II 

108TH CONGRESS 

2D SESSION S. 2468 

To reform the postal laws of the United States. 

IN THE SENATE OF THE UNITED STATES 

MAY 20, 2004 

Ms. COLLINS (for herself, Mr. CARPER, Mr. STEVENS, Mr. VOINOVICH, Mr. 

SUNUNU, Mr. LIEBERMAN, Mr. AKAKA, and Mr. DURBIN) introduced the 

following bill; which was read twice and referred to the Committee on 

Governmental Affairs 

A BILL 

To reform the postal laws of the United States. 

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

3 SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 

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

5 ‘‘Postal Accountability and Enhancement Act’’. 

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—DEFINITIONS; POSTAL SERVICES 

Sec. 101. Definitions. 

Sec. 102. Postal services. 

TITLE II—MODERN RATE REGULATION 

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

Sec. 202. Provisions relating to competitive products. 

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

Sec. 204. Reporting requirements and related provisions. 

Sec. 205. Complaints; appellate review and enforcement. 

Sec. 206. Clerical amendment. 

TITLE III—MODERN SERVICE STANDARDS 

Sec. 301. Establishment of modern service standards. 

Sec. 302. Postal service plan. 

TITLE IV—PROVISIONS RELATING TO FAIR COMPETITION 

Sec. 401. Postal Service Competitive Products Fund. 

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

Sec. 403. Unfair competition prohibited. 

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

TITLE V—GENERAL PROVISIONS 

Sec. 501. Qualification and term requirements for Governors. 

Sec. 502. Obligations. 

Sec. 503. Private carriage of letters. 

Sec. 504. Rulemaking authority. 

Sec. 505. Noninterference with collective bargaining agreements. 

TITLE VI—ENHANCED REGULATORY COMMISSION 

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

Postal Regulatory Commission. 

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

Sec. 603. Appropriations for the Postal Regulatory Commission. 

Sec. 604. Redesignation of the Postal Rate Commission. 

Sec. 605. Financial transparency. 

TITLE VII—EVALUATIONS 

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

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

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

TITLE VIII—POSTAL SERVICE RETIREMENT AND HEALTH 

BENEFITS FUNDING 

Sec. 801. Short title. 

Sec. 802. Civil Service Retirement System. 

Sec. 803. Health insurance. 

Sec. 804. Repeal of disposition of savings provision. 

Sec. 805. Effective dates. 

TITLE IX—COMPENSATION FOR WORK INJURIES 

Sec. 901. Temporary disability; continuation of pay. 

Sec. 902. Disability retirement for postal employees. 

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1 TITLE I—DEFINITIONS; POSTAL 

2 SERVICES 

3 SEC. 101. DEFINITIONS. 

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

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

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

7 inserting a semicolon, and by adding at the end the fol8 lowing: 

9 ‘‘(5) ‘postal service’ refers to the physical deliv10 ery of letters, printed matter, or packages weighing 

11 up to 70 pounds, including physical acceptance, col12 lection, sorting, transportation, or other services an13 cillary thereto; 

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

15 distinct cost or market characteristic for which a 

16 rate is applied; 

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

18 includes fees for postal services; 

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

20 the market-dominant category of mail’ means a 

21 product subject to subchapter I of chapter 36; 

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

23 competitive category of mail’ means a product sub24 ject to subchapter II of chapter 36; and 

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

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

3 SEC. 102. POSTAL SERVICES. 

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

5 States Code, is amended— 

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

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

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

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

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

11 or require that the Postal Service provide any special non12 postal or similar services.’’. 

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

14 1402(b)(1)(B)(ii) of the Victims of Crime Act of 1984 (98 

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

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

17 (2) Section 2003(b)(1) of title 39, United States 

18 Code, is amended by striking ‘‘and nonpostal’’. 

19 TITLE II—MODERN RATE 

20 REGULATION 

21 SEC. 201. PROVISIONS RELATING TO MARKET-DOMINANT 

22 PRODUCTS. 

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

24 States Code, is amended by striking sections 3621, 3622, 

25 and 3623 and inserting the following: 

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1 ‘‘§ 3621. Applicability; definitions 

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

3 with respect to— 

4 ‘‘(1) first-class mail letters; 

5 ‘‘(2) first-class mail cards; 

6 ‘‘(3) periodicals; 

7 ‘‘(4) standard mail; 

8 ‘‘(5) single-piece parcel post; 

9 ‘‘(6) media mail; 

10 ‘‘(7) bound printed matter; 

11 ‘‘(8) library mail; 

12 ‘‘(9) special services; and 

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

14 subject to any changes the Postal Regulatory Commission 

15 may make under section 3642. 

16 ‘‘(b) RULE OF CONSTRUCTION.—Mail matter re17 ferred to in subsection (a) shall, for purposes of this sub18 chapter, be considered to have the meaning given to such 

19 mail matter under the mail classification schedule. 

20 ‘‘§ 3622. Modern rate regulation 

21 ‘‘(a) AUTHORITY GENERALLY.—The Postal Regu22 latory Commission shall, within 12 months after the date 

23 of the enactment of this section, by regulation establish 

24 (and may from time to time thereafter by regulation re25 vise) a modern system for regulating rates and classes for 

26 market-dominant products. 

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

2 achieve the following objectives: 

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

4 increase the transparency of the ratemaking process. 

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

6 rates. 

7 ‘‘(3) To maximize incentives to reduce costs 

8 and increase efficiency. 

9 ‘‘(4) To enhance mail security and deter ter10 rorism by promoting secure, sender-identified mail. 

11 ‘‘(5) To allow the Postal Service pricing flexi12 bility, including the ability to use pricing to promote 

13 intelligent mail and encourage increased mail volume 

14 during nonpeak periods. 

15 ‘‘(6) To assure adequate revenues, including re16 tained earnings, to maintain financial stability and 

17 meet the service standards established under section 

18 3691. 

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

20 the Postal Service equitably between market-domi21 nant and competitive products. 

22 ‘‘(c) FACTORS.—In establishing or revising such sys23 tem, the Postal Regulatory Commission shall take into ac24 count— 

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1 ‘‘(1) the establishment and maintenance of a 

2 fair and equitable schedule for rates and classifica3 tion system; 

4 ‘‘(2) the value of the mail service actually pro5 vided each class or type of mail service to both the 

6 sender and the recipient, including but not limited to 

7 the collection, mode of transportation, and priority 

8 of delivery; 

9 ‘‘(3) the direct and indirect postal costs attrib10 utable to each class or type of mail service plus that 

11 portion of all other costs of the Postal Service rea12 sonably assignable to such class or type; 

13 ‘‘(4) the effect of rate increases upon the gen14 eral public, business mail users, and enterprises in 

15 the private sector of the economy engaged in the de16 livery of mail matter other than letters; 

17 ‘‘(5) the available alternative means of sending 

18 and receiving letters and other mail matter at rea19 sonable costs; 

20 ‘‘(6) the degree of preparation of mail for deliv21 ery into the postal system performed by the mailer 

22 and its effect upon reducing costs to the Postal 

23 Service; 

24 ‘‘(7) simplicity of structure for the entire sched25 ule and simple, identifiable relationships between the 

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1 rates or fees charged the various classes of mail for 

2 postal services; 

3 ‘‘(8) the relative value to the people of the 

4 kinds of mail matter entered into the postal system 

5 and the desirability and justification for special clas6 sifications and services of mail; 

7 ‘‘(9) the importance of providing classifications 

8 with extremely high degrees of reliability and speed 

9 of delivery and of providing those that do not re10 quire high degrees of reliability and speed of deliv11 ery; 

12 ‘‘(10) the desirability of special classifications 

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

14 Postal Service; 

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

16 informational value to the recipient of mail matter; 

17 and 

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

19 other factors as the Commission deems appropriate. 

20 ‘‘(d) REQUIREMENTS.—The system for regulating 

21 rates and classes for market-dominant products shall— 

22 ‘‘(1) require the Postal Rate Commission to set 

23 annual limitations on the percentage changes in 

24 rates based on inflation using indices, such as the 

25 Consumer Price Index, the Employment Cost Index, 

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1 the Gross Domestic Product Price Index, or any 

2 similar measure as the Postal Rate Commission may 

3 prescribe; 

4 ‘‘(2) establish a schedule whereby rates, when 

5 necessary and appropriate, would increase at regular 

6 intervals by predictable amounts; 

7 ‘‘(3) not later than 45 days before the imple8 mentation of any adjustment in rates under this sec9 tion— 

10 ‘‘(A) require the Postal Service to provide 

11 public notice of the adjustment; 

12 ‘‘(B) provide an opportunity for review by 

13 the Postal Rate Commission; 

14 ‘‘(C) provide for the Postal Rate Commis15 sion to notify the Postal Service of any non16 compliance of the adjustment with the limita17 tion under paragraph (1); and 

18 ‘‘(D) require the Postal Service to respond 

19 to the notice provided under subparagraph (C) 

20 and describe the actions to be taken to comply 

21 with the limitation under paragraph (1); 

22 ‘‘(4) notwithstanding any limitation set under 

23 paragraphs (1) and (3), establish procedures where24 by rates may be adjusted on an expedited basis due 

25 to unexpected and extraordinary circumstances. 

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1 ‘‘(e) WORKSHARE DISCOUNTS.— 

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

3 ‘workshare discount’ refers to rate discounts pro4 vided to mailers for the presorting, prebarcoding, 

5 handling, or transportation of mail, as further de6 fined by the Postal Regulatory Commission under 

7 subsection (a). 

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

9 established under subsection (a), the Postal Regu10 latory Commission shall establish rules for 

11 workshare discounts that ensure that such discounts 

12 do not exceed the cost that the Postal Service avoids 

13 as a result of workshare activity, unless— 

14 ‘‘(A) the discount is— 

15 ‘‘(i) associated with a new postal serv16 ice or with a change to an existing postal 

17 service; and 

18 ‘‘(ii) necessary to induce mailer behav19 ior that furthers the economically efficient 

20 operation of the Postal Service; 

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

22 ‘‘(i) lead to a loss of volume in the af23 fected category of mail and reduce the ag24 gregate contribution to institutional costs 

25 of the Postal Service from the mail matter 

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1 subject to the discount below what it other2 wise would have been if the discount had 

3 not been reduced to costs avoided; 

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

5 rates paid by mailers not able to take ad6 vantage of the discount; or 

7 ‘‘(iii) impede the efficient operation of 

8 the Postal Service; 

9 ‘‘(C) the amount of the discount above 

10 costs avoided— 

11 ‘‘(i) is necessary to mitigate rate 

12 shock; and 

13 ‘‘(ii) will be phased out over time; 

14 ‘‘(D) the workshare discount is provided in 

15 connection with subclasses of mail consisting 

16 exclusively of mail matter of educational, cul17 tural, or scientific value; or 

18 ‘‘(E) the Postal Regulatory Commission 

19 determines that such discounts are reasonable 

20 and equitable and consistent with the objectives 

21 and factors taken into account under sub22 sections (b) and (c). 

23 ‘‘(3) REPORT.—Whenever the Postal Service es24 tablishes or maintains a workshare discount, the 

25 Postal Service shall, at the time it publishes the 

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1 workshare discount rate, submit to the Postal Regu2 latory Commission a detailed report and explanation 

3 of the Postal Service’s reasons for establishing or 

4 maintaining the rate, setting forth the data, eco5 nomic analyses, and other information relied on by 

6 the Postal Service to justify the rate. 

7 ‘‘(f) TRANSITION RULE.—Until regulations under 

8 this section first take effect, rates and classes for market9 dominant products shall remain subject to modification in 

10 accordance with the provisions of this chapter and section 

11 407, as such provisions were last in effect before the date 

12 of the enactment of this section. 

13 ‘‘§ 3623. Service agreements for market-dominant 

14 products 

15 ‘‘(a) IN GENERAL.— 

16 ‘‘(1) AUTHORITY.—The Postal Service may 

17 enter into service agreements with a customer or 

18 group of customers that provide for the provision of 

19 postal services under terms, conditions, or service 

20 standards that differ from those that would apply 

21 under the otherwise applicable classification of mar22 ket-dominant mail. 

23 ‘‘(2) AGREEMENTS.—An agreement under this 

24 section may involve— 

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1 ‘‘(A) performance by the contracting mail 

2 user of mail preparation, processing, transpor3 tation, or other functions; 

4 ‘‘(B) performance by the Postal Service of 

5 additional mail preparation, processing, trans6 portation, or other functions; or 

7 ‘‘(C) other terms and conditions that meet 

8 the requirements of subsections (b) and (c). 

9 ‘‘(b) REQUIREMENTS.—A service agreement under 

10 this section may be entered into only if each of the fol11 lowing conditions is met: 

12 ‘‘(1) The total revenue generated under the 

13 agreement— 

14 ‘‘(A) will cover all Postal Service costs at15 tributable to the postal services covered by the 

16 agreement; and 

17 ‘‘(B) will result in no less contribution to 

18 the institutional costs of the Postal Service than 

19 would have been generated had the agreement 

20 not been entered into. 

21 ‘‘(2) Rates or fees for other mailers will not in22 crease as a result of the agreement. 

23 ‘‘(3) The agreement pertains exclusively to 

24 products in the market-dominant category of mail. 

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1 ‘‘(4) The agreement will not preclude or materi2 ally hinder similarly situated mail users from enter3 ing into agreements with the Postal Service on the 

4 same, or substantially the same terms or conditions, 

5 and the Postal Service remains willing and able to 

6 enter into such. 

7 ‘‘(c) LIMITATIONS.—A service agreement under this 

8 section shall— 

9 ‘‘(1) be for a term not to exceed 3 years; and 

10 ‘‘(2) provide that such agreement shall be sub11 ject to the cancellation authority of the Commission 

12 under section 3662. 

13 ‘‘(d) NOTICE REQUIREMENTS.— 

14 ‘‘(1) IN GENERAL.—At least 30 days before a 

15 service agreement under this section is to take ef16 fect, the Postal Service shall file with the Postal 

17 Regulatory Commission and publish in the Federal 

18 Register the following information with respect to 

19 such agreement: 

20 ‘‘(A) A description of the postal services 

21 the agreement involves. 

22 ‘‘(B) A description of the functions the 

23 customer is to perform under the agreement. 

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1 ‘‘(C) A description of the functions the 

2 Postal Service is to perform under the agree3 ment. 

4 ‘‘(D) The rates and fees payable by the 

5 customer during the term of the agreement. 

6 ‘‘(E) With respect to each condition under 

7 subsection (b), information sufficient to dem8 onstrate the bases for the view of the Postal 

9 Service that such condition would be met. 

10 ‘‘(2) AGREEMENTS LESS THAN NATIONAL IN

11 SCOPE.—In the case of a service agreement under 

12 this section that is less than national in scope, the 

13 information described under paragraph (1) shall also 

14 be published by the Postal Service in a manner de15 signed to afford reasonable notice to persons within 

16 any geographic area to which such agreement (or 

17 any amendment to that agreement) pertains. 

18 ‘‘(e) EQUAL TREATMENT REQUIRED.—If the Postal 

19 Service enters into a service agreement with a mailer 

20 under this section, the Postal Service shall make such 

21 agreement available to similarly situated mailers on func22 tionally equivalent terms and conditions consistent with 

23 the regulatory system established under section 3622 

24 without unreasonable distinctions based on mailer profiles, 

25 provided that such distinctions, if ignored, would not 

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1 render any subsequent agreement uneconomic or imprac2 tical. 

3 ‘‘(f) COMPLAINTS.—Any person who believes that a 

4 service agreement under this section is not in conformance 

5 with the requirements of this section, or who is aggrieved 

6 by a decision of the Postal Service not to enter into an 

7 agreement under this section, may file a complaint with 

8 the Postal Regulatory Commission in accordance with sec9 tion 3662. 

10 ‘‘(g) POSTAL REGULATORY COMMISSION ROLE.— 

11 ‘‘(1) REGULATIONS.—The Postal Regulatory 

12 Commission may promulgate such regulations re13 garding service agreements as the Commission de14 termines necessary to implement the requirements of 

15 this section. 

16 ‘‘(2) REVIEW.—The Postal Regulatory Commis17 sion may review any agreement or proposed agree18 ment under this section and may suspend, cancel, or 

19 prevent such agreement if the Commission finds that 

20 the agreement does not meet the requirements of 

21 this section. 

22 ‘‘(h) INTERPRETATION.—The determination of 

23 whether the revenue generated under the agreement meets 

24 the requirements of subsection (b)(1)(B) shall be based, 

25 to the extent practicable, on the actual contribution of the 

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1 mail involved, not on the average contribution made by 

2 the mail classification most similar to the services per3 formed under the agreement. If mailer-specific data is not 

4 available, the bases for the determination used shall be 

5 provided and shall include a discussion of the suitability 

6 of the data used, in accordance with regulations estab7 lished by the Postal Regulatory Commission.’’. 

8 (b) REPEALED SECTIONS.—Sections 3624, 3625, 

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

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

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

12 section 601, but before the amendment made by section 

13 202) is amended by striking the heading for subchapter 

14 II and inserting the following: 

15 ‘‘SUBCHAPTER I—PROVISIONS RELATING TO 

16 MARKET-DOMINANT PRODUCTS’’. 

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

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

21 ‘‘SUBCHAPTER II—PROVISIONS RELATING TO 

22 COMPETITIVE PRODUCTS 

23 ‘‘§ 3631. Applicability; definitions and updates 

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

25 with respect to— 

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1 ‘‘(1) priority mail; 

2 ‘‘(2) expedited mail; 

3 ‘‘(3) bulk parcel post; 

4 ‘‘(4) bulk international mail; and 

5 ‘‘(5) mailgrams; 

6 subject to subsection (d) and any changes the Postal Reg7 ulatory Commission may make under section 3642. 

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

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

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

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

15 mail matter under the mail classification schedule. 

16 ‘‘(d) LIMITATION.—Notwithstanding any other provi17 sion of this section, nothing in this subchapter shall be 

18 considered to apply with respect to any product then cur19 rently in the market-dominant category of mail. 

20 ‘‘§ 3632. Action of the Governors 

21 ‘‘(a) AUTHORITY TO ESTABLISH RATES AND CLASS22 ES.—The Governors, with the written concurrence of a 

23 majority of all of the Governors then holding office, shall 

24 establish rates and classes for products in the competitive 

25 category of mail in accordance with the requirements of 

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1 this subchapter and regulations promulgated under sec2 tion 3633. 

3 ‘‘(b) PROCEDURES.— 

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

5 established in writing, complete with a statement of 

6 explanation and justification, and the date as of 

7 which each such rate or class takes effect. 

8 ‘‘(2) PUBLIC NOTICE; REVIEW; AND COMPLI9 ANCE.—Not later than 30 days before the date of 

10 implementation of any adjustment in rates under 

11 this section— 

12 ‘‘(A) the Governors shall provide public no13 tice of the adjustment and an opportunity for 

14 review by the Postal Regulatory Commission; 

15 ‘‘(B) the Postal Rate Commission shall no16 tify the Governors of any noncompliance of the 

17 adjustment with section 3633; and 

18 ‘‘(C) the Governors shall respond to the 

19 notice provided under subparagraph (B) and 

20 describe the actions to be taken to comply with 

21 section 3633. 

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

23 section 3633 first take effect, rates and classes for com24 petitive products shall remain subject to modification in 

25 accordance with the provisions of this chapter and section 

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1 407, as such provisions were as last in effect before the 

2 date of the enactment of this section. 

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

4 products 

5 ‘‘The Postal Regulatory Commission shall, within 

6 180 days after the date of the enactment of this section, 

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

8 regulations to— 

9 ‘‘(1) prohibit the subsidization of competitive 

10 products by market-dominant products; 

11 ‘‘(2) ensure that each competitive product cov12 ers its costs attributable; and 

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

15 the Postal Service.’’. 

16 SEC. 203. PROVISIONS RELATING TO EXPERIMENTAL AND 

17 NEW PRODUCTS. 

18 Subchapter III of chapter 36 of title 39, United 

19 States Code, is amended to read as follows: 

20 ‘‘SUBCHAPTER III—PROVISIONS RELATING TO 

21 EXPERIMENTAL AND NEW PRODUCTS 

22 ‘‘§ 3641. Market tests of experimental products 

23 ‘‘(a) AUTHORITY.— 

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

2 conduct market tests of experimental products in ac3 cordance with this section. 

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

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

6 subject to the requirements of sections 3622, 3633, 

7 or 3642, or regulations promulgated under those 

8 sections. 

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

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

11 ‘‘(1) SIGNIFICANTLY DIFFERENT PRODUCT.— 

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

13 significantly different from all products offered by 

14 the Postal Service within the 2-year period preceding 

15 the start of the test. 

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

17 or continued offering of the product will not create 

18 an unfair or otherwise inappropriate competitive ad19 vantage for the Postal Service or any mailer, par20 ticularly in regard to small business concerns (as de21 fined under subsection (h)). 

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

23 Service identifies the product, for the purpose of a 

24 test under this section, as either market-dominant or 

25 competitive, consistent with the criteria under secMay 25, 2004 
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1 tion 3642(b)(1). Costs and revenues attributable to 

2 a product identified as competitive shall be included 

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

4 to provisions applicable to competitive products col5 lectively). Any test that solely affects products cur6 rently classified as competitive, or which provides 

7 services ancillary to only competitive products, shall 

8 be presumed to be in the competitive product cat9 egory without regard to whether a similar ancillary 

10 product exists for market-dominant products. 

11 ‘‘(c) NOTICE.— 

12 ‘‘(1) IN GENERAL.—At least 30 days before ini13 tiating a market test under this section, the Postal 

14 Service shall file with the Postal Regulatory Com15 mission and publish in the Federal Register a no16 tice— 

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

18 Service’s determination that the market test is 

19 covered by this section; and 

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

21 the market test. 

22 ‘‘(2) SAFEGUARDS.—For a competitive experi23 mental product, the provisions of section 504(g) 

24 shall be available with respect to any information re25 quired to be filed under paragraph (1) to the same 

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

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

3 paragraph (1) shall be considered to permit or re4 quire the publication of any information as to which 

5 confidential treatment is accorded under the pre6 ceding sentence (subject to the same exception as set 

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

8 ‘‘(d) DURATION.— 

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

10 under this section may be conducted over a period 

11 of not to exceed 24 months. 

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

13 order to determine the feasibility or desirability of a 

14 product being tested under this section, the Postal 

15 Regulatory Commission may, upon written applica16 tion of the Postal Service (filed not later than 60 days 

17 before the date as of which the testing of such prod18 uct would otherwise be scheduled to terminate under 

19 paragraph (1)), extend the testing of such product 

20 for not to exceed an additional 12 months. 

21 ‘‘(e) DOLLAR-AMOUNT LIMITATION.— 

22 ‘‘(1) IN GENERAL.—A product may only be 

23 tested under this section if the total revenues that 

24 are anticipated, or in fact received, by the Postal 

25 Service from such product do not exceed 

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1 $10,000,000 in any year, subject to paragraph (2) 

2 and subsection (g). 

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

4 Regulatory Commission may, upon written applica5 tion of the Postal Service, exempt the market test 

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

7 that are anticipated, or in fact received, by the Post8 al Service from such product do not exceed 

9 $50,000,000 in any year, subject to subsection (g). 

10 In reviewing an application under this paragraph, 

11 the Postal Regulatory Commission shall approve 

12 such application if it determines that— 

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

14 public and meet an expected demand; 

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

16 the financial stability of the Postal Service; and 

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

18 unfair or otherwise inappropriate competition. 

19 ‘‘(f) CANCELLATION.—If the Postal Regulatory Com20 mission at any time determines that a market test under 

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

22 of this section, it may order the cancellation of the test 

23 involved or take such other action as it considers appro24 priate. A determination under this subsection shall be 

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1 made in accordance with such procedures as the Commis2 sion shall by regulation prescribe. 

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

4 of each year following the year in which occurs the dead5 line for the Postal Service’s first report to the Postal Reg6 ulatory Commission under section 3652(a), each dollar 

7 amount contained in this section shall be adjusted by the 

8 change in the Consumer Price Index for such year (as de9 termined under regulations of the Commission). 

10 ‘‘(h) DEFINITION OF A SMALL BUSINESS CON11 CERN.—The criteria used in defining small business con12 cerns or otherwise categorizing business concerns as small 

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

14 established by the Postal Regulatory Commission in con15 formance with the requirements of section 3 of the Small 

16 Business Act. 

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

18 subchapter may be conducted in any year beginning with 

19 the first year in which occurs the deadline for the Postal 

20 Service’s first report to the Postal Regulatory Commission 

21 under section 3652(a). 

May 25, 2004 
26 

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1 ‘‘§ 3642. New products and transfers of products be2 tween the market-dominant and competi3 tive categories of mail 

4 ‘‘(a) IN GENERAL.—Upon request of the Postal Serv5 ice or users of the mails, or upon its own initiative, the 

6 Postal Regulatory Commission may change the list of 

7 market-dominant products under section 3621 and the list 

8 of competitive products under section 3631 by adding new 

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

10 transferring products between the lists. 

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

12 Regulatory Commission under subsection (a) shall be 

13 made in accordance with the following criteria: 

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

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

16 Postal Service exercises sufficient market power that 

17 it can effectively set the price of such product sub18 stantially above costs, raise prices significantly, de19 crease quality, or decrease output, without risk of 

20 losing substantial business to other firms offering 

21 similar products. The competitive category of prod22 ucts shall consist of all other products. 

23 ‘‘(2) EXCLUSION OF PRODUCTS COVERED BY

24 POSTAL MONOPOLY.—A product covered by the post25 al monopoly shall not be subject to transfer under 

26 this section from the market-dominant category of 

May 25, 2004 
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•S 2468 IS 

1 mail. For purposes of the preceding sentence, the 

2 term ‘product covered by the postal monopoly’ 

3 means any product the conveyance or transmission 

4 of which is reserved to the United States under sec5 tion 1696 of title 18, subject to the same exception 

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

7 ‘‘(3) ADDITIONAL CONSIDERATIONS.—In mak8 ing any decision under this section, due regard shall 

9 be given to— 

10 ‘‘(A) the availability and nature of enter11 prises in the private sector engaged in the deliv12 ery of the product involved; 

13 ‘‘(B) the views of those who use the prod14 uct involved on the appropriateness of the pro15 posed action; and 

16 ‘‘(C) the likely impact of the proposed ac17 tion on small business concerns (within the 

18 meaning of section 3641(h)). 

19 ‘‘(c) TRANSFERS OF SUBCLASSES AND OTHER SUB20 ORDINATE UNITS ALLOWABLE.—Nothing in this title 

21 shall be considered to prevent transfers under this section 

22 from being made by reason of the fact that they would 

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

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

May 25, 2004 
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•S 2468 IS 

1 service involved (without regard to satisfaction of min2 imum quantity requirements standing alone). 

3 ‘‘(d) NOTIFICATION AND PUBLICATION REQUIRE4 MENTS.— 

5 ‘‘(1) NOTIFICATION REQUIREMENT.—The Post6 al Service shall, whenever it requests to add a prod7 uct or transfer a product to a different category, file 

8 with the Postal Regulatory Commission and publish 

9 in the Federal Register a notice setting out the basis 

10 for its determination that the product satisfies the 

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

12 request to add a product or transfer a product to 

13 the competitive category of mail, that the product 

14 meets the regulations promulgated by the Postal 

15 Regulatory Commission under section 3633. The 

16 provisions of section 504(g) shall be available with 

17 respect to any information required to be filed. 

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

19 Regulatory Commission shall, whenever it changes 

20 the list of products in the market-dominant or com21 petitive category of mail, prescribe new lists of prod22 ucts. The revised lists shall indicate how and when 

23 any previous lists (including the lists under sections 

24 3621 and 3631) are superseded, and shall be pub25 lished in the Federal Register. 

May 25, 2004 
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•S 2468 IS 

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

2 3641, no product that involves the physical delivery of let3 ters, printed matter, or packages may be offered by the 

4 Postal Service unless it has been assigned to the market5 dominant or competitive category of mail (as appropriate) 

6 either— 

7 ‘‘(1) under this subchapter; or 

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

9 SEC. 204. REPORTING REQUIREMENTS AND RELATED PRO10 VISIONS. 

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

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

13 subsection (b)) is amended— 

14 (1) by striking the heading for subchapter IV 

15 and inserting the following: 

16 ‘‘SUBCHAPTER V—POSTAL SERVICES, 

17 COMPLAINTS, AND JUDICIAL REVIEW’’; and 

18 (2) by striking the heading for subchapter V 

19 and inserting the following: 

20 ‘‘SUBCHAPTER VI—GENERAL’’. 

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

22 39, United States Code, is amended by inserting after sub23 chapter III the following: 

May 25, 2004 
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•S 2468 IS 

1 ‘‘SUBCHAPTER IV—REPORTING 

2 REQUIREMENTS AND RELATED PROVISIONS 

3 ‘‘§ 3651. Annual reports by the Commission 

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

6 the Congress concerning the operations of the Commission 

7 under this title, including the extent to which regulations 

8 are achieving the objectives under sections 3622, 3633, 

9 and 3691. 

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

11 Postal Service shall provide the Postal Regulatory Com12 mission with such information as may, in the judgment 

13 of the Commission, be necessary in order for the Commis14 sion to prepare its reports under this section. 

15 ‘‘§ 3652. Annual reports to the Commission 

16 ‘‘(a) COSTS, REVENUES, RATES, AND SERVICE.—Ex17 cept as provided in subsection (c), the Postal Service shall, 

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

19 and submit to the Postal Regulatory Commission a report 

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

21 Commission may require under subsection (e))— 

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

23 and quality of service in sufficient detail to dem24 onstrate that all products during such year complied 

25 with all applicable requirements of this title; and 

May 25, 2004 
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•S 2468 IS 

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

2 product provided in such year, provide— 

3 ‘‘(A) product information, including mail 

4 volumes; and 

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

6 the Postal Service in connection with such prod7 uct, including— 

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

9 terms of speed of delivery and reliability) 

10 provided; and 

11 ‘‘(ii) the degree of customer satisfac12 tion with the service provided. 

13 Before submitting a report under this subsection (includ14 ing any annex to the report and the information required 

15 under subsection (b)), the Postal Service shall have the 

16 information contained in such report (and annex) audited 

17 by the Inspector General. The results of any such audit 

18 shall be submitted along with the report to which it per19 tains. 

20 ‘‘(b) INFORMATION RELATING TO WORKSHARE DIS21 COUNTS.—The Postal Service shall include, in each report 

22 under subsection (a), the following information with re23 spect to each market-dominant product for which a 

24 workshare discount was in effect during the period covered 

25 by such report: 

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

2 Service by virtue of such discount. 

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

4 avoided that the per-item workshare discount rep5 resents. 

6 ‘‘(3) The per-item contribution made to institu7 tional costs. 

8 ‘‘(c) SERVICE AGREEMENTS AND MARKET TESTS.— 

9 In carrying out subsections (a) and (b) with respect to 

10 service agreements (including service agreements entered 

11 into under section 3623) and experimental products of12 fered through market tests under section 3641 in a year, 

13 the Postal Service— 

14 ‘‘(1) may report summary data on the costs, 

15 revenues, and quality of service by service agreement 

16 and market test; and 

17 ‘‘(2) shall report such data as the Postal Regu18 latory Commission requires. 

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

20 Commission shall have access, in accordance with such 

21 regulations as the Commission shall prescribe, to the 

22 working papers and any other supporting matter of the 

23 Postal Service and the Inspector General in connection 

24 with any information submitted under this section. 

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

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•S 2468 IS 

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

2 Commission shall, by regulation, prescribe the con3 tent and form of the public reports (and any non4 public annex and supporting matter relating to the 

5 report) to be provided by the Postal Service under 

6 this section. In carrying out this subsection, the 

7 Commission shall give due consideration to— 

8 ‘‘(A) providing the public with timely, ade9 quate information to assess the lawfulness of 

10 rates charged; 

11 ‘‘(B) avoiding unnecessary or unwarranted 

12 administrative effort and expense on the part of 

13 the Postal Service; and 

14 ‘‘(C) protecting the confidentiality of com15 mercially sensitive information. 

16 ‘‘(2) REVISED REQUIREMENTS.—The Commis17 sion may, on its own motion or on request of an in18 terested party, initiate proceedings (to be conducted 

19 in accordance with regulations that the Commission 

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

21 completeness of Postal Service data required by the 

22 Commission under this subsection whenever it shall 

23 appear that— 

May 25, 2004 
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•S 2468 IS 

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

2 products has become significantly inaccurate or 

3 can be significantly improved; 

4 ‘‘(B) the quality of service data has 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 under subsection (d) contains information 

16 which is described in section 410(c) of this title, or 

17 exempt from public disclosure under section 552(b) 

18 of title 5, the Postal Service shall, at the time of 

19 providing such matter to the Commission, notify the 

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

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

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

25 matter described in paragraph (1) to which the 

May 25, 2004 
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•S 2468 IS 

1 Commission gains access under this section shall be 

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

3 in the same way as if the Commission had received 

4 notification with respect to such matter under sec5 tion 504(g)(1). 

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

7 submit to the Postal Regulatory Commission, together 

8 with any other submission that the Postal Service is re9 quired to make under this section in a year, copies of its 

10 then most recent— 

11 ‘‘(1) comprehensive statement under section 

12 2401(e); 

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

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

15 ‘‘(4) program performance reports under sec16 tion 2804. 

17 ‘‘§ 3653. Annual determination of compliance 

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

19 receiving the reports required under section 3652 for any 

20 year, the Postal Regulatory Commission shall promptly 

21 provide an opportunity for comment on such reports by 

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

23 Commission who shall be required to represent the inter24 ests of the general public. 

May 25, 2004 
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•S 2468 IS 

1 ‘‘(b) DETERMINATION OF COMPLIANCE OR NON2 COMPLIANCE.—Not later than 90 days after receiving the 

3 submissions required under section 3652 with respect to 

4 a year, the Postal Regulatory Commission shall make a 

5 written determination as to— 

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

7 such year (for products individually or collectively) 

8 were not in compliance with applicable provisions of 

9 this chapter (or regulations promulgated there10 under); or 

11 ‘‘(2) whether any service standards in effect 

12 during such year were not met. 

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

14 is found under this subsection to have occurred in such 

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

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

17 year, a timely written determination of noncompliance is 

18 made under subsection (b), the Postal Regulatory Com19 mission shall take any appropriate remedial action author20 ized by section 3662(c). 

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

22 determination described in the last sentence of subsection 

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

24 3662, create a rebuttable presumption of compliance by 

25 the Postal Service (with regard to the matters described 

May 25, 2004 
37 

•S 2468 IS 

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

2 the year to which such determination relates.’’. 

3 SEC. 205. COMPLAINTS; APPELLATE REVIEW AND EN4 FORCEMENT. 

5 Chapter 36 of title 39, United States Code, is amend6 ed by striking sections 3662 and 3663 and inserting the 

7 following: 

8 ‘‘§ 3662. Rate and service complaints 

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

10 officer of the Postal Regulatory Commission representing 

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

12 Service is not operating in conformance with the require13 ments of chapter 1, 4, or 6, or this chapter (or regulations 

14 promulgated under any of those chapters) may lodge a 

15 complaint with the Postal Regulatory Commission in such 

16 form and manner as the Commission may prescribe. 

17 ‘‘(b) PROMPT RESPONSE REQUIRED.— 

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

19 Commission shall, within 90 days after receiving a 

20 complaint under subsection (a), either— 

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

22 or 

23 ‘‘(B) issue an order dismissing the com24 plaint (together with a statement of the reasons 

25 therefor). 

May 25, 2004 
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•S 2468 IS 

1 ‘‘(2) TREATMENT OF COMPLAINTS NOT TIMELY

2 ACTED ON.—For purposes of section 3663, any com3 plaint under subsection (a) on which the Commis4 sion fails to act in the time and manner required by 

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

6 if it had been dismissed under an order issued by 

7 the Commission on the last day allowable for the 

8 issuance of such order under paragraph (1). 

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

10 BE JUSTIFIED.—If the Postal Regulatory Commission 

11 finds the complaint to be justified, it shall order that the 

12 Postal Service take such action as the Commission con13 siders appropriate in order to achieve compliance with the 

14 applicable requirements and to remedy the effects of any 

15 noncompliance including ordering unlawful rates to be ad16 justed to lawful levels, ordering the cancellation of market 

17 tests, ordering the Postal Service to discontinue providing 

18 loss-making products, and requiring the Postal Service to 

19 make up for revenue shortfalls in competitive products. 

20 ‘‘(d) AUTHORITY TO ORDER FINES IN CASES OF DE21 LIBERATE NONCOMPLIANCE.—In addition, in cases of de22 liberate noncompliance by the Postal Service with the re23 quirements of this title, the Postal Regulatory Commission 

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

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

May 25, 2004 
39 

•S 2468 IS 

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

2 incidence of noncompliance. Fines resulting from the pro3 vision of competitive products shall be paid out of the 

4 Competitive Products Fund established in section 2011. 

5 All receipts from fines imposed under this subsection shall 

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

7 United States. 

8 ‘‘§ 3663. Appellate review 

9 ‘‘A person, including the Postal Service, adversely af10 fected or aggrieved by a final order or decision of the Post11 al Regulatory Commission may, within 30 days after such 

12 order or decision becomes final, institute proceedings for 

13 review thereof by filing a petition in the United States 

14 Court of Appeals for the District of Columbia. The court 

15 shall review the order or decision in accordance with sec16 tion 706 of title 5, and chapter 158 and section 2112 of 

17 title 28, on the basis of the record before the Commission. 

18 ‘‘§ 3664. Enforcement of orders 

19 ‘‘The several district courts have jurisdiction specifi20 cally to enforce, and to enjoin and restrain the Postal 

21 Service from violating, any order issued by the Postal Reg22 ulatory Commission.’’. 

May 25, 2004 
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•S 2468 IS 

1 SEC. 206. CLERICAL AMENDMENT. 

2 Chapter 36 of title 39, United States Code, is amend3 ed by striking the heading and analysis for such chapter 

4 and inserting the following: 

‘‘CHAPTER 36—POSTAL RATES, CLASSES, AND SERVICES 

‘‘SUBCHAPTER I—PROVISIONS RELATING TO MARKET-DOMINANT 

PRODUCTS 

‘‘Sec. 

‘‘3621. Applicability; definitions. 

‘‘3622. Modern rate regulation. 

‘‘3623. Service agreements for market-dominant products. 

‘‘[3624. Repealed.] 

‘‘[3625. Repealed.] 

‘‘3626. Reduced Rates. 

‘‘3627. Adjusting free rates. 

‘‘[3628. Repealed.] 

‘‘3629. Reduced rates for voter registration purposes. 

‘‘SUBCHAPTER II—PROVISIONS RELATING TO COMPETITIVE 

PRODUCTS 

‘‘3631. Applicability; definitions and updates. 

‘‘3632. Action of the Governors. 

‘‘3633. Provisions applicable to rates for competitive products. 

‘‘3634. Assumed Federal income tax on competitive products. 

‘‘SUBCHAPTER III—PROVISIONS RELATING TO EXPERIMENTAL 

AND NEW PRODUCTS 

‘‘3641. Market tests of experimental products. 

‘‘3642. New products and transfers of products between the market-dominant 

and competitive categories of mail. 

‘‘SUBCHAPTER IV—REPORTING REQUIREMENTS AND RELATED 

PROVISIONS 

‘‘3651. Annual reports by the Commission. 

‘‘3652. Annual reports to the Commission. 

‘‘3653. Annual determination of compliance. 

‘‘SUBCHAPTER V—POSTAL SERVICES, COMPLAINTS, AND 

JUDICIAL REVIEW 

‘‘3661. Postal Services. 

‘‘3662. Rate and service complaints. 

‘‘3663. Appellate review. 

‘‘3664. Enforcement of orders. 

‘‘SUBCHAPTER VI—GENERAL 

‘‘3681. Reimbursement. 

‘‘3682. Size and weight limits. 

May 25, 2004 
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•S 2468 IS 

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

‘‘3684. Limitations. 

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

‘‘3686. Bonus authority. 

‘‘SUBCHAPTER VII—MODERN SERVICE STANDARDS 

‘‘3691. Establishment of modern service standards.’’. 

1 TITLE III—MODERN SERVICE 

2 STANDARDS 

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

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

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

7 end the following: 

8 ‘‘SUBCHAPTER VII—MODERN SERVICE 

9 STANDARDS 

10 ‘‘§ 3691. Establishment of modern service standards 

11 ‘‘(a) AUTHORITY GENERALLY.—The Postal Regu12 latory Commission shall, within 12 months after the date 

13 of the enactment of this section, by regulation establish 

14 (and may from time to time thereafter by regulation re15 vise) a set of service standards for market-dominant prod16 ucts consistent with sections 101 (a) and (b) and 403. 

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

18 to achieve the following objectives: 

19 ‘‘(1) To enhance and preserve the value of post20 al services to both senders and recipients. 

21 ‘‘(2) To provide a system of objective external 

22 performance measurements for each market-domiMay 25, 2004 
42 

•S 2468 IS 

1 nant product as a basis for measurement of Postal 

2 Service performance. 

3 ‘‘(3) To guarantee Postal Service customers de4 livery reliability, speed and frequency consistent with 

5 reasonable rates and best business practices. 

6 ‘‘(c) FACTORS.—In establishing or revising such 

7 standards, the Postal Regulatory Commission shall take 

8 into account— 

9 ‘‘(1) the actual level of service that Postal Serv10 ice customers receive under any service guidelines 

11 previously established by the Postal Service or serv12 ice standards established under this section; 

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

14 Postal Service performance in the acceptance, proc15 essing and delivery of mail; 

16 ‘‘(3) mail volume and revenues projected for fu17 ture years; 

18 ‘‘(4) the projected growth in the number of ad19 dresses the Postal Service will be required to serve 

20 in future years; 

21 ‘‘(5) the current and projected future cost of 

22 serving Postal Service customers; 

23 ‘‘(6) the effect of changes in technology, demo24 graphics and population distribution on the efficient 

May 25, 2004 
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•S 2468 IS 

1 and reliable operation of the postal delivery system; 

2 and 

3 ‘‘(7) the policies of this title as well as such 

4 other factors as the Commission determines appro5 priate.’’. 

6 SEC. 302. POSTAL SERVICE PLAN. 

7 (a) IN GENERAL.—Within 6 months after the estab8 lishment of the service standards under section 3691 of 

9 title 39, United States Code, as added by this Act, the 

10 Postal Service shall, in consultation with the Postal Regu11 latory Commission, develop and submit to Congress a plan 

12 for meeting those standards. 

13 (b) CONTENT.—The plan under this section shall— 

14 (1) establish performance goals; 

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

16 processing, transportation, delivery, and retail net17 works necessary to allow the Postal Service to meet 

18 the performance goals; and 

19 (3) describe any changes to planning and per20 formance management documents previously sub21 mitted to Congress to reflect new performance goals. 

22 (c) POSTAL FACILITIES.—The Postal Service plan 

23 shall include a description of its long-term vision for 

24 rationalizing its infrastructure and workforce and how it 

25 intends to implement that vision, including— 

May 25, 2004 
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•S 2468 IS 

1 (1) a strategy for how it intends to rationalize 

2 the postal facilities network and remove excess proc3 essing capacity and space from the network, includ4 ing estimated timeframes, criteria and processes to 

5 be used for making changes to the facilities network, 

6 and the process for engaging policy makers and the 

7 public in related decisions; 

8 (2) an update on how postal decisions related to 

9 mail changes, security, automation initiatives, 

10 worksharing, information technology systems, and 

11 other areas will impact network rationalization 

12 plans; 

13 (3) a discussion of what impact any facility 

14 changes may have on the postal workforce and 

15 whether the Postal Service has sufficient flexibility 

16 to make needed workforce changes; and 

17 (4) an identification of anticipated costs, cost 

18 savings, and other benefits associated with the infra19 structure rationalization alternatives discussed in the 

20 plan. 

21 (d) ALTERNATE RETAIL OPTIONS.—The Postal Serv22 ice plan shall include plans to expand and market retail 

23 access to postal services, in addition to post offices, includ24 ing— 

25 (1) vending machines; 

May 25, 2004 
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•S 2468 IS 

1 (2) the Internet; 

2 (3) Postal Service employees on delivery routes; 

3 and 

4 (4) retail facilities in which overhead costs are 

5 shared with private businesses and other government 

6 agencies. 

7 (e) REEMPLOYMENT ASSISTANCE AND RETIREMENT

8 BENEFITS.—The Postal Service plan shall include— 

9 (1) a plan under which reemployment assist10 ance shall be afforded to employees displaced as a 

11 result of the automation or privatization of any of 

12 its functions or the closing and consolidation of any 

13 of its facilities; and 

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

15 Office of Personnel Management, to offer early re16 tirement benefits. 

17 (f) INSPECTOR GENERAL REPORT.— 

18 (1) IN GENERAL.—Before submitting the plan 

19 under this section to Congress, the Postal Service 

20 shall submit the plan to the Inspector General of the 

21 United States Postal Service in a timely manner to 

22 carry out this subsection. 

23 (2) REPORT.—The Inspector General shall pre24 pare a report describing the extent to which the 

25 Postal Service plan— 

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•S 2468 IS 

1 (A) is consistent with the continuing obli2 gations of the Postal Service under title 39, 

3 United States Code; and 

4 (B) provides for the Postal Service to meet 

5 the service standards established under section 

6 3691. 

7 (3) SUBMISSION OF REPORT.—The Postal Serv8 ice shall submit the report of the Inspector General 

9 under this subsection with the plan submitted to 

10 Congress under subsection (a). 

11 TITLE IV—PROVISIONS RELAT12 ING TO FAIR COMPETITION 

13 SEC. 401. POSTAL SERVICE COMPETITIVE PRODUCTS 

14 FUND. 

15 (a) PROVISIONS RELATING TO POSTAL SERVICE

16 COMPETITIVE PRODUCTS FUND AND RELATED MAT17 TERS.— 

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

19 United States Code, is amended by adding at the 

20 end the following: 

21 ‘‘§ 2011. Provisions relating to competitive products 

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

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

24 Service Competitive Products Fund, which shall be availMay 25, 2004 
47 

•S 2468 IS 

1 able to the Postal Service without fiscal year limitation 

2 for the payment of— 

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

4 and 

5 ‘‘(2) all other costs incurred by the Postal Serv6 ice, to the extent allocable to competitive products. 

7 For purposes of this subsection, the term ‘costs attrib8 utable’ has the meaning given such term by section 3631. 

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

10 Products Fund, subject to withdrawal by the Postal Serv11 ice— 

12 ‘‘(1) revenues from competitive products; 

13 ‘‘(2) amounts received from obligations issued 

14 by the Postal Service under subsection (e); 

15 ‘‘(3) interest and dividends earned on invest16 ments of the Competitive Products Fund; and 

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

18 (including from the sale of assets), to the extent al19 locable to competitive products. 

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

21 of the Competitive Products Fund are in excess of current 

22 needs, it may invest such amounts as it considers appro23 priate in accordance with regulations which the Secretary 

24 of the Treasury shall prescribe within 12 months after the 

May 25, 2004 
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1 date of enactment of the Postal Accountability and En2 hancement Act. 

3 ‘‘(d) The Postal Service may, in its sole discretion, 

4 provide that moneys of the Competitive Products Fund be 

5 deposited in a Federal Reserve bank or a depository for 

6 public funds. 

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

8 2005(a), the Postal Service is authorized to borrow money 

9 and to issue and sell such obligations as it determines nec10 essary to provide for competitive products and deposit 

11 such amounts in the Competitive Products Fund, except 

12 that the Postal Service may pledge only assets related to 

13 the provision of competitive products (as determined 

14 under subsection (h) or, for purposes of any period before 

15 accounting practices and principles under subsection (h) 

16 have been established and applied, the best information 

17 available from the Postal Service, including the audited 

18 statements required by section 2008(e)), and the revenues 

19 and receipts from such products, for the payment of the 

20 principal of or interest on such obligations, for the pur21 chase or redemption thereof, and for other purposes inci22 dental thereto, including creation of reserve, sinking, and 

23 other funds which may be similarly pledged and used, to 

24 such extent and in such manner as the Postal Service de25 termines necessary or desirable. 

May 25, 2004 
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•S 2468 IS 

1 ‘‘(2) The Postal Service may enter into binding cov2 enants with the holders of such obligations, and with the 

3 trustee, if any, under any agreement entered into in con4 nection with the issuance thereof with respect to— 

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

6 other funds; 

7 ‘‘(B) application and use of revenues and re8 ceipts of the Competitive Products Fund; 

9 ‘‘(C) stipulations concerning the subsequent 

10 issuance of obligations or the execution of leases or 

11 lease purchases relating to properties of the Postal 

12 Service; and 

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

14 considers necessary or desirable to enhance the mar15 ketability of such obligations. 

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

17 this subsection— 

18 ‘‘(A) may not be purchased by the Secretary of 

19 the Treasury; 

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

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

23 ‘‘(C) shall not be obligations of, nor shall pay24 ment of the principal thereof or interest thereon be 

May 25, 2004 
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•S 2468 IS 

1 guaranteed by, the Government of the United 

2 States, and the obligations shall so plainly state; and 

3 ‘‘(D) notwithstanding the provisions of the Fed4 eral Financing Bank Act of 1973 or any other provi5 sion of law (except as specifically provided by ref6 erence to this subparagraph in a law enacted after 

7 this subparagraph takes effect), shall not be eligible 

8 for purchase by, commitment to purchase by, or sale 

9 or issuance to, the Federal Financing Bank. 

10 ‘‘(4)(A) This paragraph applies with respect to the 

11 period beginning on the date of the enactment of this 

12 paragraph and ending at the close of the 5-year period 

13 which begins on the date on which the Postal Service 

14 makes its submission under subsection (h)(1). 

15 ‘‘(B) During the period described in subparagraph 

16 (A), nothing in subparagraph (A) or (D) of paragraph (3) 

17 or the last sentence of section 2006(b) shall, with respect 

18 to any obligations sought to be issued by the Postal Serv19 ice under this subsection, be considered to affect such obli20 gations’ eligibility for purchase by, commitment to pur21 chase by, or sale or issuance to, the Federal Financing 

22 Bank. 

23 ‘‘(C) The Federal Financing Bank may elect to pur24 chase such obligations under such terms, including rates 

25 of interest, as the Bank and the Postal Service may agree, 

May 25, 2004 
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1 but at a rate of yield no less than the prevailing yield on 

2 outstanding marketable securities of comparable maturity 

3 issued by entities with the same credit rating as the rating 

4 then most recently obtained by the Postal Service under 

5 subparagraph (D), as determined by the Bank. 

6 ‘‘(D) In order to be eligible to borrow under this 

7 paragraph, the Postal Service shall first obtain a credit 

8 rating from a nationally recognized credit rating organiza9 tion. Such rating— 

10 ‘‘(i) shall be determined taking into account 

11 only those assets and activities of the Postal Service 

12 which are described in section 3634(a)(2) (relating 

13 to the Postal Service’s assumed taxable income from 

14 competitive products); and 

15 ‘‘(ii) may, before final rules of the Postal Regu16 latory Commission under subsection (h) are issued 

17 (or deemed to have been issued), be based on the 

18 best information available from the Postal Service, 

19 including the audited statements required by section 

20 2008(e). 

21 ‘‘(f) The receipts and disbursements of the Competi22 tive Products Fund shall be accorded the same budgetary 

23 treatment as is accorded to receipts and disbursements of 

24 the Postal Service Fund under section 2009a. 

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•S 2468 IS 

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

2 Government of the United States (or settlement of a 

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

4 of the Postal Service in the provision of competitive prod5 ucts, be paid out of the Competitive Products Fund. 

6 ‘‘(h)(1) The Postal Service, in consultation with an 

7 independent, certified public accounting firm and such 

8 other advisors as it considers appropriate, shall develop 

9 recommendations regarding— 

10 ‘‘(A) the accounting practices and principles 

11 that should be followed by the Postal Service with 

12 the objectives of identifying the capital and oper13 ating costs incurred by the Postal Service in pro14 viding competitive products, and preventing the 

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

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

18 should be followed in determining the Postal Serv19 ice’s assumed Federal income tax on competitive 

20 products income for any year (within the meaning of 

21 section 3634). 

22 Such recommendations shall be submitted to the Postal 

23 Regulatory Commission no later than 12 months after the 

24 effective date of this section. 

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

2 Postal Service under paragraph (1), the Commission shall 

3 give interested parties, including the Postal Service, enter4 prises in the private sector of the economy engaged in the 

5 delivery of mail matter other than letters, users of the 

6 mails, and an officer of the Commission who shall be re7 quired to represent the interests of the general public, an 

8 opportunity to present their views on those recommenda9 tions through submission of written data, views, or argu10 ments with or without opportunity for oral presentation, 

11 or in such other manner as the Commission considers ap12 propriate. 

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

14 information received under subparagraph (A), the Com15 mission shall by rule— 

16 ‘‘(i) provide for the establishment and applica17 tion of the accounting practices and principles which 

18 shall be followed by the Postal Service; 

19 ‘‘(ii) provide for the establishment and applica20 tion of the substantive and procedural rules de21 scribed in paragraph (1)(B); and 

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

23 Service to the Postal Regulatory Commission of an24 nual and other periodic reports setting forth such in25 formation as the Commission may require. 

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•S 2468 IS 

1 Final rules under this subparagraph shall be issued not 

2 later than 12 months after the date on which the Postal 

3 Service makes its submission to the Commission under 

4 paragraph (1) (or by such later date as the Commission 

5 and the Postal Service may agree to). If final rules are 

6 not issued by the Commission by the deadline under the 

7 preceding sentence, the recommendations submitted by 

8 the Postal Service under paragraph (1) shall be treated 

9 as the final rules. The Commission is authorized to pro10 mulgate regulations revising such rules. 

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

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

13 include such information, as the Commission by rule re14 quires. The Commission may, on its own motion or on re15 quest of an interested party, initiate proceedings (to be 

16 conducted in accordance with such rules as the Commis17 sion shall prescribe) to improve the quality, accuracy, or 

18 completeness of Postal Service data under such subpara19 graph whenever it shall appear that— 

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

21 those reports has become significantly inaccurate or 

22 can be significantly improved; or 

23 ‘‘(ii) such revisions are, in the judgment of the 

24 Commission, otherwise necessitated by the public in25 terest. 

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•S 2468 IS 

1 ‘‘(D) A copy of each report described in subpara2 graph (B)(iii) shall also be transmitted by the Postal Serv3 ice to the Secretary of the Treasury and the Inspector 

4 General of the United States Postal Service. 

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

6 to the Secretary of the Treasury concerning the operation 

7 of the Competitive Products Fund, in which it shall ad8 dress such matters as risk limitations, reserve balances, 

9 allocation or distribution of moneys, liquidity require10 ments, and measures to safeguard against losses. A copy 

11 of its then most recent report under this subsection shall 

12 be included with any other submission that it is required 

13 to make to the Postal Regulatory Commission under sec14 tion 3652(g).’’. 

15 (2) CLERICAL AMENDMENT.—The analysis for 

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

17 amended by adding after the item relating to section 

18 2010 the following: 

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

19 (b) TECHNICAL AND CONFORMING AMENDMENTS.— 

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

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

22 at the end of paragraph (1), by redesignating para23 graph (2) as paragraph (3), and by inserting after 

24 paragraph (1) the following: 

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•S 2468 IS 

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

2 Postal Service Competitive Products Fund estab3 lished by section 2011; and’’. 

4 (2) CAPITAL OF THE POSTAL SERVICE.—Sec5 tion 2002(b) of title 39, United States Code, is 

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

7 and the balance in the Competitive Products 

8 Fund,’’. 

9 (3) POSTAL SERVICE FUND.— 

10 (A) PURPOSES FOR WHICH AVAILABLE.— 

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

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

13 ‘‘title (other than any of the purposes, func14 tions, or powers for which the Competitive 

15 Products Fund is available).’’. 

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

17 39, United States Code, is amended by striking 

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

19 provided in section 2011, there’’. 

20 (4) RELATIONSHIP BETWEEN THE TREASURY

21 AND THE POSTAL SERVICE.—Section 2006 of title 

22 39, United States Code, is amended— 

23 (A) in subsection (b), by adding at the end 

24 the following: ‘‘Nothing in this chapter shall be 

25 considered to permit or require the Secretary of 

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•S 2468 IS 

1 the Treasury to purchase any obligations of the 

2 Postal Service other than those issued under 

3 section 2005.’’; and 

4 (B) in subsection (c), by inserting ‘‘under 

5 section 2005’’ before ‘‘shall be obligations’’. 

6 SEC. 402. ASSUMED FEDERAL INCOME TAX ON COMPETI7 TIVE PRODUCTS INCOME. 

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

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

10 at the end the following: 

11 ‘‘§ 3634. Assumed Federal income tax on competitive 

12 products income 

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

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

15 competitive products income’ means the net income 

16 tax that would be imposed by chapter 1 of the Inter17 nal Revenue Code of 1986 on the Postal Service’s 

18 assumed taxable income from competitive products 

19 for the year; and 

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

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

22 to the amount representing what would be the tax23 able income of a corporation under the Internal Rev24 enue Code of 1986 for the year, if— 

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

2 were the activities of the Postal Service allo3 cable under section 2011(h) to competitive 

4 products; and 

5 ‘‘(B) the only assets held by such corpora6 tion were the assets of the Postal Service allo7 cable under section 2011(h) to such activities. 

8 ‘‘(b) COMPUTATION AND TRANSFER REQUIRE9 MENTS.—The Postal Service shall, for each year beginning 

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

11 Service’s first report to the Postal Regulatory Commission 

12 under section 3652(a)— 

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

14 on competitive products income for such year; and 

15 ‘‘(2) transfer from the Competitive Products 

16 Fund to the Postal Service Fund the amount of that 

17 assumed tax. 

18 ‘‘(c) DEADLINE FOR TRANSFERS.—Any transfer re19 quired to be made under this section for a year shall be 

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

21 the close of such year.’’. 

22 SEC. 403. UNFAIR COMPETITION PROHIBITED. 

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

24 United States Code, is amended by adding after section 

25 404 the following: 

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•S 2468 IS 

1 ‘‘§ 404a. Specific limitations 

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

3 Postal Service may not: 

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

5 any standard) the effect of which is to preclude com6 petition or establish the terms of competition unless 

7 the Postal Service demonstrates that the regulation 

8 does not create an unfair competitive advantage for 

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

10 the Postal Service; 

11 ‘‘(2) compel the disclosure, transfer, or licens12 ing of intellectual property to any third party (such 

13 as patents, copyrights, trademarks, trade secrets, 

14 and proprietary information); or 

15 ‘‘(3) obtain information from a person that pro16 vides (or seeks to provide) any product, and then 

17 offer any postal service that uses or is based in 

18 whole or in part on such information, without the 

19 consent of the person providing that information, 

20 unless substantially the same information is obtained 

21 (or obtainable) from an independent source or is 

22 otherwise obtained (or obtainable). 

23 ‘‘(b) The Postal Regulatory Commission shall pre24 scribe regulations to carry out this section. 

25 ‘‘(c) Any party (including an officer of the Commis26 sion representing the interests of the general public) who 

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•S 2468 IS 

1 believes that the Postal Service has violated this section 

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

3 (b) CONFORMING AMENDMENTS.— 

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

5 39, United States Code, is amended by striking 

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

7 section 404a, the’’. 

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

9 39, United States Code, is amended by striking 

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

11 of section 404a, but otherwise without’’. 

12 (c) CLERICAL AMENDMENT.—The analysis for chap13 ter 4 of title 39, United States Code, is amended by insert14 ing after the item relating to section 404 the following: 

‘‘404a. Specific limitations.’’. 

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

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

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

18 (e) and inserting the following: 

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

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

21 Service— 

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

23 used in the provisions of law involved; and 

24 ‘‘(B) shall not be immune under any other doc25 trine of sovereign immunity from suit in Federal 

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

2 provisions of law by any officer or employee of the 

3 Postal Service. 

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

5 ‘‘(A) the Act of July 5, 1946 (commonly re6 ferred to as the ‘Trademark Act of 1946’ (15 U.S.C. 

7 1051 and following)); and 

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

9 Trade Commission Act to the extent that such sec10 tion 5 applies to unfair or deceptive acts or prac11 tices. 

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

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

14 Postal Service, engages in conduct with respect to any 

15 product which is not reserved to the United States under 

16 section 1696 of title 18, the Postal Service or other Fed17 eral agency (as the case may be)— 

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

19 sovereign immunity from suit in Federal court by 

20 any person for any violation of Federal law by such 

21 agency or any officer or employee thereof; and 

22 ‘‘(B) shall be considered to be a person (as de23 fined in subsection (a) of the first section of the 

24 Clayton Act) for purposes of— 

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•S 2468 IS 

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

2 subsection); and 

3 ‘‘(ii) section 5 of the Federal Trade Com4 mission Act to the extent that such section 5 

5 applies to unfair methods of competition. 

6 For purposes of the preceding sentence, any private car7 riage of mail allowable by virtue of section 601 shall not 

8 be considered a service reserved to the United States 

9 under section 1696 of title 18. 

10 ‘‘(2) No damages, interest on damages, costs or at11 torney’s fees may be recovered under the antitrust laws 

12 (as so defined) from the Postal Service or any officer or 

13 employee thereof acting in an official capacity for any con14 duct with respect to a product in the market-dominant 

15 category of mail. 

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

17 conduct occurring before the date of the enactment of this 

18 subsection. 

19 ‘‘(f) To the extent that the Postal Service engages 

20 in conduct with respect to the provision of competitive 

21 products, it shall be considered a person for the purposes 

22 of the Federal bankruptcy laws. 

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

24 Postal Service shall be constructed or altered, to the max25 imum extent feasible as determined by the Postal Service, 

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•S 2468 IS 

1 in compliance with 1 of the nationally recognized model 

2 building codes and with other applicable nationally recog3 nized codes. 

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

5 Postal Service shall be constructed or altered only after 

6 consideration of all requirements (other than procedural 

7 requirements) of zoning laws, land use laws, and applica8 ble environmental laws of a State or subdivision of a State 

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

10 constructed or altered by an establishment of the Govern11 ment of the United States. 

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

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

14 Postal Service shall— 

15 ‘‘(A) in preparing plans for the building, con16 sult with appropriate officials of the State or polit17 ical subdivision, or both, in which the building will 

18 be located; 

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

20 timely manner to such officials for review by such 

21 officials for a reasonable period of time not exceed22 ing 30 days; and 

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

24 construction or alteration of the building, in accord25 ance with the customary schedule of inspections for 

May 25, 2004 
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1 construction or alteration of buildings in the locality, 

2 if such officials provide to the Postal Service— 

3 ‘‘(i) a copy of such schedule before con4 struction of the building is begun; and 

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

6 conduct any inspection before conducting such 

7 inspection. 

8 Nothing in this subsection shall impose an obligation on 

9 any State or political subdivision to take any action under 

10 the preceding sentence, nor shall anything in this sub11 section require the Postal Service or any of its contractors 

12 to pay for any action taken by a State or political subdivi13 sion to carry out this subsection (including reviewing 

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

15 permits, and making recommendations). 

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

17 subdivision of a State may make recommendations to the 

18 Postal Service concerning measures necessary to meet the 

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

20 may also make recommendations to the Postal Service 

21 concerning measures which should be taken in the con22 struction or alteration of the building to take into account 

23 local conditions. The Postal Service shall give due consid24 eration to any such recommendations. 

May 25, 2004 
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•S 2468 IS 

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

2 officials under paragraph (3), the Postal Service shall es3 tablish procedures for soliciting, assessing, and incor4 porating local community input on real property and land 

5 use decisions. 

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

7 includes the District of Columbia, the Commonwealth of 

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

9 States. 

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

11 legal representation may not be furnished by the Depart12 ment of Justice to the Postal Service in any action, suit, 

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

14 the following: 

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

16 ‘‘(B) Subsection (f) or (g) of section 504 (relat17 ing to administrative subpoenas by the Postal Regu18 latory Commission). 

19 ‘‘(C) Section 3663 (relating to appellate re20 view). 

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

22 attorneys to obtain any legal representation that it is pre23 cluded from obtaining from the Department of Justice 

24 under this paragraph. 

May 25, 2004 
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•S 2468 IS 

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

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

3 furnish the Postal Service such legal representation as it 

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

5 Attorney General, the Postal Service may, in any such cir6 cumstance, employ attorneys by contract or otherwise to 

7 conduct litigation brought by or against the Postal Service 

8 or its officers or employees in matters affecting the Postal 

9 Service. 

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

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

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

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

14 is not otherwise a party, the Commission shall be per15 mitted to appear as a party on its own motion and as 

16 of right. 

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

18 terms and conditions as the Commission and the Attorney 

19 General shall consider appropriate, furnish the Commis20 sion such legal representation as it may require in connec21 tion with any such action, suit, or proceeding, except that, 

22 with the prior consent of the Attorney General, the Com23 mission may employ attorneys by contract or otherwise for 

24 that purpose. 

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•S 2468 IS 

1 ‘‘(i) A judgment against the Government of the 

2 United States arising out of activities of the Postal Service 

3 shall be paid by the Postal Service out of any funds avail4 able to the Postal Service, subject to the restriction speci5 fied in section 2011(g).’’. 

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

7 title 39, United States Code, is amended by striking ‘‘Ex8 cept as provided in section 3628 of this title,’’ and insert9 ing ‘‘Except as otherwise provided in this title,’’. 

10 TITLE V—GENERAL PROVISIONS 

11 SEC. 501. QUALIFICATION AND TERM REQUIREMENTS FOR 

12 GOVERNORS. 

13 (a) QUALIFICATIONS.— 

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

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

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

17 sentence and inserting the following: ‘‘The Gov18 ernors shall represent the public interest generally, 

19 and shall be chosen solely on the basis of their dem20 onstrated ability in managing organizations or cor21 porations (in either the public or private sector) of 

22 substantial size. The Governors shall not be rep23 resentatives of specific interests using the Postal 

24 Service, and may be removed only for cause.’’. 

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•S 2468 IS 

1 (2) APPLICABILITY.—The amendment made by 

2 paragraph (1) shall not affect the appointment or 

3 tenure of any person serving as a Governor of the 

4 United States Postal Service under an appointment 

5 made before the date of the enactment of this Act; 

6 however, when any such office becomes vacant, the 

7 appointment of any person to fill that office shall be 

8 made in accordance with such amendment. The re9 quirement set forth in the fourth sentence of section 

10 202(a)(1) of title 39, United States Code (as amend11 ed by subsection (a)) shall be met beginning not 

12 later than 9 years after the date of the enactment 

13 of this Act. 

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

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

16 the end the following: 

17 ‘‘(2) In selecting the individuals described in para18 graph (1) for nomination for appointment to the position 

19 of Governor, the President should consult with the Speak20 er of the House of Representatives, the minority leader 

21 of the House of Representatives, the majority leader of 

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

23 (c) 5-YEAR TERMS.— 

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•S 2468 IS 

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

2 United States Code, is amended in the first sentence 

3 by striking ‘‘9 years’’ and inserting ‘‘5 years’’. 

4 (2) APPLICABILITY.— 

5 (A) CONTINUATION BY INCUMBENTS.— 

6 The amendment made by paragraph (1) shall 

7 not affect the tenure of any person serving as 

8 a Governor of the United States Postal Service 

9 on the date of enactment of this Act and such 

10 person may continue to serve the remainder of 

11 the applicable term. 

12 (B) VACANCY BY INCUMBENT BEFORE 5

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

14 as a Governor of the United States Postal Serv15 ice on the date of enactment of this Act resigns, 

16 is removed, or dies before the expiration of the 

17 9-year term of that Governor, and that Gov18 ernor has served less than 5 years of that term, 

19 the resulting vacancy in office shall be treated 

20 as a vacancy in a 5-year term. 

21 (C) VACANCY BY INCUMBENT AFTER 5

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

23 as a Governor of the United States Postal Serv24 ice on the date of enactment of this Act resigns, 

25 is removed, or dies before the expiration of the 

May 25, 2004 
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•S 2468 IS 

1 9-year term of that Governor, and that Gov2 ernor has served 5 years or more of that term, 

3 that term shall be deemed to have been a 5-year 

4 term beginning on its commencement date for 

5 purposes of determining vacancies in office. Any 

6 appointment to the vacant office shall be for a 

7 5-year term beginning at the end of the original 

8 9-year term determined without regard to the 

9 deeming under the preceding sentence. Nothing 

10 in this subparagraph shall be construed to af11 fect any action or authority of any Governor or 

12 the Board of Governors during any portion of 

13 a 9-year term deemed to be a 5-year term 

14 under this subparagraph. 

15 (d) TERM LIMITATION.— 

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

17 United States Code, is amended— 

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

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

20 ‘‘(2) No person may serve more than 3 terms 

21 as a Governor.’’. 

22 (2) APPLICABILITY.—The amendments made 

23 by paragraph (1) shall not affect the tenure of any 

24 person serving as a Governor of the United States 

25 Postal Service on the date of enactment of this Act 

May 25, 2004 
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•S 2468 IS 

1 with respect to the term which that person is serving 

2 on that date. Such person may continue to serve the 

3 remainder of the applicable term, after which the 

4 amendments made by paragraph (1) shall apply. 

5 SEC. 502. OBLIGATIONS. 

6 (a) PURPOSES FOR WHICH OBLIGATIONS MAY BE

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

8 39, United States Code, is amended by striking ‘‘title.’’ 

9 and inserting ‘‘title, other than any of the purposes for 

10 which the corresponding authority is available to the Post11 al Service under section 2011.’’. 

12 (b) INCREASE RELATING TO OBLIGATIONS ISSUED

13 FOR CAPITAL IMPROVEMENTS.—Section 2005(a)(1) of 

14 title 39, United States Code, is amended by striking the 

15 third sentence. 

16 (c) AMOUNTS WHICH MAY BE PLEDGED.— 

17 (1) OBLIGATIONS TO WHICH PROVISIONS

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

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

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

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

22 (2) ASSETS, REVENUES, AND RECEIPTS TO

23 WHICH PROVISIONS APPLY.—Subsection (b) of sec24 tion 2005 of title 39, United States Code, is amendMay 25, 2004 
72 

•S 2468 IS 

1 ed by striking ‘‘(b)’’ and inserting ‘‘(b)(1)’’, and by 

2 adding at the end the following: 

3 ‘‘(2) Notwithstanding any other provision of this sec4 tion— 

5 ‘‘(A) the authority to pledge assets of the Post6 al Service under this subsection shall be available 

7 only to the extent that such assets are not related 

8 to the provision of competitive products (as deter9 mined under section 2011(h) or, for purposes of any 

10 period before accounting practices and principles 

11 under section 2011(h) have been established and ap12 plied, the best information available from the Postal 

13 Service, including the audited statements required 

14 by section 2008(e)); and 

15 ‘‘(B) any authority under this subsection relat16 ing to the pledging or other use of revenues or re17 ceipts of the Postal Service shall be available only to 

18 the extent that they are not revenues or receipts of 

19 the Competitive Products Fund.’’. 

20 SEC. 503. PRIVATE CARRIAGE OF LETTERS. 

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

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

23 inserting the following: 

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

25 when— 

May 25, 2004 
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•S 2468 IS 

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

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

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

4 single-piece first class letter; 

‘‘(2) the letter weighs at least 121 5 ⁄2 ounces; or 

6 ‘‘(3) such carriage is within the scope of serv7 ices described by regulations of the United States 

8 Postal Service (as in effect on July 1, 2001) that 

9 purport to permit private carriage by suspension of 

10 the operation of this section (as then in effect). 

11 ‘‘(c) Any regulations necessary to carry out this sec12 tion shall be promulgated by the Postal Regulatory Com13 mission.’’. 

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

15 on the date as of which the regulations promulgated under 

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

17 by section 202) take effect. 

18 SEC. 504. RULEMAKING AUTHORITY. 

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

20 States Code, is amended to read as follows: 

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

22 and regulations, not inconsistent with this title, as 

23 may be necessary in the execution of its functions 

24 under this title and such other functions as may be 

May 25, 2004 
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•S 2468 IS 

1 assigned to the Postal Service under any provisions 

2 of law outside of this title;’’. 

3 SEC. 505. NONINTERFERENCE WITH COLLECTIVE BAR4 GAINING AGREEMENTS. 

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

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

7 ‘‘§ 1207. Labor disputes 

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

9 effect, no party to such agreement shall terminate or mod10 ify such agreement unless the party desiring such termi11 nation or modification serves written notice upon the other 

12 party to the agreement of the proposed termination or 

13 modification not less than 90 days prior to the expiration 

14 date thereof, or not less than 90 days prior to the time 

15 it is proposed to make such termination or modification. 

16 The party serving such notice shall notify the Federal Me17 diation and Conciliation Service of the existence of a dis18 pute within 45 days of such notice, if no agreement has 

19 been reached by that time. 

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

21 a procedure providing for a binding resolution of a dispute 

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

23 date of the proposed termination or modification, the Di24 rector of the Federal Mediation and Conciliation Service 

25 shall within 10 days appoint a mediator of nationwide repMay 25, 2004 
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1 utation and professional stature, and who is also a mem2 ber of the National Academy of Arbitrators. The parties 

3 shall cooperate with the mediator in an effort to reach an 

4 agreement and shall meet and negotiate in good faith at 

5 such times and places that the mediator, in consultation 

6 with the parties, shall direct. 

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

8 after the expiration or termination of the agreement or 

9 the date on which the agreement became subject to modi10 fication under subsection (a) of this section, or if the par11 ties decide upon arbitration but do not agree upon the pro12 cedures therefore, an arbitration board shall be established 

13 consisting of 3 members, 1 of whom shall be selected by 

14 the Postal Service, 1 by the bargaining representative of 

15 the employees, and the third by the 2 thus selected. If 

16 either of the parties fails to select a member, or if the 

17 members chosen by the parties fail to agree on the third 

18 person within 5 days after their first meeting, the selection 

19 shall be made from a list of names provided by the Direc20 tor. This list shall consist of not less then 9 names of arbi21 trators of nationwide reputation and professional nature, 

22 who are also members of the National Academy of Arbi23 trators, and whom the Director has determined are avail24 able and willing to serve. 

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

2 full and fair hearing, including an opportunity to present 

3 evidence in support of their claims, and an opportunity 

4 to present their case in person, by counsel or by other rep5 resentative as they may elect. Decisions of the arbitration 

6 board shall be conclusive and binding upon the parties. 

7 The arbitration board shall render its decision within 45 

8 days after its appointment. 

9 ‘‘(3) Costs of the arbitration board and mediation 

10 shall be shared equally by the Postal Service and the bar11 gaining representative. 

12 ‘‘(d) In the case of a bargaining unit whose recog13 nized collective-bargaining representative does not have an 

14 agreement with the Postal Service, if the parties fail to 

15 reach the agreement within 90 days of the commencement 

16 of collective bargaining, a mediator shall be appointed in 

17 accordance with the terms in subsection (b) of this section, 

18 unless the parties have previously agreed to another proce19 dure for a binding resolution of their differences. If the 

20 parties fail to reach agreement within 180 days of the 

21 commencement of collective bargaining, and if they have 

22 not agreed to another procedure for binding resolution, an 

23 arbitration board shall be established to provide conclusive 

24 and binding arbitration in accordance with the terms of 

25 subsection (c) of this section.’’. 

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1 (b) NONINTERFERENCE WITH COLLECTIVE BAR2 GAINING AGREEMENTS.—Except as otherwise provided by 

3 the amendment made by subsection (a), nothing in this 

4 Act shall restrict, expand, or otherwise affect any of the 

5 rights, privileges, or benefits of either employees of or 

6 labor organizations representing employees of the United 

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

8 States Code, the National Labor Relations Act, any hand9 book or manual affecting employee labor relations within 

10 the United States Postal Service, or any collective bar11 gaining agreement. 

12 (c) FREE MAILING PRIVILEGES CONTINUE UN13 CHANGED.—Nothing in this Act or any amendment made 

14 by this Act shall affect any free mailing privileges ac15 corded under section 3217 or sections 3403 through 3406 

16 of title 39, United States Code. 

17 TITLE VI—ENHANCED 

18 REGULATORY COMMISSION 

19 SEC. 601. REORGANIZATION AND MODIFICATION OF CER20 TAIN PROVISIONS RELATING TO THE POSTAL 

21 REGULATORY COMMISSION. 

22 (a) TRANSFER AND REDESIGNATION.—Title 39, 

23 United States Code, is amended— 

24 (1) by inserting after chapter 4 the following: 

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1 ‘‘CHAPTER 5—POSTAL REGULATORY 

2 COMMISSION 

‘‘Sec. 

‘‘501. Establishment. 

‘‘502. Commissioners. 

‘‘503. Rules; regulations; procedures. 

‘‘504. Administration. 

3 ‘‘§ 501. Establishment 

4 ‘‘The Postal Regulatory Commission is an inde5 pendent establishment of the executive branch of the Gov6 ernment of the United States. 

7 ‘‘§ 502. Commissioners 

8 ‘‘(a) The Postal Regulatory Commission is composed 

9 of 5 Commissioners, appointed by the President, by and 

10 with the advice and consent of the Senate. The Commis11 sioners shall be chosen solely on the basis of their technical 

12 qualifications, professional standing, and demonstrated 

13 expertise in economics, accounting, law, or public adminis14 tration, and may be removed by the President only for 

15 cause. Each individual appointed to the Commission shall 

16 have the qualifications and expertise necessary to carry 

17 out the enhanced responsibilities accorded Commissioners 

18 under the Postal Accountability and Enhancement Act. 

19 Not more than 3 of the Commissioners may be adherents 

20 of the same political party. 

21 ‘‘(b) No Commissioner shall be financially interested 

22 in any enterprise in the private sector of the economy en23 gaged in the delivery of mail matter. 

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1 ‘‘(c) A Commissioner may continue to serve after the 

2 expiration of his term until his successor has qualified, 

3 except that a Commissioner may not so continue to serve 

4 for more than 1 year after the date upon which his term 

5 otherwise would expire under subsection (f). 

6 ‘‘(d) One of the Commissioners shall be designated 

7 as Chairman by, and shall serve in the position of Chair8 man at the pleasure of, the President. 

9 ‘‘(e) The Commissioners shall by majority vote des10 ignate a Vice Chairman of the Commission. The Vice 

11 Chairman shall act as Chairman of the Commission in the 

12 absence of the Chairman. 

13 ‘‘(f) The Commissioners shall serve for terms of 6 

14 years.’’; 

15 (2) by striking, in subchapter I of chapter 36 

16 (as in effect before the amendment made by section 

17 201(c)), the heading for such subchapter I and all 

18 that follows through section 3602; and 

19 (3) by redesignating sections 3603 and 3604 as 

20 sections 503 and 504, respectively, and transferring 

21 such sections to the end of chapter 5 (as inserted by 

22 paragraph (1)). 

23 (b) APPLICABILITY.—The amendment made by sub24 section (a)(1) shall not affect the appointment or tenure 

25 of any person serving as a Commissioner on the Postal 

May 25, 2004 
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1 Regulatory Commission (as so redesignated by section 

2 604) under an appointment made before the date of the 

3 enactment of this Act or any nomination made before that 

4 date, but, when any such office becomes vacant, the ap5 pointment of any person to fill that office shall be made 

6 in accordance with such amendment. 

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

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

9 after the item relating to chapter 4 the following: 

‘‘5. Postal Regulatory Commission ........................................ 501’’. 

10 SEC. 602. AUTHORITY FOR POSTAL REGULATORY COMMIS11 SION TO ISSUE SUBPOENAS. 

12 Section 504 of title 39, United States Code (as so 

13 redesignated by section 601) is amended by adding at the 

14 end the following: 

15 ‘‘(f)(1) Any Commissioner of the Postal Regulatory 

16 Commission, any administrative law judge appointed by 

17 the Commission under section 3105 of title 5, and any 

18 employee of the Commission designated by the Commis19 sion may administer oaths, examine witnesses, take depo20 sitions, and receive evidence. 

21 ‘‘(2) The Chairman of the Commission, any Commis22 sioner designated by the Chairman, and any administra23 tive law judge appointed by the Commission under section 

24 3105 of title 5 may, with respect to any proceeding con25 ducted by the Commission under this title— 

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1 ‘‘(A) issue subpoenas requiring the attendance 

2 and presentation of testimony by, or the production 

3 of documentary or other evidence in the possession 

4 of, any covered person; and 

5 ‘‘(B) order the taking of depositions and re6 sponses to written interrogatories by a covered per7 son. 

8 The written concurrence of a majority of the Commis9 sioners then holding office shall, with respect to each sub10 poena under subparagraph (A), be required in advance of 

11 its issuance. 

12 ‘‘(3) In the case of contumacy or failure to obey a 

13 subpoena issued under this subsection, upon application 

14 by the Commission, the district court of the United States 

15 for the district in which the person to whom the subpoena 

16 is addressed resides or is served may issue an order requir17 ing such person to appear at any designated place to tes18 tify or produce documentary or other evidence. Any failure 

19 to obey the order of the court may be punished by the 

20 court as a contempt thereof. 

21 ‘‘(4) For purposes of this subsection, the term ‘cov22 ered person’ means an officer, employee, agent, or con23 tractor of the Postal Service. 

24 ‘‘(g)(1) If the Postal Service determines that any doc25 ument or other matter it provides to the Postal Regulatory 

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1 Commission under a subpoena issued under subsection (f), 

2 or otherwise at the request of the Commission in connec3 tion with any proceeding or other purpose under this title, 

4 contains information which is described in section 410(c) 

5 of this title, or exempt from public disclosure under sec6 tion 552(b) of title 5, the Postal Service shall, at the time 

7 of providing such matter to the Commission, notify the 

8 Commission, in writing, of its determination (and the rea9 sons therefor). 

10 ‘‘(2) Except as provided in paragraph (3), no officer 

11 or employee of the Commission may, with respect to any 

12 information as to which the Commission has been notified 

13 under paragraph (1)— 

14 ‘‘(A) use such information for purposes other 

15 than the purposes for which it is supplied; or 

16 ‘‘(B) permit anyone who is not an officer or 

17 employee of the Commission to have access to any 

18 such information. 

19 ‘‘(3)(A) Paragraph (2) shall not prohibit the 

20 Commission from publicly disclosing relevant infor21 mation in furtherance of its duties under this title, 

22 provided that the Commission has adopted regula23 tions under section 553 of title 5, that establish a 

24 procedure for according appropriate confidentiality 

25 to information identified by the Postal Service under 

May 25, 2004 
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1 paragraph (1). In determining the appropriate de2 gree of confidentiality to be accorded information 

3 identified by the Postal Service under paragraph (1), 

4 the Commission shall balance the nature and extent 

5 of the likely commercial injury to the Postal Service 

6 against the public interest in maintaining the finan7 cial transparency of a government establishment 

8 competing in commercial markets. 

9 ‘‘(B) Paragraph (2) shall not prevent the Com10 mission from requiring production of information in 

11 the course of any discovery procedure established in 

12 connection with a proceeding under this title. The 

13 Commission shall, by regulations based on rule 26(c) 

14 of the Federal Rules of Civil Procedure, establish 

15 procedures for ensuring appropriate confidentiality 

16 for information furnished to any party.’’. 

17 SEC. 603. APPROPRIATIONS FOR THE POSTAL REGU18 LATORY COMMISSION. 

19 (a) AUTHORIZATION OF APPROPRIATIONS.—Sub20 section (d) of section 504 of title 39, United States Code 

21 (as so redesignated by section 601) is amended to read 

22 as follows: 

23 ‘‘(d) There are authorized to be appropriated, out of 

24 the Postal Service Fund, such sums as may be necessary 

25 for the Postal Regulatory Commission. In requesting an 

May 25, 2004 
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1 appropriation under this subsection for a fiscal year, the 

2 Commission shall prepare and submit to the Congress 

3 under section 2009 a budget of the Commission’s ex4 penses, including expenses for facilities, supplies, com5 pensation, and employee benefits.’’. 

6 (b) BUDGET PROGRAM.— 

7 (1) IN GENERAL.—The next to last sentence of 

8 section 2009 of title 39, United States Code, is 

9 amended to read as follows: ‘‘The budget program 

10 shall also include separate statements of the 

11 amounts which (1) the Postal Service requests to be 

12 appropriated under subsections (b) and (c) of section 

13 2401, (2) the Office of Inspector General of the 

14 United States Postal Service requests to be appro15 priated, out of the Postal Service Fund, under sec16 tion 8G(f) of the Inspector General Act of 1978, and 

17 (3) the Postal Regulatory Commission requests to be 

18 appropriated, out of the Postal Service Fund, under 

19 section 504(d) of this title.’’. 

20 (2) CONFORMING AMENDMENT.—Section 

21 2003(e)(1) of title 39, United States Code, is 

22 amended by striking the first sentence and inserting 

23 the following: ‘‘The Fund shall be available for the 

24 payment of (A) all expenses incurred by the Postal 

25 Service in carrying out its functions as provided by 

May 25, 2004 
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1 law, subject to the same limitation as set forth in the 

2 parenthetical matter under subsection (a); (B) all ex3 penses of the Postal Regulatory Commission, subject 

4 to the availability of amounts appropriated under sec5 tion 504(d); and (C) all expenses of the Office of In6 spector General, subject to the availability of amounts 

7 appropriated under section 8G(f) of the Inspector 

8 General Act of 1978.’’. 

9 (c) EFFECTIVE DATE.— 

10 (1) IN GENERAL.—The amendments made by 

11 this section shall apply with respect to fiscal years 

12 beginning on or after October 1, 2002. 

13 (2) SAVINGS PROVISION.—The provisions of 

14 title 39, United States Code, that are amended by 

15 this section shall, for purposes of any fiscal year be16 fore the first fiscal year to which the amendments 

17 made by this section apply, continue to apply in the 

18 same way as if this section had never been enacted. 

19 SEC. 604. REDESIGNATION OF THE POSTAL RATE COMMIS20 SION. 

21 (a) AMENDMENTS TO TITLE 39, UNITED STATES

22 CODE.—Title 39, United States Code, is amended in sec23 tions 404, 503 and 504 (as so redesignated by section 

24 601), 1001 and 1002, by striking ‘‘Postal Rate CommisMay 25, 2004 
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1 sion’’ each place it appears and inserting ‘‘Postal Regu2 latory Commission’’; 

3 (b) AMENDMENTS TO TITLE 5, UNITED STATES

4 CODE.—Title 5, United States Code, is amended in sec5 tions 104(1), 306(f), 2104(b), 3371(3), 5314 (in the item 

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

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

8 5514(a)(5)(B), 7342(a)(1)(A), 7511(a)(1)(B)(ii), 

9 8402(c)(1), 8423(b)(1)(B), and 8474(c)(4) by striking 

10 ‘‘Postal Rate Commission’’ and inserting ‘‘Postal Regu11 latory Commission’’. 

12 (c) AMENDMENT TO THE ETHICS IN GOVERNMENT

13 ACT OF 1978.—Section 101(f)(6) of the Ethics in Govern14 ment Act of 1978 (5 U.S.C. App.) is amended by striking 

15 ‘‘Postal Rate Commission’’ and inserting ‘‘Postal Regu16 latory Commission’’. 

17 (d) AMENDMENT TO THE REHABILITATION ACT OF

18 1973.—Section 501(b) of the Rehabilitation Act of 1973 

19 (29 U.S.C. 791(b)) is amended by striking ‘‘Postal Rate 

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

21 (e) AMENDMENT TO TITLE 44, UNITED STATES

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

23 is amended by striking ‘‘Postal Rate Commission’’ and in24 serting ‘‘Postal Regulatory Commission’’. 

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1 (f) OTHER REFERENCES.—Whenever a reference is 

2 made in any provision of law (other than this Act or a 

3 provision of law amended by this Act), regulation, rule, 

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

5 Postal Rate Commission, such reference shall be consid6 ered a reference to the Postal Regulatory Commission. 

7 SEC. 605. FINANCIAL TRANSPARENCY. 

8 Section 101 of title 39, United States Code, is 

9 amended— 

10 (1) by redesignating subsections (d) through (g) 

11 as subsections (e) through (h), respectively; and 

12 (2) by inserting after subsection (c) the fol13 lowing: 

14 ‘‘(d) As an independent establishment of the execu15 tive branch of the Government of the United States, the 

16 Postal Service shall be subject to a high degree of trans17 parency to ensure fair treatment of customers of the Post18 al Service’s market-dominant products and companies 

19 competing with the Postal Service’s competitive prod20 ucts.’’. 

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1 TITLE VII—EVALUATIONS 

2 SEC. 701. ASSESSMENTS OF RATEMAKING, CLASSIFICA3 TION, AND OTHER PROVISIONS. 

4 (a) IN GENERAL.—The Postal Regulatory Commis5 sion shall, at least every 3 years, submit a report to the 

6 President and Congress concerning— 

7 (1) the operation of the amendments made by 

8 this Act; and 

9 (2) recommendations for any legislation or 

10 other measures necessary to improve the effective11 ness or efficiency of the postal laws of the United 

12 States. 

13 (b) POSTAL SERVICE VIEWS.—A report under this 

14 section shall be submitted only after reasonable oppor15 tunity has been afforded to the Postal Service to review 

16 the report and to submit written comments on the report. 

17 Any comments timely received from the Postal Service 

18 under the preceding sentence shall be attached to the re19 port submitted under subsection (a). 

20 SEC. 702. REPORT ON UNIVERSAL POSTAL SERVICE AND 

21 THE POSTAL MONOPOLY. 

22 (a) REPORT BY THE POSTAL SERVICE.— 

23 (1) IN GENERAL.—Not later than 12 months 

24 after the date of enactment of this Act, the Postal 

25 Regulatory Commission shall submit a report to the 

May 25, 2004 
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1 President and Congress on universal postal service 

2 and the postal monopoly in the United States (in 

3 this section referred to as ‘‘universal service and the 

4 postal monopoly’’), including the monopoly on the 

5 delivery of mail and on access to mailboxes. 

6 (2) CONTENTS.—The report under this sub7 section shall include— 

8 (A) a comprehensive review of the history 

9 and development of universal service and the 

10 postal monopoly, including how the scope and 

11 standards of universal service and the postal 

12 monopoly have evolved over time for the Nation 

13 and its urban and rural areas; 

14 (B) the scope and standards of universal 

15 service and the postal monopoly provided under 

16 current law (including sections 101 and 403 of 

17 title 39, United States Code), and current 

18 rules, regulations, policy statements, and prac19 tices of the Postal Service; 

20 (C) a description of any geographic areas, 

21 populations, communities (including both urban 

22 and rural communities), organizations, or other 

23 groups or entities not currently covered by uni24 versal service or that are covered but that are 

May 25, 2004 
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1 receiving services deficient in scope or quality or 

2 both; and 

3 (D) the scope and standards of universal 

4 service and the postal monopoly likely to be re5 quired in the future in order to meet the needs 

6 and expectations of the United States public, 

7 including all types of mail users, based on dis8 cussion of such assumptions, alternative sets of 

9 assumptions, and analyses as the Postal Service 

10 considers plausible. 

11 (b) RECOMMENDED CHANGES TO UNIVERSAL SERV12 ICE AND THE MONOPOLY.—The Postal Regulatory Com13 mission shall include in the report under subsection (a), 

14 and in all reports submitted under section 701 of this 

15 Act— 

16 (1) any recommended changes to universal serv17 ice and the postal monopoly as the Commission con18 siders appropriate, including changes that the Com19 mission may implement under current law and 

20 changes that would require changes to current law, 

21 with estimated effects of the recommendations on 

22 the service, financial condition, rates, and security of 

23 mail provided by the Postal Service; 

24 (2) with respect to each recommended change 

25 described under paragraph (1)— 

May 25, 2004 
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1 (A) an estimate of the costs of the Postal 

2 Service attributable to the obligation to provide 

3 universal service under current law; and 

4 (B) an analysis of the likely benefit of the 

5 current postal monopoly to the ability of the 

6 Postal Service to sustain the current scope and 

7 standards of universal service, including esti8 mates of the financial benefit of the postal mo9 nopoly to the extent practicable, under current 

10 law; and 

11 (3) such additional topics and recommendations 

12 as the Commission considers appropriate, with esti13 mated effects of the recommendations on the service, 

14 financial condition, rates, and the security of mail 

15 provided by the Postal Service. 

16 SEC. 703. STUDY ON EQUAL APPLICATION OF LAWS TO 

17 COMPETITIVE PRODUCTS. 

18 (a) IN GENERAL.—The Federal Trade Commission 

19 shall prepare and submit to the President and Congress, 

20 and to the Postal Regulatory Commission, within 1 year 

21 after the date of the enactment of this Act, a comprehen22 sive report identifying Federal and State laws that apply 

23 differently to the United States Postal Service with re24 spect to the competitive category of mail (within the mean25 ing of section 102 of title 39, United States Code, as 

May 25, 2004 
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1 amended by section 101) and similar products provided 

2 by private companies. 

3 (b) RECOMMENDATIONS.—The Federal Trade Com4 mission shall include such recommendations as it con5 siders appropriate for bringing such legal discrimination 

6 to an end, and in the interim, to account under section 

7 3633 of title 39, United States Code (as added by this 

8 Act), for the net economic advantages provided by those 

9 laws. 

10 (c) CONSULTATION.—In preparing its report, the 

11 Federal Trade Commission shall consult with the United 

12 States Postal Service, the Postal Regulatory Commission, 

13 other Federal agencies, mailers, private companies that 

14 provide delivery services, and the general public, and shall 

15 append to such report any written comments received 

16 under this subsection. 

17 (d) COMPETITIVE PRODUCT REGULATION.—The 

18 Postal Regulatory Commission shall take into account the 

19 recommendations of the Federal Trade Commission in 

20 promulgating or revising the regulations required under 

21 section 3633 of title 39, United States Code. 

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1 TITLE VIII—POSTAL SERVICE 

2 RETIREMENT AND HEALTH 

3 BENEFITS FUNDING 

4 SEC. 801. SHORT TITLE. 

5 This title may be cited as the ‘‘Postal Civil Service 

6 Retirement and Health Benefits Funding Amendments of 

7 2004’’. 

8 SEC. 802. CIVIL SERVICE RETIREMENT SYSTEM. 

9 (a) IN GENERAL.—Chapter 83 of title 5, United 

10 States Code, is amended— 

11 (1) in section 8334(a)(1)(B), by striking clause 

12 (ii) and inserting the following: 

13 ‘‘(ii) In the case of an employee of the United States 

14 Postal Service, no amount shall be contributed under this 

15 subparagraph.’’; and 

16 (2) by amending section 8348(h) to read as fol17 lows: 

18 ‘‘(h)(1) In this subsection, the term ‘Postal surplus 

19 or supplemental liability’ means the estimated difference, 

20 as determined by the Office, between— 

21 ‘‘(A) the actuarial present value of all future 

22 benefits payable from the Fund under this sub23 chapter to current or former employees of the 

24 United States Postal Service and attributable to ciMay 25, 2004 
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1 vilian employment with the United States Postal 

2 Service; and 

3 ‘‘(B) the sum of— 

4 ‘‘(i) the actuarial present value of deduc5 tions to be withheld from the future basic pay 

6 of employees of the United States Postal Serv7 ice currently subject to this subchapter under 

8 section 8334; 

9 ‘‘(ii) that portion of the Fund balance, as 

10 of the date the Postal surplus or supplemental 

11 liability is determined, attributable to payments 

12 to the Fund by the United States Postal Serv13 ice and its employees, minus benefit payments 

14 attributable to civilian employment with the 

15 United States Postal Service, plus the earnings 

16 on such amounts while in the Fund; and 

17 ‘‘(iii) any other appropriate amount, as de18 termined by the Office in accordance with gen19 erally accepted actuarial practices and prin20 ciples. 

21 ‘‘(2)(A) Not later than June 30, 2006, the Office 

22 shall determine the Postal surplus or supplemental liabil23 ity, as of September 30, 2005. If that result is a surplus, 

24 the amount of the surplus shall be transferred to the Post25 al Service Retiree Health Benefits Fund established under 

May 25, 2004 
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1 section 8909a. If the result is a supplemental liability, the 

2 Office shall establish an amortization schedule, including 

3 a series of annual installments commencing September 30, 

4 2006, which provides for the liquidation of such liability 

5 by September 30, 2043. 

6 ‘‘(B) The Office shall redetermine the Postal surplus 

7 or supplemental liability as of the close of the fiscal year, 

8 for each fiscal year beginning after September 30, 2006, 

9 through the fiscal year ending September 30, 2038. If the 

10 result is a surplus, that amount shall remain in the Fund 

11 until distribution is authorized under subparagraph (C), 

12 and any prior amortization schedule for payments shall 

13 be terminated. If the result is a supplemental liability, the 

14 Office shall establish a new amortization schedule, includ15 ing a series of annual installments commencing on Sep16 tember 30 of the subsequent fiscal year, which provides 

17 for the liquidation of such liability by September 30, 2043. 

18 ‘‘(C) As of the close of the fiscal years ending Sep19 tember 30, 2015, 2025, 2035, and 2039, if the result is 

20 a surplus, that amount shall be transferred to the Postal 

21 Service Retiree Health Benefits Fund, and any prior am22 ortization schedule for payments shall be terminated. 

23 ‘‘(D) Amortization schedules established under this 

24 paragraph shall be set in accordance with generally accept25 ed actuarial practices and principles, with interest comMay 25, 2004 
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1 puted at the rate used in the most recent valuation of the 

2 Civil Service Retirement System. 

3 ‘‘(E) The United States Postal Service shall pay the 

4 amounts so determined to the Office, with payments due 

5 not later than the date scheduled by the Office. 

6 ‘‘(3) Notwithstanding any other provision of law, in 

7 computing the amount of any payment under any other 

8 subsection of this section that is based upon the amount 

9 of the unfunded liability, such payment shall be computed 

10 disregarding that portion of the unfunded liability that the 

11 Office determines will be liquidated by payments under 

12 this subsection.’’. 

13 (b) CREDIT ALLOWED FOR MILITARY SERVICE.—In 

14 the application of section 8348(g)(2) of title 5, United 

15 States Code, for the fiscal year 2006, the Office of Per16 sonnel Management shall include, in addition to the 

17 amount otherwise computed under that paragraph, the 

18 amounts that would have been included for the fiscal years 

19 2003 through 2005 with respect to credit for military serv20 ice of former employees of the United States Postal Serv21 ice as though the Postal Civil Service Retirement System 

22 Funding Reform Act of 2003 (Public Law 108–18) had 

23 not been enacted, and the Secretary of the Treasury shall 

24 make the required transfer to the Civil Service Retirement 

25 and Disability Fund based on that amount. 

May 25, 2004 
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1 SEC. 803. HEALTH INSURANCE. 

2 (a) IN GENERAL.—Chapter 89 of title 5, United 

3 States Code, is amended— 

4 (1) in section 8906(g)(2)(A), by striking ‘‘shall 

5 be paid by the United States Postal Service.’’ and 

6 inserting ‘‘shall be paid first from the Postal Service 

7 Retiree Health Benefits Fund up to the amount con8 tained in the Fund, with any remaining amount paid 

9 by the United States Postal Service.’’; and 

10 (2) by inserting after section 8909 the fol11 lowing: 

12 ‘‘§ 8909a. Postal Service Retiree Health Benefit Fund 

13 ‘‘(a) There is in the Treasury of the United States 

14 a Postal Service Retiree Health Benefits Fund which is 

15 administered by the Office of Personnel Management. 

16 ‘‘(b) The Fund is available without fiscal year limita17 tion for payments required under section 8906(g)(2)(A). 

18 ‘‘(c) The Secretary of the Treasury shall immediately 

19 invest, in interest-bearing securities of the United States 

20 such currently available portions of the Fund as are not 

21 immediately required for payments from the Fund. Such 

22 investments shall be made in the same manner as invest23 ments for the Civil Service Retirement and Disability 

24 Fund under section 8348. 

25 ‘‘(d)(1) Not later than December 31, 2006, and by 

26 December 31 of each succeeding year, the Office shall 

May 25, 2004 
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1 compute the net present value of the future payments re2 quired under section 8906(g)(2)(A) and attributable to 

3 the service of Postal Service employees during the most 

4 recently ended fiscal year. 

5 ‘‘(2)(A) Not later than December 31, 2006, the Of6 fice shall compute, and by December 31 of each suc7 ceeding year, the Office shall recompute the difference be8 tween— 

9 ‘‘(i) the net present value of the excess of fu10 ture payments required under section 8906(g)(2)(A) 

11 for current and future United States Postal Service 

12 annuitants as of the end of the fiscal year ending on 

13 September 30 of that year; and 

14 ‘‘(ii)(I) the value of the assets of the Postal Re15 tiree Health Benefits Fund as of the end of the fis16 cal year ending on September 30 of that year; and 

17 ‘‘(II) the net present value computed under 

18 paragraph (1). 

19 ‘‘(B) Not later than December 31, 2006, the Office 

20 shall compute, and by December 31 of each succeeding 

21 year shall recompute, an amortization schedule including 

22 a series of annual installments which provide for the liq23 uidation by January 31, 2046, or within 15 years, which24 ever is later, of the net present value determined under 

May 25, 2004 
99 

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1 subparagraph (A), including interest at the rate used in 

2 that computation. 

3 ‘‘(3) Not later than January 31, 2007, and by Janu4 ary 31 of each succeeding year, the United States Postal 

5 Service shall pay into such Fund— 

6 ‘‘(A) the net present value computed under 

7 paragraph (1); and 

8 ‘‘(B) the annual installment computed under 

9 paragraph (2)(B). 

10 ‘‘(4) Computations under this subsection shall be 

11 made consistent with the assumptions and methodology 

12 used by the Office for financial reporting under sub13 chapter II of chapter 35 of title 31. 

14 ‘‘(5) After consultation with the United States Postal 

15 Service, the Office shall promulgate any regulations the 

16 Office determines necessary under this subsection.’’. 

17 (b) TECHNICAL AND CONFORMING AMENDMENT.— 

18 The table of sections for chapter 89 of title 5, United 

19 States Code, is amended by inserting after the item relat20 ing to section 8909 the following: 

‘‘8909a. Postal Service Retiree Health Benefits Fund.’’. 

21 SEC. 804. REPEAL OF DISPOSITION OF SAVINGS PROVISION. 

22 Section 3 of the Postal Civil Service Retirement Sys23 tem Funding Reform Act of 2003 (Public Law 108–18) 

24 is repealed. 

May 25, 2004 
100 

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1 SEC. 805. EFFECTIVE DATES. 

2 (a) IN GENERAL.—Except as provided under sub3 section (b), this title shall take effect on October 1, 2005. 

4 (b) TERMINATION OF EMPLOYER CONTRIBUTION.— 

5 The amendment made by paragraph (1) of section 802(a) 

6 shall take effect on the first day of the first pay period 

7 beginning on or after October 1, 2005. 

8 TITLE IX—COMPENSATION FOR 

9 WORK INJURIES 

10 SEC. 901. TEMPORARY DISABILITY; CONTINUATION OF PAY. 

11 (a) TIME OF ACCRUAL OF RIGHT.—Section 8117 of 

12 title 5, United States Code, is amended— 

13 (1) by striking ‘‘An employee’’ and inserting 

14 ‘‘(a) An employee other than a Postal Service em15 ployee’’; and 

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

17 ‘‘(b) A Postal Service employee is not entitled to com18 pensation or continuation of pay for the first 3 days of 

19 temporary disability. A Postal Service employee may use 

20 annual leave, sick leave, or leave without pay during that 

21 3-day period.’’. 

22 (b) TECHNICAL AND CONFORMING AMENDMENT.— 

23 Section 8118(b)(1) of title 5, United States Code, is 

24 amended to read as follows: 

25 ‘‘(1) without a break in time, except as pro26 vided under section 8117;’’. 

May 25, 2004 
101 

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1 SEC. 902. DISABILITY RETIREMENT FOR POSTAL EMPLOY2 EES. 

3 (a) TOTAL DISABILITY.—Section 8105 of title 5, 

4 United States Code, is amended— 

5 (1) in subsection (a), by adding at the end the 

6 following: ‘‘This section applies to a Postal Service 

7 employee, except as provided under subsection (c).’’; 

8 and 

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

10 ‘‘(c)(1) In this subsection, the term ‘retirement age’ 

11 has the meaning given under section 216(l)(1) of the So12 cial Security Act (42 U.S.C. 416(l)(1)). 

13 ‘‘(2) Notwithstanding any other provision of law, for 

14 any injury occurring on or after the date of enactment 

15 of the Postal Accountability and Enhancement Act, and 

16 for any new claim for a period of disability commencing 

17 on or after that date, the compensation entitlement for 

18 total disability is converted to 50 percent of the monthly 

19 pay of the employee on the later of— 

20 ‘‘(A) the date on which the injured employee 

21 reaches retirement age; or 

22 ‘‘(B) 1 year after the employee begins receiving 

23 compensation.’’. 

24 (b) PARTIAL DISABILITY.—Section 8106 of title 5, 

25 United States Code, is amended— 

May 25, 2004 
102 

•S 2468 IS 

1 (1) in subsection (a), by adding at the end the 

2 following: ‘‘This section applies to a Postal Service 

3 employee, except as provided under subsection (d).’’; 

4 and 

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

6 ‘‘(d)(1) In this subsection, the term ‘retirement age’ 

7 has the meaning given under section 216(l)(1) of the So8 cial Security Act (42 U.S.C. 416(l)(1)). 

9 ‘‘(2) Notwithstanding any other provision of 

10 law, for any injury occurring on or after the date of 

11 enactment of this subsection, and for any new claim 

12 for a period of disability commencing on or after 

13 that date, the compensation entitlement for partial 

14 disability is converted to 50 percent of the difference 

15 between the monthly pay of an employee and the 

16 monthly wage earning capacity of the employee after 

17 the beginning of partial disability on the later of— 

18 ‘‘(A) the date on which the injured em19 ployee reaches retirement age; or 

20 ‘‘(B) 1 year after the employee begins re21 ceiving compensation.’’. 

Æ 

May 25, 2004