 
carrier of nonpriority bypass mail to a point in the State of Alaska, 
the Postal Service shall--
            ``(1) ensure a minimum of 1 scheduled flight per week to 
        each nonpriority bypass mail destination with guaranteed 
        capacity for nonpriority bypass mail, subject to the condition 
        that weather conditions, lack of available service, or other 
        extraordinary circumstances do not interfere with the 
        fulfillment of this minimum requirement; and
            ``(2) ensure that any flight that transports nonpriority 
        bypass mail to a nonpriority bypass mail destination and is in 
        addition to the minimum flights required under paragraph (1)--
                    ``(A) is necessary to the delivery of nonpriority 
                bypass mail; and
                    ``(B) maximizes the cost efficiency to the Postal 
                Service.'';
            (6) in subsection (c)(2) (as redesignated by paragraph (4) 
        of this subsection)--
                    (A) in subparagraph (E) by striking ``(E)(i)'' and 
                all that follows through the end of clause (i) and 
                inserting the following:
            ``(E)(i) may offer tender of nonpriority mainline bypass 
        mail at mainline rates to a bush carrier operating from an 
        acceptance point to a hub point in the State of Alaska, in 
        addition to the terms of subparagraph (C); and'';
                    (B) by striking subparagraph (F) and inserting the 
                following:
            ``(F) shall offer equitable tender of nonpriority bypass 
        mail in proportion to passenger and nonmail freight pools 
        described in this section between qualified passenger and 
        nonmail freight carriers on a route from an acceptance point to 
        a bush destination in the State of Alaska at a composite rate 
        if--
                    ``(i)(I) for a passenger carrier, the carrier 
                receiving the composite rate provided passenger service 
                in accordance with the requirements of subsection 
                (d)(2); or
                    ``(II) for a nonmail freight carrier, the carrier 
                receiving the composite rate provided at least 25 
                percent of the nonmail freight service for the 12 
                months immediately preceding the date on which the 
                carrier seeks tender of such mail;
                    ``(ii) the carrier qualifies under subsection (d) 
                to be tendered nonpriority bypass mail out of the hub 
                point being bypassed;
                    ``(iii) the tender of such mail will not decrease 
                efficiency of delivery of nonpriority bypass mail 
                service into or out of the hub point being bypassed; 
                and
                    ``(iv) such tender will result in reduced payments 
                to the carrier by the Postal Service over flying the 
                entire route; and'';
                    (C) in subparagraph (G) by striking 
                ``notwithstanding subparagraph (F),''; and
                    (D) in the matter following subparagraph (G) by 
                striking ``subparagraph (G)'' and inserting 
                ``subparagraphs (F) and (G)''; and
            (7) in subparagraph (c)(4)(A) (as redesignated by paragraph 
        (4) of this subsection) by striking ``subparagraph (B)'' and 
        inserting ``subparagraph (B), paragraph (2)(E),''.
    (b) Clerical Amendment.--The table of sections for chapter 54 of 
such title is amended by striking the item relating to section 5402 and 
inserting the following:

``5402. Alaska bypass mail transportation.''.
    (c) Conforming Amendments.--Section 5402 of such title is amended--
            (1) in subsection (a)--
                    (A) in paragraph (4) by striking ``subsection 
                (g)(1)(A)(iv)(I)'' and inserting ``subsection 
                (c)(1)(A)(iv)(I)'';
                    (B) in paragraph (5) by striking ``subsection 
                (g)(1)(A)(iv)(I)'' and inserting ``subsection 
                (c)(1)(A)(iv)(I)'';
                    (C) in paragraph (13) by striking ``subsection 
                (g)(1)(A)(iv)(II)'' and inserting ``subsection 
                (c)(1)(A)(iv)(II)''; and
                    (D) in paragraph (15)(A) by striking ``subsection 
                (g)(1)(A)(iv)'' and inserting ``subsection 
                (c)(1)(A)(iv)'';
            (2) in subsection (c) (as redesignated by subsection (a)(4) 
        of this section)--
                    (A) in paragraph (2)--
                            (i) in subparagraph (C)(ii) by striking 
                        ``subsection (h)(5)'' and inserting 
                        ``subsection (d)(5)''; and
                            (ii) in subparagraph (D)--
                                    (I) in clause (i)(II) by striking 
                                ``subsection (h)(5)'' and inserting 
                                ``subsection (d)(5)''; and
                                    (II) in clause (ii)(II) by striking 
                                ``subsection (i)(6)'' and inserting 
                                ``subsection (e)(6)''; and
                    (B) in paragraph (5)--
                            (i) in subparagraph (A)(i) by striking 
                        ``subsection (g)(1)(A)(iv)(II)'' and inserting 
                        ``paragraph (1)(A)(iv)(II)'';
                            (ii) in subparagraph (B)(iii) by striking 
                        ``subsection (h)(5)'' and inserting 
                        ``subsection (d)(5)'';
                            (iii) in subparagraph (C) by striking 
                        ``subsection (h)(2)(B)'' and inserting 
                        ``subsection (d)(2)(B)''; and
                            (iv) in subparagraph (D) by striking 
                        ``subsection (h)(5)'' and inserting 
                        ``subsection (d)(5)'';
            (3) subsection (d) (as redesignated by subsection (a)(4) of 
        this section)--
                    (A) in paragraph (1)(A) by striking ``subsection 
                (g)(1)'' and inserting ``subsection (c)(1)'';
                    (B) in paragraph (3)--
                            (i) in subparagraph (A) by striking 
                        ``subsection (g)(1)'' and inserting 
                        ``subsection (c)(1)''; and
                            (ii) in subparagraph (B)(i)(II) by striking 
                        ``subsection (i)(1)'' and inserting 
                        ``subsection (e)(1)'';
                    (C) in paragraph (5)(A) by striking ``subsection 
                (k)'' and inserting ``subsection (g)''; and
                    (D) in paragraph (6) by striking ``subsection (k)'' 
                each place it appears and inserting ``subsection (g)'';
            (4) in subsection (e) (as redesignated by subsection (a)(4) 
        of this section)--
                    (A) in paragraph (3) by striking ``subsection 
                (g)(1)'' and inserting ``subsection (c)(1)'';
                    (B) in paragraph (4) by striking ``subsection (h)'' 
                and inserting ``subsection (d)''; and
                    (C) in paragraph (6) by striking ``subsection (k)'' 
                and inserting ``subsection (g)'';
            (5) in subsection (f) (as redesignated by subsection (a)(4) 
        of this section)--
                    (A) in paragraph (1)--
                            (i) by striking ``subsection (g)(1)'' and 
                        inserting ``subsection (c)(1)''; and
                            (ii) by striking ``subsection (h) or (i)'' 
                        and inserting ``subsection (d) or (e)'';
                    (B) in paragraph (2)--
                            (i) in the matter preceding subparagraph 
                        (A) by striking ``subsections (h) and (i)'' and 
                        inserting ``subsections (d) and (e)'';
                            (ii) in subparagraph (A) by striking 
                        ``subsection (h)'' and inserting ``subsection 
                        (d)''; and
                            (iii) in subparagraph (B) by striking 
                        ``subsection (i)'' and inserting ``subsection 
                        (e)''; and
                    (C) in paragraph (3)--
                            (i) in subparagraph (B)--
                                    (I) in clause (i) by striking 
                                ``subsection (g)(1)'' and inserting 
                                ``subsection (c)(1)''; and
                                    (II) in clause (ii) by striking 
                                ``subsection (h) or (i)'' and inserting 
                                ``subsection (d) or (e)''; and
                            (ii) in subparagraph (C) by striking 
                        ``subsection (h) or (i)'' and inserting 
                        ``subsection (d) or (e)'';
            (6) in subsection (h) (as redesignated by subsection (a)(4) 
        of this section) by striking ``subsections (h) and (i)'' and 
        inserting ``subsection (d) or (e)'';
            (7) in subsection (i) (as redesignated by subsection (a)(4) 
        of this section)--
                    (A) in paragraph (1)--
                            (i) by striking ``subsections (h) and (i)'' 
                        and inserting ``subsections (d) and (e)''; and
                            (ii) by striking ``subsection (h)'' and 
                        inserting ``subsection (d)''; and
                    (B) in paragraph (2)--
                            (i) in the matter preceding subparagraph 
                        (A) by striking ``subsection (i)'' and 
                        inserting ``subsection (e)'';
                            (ii) in subparagraph (A) by striking 
                        ``subsections (h) and (i)'' and inserting 
                        ``subsections (d) and (e)''; and
                            (iii) in subparagraph (B)--
                                    (I) by striking ``subsection (h)'' 
                                and inserting ``subsection (d)''; and
                                    (II) by striking ``subsection (i)'' 
                                and inserting ``subsection (e)'';
            (8) in subsection (l) (as redesignated by subsection (a)(4) 
        of this section)--
                    (A) in paragraph (1) by striking ``subsection 
                (g)(2), (h), or (i)'' and inserting ``subsection 
                (c)(2), (d), or (e)'';
                    (B) in paragraph (2) by striking ``subsection (h) 
                or (i)'' and inserting ``subsection (d) or (e)''; and
                    (C) in paragraph (3)--
                            (i) by striking ``subsection (g)(1)(A)(iv), 
                        (g)(2)(E), (g)(4), or (g)(5)'' and inserting 
                        ``subsection (c)(1)(A)(iv), (c)(2)(E), (c)(4), 
                        or (c)(5)''; and
                            (ii) by striking ``subsection (h)'' and 
                        inserting ``subsection (d)'';
            (9) in subsection (n) (as redesignated by subsection (a)(4) 
        of this section) by striking ``subsection (g)(1)'' and 
        inserting ``subsection (c)(1)''; and
            (10) in subsection (o) (as redesignated by subsection 
        (a)(4) of this section) by striking ``subsections (b), (c) and 
        (d)'' and inserting ``subsections (b), (c), and (d) of section 
        5404''.

SEC. 3. CONTRACTS FOR FOREIGN AND INTERSTATE AIR TRANSPORTATION.

    (a) In General.--At the end of chapter 54 of title 39, United 
States Code, add the following:
``Sec. 5404. Contracts for foreign and interstate air transportation
    ``(a) Definitions.--In this section--
            ``(1) the terms `air carrier', `foreign air carrier', 
        `foreign air transportation', and `interstate air 
        transportation' have the meanings given such terms in section 
        40102(a) of title 49;
            ``(2) the term `certificated air carrier' means an air 
        carrier that holds a certificate of public convenience and 
        necessity issued under section 41102(a) of title 49;
            ``(3) the term `code-share relationship' means a 
        relationship pursuant to which any certificated air carrier or 
        foreign air carrier's designation code is used to identify a 
        flight operated by another air carrier or foreign air carrier; 
        and
            ``(4) the term `Secretary' means the Secretary of 
        Transportation.
    ``(b) International Mail.--
            ``(1) In general.--
                    ``(A) Use of certificated air carriers; code-share 
                relationships.--Except as otherwise provided in this 
                subsection, the Postal Service may contract for the 
                transportation of mail by aircraft between any of the 
                points in foreign air transportation only with 
                certificated air carriers. A contract may be awarded to 
                a certificated air carrier to transport mail by air 
                between any of the points in foreign air transportation 
                that the Secretary has authorized the carrier to serve 
                either directly or through a code-share relationship 
                with 1 or more foreign air carriers.
                    ``(B) Use of foreign air carriers.--If the Postal 
                Service has sought offers or proposals from 
                certificated air carriers to transport mail in foreign 
                air transportation between points, or pairs of points 
                within a geographic region or regions, and has not 
                received offers or proposals that meet Postal Service 
                requirements at a fair and reasonable price from at 
                least 2 such carriers, the Postal Service may seek 
                offers or proposals from foreign air carriers. Where 
                service in foreign air transportation meeting the 
                Postal Service's requirements is unavailable at a fair 
                and reasonable price from at least 2 certificated air 
                carriers, either directly or through a code-share 
                relationship with 1 or more foreign air carriers, the 
                Postal Service may contract with foreign air carriers 
                to provide the service sought if, when the Postal 
                Service seeks offers or proposals from foreign air 
                carriers, it also seeks an offer or proposal to provide 
                that service from any certificated air carrier 
                providing service between those points, or pairs of 
                points within a geographic region or regions, on the 
                same terms and conditions that are being sought from 
                foreign air carriers.
                    ``(C) Methodology for determining fair and 
                reasonable prices.--For purposes of this subsection, 
                the Postal Service shall use a methodology for 
                determining fair and reasonable prices for the Postal 
                Service designated region or regions developed in 
                consultation with, and with the concurrence of, 
                certificated air carriers representing at least 51 
                percent of available ton miles in the markets of 
                interest.
                    ``(D) Ceiling prices.--For purposes of this 
                subsection, ceiling prices determined pursuant to the 
                methodology used under subparagraph (C) shall be 
                presumed to be fair and reasonable if they do not 
                exceed the ceiling prices derived from--
                            ``(i) a weighted average based on market 
                        rate data furnished by the International Air 
                        Transport Association or a subsidiary unit 
                        thereof; or
                            ``(ii) if such data are not available from 
                        those sources, such other neutral, regularly 
                        updated set of weighted average market rates as 
                        the Postal Service, with the concurrence of 
                        certificated air carriers representing at least 
                        51 percent of available ton miles in the 
                        markets of interest, may designate.
                    ``(E) Situations in which concurrence cannot be 
                attained.--If, for purposes of subparagraph (D)(ii), 
                concurrence cannot be attained, the most recently 
                available market rate data described in this paragraph 
                shall continue to apply for the relevant market or 
                markets.
            ``(2) Contract process.--The Postal Service shall contract 
        for foreign air transportation as set forth in paragraph (1) 
        through an open procurement process that will provide--
                    ``(A) potential offerors with timely notice of 
                business opportunities in sufficient detail to allow 
                them to make a proposal;
                    ``(B) requirements, proposed terms and conditions, 
                and evaluation criteria to potential offerors; and
                    ``(C) an opportunity for unsuccessful offerors to 
                receive prompt feedback upon request.
            ``(3) Emergency or unanticipated conditions; inadequate 
        lift space.--The Postal Service may enter into contracts to 
        transport mail by air in foreign air transportation with a 
        certificated air carrier or a foreign air carrier without 
        complying with the requirements of paragraph (1) or (2) if--
                    ``(A) emergency or unanticipated conditions exist 
                that make it impractical for the Postal Service to 
                comply with such requirements; or
                    ``(B) the Postal Service's demand for lift exceeds 
                the space available to the Postal Service under 
                existing contracts and--
                            ``(i) there is insufficient time available 
                        to seek additional lift using procedures that 
                        comply with those requirements without 
                        compromising the Postal Service's service 
                        commitments to its own customers; and
                            ``(ii) the Postal Service first offers any 
                        certificated air carrier holding a contract to 
                        carry mail between the relevant points the 
                        opportunity to carry such excess volumes under 
                        the terms of its existing contract.
    ``(c) Good-Faith Effort Required.--The Postal Service and potential 
offerors shall put a good-faith effort into resolving disputes 
concerning the award of contracts made under subsection (b).
    ``(d) Special Circumstances.--If the Postal Service determines that 
service by certificated air carriers or combination of air carriers 
between any pair or pairs of points in foreign air transportation is 
not adequate for its purposes, the Postal Service may contract, without 
advertising for bids, in such manner and under such terms and 
conditions as the Postal Service may deem appropriate, with any air 
taxi operator or combination thereof for such air transportation 
service. Contracts made under this subsection may be renewed at the 
existing rate by mutual agreement between the holder and the Postal 
Service. The Postal Service, with the consent of the air taxi operator, 
may adjust the compensation under such contracts for increased or 
decreased costs occasioned by changed conditions occurring during the 
contract term. The Postal Service shall cancel such a contract when the 
Secretary authorizes an additional certificated carrier or carriers to 
provide service between any pair or pairs of points covered by the 
contract, and such carrier or carriers inaugurate schedules adequate 
for its purposes.
    ``(e) Transportation of Mail by Aircraft in Interstate Air 
Transportation.--
            ``(1) Determination of rates and contract terms.--The 
        Postal Service may determine rates and contract with any air 
        carrier for the transportation of mail by aircraft in 
        interstate air transportation either through negotiations or 
        competitive bidding.
            ``(2) Mail shipments of live animals.--
                    ``(A) In general.--In the exercise of its authority 
                under paragraph (1), the Postal Service may require any 
                air carrier to accept mail shipments of day-old 
                poultry, honeybees, and such other live animals as 
                postal regulations allow to be transmitted as mail 
                matter. The authority of the Postal Service under this 
                subparagraph shall not apply in the case of any air 
                carrier who commonly and regularly refuses to accept 
                any live animals as cargo.
                    ``(B) Surcharges.--Notwithstanding any other 
                provision of law, the Postal Service is authorized to 
                assess, as postage to be paid by the mailers of any 
                shipments covered by subparagraph (A), a reasonable 
                surcharge that the Postal Service determines in its 
                discretion to be adequate to compensate air carriers 
                for any necessary additional expense incurred in 
                handling such shipments.
    ``(f) Applicability to Points Within Alaska.--The authority of the 
Secretary and the Postal Service under subsections (b), (c), and (d), 
as in effect on September 30, 2008, shall also apply, and the authority 
of the Postal Service under subsection (e) shall not apply, to the 
transportation of mail by aircraft between any 2 points both of which 
are within the State of Alaska and between which the air carrier is 
authorized by the Secretary to engage in the transportation of mail.''.
    (b) Clerical Amendment.--The table of sections for chapter 54 of 
such title is amended by adding at the end the following:

``5404. Contracts for foreign and interstate air transportation.''.

SEC. 4. REDUCTION OF ALASKA BYPASS MAIL SUBSIDY.

    (a) In General.--Chapter 54 of title 39, United States Code (as 
amended by this Act), is further amended by adding at the end the 
following:
``Sec. 5405. Reduction of Alaska bypass mail subsidy
    ``(a) Competitive Product Classification.--
            ``(1) In general.--Except as provided in this section, 
        Alaska bypass mail service under section 5402 shall be treated 
        as a separate competitive product for all purposes.
            ``(2) Transfer prohibited.--No part of Alaska bypass mail 
        service may be transferred to the market-dominant category of 
        mail under section 3642.
            ``(3) Limitations.--Alaska bypass mail service shall not be 
        treated as a competitive product for purposes of the 
        implementation of sections 3633(a) and 3634.
    ``(b) Minimum Cost Coverage.--
            ``(1) In general.--The Postal Service shall establish and 
        maintain rates and fees for matter sent by Alaska bypass mail 
        service--
                    ``(A) for fiscal year 2015, that cover at least 30 
                percent of the costs attributable to Alaska bypass mail 
                service in that fiscal year;
                    ``(B) for fiscal year 2016, that cover at least 34 
                percent of the costs attributable to Alaska bypass mail 
                service in that fiscal year;
                    ``(C) for fiscal year 2017, that cover at least 38 
                percent of the costs attributable to Alaska bypass mail 
                service in that fiscal year;
                    ``(D) for fiscal year 2018, that cover at least 42 
                percent of the costs attributable to Alaska bypass mail 
                service in that fiscal year;
                    ``(E) for fiscal year 2019, that cover at least 46 
                percent of the costs attributable to Alaska bypass mail 
                service in that fiscal year; and
                    ``(F) for fiscal year 2020, and for each fiscal 
                year thereafter, that cover at least 50 percent of the 
                costs attributable to Alaska bypass mail service in 
                that fiscal year.
            ``(2) Costs attributable.--The costs attributable to Alaska 
        bypass mail service for a fiscal year shall include all the 
        direct and indirect costs of Alaska bypass mail service during 
        that fiscal year that are attributable to that service through 
        reliably identified causal relationships.
            ``(3) Institutional costs.--Costs that can be attributed to 
        Alaska bypass mail service may not be classified as 
        institutional costs of the Postal Service.
            ``(4) Rate increase limitation.--For fiscal years 2014 
        through 2020, no rate for any type of Alaska bypass mail 
        service may be increased in a fiscal year by more than the 
        maximum permitted rate increase for market dominant products 
        plus an additional 1 percent.
    ``(c) Compliance.--
            ``(1) Annual review.--At least once each fiscal year, the 
        Postal Regulatory Commission shall determine whether the Postal 
        Service is in compliance with the requirements under subsection 
        (b).
            ``(2) Remedial actions.--If, under paragraph (1), the 
        Postal Regulatory Commission determines that the Postal Service 
        has not complied with the requirements under subsection (b) 
        with respect to a fiscal year, the Commission shall prescribe, 
        not later than 60 days after making such determination, actions 
        to ensure--
                    ``(A) the establishment and maintenance of rates 
                and fees for Alaska bypass mail service that recover 
                any costs required to have been covered for such fiscal 
                year under subsection (b), but that were not covered, 
                by the date that is not later than the last day of the 
                fiscal year that follows such fiscal year; and
                    ``(B) compliance with the requirements under 
                subsection (b) in subsequent fiscal years.
            ``(3) Limitation.--The Postal Regulatory Commission may not 
        order the Postal Service to discontinue Alaska bypass mail 
        service.
            ``(4) Regulations.--Not later than 90 days after the date 
        of enactment of this subsection, the Postal Regulatory 
        Commission shall issue regulations to implement this 
        subsection.''.
    (b) Clerical Amendment.--The table of sections for chapter 54 of 
such title (as amended by this Act) is further amended by adding at the 
end the following:

``5405. Reduction of Alaska bypass mail subsidy.''.
                                 <all>
```