II 

Calendar No. 674

108TH CONGRESS 

2D SESSION S. 2468

[Report No. 108–318] 

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, Mr. DURBIN, Mr. LAUTENBERG, 

Mr. COLEMAN, Mr. BURNS, Mr. ALLEN, Mr. DODD, and Mr. BINGAMAN) 

introduced the following bill; which was read twice and referred to the 

Committee on Governmental Affairs 

AUGUST 25, 2004

Reported, under authority of the order of the Senate of July 22, 2004, by 

Ms. COLLINS, with an amendment 

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

A BILL

To reform the postal laws of the United States.

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

3 SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 

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

5 ‘‘Postal Accountability and Enhancement Act’’. 
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1 (b) TABLE OF CONTENTS.—The table of contents for 

2 this Act is as follows:

Sec. 1. Short title; table of contents. 

TITLE I—DEFINITIONS; POSTAL SERVICES 

Sec. 101. Definitions. 

Sec. 102. Postal services. 

TITLE II—MODERN RATE REGULATION 

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

Sec. 202. Provisions relating to competitive products. 

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

Sec. 204. Reporting requirements and related provisions. 

Sec. 205. Complaints; appellate review and enforcement. 

Sec. 206. 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. 
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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.

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; 
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1 ‘‘(9) ‘competitive product’ or ‘product in the 

2 competitive category of mail’ means a product sub3 ject to subchapter II of chapter 36; and 

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

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

6 SEC. 102. POSTAL SERVICES. 

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

8 States Code, is amended—

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

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

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

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

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

14 or require that the Postal Service provide any special non15 postal or similar services.’’. 

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

17 1402(b)(1)(B)(ii) of the Victims of Crime Act of 1984 (98 

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

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

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

21 Code, is amended by striking ‘‘and nonpostal’’.
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1 TITLE II—MODERN RATE 

2 REGULATION 

3 SEC. 201. PROVISIONS RELATING TO MARKET-DOMINANT 

4 PRODUCTS. 

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

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

7 and 3623 and inserting the following: 

8 ‘‘§ 3621. Applicability; definitions 

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

10 with respect to—

11 ‘‘(1) first-class mail letters; 

12 ‘‘(2) first-class mail cards; 

13 ‘‘(3) periodicals; 

14 ‘‘(4) standard mail; 

15 ‘‘(5) single-piece parcel post; 

16 ‘‘(6) media mail; 

17 ‘‘(7) bound printed matter; 

18 ‘‘(8) library mail; 

19 ‘‘(9) special services; and 

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

21 subject to any changes the Postal Regulatory Commission 

22 may make under section 3642. 

23 ‘‘(b) RULE OF CONSTRUCTION.—Mail matter re24 ferred to in subsection (a) shall, for purposes of this sub-
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1 chapter, be considered to have the meaning given to such 

2 mail matter under the mail classification schedule. 

3 ‘‘§ 3622. Modern rate regulation 

4 ‘‘(a) AUTHORITY GENERALLY.—The Postal Regu5 latory Commission shall, within 12 months after the date 

6 of the enactment of this section, by regulation establish 

7 (and may from time to time thereafter by regulation re8 vise) a modern system for regulating rates and classes for 

9 market-dominant products.

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

11 achieve the following objectives: 

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

13 increase the transparency of the ratemaking process. 

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

15 rates. 

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

17 and increase efficiency. 

18 ‘‘(4) To enhance mail security and deter ter19 rorism by promoting secure, sender-identified mail. 

20 ‘‘(5) To allow the Postal Service pricing flexi21 bility, including the ability to use pricing to promote 

22 intelligent mail and encourage increased mail volume 

23 during nonpeak periods. 

24 ‘‘(6) To assure adequate revenues, including re25 tained earnings, to maintain financial stability and 
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1 meet the service standards established under section 

2 3691. 

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

4 the Postal Service equitably between market-domi5 nant and competitive products. 

6 ‘‘(c) FACTORS.—In establishing or revising such sys7 tem, the Postal Regulatory Commission shall take into ac8 count—

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

10 fair and equitable schedule for rates and classifica11 tion system; 

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

14 sender and the recipient, including but not limited to 

15 the collection, mode of transportation, and priority 

16 of delivery; 

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

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

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

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

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

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

6 and its effect upon reducing costs to the Postal 

7 Service; 

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

10 rates or fees charged the various classes of mail for 

11 postal services; 

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

13 kinds of mail matter entered into the postal system 

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

16 ‘‘(9) the importance of providing classifications 

17 with extremely high degrees of reliability and speed 

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

21 ‘‘(10) the desirability of special classifications 

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

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

2 informational value to the recipient of mail matter; 

3 and 

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

5 other factors as the Commission deems appropriate. 

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

7 rates and classes for market-dominant products shall—

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

9 annual limitations on the percentage changes in 

10 rates based on inflation using indices, such as the 

11 Consumer Price Index, the Employment Cost Index, 

12 the Gross Domestic Product Price Index, or any 

13 similar measure as the Postal Rate Commission may 

14 prescribe; 

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

16 necessary and appropriate, would increase at regular 

17 intervals by predictable amounts; 

18 ‘‘(3) not later than 45 days before the imple19 mentation of any adjustment in rates under this sec20 tion—

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

22 public notice of the adjustment; 

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

24 the Postal Rate Commission; 
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1 ‘‘(C) provide for the Postal Rate Commis2 sion to notify the Postal Service of any non3 compliance of the adjustment with the limita4 tion under paragraph (1); and 

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

6 to the notice provided under subparagraph (C) 

7 and describe the actions to be taken to comply 

8 with the limitation under paragraph (1); 

9 ‘‘(4) notwithstanding any limitation set under 

10 paragraphs (1) and (3), establish procedures where11 by rates may be adjusted on an expedited basis due 

12 to unexpected and extraordinary circumstances. 

13 ‘‘(e) WORKSHARE DISCOUNTS.—

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

15 ‘workshare discount’ refers to rate discounts pro16 vided to mailers for the presorting, prebarcoding, 

17 handling, or transportation of mail, as further de18 fined by the Postal Regulatory Commission under 

19 subsection (a). 

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

21 established under subsection (a), the Postal Regu22 latory Commission shall establish rules for 

23 workshare discounts that ensure that such discounts 

24 do not exceed the cost that the Postal Service avoids 

25 as a result of workshare activity, unless—
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1 ‘‘(A) the discount is—

2 ‘‘(i) associated with a new postal serv3 ice or with a change to an existing postal 

4 service; and 

5 ‘‘(ii) necessary to induce mailer behav6 ior that furthers the economically efficient 

7 operation of the Postal Service; 

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

9 ‘‘(i) lead to a loss of volume in the af10 fected category of mail and reduce the ag11 gregate contribution to institutional costs 

12 of the Postal Service from the mail matter

13 subject to the discount below what it other14 wise would have been if the discount had 

15 not been reduced to costs avoided; 

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

17 rates paid by mailers not able to take ad18 vantage of the discount; or 

19 ‘‘(iii) impede the efficient operation of 

20 the Postal Service; 

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

22 costs avoided—

23 ‘‘(i) is necessary to mitigate rate 

24 shock; and 

25 ‘‘(ii) will be phased out over time; 
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1 ‘‘(D) the workshare discount is provided in 

2 connection with subclasses of mail consisting 

3 exclusively of mail matter of educational, cul4 tural, or scientific value; or 

5 ‘‘(E) the Postal Regulatory Commission 

6 determines that such discounts are reasonable 

7 and equitable and consistent with the objectives 

8 and factors taken into account under sub9 sections (b) and (c). 

10 ‘‘(3) REPORT.—Whenever the Postal Service es11 tablishes or maintains a workshare discount, the 

12 Postal Service shall, at the time it publishes the 

13 workshare discount rate, submit to the Postal Regu14 latory Commission a detailed report and explanation 

15 of the Postal Service’s reasons for establishing or 

16 maintaining the rate, setting forth the data, eco17 nomic analyses, and other information relied on by 

18 the Postal Service to justify the rate. 

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

20 this section first take effect, rates and classes for market21 dominant products shall remain subject to modification in 

22 accordance with the provisions of this chapter and section 

23 407, as such provisions were last in effect before the date 

24 of the enactment of this section. 
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1 ‘‘§ 3623. Service agreements for market-dominant 

2 products 

3 ‘‘(a) IN GENERAL.—

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

5 enter into service agreements with a customer or 

6 group of customers that provide for the provision of 

7 postal services under terms, conditions, or service 

8 standards that differ from those that would apply 

9 under the otherwise applicable classification of mar10 ket-dominant mail. 

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

12 section may involve—

13 ‘‘(A) performance by the contracting mail 

14 user of mail preparation, processing, transpor15 tation, or other functions; 

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

17 additional mail preparation, processing, trans18 portation, or other functions; or 

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

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

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

22 this section may be entered into only if each of the fol23 lowing conditions is met: 

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

25 agreement—
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1 ‘‘(A) will cover all Postal Service costs at2 tributable to the postal services covered by the 

3 agreement; and 

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

5 the institutional costs of the Postal Service than 

6 would have been generated had the agreement 

7 not been entered into. 

8 ‘‘(2) Rates or fees for other mailers will not in9 crease as a result of the agreement. 

10 ‘‘(3) The agreement pertains exclusively to 

11 products in the market-dominant category of mail. 

12 ‘‘(4) The agreement will not preclude or materi13 ally hinder similarly situated mail users from enter14 ing into agreements with the Postal Service on the 

15 same, or substantially the same terms or conditions, 

16 and the Postal Service remains willing and able to 

17 enter into such. 

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

19 section shall—

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

21 ‘‘(2) provide that such agreement shall be sub22 ject to the cancellation authority of the Commission 

23 under section 3662. 

24 ‘‘(d) NOTICE REQUIREMENTS.—
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1 ‘‘(1) IN GENERAL.—At least 30 days before a 

2 service agreement under this section is to take ef3 fect, the Postal Service shall file with the Postal 

4 Regulatory Commission and publish in the Federal 

5 Register the following information with respect to 

6 such agreement: 

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

8 the agreement involves. 

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

10 customer is to perform under the agreement. 

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

12 Postal Service is to perform under the agree13 ment. 

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

15 customer during the term of the agreement. 

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

17 subsection (b), information sufficient to dem18 onstrate the bases for the view of the Postal 

19 Service that such condition would be met. 

20 ‘‘(2) AGREEMENTS LESS THAN NATIONAL IN

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

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

23 information described under paragraph (1) shall also 

24 be published by the Postal Service in a manner de25 signed to afford reasonable notice to persons within 
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1 any geographic area to which such agreement (or 

2 any amendment to that agreement) pertains. 

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

4 Service enters into a service agreement with a mailer 

5 under this section, the Postal Service shall make such 

6 agreement available to similarly situated mailers on func7 tionally equivalent terms and conditions consistent with 

8 the regulatory system established under section 3622 

9 without unreasonable distinctions based on mailer profiles, 

10 provided that such distinctions, if ignored, would not

11 render any subsequent agreement uneconomic or imprac12 tical. 

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

14 service agreement under this section is not in conformance 

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

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

17 agreement under this section, may file a complaint with 

18 the Postal Regulatory Commission in accordance with sec19 tion 3662. 

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

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

22 Commission may promulgate such regulations re23 garding service agreements as the Commission de24 termines necessary to implement the requirements of 

25 this section. 
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1 ‘‘(2) REVIEW.—The Postal Regulatory Commis2 sion may review any agreement or proposed agree3 ment under this section and may suspend, cancel, or 

4 prevent such agreement if the Commission finds that 

5 the agreement does not meet the requirements of 

6 this section. 

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

8 whether the revenue generated under the agreement meets 

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

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

11 mail involved, not on the average contribution made by 

12 the mail classification most similar to the services per13 formed under the agreement. If mailer-specific data is not 

14 available, the bases for the determination used shall be 

15 provided and shall include a discussion of the suitability 

16 of the data used, in accordance with regulations estab17 lished by the Postal Regulatory Commission.’’. 

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

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

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

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

22 section 601, but before the amendment made by section 

23 202) is amended by striking the heading for subchapter 

24 II and inserting the following: 
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1 ‘‘SUBCHAPTER I—PROVISIONS RELATING TO 

2 MARKET-DOMINANT PRODUCTS’’.

3 SEC. 202. PROVISIONS RELATING TO COMPETITIVE PROD4 UCTS. 

5 Chapter 36 of title 39, United States Code, is amend6 ed by inserting after section 3629 the following: 

7 ‘‘SUBCHAPTER II—PROVISIONS RELATING TO 

8 COMPETITIVE PRODUCTS 

9 ‘‘§ 3631. Applicability; definitions and updates 

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

11 with respect to—

12 ‘‘(1) priority mail; 

13 ‘‘(2) expedited mail; 

14 ‘‘(3) bulk parcel post; 

15 ‘‘(4) bulk international mail; and 

16 ‘‘(5) mailgrams; 

17 subject to subsection (d) and any changes the Postal Reg18 ulatory Commission may make under section 3642. 

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

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

21 product, means the direct and indirect postal costs attrib22 utable to such product. 

23 ‘‘(c) RULE OF CONSTRUCTION.—Mail matter re24 ferred to in subsection (a) shall, for purposes of this sub-
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1 chapter, be considered to have the meaning given to such 

2 mail matter under the mail classification schedule. 

3 ‘‘(d) LIMITATION.—Notwithstanding any other provi4 sion of this section, nothing in this subchapter shall be 

5 considered to apply with respect to any product then cur6 rently in the market-dominant category of mail. 

7 ‘‘§ 3632. Action of the Governors 

8 ‘‘(a) AUTHORITY TO ESTABLISH RATES AND CLASS9 ES.—The Governors, with the written concurrence of a 

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

11 establish rates and classes for products in the competitive 

12 category of mail in accordance with the requirements of 

13 this subchapter and regulations promulgated under sec14 tion 3633.

15 ‘‘(b) PROCEDURES.—

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

17 established in writing, complete with a statement of 

18 explanation and justification, and the date as of 

19 which each such rate or class takes effect. 

20 ‘‘(2) PUBLIC NOTICE; REVIEW; AND COMPLI21 ANCE.—Not later than 30 days before the date of 

22 implementation of any adjustment in rates under 

23 this section—
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1 ‘‘(A) the Governors shall provide public no2 tice of the adjustment and an opportunity for 

3 review by the Postal Regulatory Commission; 

4 ‘‘(B) the Postal Rate Commission shall no5 tify the Governors of any noncompliance of the 

6 adjustment with section 3633; and 

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

8 notice provided under subparagraph (B) and 

9 describe the actions to be taken to comply with 

10 section 3633. 

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

12 section 3633 first take effect, rates and classes for com13 petitive products shall remain subject to modification in 

14 accordance with the provisions of this chapter and section 

15 407, as such provisions were as last in effect before the 

16 date of the enactment of this section. 

17 ‘‘§ 3633. Provisions applicable to rates for competitive 

18 products 

19 ‘‘The Postal Regulatory Commission shall, within 

20 180 days after the date of the enactment of this section, 

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

22 regulations to—

23 ‘‘(1) prohibit the subsidization of competitive 

24 products by market-dominant products; 
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1 ‘‘(2) ensure that each competitive product cov2 ers its costs attributable; and 

3 ‘‘(3) ensure that all competitive products collec4 tively cover their share of the institutional costs of 

5 the Postal Service.’’. 

6 SEC. 203. PROVISIONS RELATING TO EXPERIMENTAL AND 

7 NEW PRODUCTS. 

8 Subchapter III of chapter 36 of title 39, United 

9 States Code, is amended to read as follows:

10 ‘‘SUBCHAPTER III—PROVISIONS RELATING TO 

11 EXPERIMENTAL AND NEW PRODUCTS 

12 ‘‘§ 3641. Market tests of experimental products 

13 ‘‘(a) AUTHORITY.—

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

15 conduct market tests of experimental products in ac16 cordance with this section. 

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

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

19 subject to the requirements of sections 3622, 3633, 

20 or 3642, or regulations promulgated under those 

21 sections. 

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

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

24 ‘‘(1) SIGNIFICANTLY DIFFERENT PRODUCT.—

25 The product is, from the viewpoint of the mail users, 
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1 significantly different from all products offered by 

2 the Postal Service within the 2-year period preceding 

3 the start of the test. 

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

5 or continued offering of the product will not create 

6 an unfair or otherwise inappropriate competitive ad7 vantage for the Postal Service or any mailer, par8 ticularly in regard to small business concerns (as de9 fined under subsection (h)). 

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

11 Service identifies the product, for the purpose of a 

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

13 competitive, consistent with the criteria under sec14 tion 3642(b)(1). Costs and revenues attributable to 

15 a product identified as competitive shall be included 

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

17 to provisions applicable to competitive products col18 lectively). Any test that solely affects products cur19 rently classified as competitive, or which provides 

20 services ancillary to only competitive products, shall 

21 be presumed to be in the competitive product cat22 egory without regard to whether a similar ancillary 

23 product exists for market-dominant products. 

24 ‘‘(c) NOTICE.—
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1 ‘‘(1) IN GENERAL.—At least 30 days before ini2 tiating a market test under this section, the Postal 

3 Service shall file with the Postal Regulatory Com4 mission and publish in the Federal Register a no5 tice—

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

7 Service’s determination that the market test is 

8 covered by this section; and 

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

10 the market test. 

11 ‘‘(2) SAFEGUARDS.—For a competitive experi12 mental product, the provisions of section 504(g) 

13 shall be available with respect to any information re14 quired to be filed under paragraph (1) to the same 

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

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

17 paragraph (1) shall be considered to permit or re18 quire the publication of any information as to which 

19 confidential treatment is accorded under the pre20 ceding sentence (subject to the same exception as set 

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

22 ‘‘(d) DURATION.—

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

24 under this section may be conducted over a period 

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

2 order to determine the feasibility or desirability of a

3 product being tested under this section, the Postal 

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

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

7 product would otherwise be scheduled to terminate 

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

9 product for not to exceed an additional 12 months. 

10 ‘‘(e) DOLLAR-AMOUNT LIMITATION.—

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

12 tested under this section if the total revenues that 

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

14 Service from such product do not exceed 

15 $10,000,000 in any year, subject to paragraph (2) 

16 and subsection (g). 

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

18 Regulatory Commission may, upon written applica19 tion of the Postal Service, exempt the market test 

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

21 that are anticipated, or in fact received, by the Post22 al Service from such product do not exceed 

23 $50,000,000 in any year, subject to subsection (g). 

24 In reviewing an application under this paragraph, 
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1 the Postal Regulatory Commission shall approve 

2 such application if it determines that—

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

4 public and meet an expected demand; 

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

6 the financial stability of the Postal Service; and 

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

8 unfair or otherwise inappropriate competition. 

9 ‘‘(f) CANCELLATION.—If the Postal Regulatory Com10 mission at any time determines that a market test under 

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

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

13 involved or take such other action as it considers appro14 priate. A determination under this subsection shall be 

15 made in accordance with such procedures as the Commis16 sion shall by regulation prescribe. 

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

18 of each year following the year in which occurs the dead19 line for the Postal Service’s first report to the Postal Reg20 ulatory Commission under section 3652(a), each dollar 

21 amount contained in this section shall be adjusted by the 

22 change in the Consumer Price Index for such year (as de23 termined under regulations of the Commission). 

24 ‘‘(h) DEFINITION OF A SMALL BUSINESS CON25 CERN.—The criteria used in defining small business con-
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1 cerns or otherwise categorizing business concerns as small 

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

3 established by the Postal Regulatory Commission in con4 formance with the requirements of section 3 of the Small 

5 Business Act. 

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

7 subchapter may be conducted in any year beginning with 

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

9 Service’s first report to the Postal Regulatory Commission 

10 under section 3652(a).

11 ‘‘§ 3642. New products and transfers of products be12 tween the market-dominant and competi13 tive categories of mail

14 ‘‘(a) IN GENERAL.—Upon request of the Postal Serv15 ice or users of the mails, or upon its own initiative, the 

16 Postal Regulatory Commission may change the list of 

17 market-dominant products under section 3621 and the list 

18 of competitive products under section 3631 by adding new 

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

20 transferring products between the lists. 

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

22 Regulatory Commission under subsection (a) shall be 

23 made in accordance with the following criteria:

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

25 shall consist of each product in the sale of which the 
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1 Postal Service exercises sufficient market power that 

2 it can effectively set the price of such product sub3 stantially above costs, raise prices significantly, de4 crease quality, or decrease output, without risk of 

5 losing substantial business to other firms offering 

6 similar products. The competitive category of prod7 ucts shall consist of all other products.

8 ‘‘(2) EXCLUSION OF PRODUCTS COVERED BY

9 POSTAL MONOPOLY.—A product covered by the post10 al monopoly shall not be subject to transfer under 

11 this section from the market-dominant category of 

12 mail. For purposes of the preceding sentence, the 

13 term ‘product covered by the postal monopoly’ 

14 means any product the conveyance or transmission 

15 of which is reserved to the United States under sec16 tion 1696 of title 18, subject to the same exception 

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

18 ‘‘(3) ADDITIONAL CONSIDERATIONS.—In mak19 ing any decision under this section, due regard shall 

20 be given to—

21 ‘‘(A) the availability and nature of enter22 prises in the private sector engaged in the deliv23 ery of the product involved; 
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1 ‘‘(B) the views of those who use the prod2 uct involved on the appropriateness of the pro3 posed action; and 

4 ‘‘(C) the likely impact of the proposed ac5 tion on small business concerns (within the 

6 meaning of section 3641(h)). 

7 ‘‘(c) TRANSFERS OF SUBCLASSES AND OTHER SUB8 ORDINATE UNITS ALLOWABLE.—Nothing in this title 

9 shall be considered to prevent transfers under this section 

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

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

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

13 service involved (without regard to satisfaction of min14 imum quantity requirements standing alone). 

15 ‘‘(d) NOTIFICATION AND PUBLICATION REQUIRE16 MENTS.—

17 ‘‘(1) NOTIFICATION REQUIREMENT.—The Post18 al Service shall, whenever it requests to add a prod19 uct or transfer a product to a different category, file 

20 with the Postal Regulatory Commission and publish 

21 in the Federal Register a notice setting out the basis 

22 for its determination that the product satisfies the 

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

24 request to add a product or transfer a product to 

25 the competitive category of mail, that the product 
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1 meets the regulations promulgated by the Postal 

2 Regulatory Commission under section 3633. The 

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

4 respect to any information required to be filed.

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

6 Regulatory Commission shall, whenever it changes 

7 the list of products in the market-dominant or com8 petitive category of mail, prescribe new lists of prod9 ucts. The revised lists shall indicate how and when 

10 any previous lists (including the lists under sections 

11 3621 and 3631) are superseded, and shall be pub12 lished in the Federal Register.

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

14 3641, no product that involves the physical delivery of let15 ters, printed matter, or packages may be offered by the 

16 Postal Service unless it has been assigned to the market17 dominant or competitive category of mail (as appropriate) 

18 either—

19 ‘‘(1) under this subchapter; or 

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

21 SEC. 204. REPORTING REQUIREMENTS AND RELATED PRO22 VISIONS. 

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

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

25 subsection (b)) is amended— 
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1 (1) by striking the heading for subchapter IV 

2 and inserting the following:

3 ‘‘SUBCHAPTER V—POSTAL SERVICES, 

4 COMPLAINTS, AND JUDICIAL REVIEW’’; and 

5 (2) by striking the heading for subchapter V 

6 and inserting the following: 

7 ‘‘SUBCHAPTER VI—GENERAL’’.

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

9 39, United States Code, is amended by inserting after sub10 chapter III the following:

11 ‘‘SUBCHAPTER IV—REPORTING 

12 REQUIREMENTS AND RELATED PROVISIONS 

13 ‘‘§ 3651. Annual reports by the Commission 

14 ‘‘(a) IN GENERAL.—The Postal Regulatory Commis15 sion shall submit an annual report to the President and 

16 the Congress concerning the operations of the Commission 

17 under this title, including the extent to which regulations 

18 are achieving the objectives under sections 3622, 3633, 

19 and 3691. 

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

21 Postal Service shall provide the Postal Regulatory Com22 mission with such information as may, in the judgment 

23 of the Commission, be necessary in order for the Commis24 sion to prepare its reports under this section. 
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1 ‘‘§ 3652. Annual reports to the Commission 

2 ‘‘(a) COSTS, REVENUES, RATES, AND SERVICE.—Ex3 cept as provided in subsection (c), the Postal Service shall, 

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

5 and submit to the Postal Regulatory Commission a report 

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

7 Commission may require under subsection (e))—

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

9 and quality of service in sufficient detail to dem10 onstrate that all products during such year complied 

11 with all applicable requirements of this title; and

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

13 product provided in such year, provide—

14 ‘‘(A) product information, including mail 

15 volumes; and 

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

17 the Postal Service in connection with such prod18 uct, including—

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

20 terms of speed of delivery and reliability) 

21 provided; and 

22 ‘‘(ii) the degree of customer satisfac23 tion with the service provided. 

24 Before submitting a report under this subsection (includ25 ing any annex to the report and the information required 

26 under subsection (b)), the Postal Service shall have the 
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1 information contained in such report (and annex) audited 

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

3 shall be submitted along with the report to which it per4 tains. 

5 ‘‘(b) INFORMATION RELATING TO WORKSHARE DIS6 COUNTS.—The Postal Service shall include, in each report 

7 under subsection (a), the following information with re8 spect to each market-dominant product for which a 

9 workshare discount was in effect during the period covered 

10 by such report: 

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

12 Service by virtue of such discount. 

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

14 avoided that the per-item workshare discount rep15 resents. 

16 ‘‘(3) The per-item contribution made to institu17 tional costs. 

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

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

20 service agreements (including service agreements entered 

21 into under section 3623) and experimental products of22 fered through market tests under section 3641 in a year, 

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

2 revenues, and quality of service by service agreement 

3 and market test; and 

4 ‘‘(2) shall report such data as the Postal Regu5 latory Commission requires. 

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

7 Commission shall have access, in accordance with such 

8 regulations as the Commission shall prescribe, to the 

9 working papers and any other supporting matter of the 

10 Postal Service and the Inspector General in connection 

11 with any information submitted under this section. 

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

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

14 Commission shall, by regulation, prescribe the con15 tent and form of the public reports (and any non16 public annex and supporting matter relating to the 

17 report) to be provided by the Postal Service under 

18 this section. In carrying out this subsection, the 

19 Commission shall give due consideration to—

20 ‘‘(A) providing the public with timely, ade21 quate information to assess the lawfulness of 

22 rates charged;

23 ‘‘(B) avoiding unnecessary or unwarranted 

24 administrative effort and expense on the part of 

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

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

6 in accordance with regulations that the Commission 

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

8 completeness of Postal Service data required by the 

9 Commission under this subsection whenever it shall 

10 appear that—

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

12 products has become significantly inaccurate or 

13 can be significantly improved; 

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

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

18 the Commission, otherwise necessitated by the 

19 public interest. 

20 ‘‘(f) CONFIDENTIAL INFORMATION.—

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

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

25 section or under subsection (d) contains information 
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1 which is described in section 410(c) of this title, or 

2 exempt from public disclosure under section 552(b) 

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

4 providing such matter to the Commission, notify the 

5 Commission of its determination, in writing, and de6 scribe with particularity the documents (or portions 

7 of documents) or other matter for which confiden8 tiality is sought and the reasons therefor. 

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

10 matter described in paragraph (1) to which the 

11 Commission gains access under this section shall be 

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

13 in the same way as if the Commission had received 

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

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

17 submit to the Postal Regulatory Commission, together 

18 with any other submission that the Postal Service is re19 quired to make under this section in a year, copies of its 

20 then most recent—

21 ‘‘(1) comprehensive statement under section 

22 2401(e); 

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

24 ‘‘(3) performance plan under section 2803; and 
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1 ‘‘(4) program performance reports under sec2 tion 2804. 

3 ‘‘§ 3653. Annual determination of compliance

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

5 receiving the reports required under section 3652 for any 

6 year, the Postal Regulatory Commission shall promptly 

7 provide an opportunity for comment on such reports by 

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

9 Commission who shall be required to represent the inter10 ests of the general public.

11 ‘‘(b) DETERMINATION OF COMPLIANCE OR NON12 COMPLIANCE.—Not later than 90 days after receiving the 

13 submissions required under section 3652 with respect to 

14 a year, the Postal Regulatory Commission shall make a 

15 written determination as to—

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

17 such year (for products individually or collectively) 

18 were not in compliance with applicable provisions of 

19 this chapter (or regulations promulgated there20 under); or 

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

22 during such year were not met. 

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

24 is found under this subsection to have occurred in such 

25 year, the written determination shall be to that effect.
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1 ‘‘(c) IF ANY NONCOMPLIANCE IS FOUND.—If, for a 

2 year, a timely written determination of noncompliance is 

3 made under subsection (b), the Postal Regulatory Com4 mission shall take any appropriate remedial action author5 ized by section 3662(c). 

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

7 determination described in the last sentence of subsection 

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

9 3662, create a rebuttable presumption of compliance by 

10 the Postal Service (with regard to the matters described 

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

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

13 SEC. 205. COMPLAINTS; APPELLATE REVIEW AND EN14 FORCEMENT. 

15 Chapter 36 of title 39, United States Code, is amend16 ed by striking sections 3662 and 3663 and inserting the 

17 following: 

18 ‘‘§ 3662. Rate and service complaints 

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

20 officer of the Postal Regulatory Commission representing 

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

22 Service is not operating in conformance with the require23 ments of chapter 1, 4, or 6, or this chapter (or regulations 

24 promulgated under any of those chapters) may lodge a 
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1 complaint with the Postal Regulatory Commission in such 

2 form and manner as the Commission may prescribe. 

3 ‘‘(b) PROMPT RESPONSE REQUIRED.—

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

5 Commission shall, within 90 days after receiving a 

6 complaint under subsection (a), either—

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

8 or 

9 ‘‘(B) issue an order dismissing the com10 plaint (together with a statement of the reasons 

11 therefor). 

12 ‘‘(2) TREATMENT OF COMPLAINTS NOT TIMELY

13 ACTED ON.—For purposes of section 3663, any com14 plaint under subsection (a) on which the Commis15 sion fails to act in the time and manner required by 

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

17 if it had been dismissed under an order issued by 

18 the Commission on the last day allowable for the 

19 issuance of such order under paragraph (1). 

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

21 BE JUSTIFIED.—If the Postal Regulatory Commission 

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

23 Postal Service take such action as the Commission con24 siders appropriate in order to achieve compliance with the 

25 applicable requirements and to remedy the effects of any 
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1 noncompliance including ordering unlawful rates to be ad2 justed to lawful levels, ordering the cancellation of market 

3 tests, ordering the Postal Service to discontinue providing 

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

5 make up for revenue shortfalls in competitive products. 

6 ‘‘(d) AUTHORITY TO ORDER FINES IN CASES OF DE7 LIBERATE NONCOMPLIANCE.—In addition, in cases of de8 liberate noncompliance by the Postal Service with the re9 quirements of this title, the Postal Regulatory Commission 

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

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

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

13 incidence of noncompliance. Fines resulting from the pro14 vision of competitive products shall be paid out of the 

15 Competitive Products Fund established in section 2011. 

16 All receipts from fines imposed under this subsection shall 

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

18 United States. 

19 ‘‘§ 3663. Appellate review 

20 ‘‘A person, including the Postal Service, adversely af21 fected or aggrieved by a final order or decision of the Post22 al Regulatory Commission may, within 30 days after such 

23 order or decision becomes final, institute proceedings for 

24 review thereof by filing a petition in the United States 

25 Court of Appeals for the District of Columbia. The court 
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1 shall review the order or decision in accordance with sec2 tion 706 of title 5, and chapter 158 and section 2112 of 

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

4 ‘‘§ 3664. Enforcement of orders 

5 ‘‘The several district courts have jurisdiction specifi6 cally to enforce, and to enjoin and restrain the Postal 

7 Service from violating, any order issued by the Postal Reg8 ulatory Commission.’’. 

9 SEC. 206. CLERICAL AMENDMENT. 

10 Chapter 36 of title 39, United States Code, is amend11 ed by striking the heading and analysis for such chapter 

12 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. 
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‘‘SUBCHAPTER IV—REPORTING REQUIREMENTS AND RELATED 

PROVISIONS 

‘‘3651. Annual reports by the Commission. 

‘‘3652. Annual reports to the Commission. 

‘‘3653. Annual determination of compliance. 

‘‘SUBCHAPTER V—POSTAL SERVICES, COMPLAINTS, AND 

JUDICIAL REVIEW 

‘‘3661. Postal Services. 

‘‘3662. Rate and service complaints. 

‘‘3663. Appellate review. 

‘‘3664. Enforcement of orders. 

‘‘SUBCHAPTER VI—GENERAL 

‘‘3681. Reimbursement. 

‘‘3682. Size and weight limits.

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

‘‘3684. Limitations. 

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

‘‘3686. Bonus authority. 

‘‘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 
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1 (and may from time to time thereafter by regulation re2 vise) a set of service standards for market-dominant prod3 ucts consistent with sections 101 (a) and (b) and 403. 

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

5 to achieve the following objectives: 

6 ‘‘(1) To enhance and preserve the value of post7 al services to both senders and recipients. 

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

9 performance measurements for each market-domi10 nant product as a basis for measurement of Postal 

11 Service performance. 

12 ‘‘(3) To guarantee Postal Service customers de13 livery reliability, speed and frequency consistent with 

14 reasonable rates and best business practices. 

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

16 standards, the Postal Regulatory Commission shall take 

17 into account—

18 ‘‘(1) the actual level of service that Postal Serv19 ice customers receive under any service guidelines 

20 previously established by the Postal Service or serv21 ice standards established under this section; 

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

23 Postal Service performance in the acceptance, proc24 essing and delivery of mail; 
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1 ‘‘(3) mail volume and revenues projected for fu2 ture years; 

3 ‘‘(4) the projected growth in the number of ad4 dresses the Postal Service will be required to serve 

5 in future years; 

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

7 serving Postal Service customers; 

8 ‘‘(6) the effect of changes in technology, demo9 graphics and population distribution on the efficient 

10 and reliable operation of the postal delivery system; 

11 and 

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

13 other factors as the Commission determines appro14 priate.’’. 

15 SEC. 302. POSTAL SERVICE PLAN. 

16 (a) IN GENERAL.—Within 6 months after the estab17 lishment of the service standards under section 3691 of 

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

19 Postal Service shall, in consultation with the Postal Regu20 latory Commission, develop and submit to Congress a plan 

21 for meeting those standards. 

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

23 (1) establish performance goals; 

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

25 processing, transportation, delivery, and retail net-
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1 works necessary to allow the Postal Service to meet 

2 the performance goals; and 

3 (3) describe any changes to planning and per4 formance management documents previously sub5 mitted to Congress to reflect new performance goals. 

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

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

8 rationalizing its infrastructure and workforce and how it 

9 intends to implement that vision, including—

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

11 the postal facilities network and remove excess proc12 essing capacity and space from the network, includ13 ing estimated timeframes, criteria and processes to 

14 be used for making changes to the facilities network, 

15 and the process for engaging policy makers and the 

16 public in related decisions; 

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

18 mail changes, security, automation initiatives, 

19 worksharing, information technology systems, and 

20 other areas will impact network rationalization 

21 plans; 

22 (3) a discussion of what impact any facility 

23 changes may have on the postal workforce and 

24 whether the Postal Service has sufficient flexibility 

25 to make needed workforce changes; and 
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1 (4) an identification of anticipated costs, cost 

2 savings, and other benefits associated with the infra3 structure rationalization alternatives discussed in the 

4 plan. 

5 (d) ALTERNATE RETAIL OPTIONS.—The Postal Serv6 ice plan shall include plans to expand and market retail 

7 access to postal services, in addition to post offices, includ8 ing—

9 (1) vending machines; 

10 (2) the Internet; 

11 (3) Postal Service employees on delivery routes; 

12 and 

13 (4) retail facilities in which overhead costs are 

14 shared with private businesses and other government 

15 agencies. 

16 (e) REEMPLOYMENT ASSISTANCE AND RETIREMENT

17 BENEFITS.—The Postal Service plan shall include—

18 (1) a plan under which reemployment assist19 ance shall be afforded to employees displaced as a 

20 result of the automation or privatization of any of 

21 its functions or the closing and consolidation of any 

22 of its facilities; and 

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

24 Office of Personnel Management, to offer early re25 tirement benefits. 
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1 (f) INSPECTOR GENERAL REPORT.—

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

3 under this section to Congress, the Postal Service 

4 shall submit the plan to the Inspector General of the 

5 United States Postal Service in a timely manner to 

6 carry out this subsection. 

7 (2) REPORT.—The Inspector General shall pre8 pare a report describing the extent to which the 

9 Postal Service plan—

10 (A) is consistent with the continuing obli11 gations of the Postal Service under title 39, 

12 United States Code; and 

13 (B) provides for the Postal Service to meet 

14 the service standards established under section 

15 3691. 

16 (3) SUBMISSION OF REPORT.—The Postal Serv17 ice shall submit the report of the Inspector General 

18 under this subsection with the plan submitted to 

19 Congress under subsection (a). 
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1 TITLE IV—PROVISIONS RELAT2 ING TO FAIR COMPETITION 

3 SEC. 401. POSTAL SERVICE COMPETITIVE PRODUCTS 

4 FUND. 

5 (a) PROVISIONS RELATING TO POSTAL SERVICE

6 COMPETITIVE PRODUCTS FUND AND RELATED MAT7 TERS.—

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

9 United States Code, is amended by adding at the 

10 end the following: 

11 ‘‘§ 2011. Provisions relating to competitive products 

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

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

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

16 for the payment of—

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

18 and 

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

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

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

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

2 ‘‘(2) amounts received from obligations issued 

3 by the Postal Service under subsection (e); 

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

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

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

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

10 of the Competitive Products Fund are in excess of current 

11 needs, it may invest such amounts as it considers appro12 priate in accordance with regulations which the Secretary 

13 of the Treasury shall prescribe within 12 months after the 

14 date of enactment of the Postal Accountability and En15 hancement Act. 

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

17 provide that moneys of the Competitive Products Fund be 

18 deposited in a Federal Reserve bank or a depository for 

19 public funds. 

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

21 2005(a), the Postal Service is authorized to borrow money 

22 and to issue and sell such obligations as it determines nec23 essary to provide for competitive products and deposit 

24 such amounts in the Competitive Products Fund, except 

25 that the Postal Service may pledge only assets related to 
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1 the provision of competitive products (as determined 

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

3 accounting practices and principles under subsection (h) 

4 have been established and applied, the best information 

5 available from the Postal Service, including the audited 

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

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

8 principal of or interest on such obligations, for the pur9 chase or redemption thereof, and for other purposes inci10 dental thereto, including creation of reserve, sinking, and 

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

12 such extent and in such manner as the Postal Service de13 termines necessary or desirable. 

14 ‘‘(2) The Postal Service may enter into binding cov15 enants with the holders of such obligations, and with the 

16 trustee, if any, under any agreement entered into in con17 nection with the issuance thereof with respect to—

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

19 other funds; 

20 ‘‘(B) application and use of revenues and re21 ceipts of the Competitive Products Fund; 

22 ‘‘(C) stipulations concerning the subsequent 

23 issuance of obligations or the execution of leases or 

24 lease purchases relating to properties of the Postal 

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

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

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

5 this subsection—

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

7 the Treasury; 

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

9 or interest from any taxation now or hereafter im10 posed by any State or local taxing authority; 

11 ‘‘(C) shall not be obligations of, nor shall pay12 ment of the principal thereof or interest thereon be 

13 guaranteed by, the Government of the United 

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

15 ‘‘(D) notwithstanding the provisions of the Fed16 eral Financing Bank Act of 1973 or any other provi17 sion of law (except as specifically provided by ref18 erence to this subparagraph in a law enacted after 

19 this subparagraph takes effect), shall not be eligible 

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

21 or issuance to, the Federal Financing Bank. 

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

23 period beginning on the date of the enactment of this 

24 paragraph and ending at the close of the 5-year period 
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1 which begins on the date on which the Postal Service 

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

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

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

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

6 to any obligations sought to be issued by the Postal Serv7 ice under this subsection, be considered to affect such obli8 gations’ eligibility for purchase by, commitment to pur9 chase by, or sale or issuance to, the Federal Financing 

10 Bank. 

11 ‘‘(C) The Federal Financing Bank may elect to pur12 chase such obligations under such terms, including rates 

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

14 but at a rate of yield no less than the prevailing yield on 

15 outstanding marketable securities of comparable maturity 

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

17 then most recently obtained by the Postal Service under 

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

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

20 paragraph, the Postal Service shall first obtain a credit 

21 rating from a nationally recognized credit rating organiza22 tion. Such rating—

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

24 only those assets and activities of the Postal Service 

25 which are described in section 3634(a)(2) (relating 
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1 to the Postal Service’s assumed taxable income from 

2 competitive products); and 

3 ‘‘(ii) may, before final rules of the Postal Regu4 latory Commission under subsection (h) are issued 

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

6 best information available from the Postal Service, 

7 including the audited statements required by section 

8 2008(e). 

9 ‘‘(f) The receipts and disbursements of the Competi10 tive Products Fund shall be accorded the same budgetary 

11 treatment as is accorded to receipts and disbursements of 

12 the Postal Service Fund under section 2009a. 

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

14 Government of the United States (or settlement of a 

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

16 of the Postal Service in the provision of competitive prod17 ucts, be paid out of the Competitive Products Fund. 

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

19 independent, certified public accounting firm and such 

20 other advisors as it considers appropriate, shall develop 

21 recommendations regarding—

22 ‘‘(A) the accounting practices and principles 

23 that should be followed by the Postal Service with 

24 the objectives of identifying the capital and oper25 ating costs incurred by the Postal Service in pro-
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1 viding competitive products, and preventing the 

2 cross-subsidization of such products by market-domi3 nant products; and 

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

5 should be followed in determining the Postal Serv6 ice’s assumed Federal income tax on competitive 

7 products income for any year (within the meaning of 

8 section 3634). 

9 Such recommendations shall be submitted to the Postal 

10 Regulatory Commission no later than 12 months after the 

11 effective date of this section. 

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

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

14 give interested parties, including the Postal Service, enter15 prises in the private sector of the economy engaged in the 

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

17 mails, and an officer of the Commission who shall be re18 quired to represent the interests of the general public, an 

19 opportunity to present their views on those recommenda20 tions through submission of written data, views, or argu21 ments with or without opportunity for oral presentation, 

22 or in such other manner as the Commission considers ap23 propriate. 
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1 ‘‘(B) After due consideration of the views and other 

2 information received under subparagraph (A), the Com3 mission shall by rule—

4 ‘‘(i) provide for the establishment and applica5 tion of the accounting practices and principles which 

6 shall be followed by the Postal Service; 

7 ‘‘(ii) provide for the establishment and applica8 tion of the substantive and procedural rules de9 scribed in paragraph (1)(B); and 

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

11 Service to the Postal Regulatory Commission of an12 nual and other periodic reports setting forth such in13 formation as the Commission may require. 

14 Final rules under this subparagraph shall be issued not 

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

16 Service makes its submission to the Commission under 

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

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

19 not issued by the Commission by the deadline under the 

20 preceding sentence, the recommendations submitted by

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

22 as the final rules. The Commission is authorized to pro23 mulgate regulations revising such rules. 

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

25 be submitted at such time and in such form, and shall 
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1 include such information, as the Commission by rule re2 quires. The Commission may, on its own motion or on re3 quest of an interested party, initiate proceedings (to be 

4 conducted in accordance with such rules as the Commis5 sion shall prescribe) to improve the quality, accuracy, or 

6 completeness of Postal Service data under such subpara7 graph whenever it shall appear that—

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

9 those reports has become significantly inaccurate or 

10 can be significantly improved; or 

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

12 Commission, otherwise necessitated by the public in13 terest. 

14 ‘‘(D) A copy of each report described in subpara15 graph (B)(iii) shall also be transmitted by the Postal Serv16 ice to the Secretary of the Treasury and the Inspector 

17 General of the United States Postal Service. 

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

19 to the Secretary of the Treasury concerning the operation 

20 of the Competitive Products Fund, in which it shall ad21 dress such matters as risk limitations, reserve balances, 

22 allocation or distribution of moneys, liquidity require23 ments, and measures to safeguard against losses. A copy 

24 of its then most recent report under this subsection shall 

25 be included with any other submission that it is required 
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1 to make to the Postal Regulatory Commission under sec2 tion 3652(g).’’. 

3 (2) CLERICAL AMENDMENT.—The analysis for 

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

5 amended by adding after the item relating to section 

6 2010 the following:

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

7 (b) TECHNICAL AND CONFORMING AMENDMENTS.—

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

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

10 at the end of paragraph (1), by redesignating para11 graph (2) as paragraph (3), and by inserting after 

12 paragraph (1) the following: 

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

14 Postal Service Competitive Products Fund estab15 lished by section 2011; and’’. 

16 (2) CAPITAL OF THE POSTAL SERVICE.—Sec17 tion 2002(b) of title 39, United States Code, is 

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

19 and the balance in the Competitive Products 

20 Fund,’’. 

21 (3) POSTAL SERVICE FUND.—

22 (A) PURPOSES FOR WHICH AVAILABLE.—

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

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

25 ‘‘title (other than any of the purposes, func-
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1 tions, or powers for which the Competitive 

2 Products Fund is available).’’. 

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

4 39, United States Code, is amended by striking 

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

6 provided in section 2011, there’’. 

7 (4) RELATIONSHIP BETWEEN THE TREASURY

8 AND THE POSTAL SERVICE.—Section 2006 of title 

9 39, United States Code, is amended—

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

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

12 considered to permit or require the Secretary of 

13 the Treasury to purchase any obligations of the 

14 Postal Service other than those issued under 

15 section 2005.’’; and 

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

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

18 SEC. 402. ASSUMED FEDERAL INCOME TAX ON COMPETI19 TIVE PRODUCTS INCOME. 

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

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

22 at the end the following: 

23 ‘‘§ 3634. Assumed Federal income tax on competitive 

24 products income 

25 ‘‘(a) DEFINITIONS.—For purposes of this section—
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1 ‘‘(1) the term ‘assumed Federal income tax on 

2 competitive products income’ means the net income 

3 tax that would be imposed by chapter 1 of the Inter4 nal Revenue Code of 1986 on the Postal Service’s 

5 assumed taxable income from competitive products 

6 for the year; and 

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

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

9 to the amount representing what would be the tax10 able income of a corporation under the Internal Rev11 enue Code of 1986 for the year, if—

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

13 were the activities of the Postal Service allo14 cable under section 2011(h) to competitive 

15 products; and 

16 ‘‘(B) the only assets held by such corpora17 tion were the assets of the Postal Service allo18 cable under section 2011(h) to such activities. 

19 ‘‘(b) COMPUTATION AND TRANSFER REQUIRE20 MENTS.—The Postal Service shall, for each year beginning 

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

22 Service’s first report to the Postal Regulatory Commission 

23 under section 3652(a)—

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

25 on competitive products income for such year; and 
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1 ‘‘(2) transfer from the Competitive Products 

2 Fund to the Postal Service Fund the amount of that 

3 assumed tax. 

4 ‘‘(c) DEADLINE FOR TRANSFERS.—Any transfer re5 quired to be made under this section for a year shall be 

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

7 the close of such year.’’. 

8 SEC. 403. UNFAIR COMPETITION PROHIBITED. 

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

10 United States Code, is amended by adding after section 

11 404 the following: 

12 ‘‘§ 404a. Specific limitations 

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

14 Postal Service may not: 

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

16 any standard) the effect of which is to preclude com17 petition or establish the terms of competition unless 

18 the Postal Service demonstrates that the regulation

19 does not create an unfair competitive advantage for 

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

21 the Postal Service; 

22 ‘‘(2) compel the disclosure, transfer, or licens23 ing of intellectual property to any third party (such 

24 as patents, copyrights, trademarks, trade secrets, 

25 and proprietary information); or 
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1 ‘‘(3) obtain information from a person that pro2 vides (or seeks to provide) any product, and then 

3 offer any postal service that uses or is based in 

4 whole or in part on such information, without the 

5 consent of the person providing that information, 

6 unless substantially the same information is obtained 

7 (or obtainable) from an independent source or is 

8 otherwise obtained (or obtainable). 

9 ‘‘(b) The Postal Regulatory Commission shall pre10 scribe regulations to carry out this section. 

11 ‘‘(c) Any party (including an officer of the Commis12 sion representing the interests of the general public) who 

13 believes that the Postal Service has violated this section 

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

15 (b) CONFORMING AMENDMENTS.—

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

17 39, United States Code, is amended by striking 

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

19 section 404a, the’’. 

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

21 39, United States Code, is amended by striking 

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

23 of section 404a, but otherwise without’’. 
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1 (c) CLERICAL AMENDMENT.—The analysis for chap2 ter 4 of title 39, United States Code, is amended by insert3 ing after the item relating to section 404 the following:

‘‘404a. Specific limitations.’’.

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

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

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

7 (e) and inserting the following: 

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

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

10 Service—

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

12 used in the provisions of law involved; and 

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

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

16 provisions of law by any officer or employee of the 

17 Postal Service. 

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

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

21 1051 and following)); and 

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

23 Trade Commission Act to the extent that such sec24 tion 5 applies to unfair or deceptive acts or prac25 tices. 
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1 ‘‘(e)(1) To the extent that the Postal Service, or other 

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

3 Postal Service, engages in conduct with respect to any 

4 product which is not reserved to the United States under 

5 section 1696 of title 18, the Postal Service or other Fed6 eral agency (as the case may be)—

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

8 sovereign immunity from suit in Federal court by 

9 any person for any violation of Federal law by such 

10 agency or any officer or employee thereof; and 

11 ‘‘(B) shall be considered to be a person (as de12 fined in subsection (a) of the first section of the 

13 Clayton Act) for purposes of—

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

15 subsection); and 

16 ‘‘(ii) section 5 of the Federal Trade Com17 mission Act to the extent that such section 5 

18 applies to unfair methods of competition. 

19 For purposes of the preceding sentence, any private car20 riage of mail allowable by virtue of section 601 shall not 

21 be considered a service reserved to the United States 

22 under section 1696 of title 18. 

23 ‘‘(2) No damages, interest on damages, costs or at24 torney’s fees may be recovered under the antitrust laws 

25 (as so defined) from the Postal Service or any officer or 
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1 employee thereof acting in an official capacity for any con2 duct with respect to a product in the market-dominant 

3 category of mail. 

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

5 conduct occurring before the date of the enactment of this 

6 subsection. 

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

8 in conduct with respect to the provision of competitive 

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

10 of the Federal bankruptcy laws. 

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

12 Postal Service shall be constructed or altered, to the max13 imum extent feasible as determined by the Postal Service, 

14 in compliance with 1 of the nationally recognized model 

15 building codes and with other applicable nationally recog16 nized codes. 

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

18 Postal Service shall be constructed or altered only after 

19 consideration of all requirements (other than procedural 

20 requirements) of zoning laws, land use laws, and applica21 ble environmental laws of a State or subdivision of a State 

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

23 constructed or altered by an establishment of the Govern24 ment of the United States. 
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1 ‘‘(3) For purposes of meeting the requirements of 

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

3 Postal Service shall—

4 ‘‘(A) in preparing plans for the building, con5 sult with appropriate officials of the State or polit6 ical subdivision, or both, in which the building will 

7 be located; 

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

9 timely manner to such officials for review by such 

10 officials for a reasonable period of time not exceed11 ing 30 days; and 

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

13 construction or alteration of the building, in accord14 ance with the customary schedule of inspections for 

15 construction or alteration of buildings in the locality, 

16 if such officials provide to the Postal Service—

17 ‘‘(i) a copy of such schedule before con18 struction of the building is begun; and 

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

20 conduct any inspection before conducting such 

21 inspection. 

22 Nothing in this subsection shall impose an obligation on 

23 any State or political subdivision to take any action under 

24 the preceding sentence, nor shall anything in this sub25 section require the Postal Service or any of its contractors 
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1 to pay for any action taken by a State or political subdivi2 sion to carry out this subsection (including reviewing 

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

4 permits, and making recommendations). 

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

6 subdivision of a State may make recommendations to the 

7 Postal Service concerning measures necessary to meet the 

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

9 may also make recommendations to the Postal Service 

10 concerning measures which should be taken in the con11 struction or alteration of the building to take into account 

12 local conditions. The Postal Service shall give due consid13 eration to any such recommendations. 

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

15 officials under paragraph (3), the Postal Service shall es16 tablish procedures for soliciting, assessing, and incor17 porating local community input on real property and land 

18 use decisions. 

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

20 includes the District of Columbia, the Commonwealth of 

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

22 States. 

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

24 legal representation may not be furnished by the Depart25 ment of Justice to the Postal Service in any action, suit, 
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1 or proceeding arising, in whole or in part, under any of 

2 the following: 

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

4 ‘‘(B) Subsection (f) or (g) of section 504 (relat5 ing to administrative subpoenas by the Postal Regu6 latory Commission). 

7 ‘‘(C) Section 3663 (relating to appellate re8 view). 

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

10 attorneys to obtain any legal representation that it is pre11 cluded from obtaining from the Department of Justice 

12 under this paragraph. 

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

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

15 furnish the Postal Service such legal representation as it 

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

17 Attorney General, the Postal Service may, in any such cir18 cumstance, employ attorneys by contract or otherwise to 

19 conduct litigation brought by or against the Postal Service 

20 or its officers or employees in matters affecting the Postal 

21 Service. 

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

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

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

25 or (C) of paragraph (1), and to which the Commission 
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1 is not otherwise a party, the Commission shall be per2 mitted to appear as a party on its own motion and as 

3 of right. 

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

5 terms and conditions as the Commission and the Attorney 

6 General shall consider appropriate, furnish the Commis7 sion such legal representation as it may require in connec8 tion with any such action, suit, or proceeding, except that, 

9 with the prior consent of the Attorney General, the Com10 mission may employ attorneys by contract or otherwise for 

11 that purpose. 

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

13 United States arising out of activities of the Postal Service 

14 shall be paid by the Postal Service out of any funds avail15 able to the Postal Service, subject to the restriction speci16 fied in section 2011(g).’’. 

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

18 title 39, United States Code, is amended by striking ‘‘Ex19 cept as provided in section 3628 of this title,’’ and insert20 ing ‘‘Except as otherwise provided in this title,’’. 

21 TITLE V—GENERAL PROVISIONS 

22 SEC. 501. QUALIFICATION AND TERM REQUIREMENTS FOR 

23 GOVERNORS. 

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

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

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

4 sentence and inserting the following: ‘‘The Gov5 ernors shall represent the public interest generally, 

6 and shall be chosen solely on the basis of their dem7 onstrated ability in managing organizations or cor8 porations (in either the public or private sector) of 

9 substantial size. The Governors shall not be rep10 resentatives of specific interests using the Postal 

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

12 (2) APPLICABILITY.—The amendment made by 

13 paragraph (1) shall not affect the appointment or 

14 tenure of any person serving as a Governor of the 

15 United States Postal Service under an appointment 

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

17 however, when any such office becomes vacant, the 

18 appointment of any person to fill that office shall be 

19 made in accordance with such amendment. The re20 quirement set forth in the fourth sentence of section 

21 202(a)(1) of title 39, United States Code (as amend22 ed by subsection (a)) shall be met beginning not 

23 later than 9 years after the date of the enactment 

24 of this Act. 
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1 (b) CONSULTATION REQUIREMENT.—Section 202(a) 

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

3 the end the following: 

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

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

8 of the House of Representatives, the majority leader of 

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

10 (c) 5-YEAR TERMS.—

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

12 United States Code, is amended in the first sentence 

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

14 (2) APPLICABILITY.—

15 (A) CONTINUATION BY INCUMBENTS.—

16 The amendment made by paragraph (1) shall 

17 not affect the tenure of any person serving as 

18 a Governor of the United States Postal Service 

19 on the date of enactment of this Act and such 

20 person may continue to serve the remainder of 

21 the applicable term. 

22 (B) VACANCY BY INCUMBENT BEFORE 5

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

24 as a Governor of the United States Postal Serv25 ice on the date of enactment of this Act resigns, 
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1 is removed, or dies before the expiration of the 

2 9-year term of that Governor, and that Gov3 ernor has served less than 5 years of that term, 

4 the resulting vacancy in office shall be treated 

5 as a vacancy in a 5-year term. 

6 (C) VACANCY BY INCUMBENT AFTER 5

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

8 as a Governor of the United States Postal Serv9 ice on the date of enactment of this Act resigns, 

10 is removed, or dies before the expiration of the 

11 9-year term of that Governor, and that Gov12 ernor has served 5 years or more of that term, 

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

14 term beginning on its commencement date for 

15 purposes of determining vacancies in office. Any 

16 appointment to the vacant office shall be for a 

17 5-year term beginning at the end of the original 

18 9-year term determined without regard to the 

19 deeming under the preceding sentence. Nothing 

20 in this subparagraph shall be construed to af21 fect any action or authority of any Governor or 

22 the Board of Governors during any portion of 

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

24 under this subparagraph. 

25 (d) TERM LIMITATION.—
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1 (1) IN GENERAL.—Section 202(b) of title 39, 

2 United States Code, is amended—

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

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

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

6 as a Governor.’’. 

7 (2) APPLICABILITY.—The amendments made 

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

9 person serving as a Governor of the United States 

10 Postal Service on the date of enactment of this Act

11 with respect to the term which that person is serving 

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

13 remainder of the applicable term, after which the 

14 amendments made by paragraph (1) shall apply. 

15 SEC. 502. OBLIGATIONS. 

16 (a) PURPOSES FOR WHICH OBLIGATIONS MAY BE

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

18 39, United States Code, is amended by striking ‘‘title.’’ 

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

20 which the corresponding authority is available to the Post21 al Service under section 2011.’’. 

22 (b) INCREASE RELATING TO OBLIGATIONS ISSUED

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

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

25 third sentence. 
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1 (c) AMOUNTS WHICH MAY BE PLEDGED.—

2 (1) OBLIGATIONS TO WHICH PROVISIONS

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

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

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

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

7 (2) ASSETS, REVENUES, AND RECEIPTS TO

8 WHICH PROVISIONS APPLY.—Subsection (b) of sec9 tion 2005 of title 39, United States Code, is amend10 ed by striking ‘‘(b)’’ and inserting ‘‘(b)(1)’’, and by 

11 adding at the end the following: 

12 ‘‘(2) Notwithstanding any other provision of this sec13 tion—

14 ‘‘(A) the authority to pledge assets of the Post15 al Service under this subsection shall be available 

16 only to the extent that such assets are not related 

17 to the provision of competitive products (as deter18 mined under section 2011(h) or, for purposes of any 

19 period before accounting practices and principles 

20 under section 2011(h) have been established and ap21 plied, the best information available from the Postal 

22 Service, including the audited statements required 

23 by section 2008(e)); and 

24 ‘‘(B) any authority under this subsection relat25 ing to the pledging or other use of revenues or re-
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1 ceipts of the Postal Service shall be available only to 

2 the extent that they are not revenues or receipts of 

3 the Competitive Products Fund.’’. 

4 SEC. 503. PRIVATE CARRIAGE OF LETTERS. 

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

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

7 inserting the following: 

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

9 when—

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

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

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

13 single-piece first class letter; 

‘‘(2) the letter weighs at least 121 14 ⁄2 ounces; or 

15 ‘‘(3) such carriage is within the scope of serv16 ices described by regulations of the United States 

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

18 purport to permit private carriage by suspension of 

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

20 ‘‘(c) Any regulations necessary to carry out this sec21 tion shall be promulgated by the Postal Regulatory Com22 mission.’’. 

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

24 on the date as of which the regulations promulgated under 
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1 section 3633 of title 39, United States Code (as amended 

2 by section 202) take effect. 

3 SEC. 504. RULEMAKING AUTHORITY. 

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

5 States Code, is amended to read as follows: 

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

7 and regulations, not inconsistent with this title, as 

8 may be necessary in the execution of its functions 

9 under this title and such other functions as may be 

10 assigned to the Postal Service under any provisions 

11 of law outside of this title;’’. 

12 SEC. 505. NONINTERFERENCE WITH COLLECTIVE BAR13 GAINING AGREEMENTS. 

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

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

16 ‘‘§ 1207. Labor disputes 

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

18 effect, no party to such agreement shall terminate or mod19 ify such agreement unless the party desiring such termi20 nation or modification serves written notice upon the other 

21 party to the agreement of the proposed termination or 

22 modification not less than 90 days prior to the expiration 

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

24 it is proposed to make such termination or modification. 

25 The party serving such notice shall notify the Federal Me-
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1 diation and Conciliation Service of the existence of a dis2 pute within 45 days of such notice, if no agreement has 

3 been reached by that time. 

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

5 a procedure providing for a binding resolution of a dispute 

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

7 date of the proposed termination or modification, the Di8 rector of the Federal Mediation and Conciliation Service 

9 shall within 10 days appoint a mediator of nationwide rep10 utation and professional stature, and who is also a mem11 ber of the National Academy of Arbitrators. The parties 

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

13 agreement and shall meet and negotiate in good faith at 

14 such times and places that the mediator, in consultation 

15 with the parties, shall direct. 

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

17 after the expiration or termination of the agreement or 

18 the date on which the agreement became subject to modi19 fication under subsection (a) of this section, or if the par20 ties decide upon arbitration but do not agree upon the pro21 cedures therefore, an arbitration board shall be established 

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

23 the Postal Service, 1 by the bargaining representative of 

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

25 either of the parties fails to select a member, or if the 
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1 members chosen by the parties fail to agree on the third 

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

3 shall be made from a list of names provided by the Direc4 tor. This list shall consist of not less then 9 names of arbi5 trators of nationwide reputation and professional nature, 

6 who are also members of the National Academy of Arbi7 trators, and whom the Director has determined are avail8 able and willing to serve. 

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

10 full and fair hearing, including an opportunity to present 

11 evidence in support of their claims, and an opportunity 

12 to present their case in person, by counsel or by other rep13 resentative as they may elect. Decisions of the arbitration 

14 board shall be conclusive and binding upon the parties. 

15 The arbitration board shall render its decision within 45 

16 days after its appointment. 

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

18 shall be shared equally by the Postal Service and the bar19 gaining representative. 

20 ‘‘(d) In the case of a bargaining unit whose recog21 nized collective-bargaining representative does not have an 

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

23 reach the agreement within 90 days of the commencement 

24 of collective bargaining, a mediator shall be appointed in 

25 accordance with the terms in subsection (b) of this section, 
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1 unless the parties have previously agreed to another proce2 dure for a binding resolution of their differences. If the 

3 parties fail to reach agreement within 180 days of the 

4 commencement of collective bargaining, and if they have 

5 not agreed to another procedure for binding resolution, an 

6 arbitration board shall be established to provide conclusive 

7 and binding arbitration in accordance with the terms of 

8 subsection (c) of this section.’’. 

9 (b) NONINTERFERENCE WITH COLLECTIVE BAR10 GAINING AGREEMENTS.—Except as otherwise provided by 

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

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

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

14 labor organizations representing employees of the United 

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

16 States Code, the National Labor Relations Act, any hand17 book or manual affecting employee labor relations within 

18 the United States Postal Service, or any collective bar19 gaining agreement. 

20 (c) FREE MAILING PRIVILEGES CONTINUE UN21 CHANGED.—Nothing in this Act or any amendment made 

22 by this Act shall affect any free mailing privileges ac23 corded under section 3217 or sections 3403 through 3406 

24 of title 39, United States Code. 
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1 TITLE VI—ENHANCED 

2 REGULATORY COMMISSION 

3 SEC. 601. REORGANIZATION AND MODIFICATION OF CER4 TAIN PROVISIONS RELATING TO THE POSTAL 

5 REGULATORY COMMISSION. 

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

7 United States Code, is amended—

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

9 ‘‘CHAPTER 5—POSTAL REGULATORY 

10 COMMISSION

‘‘Sec. 

‘‘501. Establishment. 

‘‘502. Commissioners. 

‘‘503. Rules; regulations; procedures. 

‘‘504. Administration.

11 ‘‘§ 501. Establishment 

12 ‘‘The Postal Regulatory Commission is an inde13 pendent establishment of the executive branch of the Gov14 ernment of the United States. 

15 ‘‘§ 502. Commissioners 

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

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

18 with the advice and consent of the Senate. The Commis19 sioners shall be chosen solely on the basis of their technical 

20 qualifications, professional standing, and demonstrated 

21 expertise in economics, accounting, law, or public adminis22 tration, and may be removed by the President only for
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1 cause. Each individual appointed to the Commission shall 

2 have the qualifications and expertise necessary to carry 

3 out the enhanced responsibilities accorded Commissioners 

4 under the Postal Accountability and Enhancement Act. 

5 Not more than 3 of the Commissioners may be adherents 

6 of the same political party. 

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

8 in any enterprise in the private sector of the economy en9 gaged in the delivery of mail matter. 

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

11 expiration of his term until his successor has qualified, 

12 except that a Commissioner may not so continue to serve 

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

14 otherwise would expire under subsection (f). 

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

16 as Chairman by, and shall serve in the position of Chair17 man at the pleasure of, the President. 

18 ‘‘(e) The Commissioners shall by majority vote des19 ignate a Vice Chairman of the Commission. The Vice 

20 Chairman shall act as Chairman of the Commission in the 

21 absence of the Chairman. 

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

23 years.’’; 

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

25 (as in effect before the amendment made by section 
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1 201(c)), the heading for such subchapter I and all 

2 that follows through section 3602; and 

3 (3) by redesignating sections 3603 and 3604 as 

4 sections 503 and 504, respectively, and transferring 

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

6 paragraph (1)). 

7 (b) APPLICABILITY.—The amendment made by sub8 section (a)(1) shall not affect the appointment or tenure 

9 of any person serving as a Commissioner on the Postal 

10 Regulatory Commission (as so redesignated by section 

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

12 enactment of this Act or any nomination made before that 

13 date, but, when any such office becomes vacant, the ap14 pointment of any person to fill that office shall be made 

15 in accordance with such amendment. 

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

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

18 after the item relating to chapter 4 the following:

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

19 SEC. 602. AUTHORITY FOR POSTAL REGULATORY COMMIS20 SION TO ISSUE SUBPOENAS. 

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

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

23 end the following: 

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

25 Commission, any administrative law judge appointed by 
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1 the Commission under section 3105 of title 5, and any 

2 employee of the Commission designated by the Commis3 sion may administer oaths, examine witnesses, take depo4 sitions, and receive evidence. 

5 ‘‘(2) The Chairman of the Commission, any Commis6 sioner designated by the Chairman, and any administra7 tive law judge appointed by the Commission under section 

8 3105 of title 5 may, with respect to any proceeding con9 ducted by the Commission under this title—

10 ‘‘(A) issue subpoenas requiring the attendance 

11 and presentation of testimony by, or the production 

12 of documentary or other evidence in the possession 

13 of, any covered person; and 

14 ‘‘(B) order the taking of depositions and re15 sponses to written interrogatories by a covered per16 son. 

17 The written concurrence of a majority of the Commis18 sioners then holding office shall, with respect to each sub19 poena under subparagraph (A), be required in advance of 

20 its issuance. 

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

22 subpoena issued under this subsection, upon application 

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

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

25 is addressed resides or is served may issue an order requir-
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1 ing such person to appear at any designated place to tes2 tify or produce documentary or other evidence. Any failure 

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

4 court as a contempt thereof. 

5 ‘‘(4) For purposes of this subsection, the term ‘cov6 ered person’ means an officer, employee, agent, or con7 tractor of the Postal Service. 

8 ‘‘(g)(1) If the Postal Service determines that any doc9 ument or other matter it provides to the Postal Regulatory 

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

11 or otherwise at the request of the Commission in connec12 tion with any proceeding or other purpose under this title, 

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

14 of this title, or exempt from public disclosure under sec15 tion 552(b) of title 5, the Postal Service shall, at the time 

16 of providing such matter to the Commission, notify the 

17 Commission, in writing, of its determination (and the rea18 sons therefor). 

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

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

21 information as to which the Commission has been notified 

22 under paragraph (1)—

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

24 than the purposes for which it is supplied; or 
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1 ‘‘(B) permit anyone who is not an officer or 

2 employee of the Commission to have access to any 

3 such information. 

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

5 Commission from publicly disclosing relevant infor6 mation in furtherance of its duties under this title, 

7 provided that the Commission has adopted regula8 tions under section 553 of title 5, that establish a 

9 procedure for according appropriate confidentiality 

10 to information identified by the Postal Service under 

11 paragraph (1). In determining the appropriate de12 gree of confidentiality to be accorded information 

13 identified by the Postal Service under paragraph (1), 

14 the Commission shall balance the nature and extent 

15 of the likely commercial injury to the Postal Service 

16 against the public interest in maintaining the finan17 cial transparency of a government establishment 

18 competing in commercial markets. 

19 ‘‘(B) Paragraph (2) shall not prevent the Com20 mission from requiring production of information in 

21 the course of any discovery procedure established in 

22 connection with a proceeding under this title. The 

23 Commission shall, by regulations based on rule 26(c) 

24 of the Federal Rules of Civil Procedure, establish 
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1 procedures for ensuring appropriate confidentiality 

2 for information furnished to any party.’’. 

3 SEC. 603. APPROPRIATIONS FOR THE POSTAL REGU4 LATORY COMMISSION. 

5 (a) AUTHORIZATION OF APPROPRIATIONS.—Sub6 section (d) of section 504 of title 39, United States Code 

7 (as so redesignated by section 601) is amended to read 

8 as follows: 

9 ‘‘(d) There are authorized to be appropriated, out of 

10 the Postal Service Fund, such sums as may be necessary 

11 for the Postal Regulatory Commission. In requesting an 

12 appropriation under this subsection for a fiscal year, the 

13 Commission shall prepare and submit to the Congress 

14 under section 2009 a budget of the Commission’s ex15 penses, including expenses for facilities, supplies, com16 pensation, and employee benefits.’’. 

17 (b) BUDGET PROGRAM.—

18 (1) IN GENERAL.—The next to last sentence of 

19 section 2009 of title 39, United States Code, is 

20 amended to read as follows: ‘‘The budget program 

21 shall also include separate statements of the 

22 amounts which (1) the Postal Service requests to be 

23 appropriated under subsections (b) and (c) of section 

24 2401, (2) the Office of Inspector General of the 

25 United States Postal Service requests to be appro-
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1 priated, out of the Postal Service Fund, under sec2 tion 8G(f) of the Inspector General Act of 1978, and 

3 (3) the Postal Regulatory Commission requests to be 

4 appropriated, out of the Postal Service Fund, under 

5 section 504(d) of this title.’’. 

6 (2) CONFORMING AMENDMENT.—Section 

7 2003(e)(1) of title 39, United States Code, is 

8 amended by striking the first sentence and inserting 

9 the following: ‘‘The Fund shall be available for the 

10 payment of (A) all expenses incurred by the Postal 

11 Service in carrying out its functions as provided by

12 law, subject to the same limitation as set forth in 

13 the parenthetical matter under subsection (a); (B) 

14 all expenses of the Postal Regulatory Commission, 

15 subject to the availability of amounts appropriated 

16 under section 504(d); and (C) all expenses of the 

17 Office of Inspector General, subject to the avail18 ability of amounts appropriated under section 8G(f) 

19 of the Inspector General Act of 1978.’’. 

20 (c) EFFECTIVE DATE.—

21 (1) IN GENERAL.—The amendments made by 

22 this section shall apply with respect to fiscal years 

23 beginning on or after October 1, 2002. 

24 (2) SAVINGS PROVISION.—The provisions of 

25 title 39, United States Code, that are amended by 
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1 this section shall, for purposes of any fiscal year be2 fore the first fiscal year to which the amendments 

3 made by this section apply, continue to apply in the 

4 same way as if this section had never been enacted. 

5 SEC. 604. REDESIGNATION OF THE POSTAL RATE COMMIS6 SION. 

7 (a) AMENDMENTS TO TITLE 39, UNITED STATES

8 CODE.—Title 39, United States Code, is amended in sec9 tions 404, 503 and 504 (as so redesignated by section 

10 601), 1001 and 1002, by striking ‘‘Postal Rate Commis11 sion’’ each place it appears and inserting ‘‘Postal Regu12 latory Commission’’. 

13 (b) AMENDMENTS TO TITLE 5, UNITED STATES

14 CODE.—Title 5, United States Code, is amended in sec15 tions 104(1), 306(f), 2104(b), 3371(3), 5314 (in the item 

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

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

18 5514(a)(5)(B), 7342(a)(1)(A), 7511(a)(1)(B)(ii), 

19 8402(c)(1), 8423(b)(1)(B), and 8474(c)(4) by striking 

20 ‘‘Postal Rate Commission’’ and inserting ‘‘Postal Regu21 latory Commission’’. 

22 (c) AMENDMENT TO THE ETHICS IN GOVERNMENT

23 ACT OF 1978.—Section 101(f)(6) of the Ethics in Govern24 ment Act of 1978 (5 U.S.C. App.) is amended by striking 
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1 ‘‘Postal Rate Commission’’ and inserting ‘‘Postal Regu2 latory Commission’’. 

3 (d) AMENDMENT TO THE REHABILITATION ACT OF

4 1973.—Section 501(b) of the Rehabilitation Act of 1973 

5 (29 U.S.C. 791(b)) is amended by striking ‘‘Postal Rate 

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

7 (e) AMENDMENT TO TITLE 44, UNITED STATES

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

9 is amended by striking ‘‘Postal Rate Commission’’ and in10 serting ‘‘Postal Regulatory Commission’’. 

11 (f) OTHER REFERENCES.—Whenever a reference is 

12 made in any provision of law (other than this Act or a 

13 provision of law amended by this Act), regulation, rule, 

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

15 Postal Rate Commission, such reference shall be consid16 ered a reference to the Postal Regulatory Commission. 

17 SEC. 605. FINANCIAL TRANSPARENCY. 

18 Section 101 of title 39, United States Code, is 

19 amended— 

20 (1) by redesignating subsections (d) through (g) 

21 as subsections (e) through (h), respectively; and 

22 (2) by inserting after subsection (c) the fol23 lowing: 

24 ‘‘(d) As an independent establishment of the execu25 tive branch of the Government of the United States, the 
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1 Postal Service shall be subject to a high degree of trans2 parency to ensure fair treatment of customers of the Post3 al Service’s market-dominant products and companies 

4 competing with the Postal Service’s competitive prod5 ucts.’’. 

6 TITLE VII—EVALUATIONS 

7 SEC. 701. ASSESSMENTS OF RATEMAKING, CLASSIFICA8 TION, AND OTHER PROVISIONS. 

9 (a) IN GENERAL.—The Postal Regulatory Commis10 sion shall, at least every 3 years, submit a report to the 

11 President and Congress concerning—

12 (1) the operation of the amendments made by 

13 this Act; and 

14 (2) recommendations for any legislation or 

15 other measures necessary to improve the effective16 ness or efficiency of the postal laws of the United 

17 States. 

18 (b) POSTAL SERVICE VIEWS.—A report under this 

19 section shall be submitted only after reasonable oppor20 tunity has been afforded to the Postal Service to review 

21 the report and to submit written comments on the report. 

22 Any comments timely received from the Postal Service 

23 under the preceding sentence shall be attached to the re24 port submitted under subsection (a). 
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1 SEC. 702. REPORT ON UNIVERSAL POSTAL SERVICE AND 

2 THE POSTAL MONOPOLY. 

3 (a) REPORT BY THE POSTAL SERVICE.—

4 (1) IN GENERAL.—Not later than 12 months 

5 after the date of enactment of this Act, the Postal 

6 Regulatory Commission shall submit a report to the 

7 President and Congress on universal postal service 

8 and the postal monopoly in the United States (in 

9 this section referred to as ‘‘universal service and the 

10 postal monopoly’’), including the monopoly on the 

11 delivery of mail and on access to mailboxes. 

12 (2) CONTENTS.—The report under this sub13 section shall include—

14 (A) a comprehensive review of the history 

15 and development of universal service and the 

16 postal monopoly, including how the scope and 

17 standards of universal service and the postal 

18 monopoly have evolved over time for the Nation 

19 and its urban and rural areas; 

20 (B) the scope and standards of universal 

21 service and the postal monopoly provided under 

22 current law (including sections 101 and 403 of 

23 title 39, United States Code), and current 

24 rules, regulations, policy statements, and prac25 tices of the Postal Service; 
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1 (C) a description of any geographic areas, 

2 populations, communities (including both urban 

3 and rural communities), organizations, or other 

4 groups or entities not currently covered by uni5 versal service or that are covered but that are

6 receiving services deficient in scope or quality 

7 or both; and 

8 (D) the scope and standards of universal 

9 service and the postal monopoly likely to be re10 quired in the future in order to meet the needs 

11 and expectations of the United States public, 

12 including all types of mail users, based on dis13 cussion of such assumptions, alternative sets of 

14 assumptions, and analyses as the Postal Service 

15 considers plausible. 

16 (b) RECOMMENDED CHANGES TO UNIVERSAL SERV17 ICE AND THE MONOPOLY.—The Postal Regulatory Com18 mission shall include in the report under subsection (a), 

19 and in all reports submitted under section 701 of this 

20 Act—

21 (1) any recommended changes to universal serv22 ice and the postal monopoly as the Commission con23 siders appropriate, including changes that the Com24 mission may implement under current law and 

25 changes that would require changes to current law, 
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1 with estimated effects of the recommendations on 

2 the service, financial condition, rates, and security of 

3 mail provided by the Postal Service; 

4 (2) with respect to each recommended change 

5 described under paragraph (1)—

6 (A) an estimate of the costs of the Postal 

7 Service attributable to the obligation to provide 

8 universal service under current law; and 

9 (B) an analysis of the likely benefit of the 

10 current postal monopoly to the ability of the 

11 Postal Service to sustain the current scope and 

12 standards of universal service, including esti13 mates of the financial benefit of the postal mo14 nopoly to the extent practicable, under current 

15 law; and 

16 (3) such additional topics and recommendations 

17 as the Commission considers appropriate, with esti18 mated effects of the recommendations on the service, 

19 financial condition, rates, and the security of mail 

20 provided by the Postal Service. 

21 SEC. 703. STUDY ON EQUAL APPLICATION OF LAWS TO 

22 COMPETITIVE PRODUCTS. 

23 (a) IN GENERAL.—The Federal Trade Commission 

24 shall prepare and submit to the President and Congress, 

25 and to the Postal Regulatory Commission, within 1 year 
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1 after the date of the enactment of this Act, a comprehen2 sive report identifying Federal and State laws that apply 

3 differently to the United States Postal Service with re4 spect to the competitive category of mail (within the mean5 ing of section 102 of title 39, United States Code, as 

6 amended by section 101) and similar products provided 

7 by private companies. 

8 (b) RECOMMENDATIONS.—The Federal Trade Com9 mission shall include such recommendations as it con10 siders appropriate for bringing such legal discrimination 

11 to an end, and in the interim, to account under section 

12 3633 of title 39, United States Code (as added by this 

13 Act), for the net economic advantages provided by those 

14 laws. 

15 (c) CONSULTATION.—In preparing its report, the 

16 Federal Trade Commission shall consult with the United 

17 States Postal Service, the Postal Regulatory Commission, 

18 other Federal agencies, mailers, private companies that 

19 provide delivery services, and the general public, and shall 

20 append to such report any written comments received 

21 under this subsection. 

22 (d) COMPETITIVE PRODUCT REGULATION.—The 

23 Postal Regulatory Commission shall take into account the 

24 recommendations of the Federal Trade Commission in 
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1 promulgating or revising the regulations required under 

2 section 3633 of title 39, United States Code. 

3 TITLE VIII—POSTAL SERVICE 

4 RETIREMENT AND HEALTH 

5 BENEFITS FUNDING 

6 SEC. 801. SHORT TITLE. 

7 This title may be cited as the ‘‘Postal Civil Service 

8 Retirement and Health Benefits Funding Amendments of 

9 2004’’. 

10 SEC. 802. CIVIL SERVICE RETIREMENT SYSTEM. 

11 (a) IN GENERAL.—Chapter 83 of title 5, United 

12 States Code, is amended—

13 (1) in section 8334(a)(1)(B), by striking clause 

14 (ii) and inserting the following: 

15 ‘‘(ii) In the case of an employee of the United States 

16 Postal Service, no amount shall be contributed under this 

17 subparagraph.’’; and 

18 (2) by amending section 8348(h) to read as fol19 lows: 

20 ‘‘(h)(1) In this subsection, the term ‘Postal surplus 

21 or supplemental liability’ means the estimated difference, 

22 as determined by the Office, between—

23 ‘‘(A) the actuarial present value of all future 

24 benefits payable from the Fund under this sub25 chapter to current or former employees of the 
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1 United States Postal Service and attributable to ci2 vilian employment with the United States Postal 

3 Service; and 

4 ‘‘(B) the sum of—

5 ‘‘(i) the actuarial present value of deduc6 tions to be withheld from the future basic pay 

7 of employees of the United States Postal Serv8 ice currently subject to this subchapter under 

9 section 8334; 

10 ‘‘(ii) that portion of the Fund balance, as 

11 of the date the Postal surplus or supplemental 

12 liability is determined, attributable to payments 

13 to the Fund by the United States Postal Serv14 ice and its employees, minus benefit payments 

15 attributable to civilian employment with the 

16 United States Postal Service, plus the earnings 

17 on such amounts while in the Fund; and 

18 ‘‘(iii) any other appropriate amount, as de19 termined by the Office in accordance with gen20 erally accepted actuarial practices and prin21 ciples. 

22 ‘‘(2)(A) Not later than June 30, 2006, the Office 

23 shall determine the Postal surplus or supplemental liabil24 ity, as of September 30, 2005. If that result is a surplus, 

25 the amount of the surplus shall be transferred to the Post-
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1 al Service Retiree Health Benefits Fund established under

2 section 8909a. If the result is a supplemental liability, the 

3 Office shall establish an amortization schedule, including 

4 a series of annual installments commencing September 30, 

5 2006, which provides for the liquidation of such liability 

6 by September 30, 2043. 

7 ‘‘(B) The Office shall redetermine the Postal surplus 

8 or supplemental liability as of the close of the fiscal year, 

9 for each fiscal year beginning after September 30, 2006, 

10 through the fiscal year ending September 30, 2038. If the 

11 result is a surplus, that amount shall remain in the Fund 

12 until distribution is authorized under subparagraph (C), 

13 and any prior amortization schedule for payments shall 

14 be terminated. If the result is a supplemental liability, the 

15 Office shall establish a new amortization schedule, includ16 ing a series of annual installments commencing on Sep17 tember 30 of the subsequent fiscal year, which provides 

18 for the liquidation of such liability by September 30, 2043. 

19 ‘‘(C) As of the close of the fiscal years ending Sep20 tember 30, 2015, 2025, 2035, and 2039, if the result is 

21 a surplus, that amount shall be transferred to the Postal 

22 Service Retiree Health Benefits Fund, and any prior am23 ortization schedule for payments shall be terminated. 

24 ‘‘(D) Amortization schedules established under this 

25 paragraph shall be set in accordance with generally accept-
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1 ed actuarial practices and principles, with interest com2 puted at the rate used in the most recent valuation of the 

3 Civil Service Retirement System. 

4 ‘‘(E) The United States Postal Service shall pay the 

5 amounts so determined to the Office, with payments due 

6 not later than the date scheduled by the Office. 

7 ‘‘(3) Notwithstanding any other provision of law, in 

8 computing the amount of any payment under any other 

9 subsection of this section that is based upon the amount 

10 of the unfunded liability, such payment shall be computed 

11 disregarding that portion of the unfunded liability that the 

12 Office determines will be liquidated by payments under 

13 this subsection.’’. 

14 (b) CREDIT ALLOWED FOR MILITARY SERVICE.—In 

15 the application of section 8348(g)(2) of title 5, United 

16 States Code, for the fiscal year 2006, the Office of Per17 sonnel Management shall include, in addition to the 

18 amount otherwise computed under that paragraph, the 

19 amounts that would have been included for the fiscal years 

20 2003 through 2005 with respect to credit for military serv21 ice of former employees of the United States Postal Serv22 ice as though the Postal Civil Service Retirement System 

23 Funding Reform Act of 2003 (Public Law 108–18) had 

24 not been enacted, and the Secretary of the Treasury shall 
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1 make the required transfer to the Civil Service Retirement 

2 and Disability Fund based on that amount. 

3 SEC. 803. HEALTH INSURANCE. 

4 (a) IN GENERAL.—Chapter 89 of title 5, United 

5 States Code, is amended—

6 (1) in section 8906(g)(2)(A), by striking ‘‘shall 

7 be paid by the United States Postal Service.’’ and 

8 inserting ‘‘shall be paid first from the Postal Service 

9 Retiree Health Benefits Fund up to the amount con10 tained in the Fund, with any remaining amount paid 

11 by the United States Postal Service.’’; and 

12 (2) by inserting after section 8909 the fol13 lowing: 

14 ‘‘§ 8909a. Postal Service Retiree Health Benefits Fund 

15 ‘‘(a) There is in the Treasury of the United States 

16 a Postal Service Retiree Health Benefits Fund which is 

17 administered by the Office of Personnel Management. 

18 ‘‘(b) The Fund is available without fiscal year limita19 tion for payments required under section 8906(g)(2)(A). 

20 ‘‘(c) The Secretary of the Treasury shall immediately 

21 invest, in interest-bearing securities of the United States 

22 such currently available portions of the Fund as are not 

23 immediately required for payments from the Fund. Such 

24 investments shall be made in the same manner as invest-
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1 ments for the Civil Service Retirement and Disability 

2 Fund under section 8348. 

3 ‘‘(d)(1) Not later than December 31, 2006, and by 

4 December 31 of each succeeding year, the Office shall 

5 compute the net present value of the future payments re6 quired under section 8906(g)(2)(A) and attributable to 

7 the service of Postal Service employees during the most 

8 recently ended fiscal year. 

9 ‘‘(2)(A) Not later than December 31, 2006, the Of10 fice shall compute, and by December 31 of each suc11 ceeding year, the Office shall recompute the difference be12 tween—

13 ‘‘(i) the net present value of the excess of fu14 ture payments required under section 8906(g)(2)(A) 

15 for current and future United States Postal Service 

16 annuitants as of the end of the fiscal year ending on 

17 September 30 of that year; and 

18 ‘‘(ii)(I) the value of the assets of the Postal Re19 tiree Health Benefits Fund as of the end of the fis20 cal year ending on September 30 of that year; and 

21 ‘‘(II) the net present value computed under 

22 paragraph (1). 

23 ‘‘(B) Not later than December 31, 2006, the Office 

24 shall compute, and by December 31 of each succeeding 

25 year shall recompute, an amortization schedule including 
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1 a series of annual installments which provide for the liq2 uidation by January 31, 2046, or within 15 years, which3 ever is later, of the net present value determined under

4 subparagraph (A), including interest at the rate used in 

5 that computation. 

6 ‘‘(3) Not later than January 31, 2007, and by Janu7 ary 31 of each succeeding year, the United States Postal 

8 Service shall pay into such Fund—

9 ‘‘(A) the net present value computed under 

10 paragraph (1); and 

11 ‘‘(B) the annual installment computed under 

12 paragraph (2)(B). 

13 ‘‘(4) Computations under this subsection shall be 

14 made consistent with the assumptions and methodology 

15 used by the Office for financial reporting under sub16 chapter II of chapter 35 of title 31. 

17 ‘‘(5) After consultation with the United States Postal 

18 Service, the Office shall promulgate any regulations the 

19 Office determines necessary under this subsection.’’. 

20 (b) TECHNICAL AND CONFORMING AMENDMENT.—

21 The table of sections for chapter 89 of title 5, United 

22 States Code, is amended by inserting after the item relat23 ing to section 8909 the following:

‘‘8909a. Postal Service Retiree Health Benefits Fund.’’.
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1 SEC. 804. REPEAL OF DISPOSITION OF SAVINGS PROVISION. 

2 Section 3 of the Postal Civil Service Retirement Sys3 tem Funding Reform Act of 2003 (Public Law 108–18) 

4 is repealed. 

5 SEC. 805. EFFECTIVE DATES. 

6 (a) IN GENERAL.—Except as provided under sub7 section (b), this title shall take effect on October 1, 2005. 

8 (b) TERMINATION OF EMPLOYER CONTRIBUTION.—

9 The amendment made by paragraph (1) of section 802(a) 

10 shall take effect on the first day of the first pay period 

11 beginning on or after October 1, 2005. 

12 TITLE IX—COMPENSATION FOR 

13 WORK INJURIES 

14 SEC. 901. TEMPORARY DISABILITY; CONTINUATION OF PAY. 

15 (a) TIME OF ACCRUAL OF RIGHT.—Section 8117 of 

16 title 5, United States Code, is amended—

17 (1) by striking ‘‘An employee’’ and inserting 

18 ‘‘(a) An employee other than a Postal Service em19 ployee’’; and 

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

21 ‘‘(b) A Postal Service employee is not entitled to com22 pensation or continuation of pay for the first 3 days of 

23 temporary disability. A Postal Service employee may use 

24 annual leave, sick leave, or leave without pay during that 

25 3-day period.’’. 
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1 (b) TECHNICAL AND CONFORMING AMENDMENT.—

2 Section 8118(b)(1) of title 5, United States Code, is 

3 amended to read as follows: 

4 ‘‘(1) without a break in time, except as pro5 vided under section 8117;’’. 

6 SEC. 902. DISABILITY RETIREMENT FOR POSTAL EMPLOY7 EES. 

8 (a) TOTAL DISABILITY.—Section 8105 of title 5, 

9 United States Code, is amended—

10 (1) in subsection (a), by adding at the end the 

11 following: ‘‘This section applies to a Postal Service 

12 employee, except as provided under subsection (c).’’; 

13 and 

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

15 ‘‘(c)(1) In this subsection, the term ‘retirement age’ 

16 has the meaning given under section 216(l)(1) of the So17 cial Security Act (42 U.S.C. 416(l)(1)). 

18 ‘‘(2) Notwithstanding any other provision of law, for 

19 any injury occurring on or after the date of enactment 

20 of the Postal Accountability and Enhancement Act, and 

21 for any new claim for a period of disability commencing 

22 on or after that date, the compensation entitlement for 

23 total disability is converted to 50 percent of the monthly 

24 pay of the employee on the later of—
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1 ‘‘(A) the date on which the injured employee 

2 reaches retirement age; or 

3 ‘‘(B) 1 year after the employee begins receiving 

4 compensation.’’. 

5 (b) PARTIAL DISABILITY.—Section 8106 of title 5, 

6 United States Code, is amended—

7 (1) in subsection (a), by adding at the end the 

8 following: ‘‘This section applies to a Postal Service 

9 employee, except as provided under subsection (d).’’; 

10 and 

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

12 ‘‘(d)(1) In this subsection, the term ‘retirement age’ 

13 has the meaning given under section 216(l)(1) of the So14 cial Security Act (42 U.S.C. 416(l)(1)). 

15 ‘‘(2) Notwithstanding any other provision of 

16 law, for any injury occurring on or after the date of 

17 enactment of this subsection, and for any new claim 

18 for a period of disability commencing on or after 

19 that date, the compensation entitlement for partial 

20 disability is converted to 50 percent of the difference 

21 between the monthly pay of an employee and the 

22 monthly wage earning capacity of the employee after 

23 the beginning of partial disability on the later of—

24 ‘‘(A) the date on which the injured em25 ployee reaches retirement age; or
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1 ‘‘(B) 1 year after the employee begins re2 ceiving compensation.’’.

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 

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. 

Sec. 405. International postal arrangements. 

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. 
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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. 

Sec. 704. Report on postal workplace safety and workplace-related injuries. 

Sec. 705. Study on recycled paper. 

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. 

TITLE X—MISCELLANEOUS 

Sec. 1001. Employment of postal police officers. 

Sec. 1002. Expanded contracting authority.

1 TITLE I—DEFINITIONS; POSTAL 

2 SERVICES 

3 SEC. 101. DEFINITIONS. 

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

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

6 the period at the end of paragraph (4) and inserting a semi7 colon, and by adding at the end the following: 

8 ‘‘(5) ‘postal service’ refers to the physical deliv9 ery of letters, printed matter, or packages weighing 

10 up to 70 pounds, including physical acceptance, col11 lection, sorting, transportation, or other services an12 cillary thereto; 
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1 ‘‘(6) ‘product’ means a postal service with a dis2 tinct cost or market characteristic for which a rate or 

3 rates are applied; 

4 ‘‘(7) ‘rates’, as used with respect to products, in5 cludes fees for postal services; 

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

7 the market-dominant category of mail’ means a prod8 uct subject to subchapter I of chapter 36; and 

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

10 competitive category of mail’ means a product subject 

11 to subchapter II of chapter 36; and 

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

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

14 SEC. 102. POSTAL SERVICES. 

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

16 States Code, is amended—

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

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

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

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

21 ‘‘(c) Except as provided in section 411, nothing in this 

22 title shall be considered to permit or require that the Postal 

23 Service provide any special nonpostal or similar services.’’. 

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

25 1402(b)(1)(B)(ii) of the Victims of Crime Act of 1984 (98 
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1 Stat. 2170; 42 U.S.C. 10601(b)(1)(B)(ii)) is amended by 

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

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

4 is amended by striking ‘‘and nonpostal’’.

5 TITLE II—MODERN RATE 

6 REGULATION 

7 SEC. 201. PROVISIONS RELATING TO MARKET-DOMINANT 

8 PRODUCTS. 

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

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

11 and 3623 and inserting the following: 

12 ‘‘§ 3621. Applicability; definitions 

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

14 with respect to—

15 ‘‘(1) first-class mail letters and sealed parcels; 

16 ‘‘(2) first-class mail cards; 

17 ‘‘(3) periodicals; 

18 ‘‘(4) standard mail; 

19 ‘‘(5) single-piece parcel post; 

20 ‘‘(6) media mail; 

21 ‘‘(7) bound printed matter; 

22 ‘‘(8) library mail; 

23 ‘‘(9) special services; and 

24 ‘‘(10) single-piece international mail, 
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1 subject to any changes the Postal Regulatory Commission 

2 may make under section 3642. 

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

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

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

6 under the mail classification schedule. 

7 ‘‘§ 3622. Modern rate regulation 

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

9 Commission shall, within 12 months after the date of the 

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

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

12 system for regulating rates and classes for market-dominant 

13 products. 

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

15 achieve the following objectives: 

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

17 increase the transparency of the ratemaking process 

18 while affording reasonable opportunities for interested 

19 parties to participate in that process. 

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

21 rates. 

22 ‘‘(3) To maximize incentives to reduce costs and 

23 increase efficiency. 

24 ‘‘(4) To enhance mail security and deter ter25 rorism by promoting secure, sender-identified mail.
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1 ‘‘(5) To allow the Postal Service pricing flexi2 bility, including the ability to use pricing to promote 

3 intelligent mail and encourage increased mail volume 

4 during nonpeak periods. 

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

7 meet the service standards established under section 

8 3691. 

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

10 the Postal Service equitably between market-dominant 

11 and competitive products. 

12 ‘‘(c) FACTORS.—In establishing or revising such sys13 tem, the Postal Regulatory Commission shall take into ac14 count—

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

16 and equitable schedule for rates and classification sys17 tem; 

18 ‘‘(2) the value of the mail service actually pro19 vided each class or type of mail service to both the 

20 sender and the recipient, including but not limited to 

21 the collection, mode of transportation, and priority of 

22 delivery; 

23 ‘‘(3) the requirement that each class of mail or 

24 type of mail service bear the direct and indirect post25 al costs attributable to each class or type of mail serv-
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1 ice plus that portion of all other costs of the Postal 

2 Service reasonably assignable to such class or type; 

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

4 public, business mail users, and enterprises in the 

5 private sector of the economy engaged in the delivery 

6 of mail matter other than letters; 

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

8 and receiving letters and other mail matter at reason9 able costs; 

10 ‘‘(6) the degree of preparation of mail for deliv11 ery into the postal system performed by the mailer 

12 and its effect upon reducing costs to the Postal Serv13 ice; 

14 ‘‘(7) simplicity of structure for the entire sched15 ule and simple, identifiable relationships between the 

16 rates or fees charged the various classes of mail for 

17 postal services; 

18 ‘‘(8) the relative value to the people of the kinds 

19 of mail matter entered into the postal system and the 

20 desirability and justification for special classifica21 tions and services of mail; 

22 ‘‘(9) the importance of providing classifications 

23 with extremely high degrees of reliability and speed of 

24 delivery and of providing those that do not require 

25 high degrees of reliability and speed of delivery; 
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1 ‘‘(10) the desirability of special classifications 

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

3 Postal Service; 

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

5 informational value to the recipient of mail matter; 

6 and 

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

8 other factors as the Commission deems appropriate. 

9 ‘‘(d) REQUIREMENTS.—The system for regulating rates 

10 and classes for market-dominant products shall—

11 ‘‘(1) require the Postal Regulatory Commission 

12 to set annual limitations on the percentage changes in 

13 rates based on inflation using indices, such as the 

14 Consumer Price Index, the Employment Cost Index, 

15 the Gross Domestic Product Price Index, or any simi16 lar measure as the Postal Regulatory Commission 

17 may prescribe; 

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

19 necessary and appropriate, would change at regular 

20 intervals by predictable amounts; 

21 ‘‘(3) not later than 45 days before the implemen22 tation of any adjustment in rates under this sec23 tion—

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

25 public notice of the adjustment; 
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1 ‘‘(B) provide an opportunity for review by 

2 the Postal Regulatory Commission; 

3 ‘‘(C) provide for the Postal Regulatory 

4 Commission to notify the Postal Service of any 

5 noncompliance of the adjustment with the limi6 tation under paragraph (1); and 

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

8 to the notice provided under subparagraph (C) 

9 and describe the actions to be taken to comply 

10 with the limitation under paragraph (1). 

11 ‘‘(4) notwithstanding any limitation set under 

12 paragraphs (1) and (3), establish procedures whereby 

13 rates may be adjusted on an expedited basis due to 

14 unexpected and extraordinary circumstances. 

15 ‘‘(e) WORKSHARE DISCOUNTS.—

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

17 ‘workshare discount’ refers to rate discounts provided 

18 to mailers for the presorting, prebarcoding, handling, 

19 or transportation of mail, as further defined by the 

20 Postal Regulatory Commission under subsection (a). 

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

22 established under subsection (a), the Postal Regu23 latory Commission shall establish rules for workshare 

24 discounts that ensure that such discounts do not ex-
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1 ceed the cost that the Postal Service avoids as a result 

2 of workshare activity, unless—

3 ‘‘(A) the discount is—

4 ‘‘(i) associated with a new postal serv5 ice or with a change to an existing postal 

6 service; and 

7 ‘‘(ii) necessary, over a period of time 

8 not to exceed 4 years, to induce mailer be9 havior that furthers the economically effi10 cient operation of the Postal Service; 

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

12 ‘‘(i) lead to a loss of volume in the af13 fected category of mail and reduce the ag14 gregate contribution to institutional costs of 

15 the Postal Service from the mail matter 

16 subject to the discount below what it other17 wise would have been if the discount had 

18 not been reduced to costs avoided; 

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

20 rates paid by mailers not able to take ad21 vantage of the discount; or 

22 ‘‘(iii) impede the efficient operation of 

23 the Postal Service; 

24 ‘‘(C) the amount of the discount above costs 

25 avoided—
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1 ‘‘(i) is necessary to mitigate rate shock; 

2 and 

3 ‘‘(ii) will be phased out over time; or 

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

5 connection with subclasses of mail consisting ex6 clusively of mail matter of educational, cultural, 

7 or scientific value. 

8 ‘‘(3) REPORT.—Whenever the Postal Service es9 tablishes or maintains a workshare discount, the Post10 al Service shall, at the time it publishes the workshare 

11 discount rate, submit to the Postal Regulatory Com12 mission a detailed report and explanation of the Post13 al Service’s reasons for establishing or maintaining 

14 the rate, setting forth the data, economic analyses, 

15 and other information relied on by the Postal Service 

16 to justify the rate. 

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

18 section first take effect, rates and classes for market-domi19 nant products shall remain subject to modification in ac20 cordance with the provisions of this chapter and section 

21 407, as such provisions were last in effect before the date 

22 of the enactment of this section. 

23 ‘‘§ 3623. Service agreements for market-dominant 

24 products 

25 ‘‘(a) IN GENERAL.—
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1 ‘‘(1) AUTHORITY.—The Postal Service may enter 

2 into service agreements with a customer or group of 

3 customers that provide for the provision of postal 

4 services under terms, conditions, or service standards 

5 that differ from those that would apply under the oth6 erwise applicable classification of market-dominant 

7 mail. 

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

9 section may involve—

10 ‘‘(A) performance by the contracting mail 

11 user of mail preparation, processing, transpor12 tation, or other functions; 

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

14 additional mail preparation, processing, trans15 portation, or other functions; or 

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

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

18 ‘‘(b) REQUIREMENTS.—A service agreement under this 

19 section may be entered into only if each of the following 

20 conditions is met: 

21 ‘‘(1) The total revenue generated under the agree22 ment—

23 ‘‘(A) will cover all Postal Service costs at24 tributable to the postal services covered by the 

25 agreement; and 
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1 ‘‘(B) will result in no less contribution to 

2 the institutional costs of the Postal Service than 

3 would have been generated had the agreement not 

4 been entered into. 

5 ‘‘(2) Rates or fees for other mailers will not in6 crease as a result of the agreement. 

7 ‘‘(3) The agreement pertains exclusively to prod8 ucts in the market-dominant category of mail. 

9 ‘‘(4) The agreement will not preclude or materi10 ally hinder similarly situated mail users from enter11 ing into agreements with the Postal Service on the 

12 same, or substantially the same terms or conditions, 

13 and the Postal Service remains willing and able to 

14 enter into such. 

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

16 section shall—

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

18 ‘‘(2) provide that such agreement shall be subject 

19 to the cancellation authority of the Commission under 

20 section 3662. 

21 ‘‘(d) NOTICE REQUIREMENTS.—

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

23 service agreement under this section is to take effect, 

24 the Postal Service shall file with the Postal Regu25 latory Commission and publish in the Federal Reg-
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1 ister the following information with respect to such 

2 agreement: 

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

4 agreement involves. 

5 ‘‘(B) A description of the functions the cus6 tomer is to perform under the agreement. 

7 ‘‘(C) A description of the functions the Post8 al Service is to perform under the agreement. 

9 ‘‘(D) The rates and fees payable by the cus10 tomer during the term of the agreement. 

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

12 subsection (b), information sufficient to dem13 onstrate the bases for the view of the Postal Serv14 ice that such condition would be met. 

15 ‘‘(2) AGREEMENTS LESS THAN NATIONAL IN

16 SCOPE.—In the case of a service agreement under this 

17 section that is less than national in scope, the infor18 mation described under paragraph (1) shall also be 

19 published by the Postal Service in a manner designed 

20 to afford reasonable notice to persons within any geo21 graphic area to which such agreement (or any amend22 ment to that agreement) pertains. 

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

24 Service enters into a service agreement with a mailer under 

25 this section, the Postal Service shall make such agreement 
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1 available to similarly situated mailers on functionally 

2 equivalent terms and conditions consistent with the regu3 latory system established under section 3622 without unrea4 sonable distinctions based on mailer profiles, provided that 

5 such distinctions, if ignored, would not render any subse6 quent agreement uneconomic or impractical. 

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

8 service agreement under this section is not in conformance 

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

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

11 agreement under this section, may file a complaint with 

12 the Postal Regulatory Commission in accordance with sec13 tion 3662. 

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

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

16 Commission may promulgate such regulations regard17 ing service agreements as the Commission determines 

18 necessary to implement the requirements of this sec19 tion. 

20 ‘‘(2) REVIEW.—The Postal Regulatory Commis21 sion may review any agreement or proposed agree22 ment under this section and may suspend, cancel, or 

23 prevent such agreement if the Commission finds that 

24 the agreement does not meet the requirements of this 

25 section.
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1 ‘‘(h) INTERPRETATION.—The determination of whether 

2 the revenue generated under the agreement meets the re3 quirements of subsection (b)(1)(B) shall be based, to the ex4 tent practicable, on the actual contribution of the mail in5 volved, not on the average contribution made by the mail 

6 classification most similar to the services performed under 

7 the agreement. If mailer-specific data is not available, the 

8 bases for the determination used shall be provided and shall 

9 include a discussion of the suitability of the data used, in 

10 accordance with regulations established by the Postal Regu11 latory Commission.’’. 

12 (b) REPEALED SECTIONS.—Sections 3624, 3625, and 

13 3628 of title 39, United States Code, are repealed. 

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

15 States Code (as in effect after the amendment made by sec16 tion 601, but before the amendment made by section 202) 

17 is amended by striking the heading for subchapter II and 

18 inserting the following: 

19 ‘‘SUBCHAPTER I—PROVISIONS RELATING TO 

20 MARKET-DOMINANT PRODUCTS’’.

21 SEC. 202. PROVISIONS RELATING TO COMPETITIVE PROD22 UCTS. 

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

24 by inserting after section 3629 the following: 
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1 ‘‘SUBCHAPTER II—PROVISIONS RELATING TO 

2 COMPETITIVE PRODUCTS 

3 ‘‘§ 3631. Applicability; definitions and updates 

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

5 with respect to—

6 ‘‘(1) priority mail; 

7 ‘‘(2) expedited mail; 

8 ‘‘(3) bulk parcel post; 

9 ‘‘(4) bulk international mail; and 

10 ‘‘(5) mailgrams; 

11 subject to subsection (d) and any changes the Postal Regu12 latory Commission may make under section 3642. 

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

14 the term ‘costs attributable’, as used with respect to a prod15 uct, means the direct and indirect postal costs attributable 

16 to such product. 

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

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

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

20 under the mail classification schedule. 

21 ‘‘(d) LIMITATION.—Notwithstanding any other provi22 sion of this section, nothing in this subchapter shall be con23 sidered to apply with respect to any product then currently 

24 in the market-dominant category of mail. 
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1 ‘‘§ 3632. Action of the Governors 

2 ‘‘(a) AUTHORITY TO ESTABLISH RATES AND CLASS3 ES.—The Governors, with the written concurrence of a ma4 jority of all of the Governors then holding office, shall estab5 lish rates and classes for products in the competitive cat6 egory of mail in accordance with the requirements of this 

7 subchapter and regulations promulgated under section 

8 3633.

9 ‘‘(b) PROCEDURES.—

10 ‘‘(1) IN GENERAL.—Rates and classes shall be es11 tablished in writing, complete with a statement of ex12 planation and justification, and the date as of which 

13 each such rate or class takes effect. 

14 ‘‘(2) PUBLIC NOTICE; REVIEW; AND COMPLI15 ANCE.—Not later than 30 days before the date of im16 plementation of any adjustment in rates under this 

17 section—

18 ‘‘(A) the Governors shall provide public no19 tice of the adjustment and an opportunity for re20 view by the Postal Regulatory Commission; 

21 ‘‘(B) the Postal Regulatory Commission 

22 shall notify the Governors of any noncompliance 

23 of the adjustment with section 3633; and 

24 ‘‘(C) the Governors shall respond to the no25 tice provided under subparagraph (B) and de-
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1 scribe the actions to be taken to comply with sec2 tion 3633. 

3 ‘‘(c) TRANSITION RULE.—Until regulations under sec4 tion 3633 first take effect, rates and classes for competitive 

5 products shall remain subject to modification in accordance 

6 with the provisions of this chapter and section 407, as such 

7 provisions were as last in effect before the date of the enact8 ment of this section. 

9 ‘‘§ 3633. Provisions applicable to rates for competitive 

10 products 

11 ‘‘The Postal Regulatory Commission shall, within 180 

12 days after the date of the enactment of this section, promul13 gate (and may from time to time thereafter revise) regula14 tions to—

15 ‘‘(1) prohibit the subsidization of competitive 

16 products by market-dominant products; 

17 ‘‘(2) ensure that each competitive product covers 

18 its costs attributable; and 

19 ‘‘(3) ensure that all competitive products collec20 tively cover their share of the institutional costs of the 

21 Postal Service.’’. 

22 SEC. 203. PROVISIONS RELATING TO EXPERIMENTAL AND 

23 NEW PRODUCTS. 

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

25 Code, is amended to read as follows:
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1 ‘‘SUBCHAPTER III—PROVISIONS RELATING TO 

2 EXPERIMENTAL AND NEW PRODUCTS 

3 ‘‘§ 3641. Market tests of experimental products 

4 ‘‘(a) AUTHORITY.—

5 ‘‘(1) IN GENERAL.—The Postal Service may con6 duct market tests of experimental products in accord7 ance with this section. 

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

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

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

11 or regulations promulgated under those sections. 

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

13 this section unless it satisfies each of the following: 

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

15 product is, from the viewpoint of the mail users, sig16 nificantly different from all products offered by the 

17 Postal Service within the 2-year period preceding the 

18 start of the test. 

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

20 continued offering of the product will not create an 

21 unfair or otherwise inappropriate competitive advan22 tage for the Postal Service or any mailer, particularly 

23 in regard to small business concerns (as defined under 

24 subsection (h)).
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1 ‘‘(3) CORRECT CATEGORIZATION.—The Postal 

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

3 under this section, as either market-dominant or com4 petitive, consistent with the criteria under section 

5 3642(b)(1). Costs and revenues attributable to a prod6 uct identified as competitive shall be included in any 

7 determination under section 3633(3)(relating to pro8 visions applicable to competitive products collec9 tively). Any test that solely affects products currently 

10 classified as competitive, or which provides services 

11 ancillary to only competitive products, shall be pre12 sumed to be in the competitive product category with13 out regard to whether a similar ancillary product ex14 ists for market-dominant products. 

15 ‘‘(c) NOTICE.—

16 ‘‘(1) IN GENERAL.—At least 30 days before initi17 ating a market test under this section, the Postal 

18 Service shall file with the Postal Regulatory Commis19 sion and publish in the Federal Register a notice—

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

21 Service’s determination that the market test is 

22 covered by this section; and 

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

24 market test. 
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1 ‘‘(2) SAFEGUARDS.—For a competitive experi2 mental product, the provisions of section 504(g) shall 

3 be available with respect to any information required 

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

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

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

7 (1) shall be considered to permit or require the publi8 cation of any information as to which confidential 

9 treatment is accorded under the preceding sentence 

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

11 504(g)(3)). 

12 ‘‘(d) DURATION.—

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

14 under this section may be conducted over a period of 

15 not to exceed 24 months. 

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

17 order to determine the feasibility or desirability of a

18 product being tested under this section, the Postal 

19 Regulatory Commission may, upon written applica20 tion of the Postal Service (filed not later than 60 days 

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

22 would otherwise be scheduled to terminate under 

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

24 not to exceed an additional 12 months. 

25 ‘‘(e) DOLLAR-AMOUNT LIMITATION.—
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1 ‘‘(1) IN GENERAL.—A product may only be test2 ed under this section if the total revenues that are an3 ticipated, or in fact received, by the Postal Service 

4 from such product do not exceed $10,000,000 in any 

5 year, subject to paragraph (2) and subsection (g). 

6 ‘‘(2) EXEMPTION AUTHORITY.—The Postal Regu7 latory Commission may, upon written application of 

8 the Postal Service, exempt the market test from the 

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

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

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

12 year, subject to subsection (g). In reviewing an appli13 cation under this paragraph, the Postal Regulatory 

14 Commission shall approve such application if it de15 termines that—

16 ‘‘(A) the product is likely to benefit the pub17 lic and meet an expected demand; 

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

19 the financial stability of the Postal Service; and 

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

21 unfair or otherwise inappropriate competition. 

22 ‘‘(f) CANCELLATION.—If the Postal Regulatory Com23 mission at any time determines that a market test under 

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

25 this section, it may order the cancellation of the test in-
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1 volved or take such other action as it considers appropriate. 

2 A determination under this subsection shall be made in ac3 cordance with such procedures as the Commission shall by 

4 regulation prescribe. 

5 ‘‘(g) ADJUSTMENT FOR INFLATION.—For purposes of 

6 each year following the year in which occurs the deadline 

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

8 Commission under section 3652(a), each dollar amount con9 tained in this section shall be adjusted by the change in 

10 the Consumer Price Index for such year (as determined 

11 under regulations of the Commission). 

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

13 The criteria used in defining small business concerns or oth14 erwise categorizing business concerns as small business con15 cerns shall, for purposes of this section, be established by 

16 the Postal Regulatory Commission in conformance with the 

17 requirements of section 3 of the Small Business Act. 

18 ‘‘(i) EFFECTIVE DATE.—Market tests under this sub19 chapter may be conducted in any year beginning with the 

20 first year in which occurs the deadline for the Postal Serv21 ice’s first report to the Postal Regulatory Commission under 

22 section 3652(a). 
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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 Service 

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

6 Regulatory Commission may change the list of market-dom7 inant products under section 3621 and the list of competi8 tive products under section 3631 by adding new products 

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

10 products between the lists. 

11 ‘‘(b) CRITERIA.—All determinations by the Postal Reg12 ulatory Commission under subsection (a) shall be made in 

13 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 substan18 tially above costs, raise prices significantly, decrease 

19 quality, or decrease output, without risk of losing sub20 stantial business to other firms offering similar prod21 ucts. The competitive category of products shall con22 sist of all other products.

23 ‘‘(2) EXCLUSION OF PRODUCTS COVERED BY

24 POSTAL MONOPOLY.—A product covered by the postal 

25 monopoly shall not be subject to transfer under this 

26 section from the market-dominant category of mail.
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1 For purposes of the preceding sentence, the term 

2 ‘product covered by the postal monopoly’ means any 

3 product the conveyance or transmission of which is 

4 reserved to the United States under section 1696 of 

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

6 the last sentence of section 409(e)(1). 

7 ‘‘(3) ADDITIONAL CONSIDERATIONS.—In making 

8 any decision under this section, due regard shall be 

9 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 product 

14 involved on the appropriateness of the proposed 

15 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 SUBOR20 DINATE UNITS ALLOWABLE.—Nothing in this title shall be 

21 considered to prevent transfers under this section from being 

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

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

24 units of the class of mail or type of postal service involved 
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1 (without regard to satisfaction of minimum quantity re2 quirements standing alone). 

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

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

6 Service shall, whenever it requests to add a product 

7 or transfer a product to a different category, file with 

8 the Postal Regulatory Commission and publish in the 

9 Federal Register a notice setting out the basis for its 

10 determination that the product satisfies the criteria 

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

12 add a product or transfer a product to the competi13 tive category of mail, that the product meets the regu14 lations promulgated by the Postal Regulatory Com15 mission under section 3633. The provisions of section 

16 504(g) shall be available with respect to any informa17 tion required to be filed.

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

19 Regulatory Commission shall, whenever it changes the 

20 list of products in the market-dominant or competi21 tive category of mail, prescribe new lists of products. 

22 The revised lists shall indicate how and when any 

23 previous lists (including the lists under sections 3621 

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

25 the Federal Register.
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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 Post4 al Service unless it has been assigned to the market-domi5 nant or competitive category of mail (as appropriate) ei6 ther—

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 sub13 section (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 and 

19 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:
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1 ‘‘SUBCHAPTER IV—REPORTING REQUIREMENTS 

2 AND RELATED PROVISIONS 

3 ‘‘§ 3651. Annual reports by the Commission 

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

6 the Congress concerning the operations of the Commission 

7 under this title, including the extent to which regulations 

8 are achieving the objectives under sections 3622, 3633, and 

9 3691. 

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

11 Postal Service shall provide the Postal Regulatory Commis12 sion with such information as may, in the judgment of the 

13 Commission, be necessary in order for the Commission to 

14 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 
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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 the 

6 Postal Service in connection with such product, 

7 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 satisfaction 

12 with the service provided. 

13 Before submitting a report under this subsection (including 

14 any annex to the report and the information required under 

15 subsection (b)), the Postal Service shall have the informa16 tion contained in such report (and annex) audited by the 

17 Inspector General. The results of any such audit shall be 

18 submitted along with the report to which it pertains. 

19 ‘‘(b) INFORMATION RELATING TO WORKSHARE DIS20 COUNTS.—The Postal Service shall include, in each report 

21 under subsection (a), the following information with respect 

22 to each market-dominant product for which a workshare 

23 discount was in effect during the period covered by such 

24 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 avoided 

4 that the per-item workshare discount represents. 

5 ‘‘(3) The per-item contribution made to institu6 tional costs. 

7 ‘‘(c) SERVICE AGREEMENTS AND MARKET TESTS.—In 

8 carrying out subsections (a) and (b) with respect to service 

9 agreements (including service agreements entered into 

10 under section 3623) and experimental products offered 

11 through market tests under section 3641 in a year, the Post12 al Service—

13 ‘‘(1) may report summary data on the costs, rev14 enues, and quality of service by service agreement and 

15 market test; and 

16 ‘‘(2) shall report such data as the Postal Regu17 latory Commission requires. 

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

19 Commission shall have access, in accordance with such reg20 ulations as the Commission shall prescribe, to the working 

21 papers and any other supporting matter of the Postal Serv22 ice and the Inspector General in connection with any infor23 mation submitted under this section. 

24 ‘‘(e) CONTENT AND FORM OF REPORTS.—
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1 ‘‘(1) IN GENERAL.—The Postal Regulatory Com2 mission shall, by regulation, prescribe the content and 

3 form of the public reports (and any nonpublic annex 

4 and supporting matter relating to the report) to be 

5 provided by the Postal Service under this section. In 

6 carrying out this subsection, the Commission shall 

7 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—
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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 become 

5 significantly inaccurate or can be significantly 

6 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 Regu14 latory 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 ex17 empt from public disclosure under section 552(b) of 

18 title 5, the Postal Service shall, at the time of pro19 viding 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 Com-
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1 mission gains access under this section shall be sub2 ject to paragraphs (2) and (3) of section 504(g) in the 

3 same way as if the Commission had received notifica4 tion with respect to such matter under section 

5 504(g)(1). 

6 ‘‘(g) OTHER REPORTS.—The Postal Service shall sub7 mit to the Postal Regulatory Commission, together with any 

8 other submission that the Postal Service is required to make 

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

10 ‘‘(1) comprehensive statement under section 

11 2401(e); 

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

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

14 ‘‘(4) program performance reports under section 

15 2804. 

16 ‘‘§ 3653. Annual determination of compliance

17 ‘‘(a) OPPORTUNITY FOR PUBLIC COMMENT.—After re18 ceiving the reports required under section 3652 for any 

19 year, the Postal Regulatory Commission shall promptly 

20 provide an opportunity for comment on such reports by 

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

22 Commission who shall be required to represent the interests 

23 of the general public. 

24 ‘‘(b) DETERMINATION OF COMPLIANCE OR NONCOMPLI25 ANCE.—Not later than 90 days after receiving the submis-
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1 sions required under section 3652 with respect to a year, 

2 the Postal Regulatory Commission shall make a written de3 termination as to—

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

5 such year (for products individually or collectively) 

6 were not in compliance with applicable provisions of 

7 this chapter (or regulations promulgated thereunder); 

8 or 

9 ‘‘(2) whether any service standards in effect dur10 ing such year were not met. 

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

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

13 the written determination shall be to that effect. 

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

15 year, a timely written determination of noncompliance is 

16 made under subsection (b), the Postal Regulatory Commis17 sion shall take any appropriate remedial action authorized 

18 by section 3662(c). 

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

20 determination described in the last sentence of subsection 

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

22 create a rebuttable presumption of compliance by the Postal 

23 Service (with regard to the matters described in paragraphs 

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

25 such determination relates.’’.
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1 SEC. 205. COMPLAINTS; APPELLATE REVIEW AND ENFORCE2 MENT. 

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

4 by striking sections 3662 and 3663 and inserting the fol5 lowing: 

6 ‘‘§ 3662. Rate and service complaints 

7 ‘‘(a) IN GENERAL.—Any person (including an officer 

8 of the Postal Regulatory Commission representing the inter9 ests of the general public) who believes the Postal Service 

10 is not operating in conformance with the requirements of 

11 chapter 1, 4, or 6, or this chapter (or regulations promul12 gated under any of those chapters) may lodge a complaint 

13 with the Postal Regulatory Commission in such form and 

14 manner as the Commission may prescribe. 

15 ‘‘(b) PROMPT RESPONSE REQUIRED.—

16 ‘‘(1) IN GENERAL.—The Postal Regulatory Com17 mission shall, within 90 days after receiving a com18 plaint under subsection (a), either—

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

20 or 

21 ‘‘(B) issue an order dismissing the com22 plaint (together with a statement of the reasons 

23 therefor). 

24 ‘‘(2) TREATMENT OF COMPLAINTS NOT TIMELY

25 ACTED ON.—For purposes of section 3663, any com26 plaint under subsection (a) on which the Commission 
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1 fails to act in the time and manner required by para2 graph (1) shall be treated in the same way as if it 

3 had been dismissed under an order issued by the 

4 Commission on the last day allowable for the issuance 

5 of such order under paragraph (1). 

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

7 JUSTIFIED.—If the Postal Regulatory Commission finds the 

8 complaint to be justified, it shall order that the Postal Serv9 ice take such action as the Commission considers appro10 priate in order to achieve compliance with the applicable 

11 requirements and to remedy the effects of any noncompli12 ance including ordering unlawful rates to be adjusted to 

13 lawful levels, ordering the cancellation of market tests, or14 dering the Postal Service to discontinue providing loss-mak15 ing products, and requiring the Postal Service to make up 

16 for revenue shortfalls in competitive products.

17 ‘‘(d) AUTHORITY TO ORDER FINES IN CASES OF DE18 LIBERATE NONCOMPLIANCE.—In addition, in cases of delib19 erate noncompliance by the Postal Service with the require20 ments of this title, the Postal Regulatory Commission may 

21 order, based on the nature, circumstances, extent, and seri22 ousness of the noncompliance, a fine (in the amount speci23 fied by the Commission in its order) for each incidence of 

24 noncompliance. Fines resulting from the provision of com25 petitive products shall be paid out of the Competitive Prod-
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1 ucts Fund established in section 2011. All receipts from 

2 fines imposed under this subsection shall be deposited in 

3 the general fund of the Treasury of the United States. 

4 ‘‘§ 3663. Appellate review 

5 ‘‘A person, including the Postal Service, adversely af6 fected or aggrieved by a final order or decision of the Postal 

7 Regulatory Commission may, within 30 days after such 

8 order or decision becomes final, institute proceedings for re9 view thereof by filing a petition in the United States Court 

10 of Appeals for the District of Columbia. The court shall re11 view the order or decision in accordance with section 706 

12 of title 5, and chapter 158 and section 2112 of title 28, 

13 on the basis of the record before the Commission. 

14 ‘‘§ 3664. Enforcement of orders 

15 ‘‘The several district courts have jurisdiction specifi16 cally to enforce, and to enjoin and restrain the Postal Serv17 ice from violating, any order issued by the Postal Regu18 latory Commission.’’. 

19 SEC. 206. CLERICAL AMENDMENT. 

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

21 by striking the heading and analysis for such chapter and 

22 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. 
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‘‘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. 

‘‘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.’’.
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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 amended 

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

7 following: 

8 ‘‘SUBCHAPTER VII—MODERN SERVICE 

9 STANDARDS 

10 ‘‘§ 3691. Establishment of modern service standards 

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

12 Commission shall, within 12 months after the date of the 

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

14 from time to time thereafter by regulation revise) a set of 

15 service standards for market-dominant products consistent 

16 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 postal 

20 services to both senders and recipients. 

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

22 performance measurements for each market-dominant 

23 product as a basis for measurement of Postal Service 

24 performance.
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1 ‘‘(3) To guarantee Postal Service customers de2 livery reliability, speed and frequency consistent with 

3 reasonable rates and best business practices. 

4 ‘‘(c) FACTORS.—In establishing or revising such stand5 ards, the Postal Regulatory Commission shall take into ac6 count—

7 ‘‘(1) the actual level of service that Postal Service 

8 customers receive under any service guidelines pre9 viously established by the Postal Service or service 

10 standards established under this section; 

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

12 Postal Service performance in the acceptance, proc13 essing and delivery of mail; 

14 ‘‘(3) mail volume and revenues projected for fu15 ture years; 

16 ‘‘(4) the projected growth in the number of ad17 dresses the Postal Service will be required to serve in 

18 future years; 

19 ‘‘(5) the current and projected future cost of serv20 ing Postal Service customers; 

21 ‘‘(6) the effect of changes in technology, demo22 graphics and population distribution on the efficient 

23 and reliable operation of the postal delivery system; 

24 and 
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1 ‘‘(7) the policies of this title as well as such other 

2 factors as the Commission determines appropriate.’’. 

3 SEC. 302. POSTAL SERVICE PLAN. 

4 (a) IN GENERAL.—Within 6 months after the estab5 lishment of the service standards under section 3691 of title 

6 39, United States Code, as added by this Act, the Postal 

7 Service shall, in consultation with the Postal Regulatory 

8 Commission, develop and submit to Congress a plan for 

9 meeting those standards. 

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

11 (1) establish performance goals; 

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

13 processing, transportation, delivery, and retail net14 works necessary to allow the Postal Service to meet 

15 the performance goals; and 

16 (3) describe any changes to planning and per17 formance management documents previously sub18 mitted to Congress to reflect new performance goals. 

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

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

21 rationalizing its infrastructure and workforce and how it 

22 intends to implement that vision, including—

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

24 the postal facilities network and remove excess proc25 essing capacity and space from the network, includ-
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1 ing estimated timeframes, criteria and processes to be 

2 used for making changes to the facilities network, and 

3 the process for engaging policy makers and the public 

4 in related decisions; 

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

6 mail changes, security, automation initiatives, 

7 worksharing, information technology systems, and 

8 other areas will impact network rationalization 

9 plans; 

10 (3) a discussion of what impact any facility 

11 changes may have on the postal workforce and wheth12 er the Postal Service has sufficient flexibility to make 

13 needed workforce changes; and 

14 (4) an identification of anticipated costs, cost 

15 savings, and other benefits associated with the infra16 structure rationalization alternatives discussed in the 

17 plan. 

18 (d) ALTERNATE RETAIL OPTIONS.—The Postal Service 

19 plan shall include plans to expand and market retail access 

20 to postal services, in addition to post offices, including—

21 (1) vending machines; 

22 (2) the Internet; 

23 (3) Postal Service employees on delivery routes; 
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1 (4) retail facilities in which overhead costs are 

2 shared with private businesses and other government 

3 agencies; or 

4 (5) any other nonpost office access channel pro5 viding market retail access to postal services. 

6 (e) REEMPLOYMENT ASSISTANCE AND RETIREMENT

7 BENEFITS.—The Postal Service plan shall include—

8 (1) a plan under which reemployment assistance 

9 shall be afforded to employees displaced as a result of 

10 the automation of any of its functions or the closing 

11 and consolidation of any of its facilities; and 

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

13 Office of Personnel Management, to offer early retire14 ment benefits. 

15 (f) INSPECTOR GENERAL REPORT.—

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

17 under this section to Congress, the Postal Service shall 

18 submit the plan to the Inspector General of the 

19 United States Postal Service in a timely manner to 

20 carry out this subsection. 

21 (2) REPORT.—The Inspector General shall pre22 pare a report describing the extent to which the Postal 

23 Service plan—
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1 (A) is consistent with the continuing obliga2 tions of the Postal Service under title 39, United 

3 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 Con10 gress under subsection (a).

11 TITLE IV—PROVISIONS RELAT12 ING TO FAIR COMPETITION 

13 SEC. 401. POSTAL SERVICE COMPETITIVE PRODUCTS FUND. 

14 (a) PROVISIONS RELATING TO POSTAL SERVICE COM15 PETITIVE PRODUCTS FUND AND RELATED MATTERS.—

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

17 States Code, is amended by adding at the end the fol18 lowing: 

19 ‘‘§ 2011. Provisions relating to competitive products 

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

21 States a revolving fund, to be called the Postal Service Com22 petitive Products Fund, which shall be available to the Post23 al Service without fiscal year limitation for the payment 

24 of—
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1 ‘‘(1) costs attributable to competitive products; 

2 and 

3 ‘‘(2) all other costs incurred by the Postal Serv4 ice, to the extent allocable to competitive products. 

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

6 has the meaning given such term by section 3631. 

7 ‘‘(b) There shall be deposited in the Competitive Prod8 ucts Fund, subject to withdrawal by the Postal Service—

9 ‘‘(1) revenues from competitive products; 

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

11 the Postal Service under subsection (e); 

12 ‘‘(3) interest and dividends earned on invest13 ments of the Competitive Products Fund; and 

14 ‘‘(4) any other receipts of the Postal Service (in15 cluding from the sale of assets), to the extent allocable 

16 to competitive products. 

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

18 of the Competitive Products Fund are in excess of current 

19 needs, it may invest such amounts as it considers appro20 priate in accordance with regulations which the Secretary 

21 of the Treasury shall prescribe within 12 months after the 

22 date of enactment of the Postal Accountability and En23 hancement Act. 

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

25 provide that moneys of the Competitive Products Fund be 
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1 deposited in a Federal Reserve bank or a depository for 

2 public funds. 

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

4 2005(a), the Postal Service is authorized to borrow money 

5 and to issue and sell such obligations as it determines nec6 essary to provide for competitive products and deposit such 

7 amounts in the Competitive Products Fund, except that the 

8 Postal Service may pledge only assets related to the provi9 sion of competitive products (as determined under sub10 section (h) or, for purposes of any period before accounting 

11 practices and principles under subsection (h) have been es12 tablished and applied, the best information available from 

13 the Postal Service, including the audited statements re14 quired by section 2008(e)), and the revenues and receipts 

15 from such products, for the payment of the principal of or 

16 interest on such obligations, for the purchase or redemption 

17 thereof, and for other purposes incidental thereto, including 

18 creation of reserve, sinking, and other funds which may be 

19 similarly pledged and used, to such extent and in such man20 ner as the Postal Service determines necessary or desirable. 

21 ‘‘(2) The Postal Service may enter into binding cov22 enants with the holders of such obligations, and with the 

23 trustee, if any, under any agreement entered into in connec24 tion with the issuance thereof with respect to—
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1 ‘‘(A) the establishment of reserve, sinking, and 

2 other funds; 

3 ‘‘(B) application and use of revenues and re4 ceipts of the Competitive Products Fund; 

5 ‘‘(C) stipulations concerning the subsequent 

6 issuance of obligations or the execution of leases or 

7 lease purchases relating to properties of the Postal 

8 Service; and 

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

10 considers necessary or desirable to enhance the mar11 ketability of such obligations. 

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

13 this subsection—

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

15 the Treasury; 

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

17 or interest from any taxation now or hereafter im18 posed by any State or local taxing authority; 

19 ‘‘(C) shall not be obligations of, nor shall pay20 ment of the principal thereof or interest thereon be 

21 guaranteed by, the Government of the United States, 

22 and the obligations shall so plainly state; and 

23 ‘‘(D) notwithstanding the provisions of the Fed24 eral Financing Bank Act of 1973 or any other provi25 sion of law (except as specifically provided by ref-
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1 erence to this subparagraph in a law enacted after 

2 this subparagraph takes effect), shall not be eligible 

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

4 or issuance to, the Federal Financing Bank.

5 ‘‘(4)(A) This paragraph applies with respect to the pe6 riod beginning on the date of the enactment of this para7 graph and ending at the close of the 5-year period which 

8 begins on the date on which the Postal Service makes its 

9 submission under subsection (h)(1). 

10 ‘‘(B) During the period described in subparagraph (A), 

11 nothing in subparagraph (A) or (D) of paragraph (3) or 

12 the last sentence of section 2006(b) shall, with respect to 

13 any obligations sought to be issued by the Postal Service 

14 under this subsection, be considered to affect such obliga15 tions’ eligibility for purchase by, commitment to purchase 

16 by, or sale or issuance to, the Federal Financing Bank. 

17 ‘‘(C) The Federal Financing Bank may elect to pur18 chase such obligations under such terms, including rates of 

19 interest, as the Bank and the Postal Service may agree, but 

20 at a rate of yield no less than the prevailing yield on out21 standing marketable securities of comparable maturity 

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

23 then most recently obtained by the Postal Service under sub24 paragraph (D), as determined by the Bank. 
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1 ‘‘(D) In order to be eligible to borrow under this para2 graph, the Postal Service shall first obtain a credit rating 

3 from a nationally recognized credit rating organization. 

4 Such rating—

5 ‘‘(i) shall be determined taking into account only 

6 those assets and activities of the Postal Service which 

7 are described in section 3634(a)(2) (relating to the 

8 Postal Service’s assumed taxable income from com9 petitive products); and 

10 ‘‘(ii) may, before final rules of the Postal Regu11 latory Commission under subsection (h) are issued (or 

12 deemed to have been issued), be based on the best in13 formation available from the Postal Service, includ14 ing the audited statements required by section 

15 2008(e). 

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

17 Products Fund shall be accorded the same budgetary treat18 ment as is accorded to receipts and disbursements of the 

19 Postal Service Fund under section 2009a. 

20 ‘‘(g) A judgment against the Postal Service or the Gov21 ernment of the United States (or settlement of a claim) 

22 shall, to the extent that it arises out of activities of the Post23 al Service in the provision of competitive products, be paid 

24 out of the Competitive Products Fund.
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1 ‘‘(h)(1) The Secretary of the Treasury, in consultation 

2 with the Postal Service, an independent, certified public ac3 counting firm, and such other advisers as the Secretary con4 siders appropriate, shall develop recommendations regard5 ing—

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

7 should be followed by the Postal Service with the ob8 jectives of—

9 ‘‘(i) identifying and valuing the assets and 

10 liabilities of the Postal Service associated with 

11 providing, and the capital and operating costs 

12 incurred by the Postal Service in providing, 

13 competitive products; and 

14 ‘‘(ii) preventing the subsidization of such 

15 products by market-dominant products; and 

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

17 should be followed in determining the Postal Service’s 

18 assumed Federal income tax on competitive products 

19 income for any year (within the meaning of section 

20 3634). 

21 Such recommendations shall be submitted to the Postal Reg22 ulatory Commission not earlier than 6 months, and not 

23 later than 12 months, after the effective date of this section. 

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

25 Secretary of the Treasury under paragraph (1), the Com-
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1 mission shall give interested parties, including the Postal 

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

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

4 public, an opportunity to present their views on those rec5 ommendations through submission of written data, views, 

6 or arguments with or without opportunity for oral presen7 tation, or in such other manner as the Commission con8 siders appropriate. 

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

10 information received under subparagraph (A), the Commis11 sion shall by rule—

12 ‘‘(i) provide for the establishment and applica13 tion of the accounting practices and principles which 

14 shall be followed by the Postal Service; 

15 ‘‘(ii) provide for the establishment and applica16 tion of the substantive and procedural rules described 

17 in paragraph (1)(B); and 

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

19 Service to the Postal Regulatory Commission of an20 nual and other periodic reports setting forth such in21 formation as the Commission may require. 

22 Final rules under this subparagraph shall be issued not 

23 later than 12 months after the date on which the Secretary 

24 of the Treasury makes his submission to the Commission 

25 under paragraph (1) (or by such later date as agreed to 
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1 by the Commission and the Postal Service). The Commis2 sion is authorized to promulgate regulations revising such 

3 rules. 

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

5 be submitted at such time, in such form, and shall include 

6 such information, as the Commission by rule requires. The 

7 Commission may, on its own motion or on request of an 

8 interested party, initiate proceedings (to be conducted in 

9 accordance with such rules as the Commission shall pre10 scribe) to improve the quality, accuracy, or completeness of 

11 Postal Service data under such subparagraph whenever it 

12 shall appear that—

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

14 those reports has become significantly inaccurate or 

15 can be significantly improved; or 

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

17 Commission, otherwise necessitated by the public in18 terest. 

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

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

21 the Secretary of the Treasury and the Inspector General of 

22 the United States Postal Service. 

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

24 to the Secretary of the Treasury concerning the operation 

25 of the Competitive Products Fund, in which it shall address 
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1 such matters as risk limitations, reserve balances, allocation 

2 or distribution of moneys, liquidity requirements, and 

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

4 recent report under this subsection shall be included with 

5 any other submission that it is required to make to the Post6 al Regulatory Commission under section 3652(g).’’. 

7 (2) CLERICAL AMENDMENT.—The analysis for 

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

9 by adding after the item relating to section 2010 the 

10 following:

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

11 (b) TECHNICAL AND CONFORMING AMENDMENTS.—

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

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

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

15 (2) as paragraph (3), and by inserting after para16 graph (1) the following: 

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

18 Postal Service Competitive Products Fund established 

19 by section 2011; and’’. 

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

21 2002(b) of title 39, United States Code, is amended 

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

23 balance in the Competitive Products Fund,’’. 

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

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

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

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

5 or powers for which the Competitive Products 

6 Fund is available).’’. 

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

8 United States Code, is amended by striking 

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

11 (4) RELATIONSHIP BETWEEN THE TREASURY

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

13 United States Code, is amended—

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

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

16 considered to permit or require the Secretary of 

17 the Treasury to purchase any obligations of the 

18 Postal Service other than those issued under sec19 tion 2005.’’; and 

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

21 section 2005’’ before ‘‘shall be obligations’’.
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1 SEC. 402. ASSUMED FEDERAL INCOME TAX ON COMPETI2 TIVE PRODUCTS INCOME. 

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

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

5 at the end the following: 

6 ‘‘§ 3634. Assumed Federal income tax on competitive 

7 products income 

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

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

10 competitive products income’ means the net income 

11 tax that would be imposed by chapter 1 of the Inter12 nal Revenue Code of 1986 on the Postal Service’s as13 sumed taxable income from competitive products for 

14 the year; and 

15 ‘‘(2) the term ‘assumed taxable income from com16 petitive products’, with respect to a year, refers to the 

17 amount representing what would be the taxable in18 come of a corporation under the Internal Revenue 

19 Code of 1986 for the year, if—

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

21 were the activities of the Postal Service allocable 

22 under section 2011(h) to competitive products; 

23 and 

24 ‘‘(B) the only assets held by such corpora25 tion were the assets of the Postal Service allo26 cable under section 2011(h) to such activities. 
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1 ‘‘(b) COMPUTATION AND TRANSFER REQUIREMENTS.—

2 The Postal Service shall, for each year beginning with the 

3 year in which occurs the deadline for the Postal Service’s 

4 first report to the Postal Regulatory Commission under sec5 tion 3652(a)—

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

7 competitive products income for such year; and 

8 ‘‘(2) transfer from the Competitive Products 

9 Fund to the Postal Service Fund the amount of that 

10 assumed tax. 

11 ‘‘(c) DEADLINE FOR TRANSFERS.—Any transfer re12 quired to be made under this section for a year shall be 

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

14 close of such year.’’.

15 SEC. 403. UNFAIR COMPETITION PROHIBITED. 

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

17 United States Code, is amended by adding after section 404 

18 the following: 

19 ‘‘§ 404a. Specific limitations 

20 ‘‘(a) Except as specifically authorized by law, the Post21 al Service may not—

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

23 any standard) the effect of which is to preclude com24 petition or establish the terms of competition unless 

25 the Postal Service demonstrates that the regulation
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1 does not create an unfair competitive advantage for 

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

3 the Postal Service; 

4 ‘‘(2) compel the disclosure, transfer, or licensing 

5 of intellectual property to any third party (such as 

6 patents, copyrights, trademarks, trade secrets, and 

7 proprietary information); or 

8 ‘‘(3) obtain information from a person that pro9 vides (or seeks to provide) any product, and then offer 

10 any postal service that uses or is based in whole or 

11 in part on such information, without the consent of 

12 the person providing that information, unless sub13 stantially the same information is obtained (or ob14 tainable) from an independent source or is otherwise 

15 obtained (or obtainable). 

16 ‘‘(b) The Postal Regulatory Commission shall prescribe 

17 regulations to carry out this section. 

18 ‘‘(c) Any party (including an officer of the Commis19 sion representing the interests of the general public) who 

20 believes that the Postal Service has violated this section may 

21 bring a complaint in accordance with section 3662.’’. 

22 (b) CONFORMING AMENDMENTS.—

23 (1) GENERAL POWERS.—Section 401 of title 39, 

24 United States Code, is amended by striking ‘‘The’’ 
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1 and inserting ‘‘Subject to the provisions of section 

2 404a, the’’. 

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

4 39, United States Code, is amended by striking 

5 ‘‘Without’’ and inserting ‘‘Subject to the provisions of 

6 section 404a, but otherwise without’’. 

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

8 4 of title 39, United States Code, is amended by inserting 

9 after the item relating to section 404 the following:

‘‘404a. Specific limitations.’’.

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

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

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

13 and inserting the following: 

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

15 paragraphs (2)(A) and (2)(B), respectively, the Postal Serv16 ice—

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

18 in the provisions of law involved; and 

19 ‘‘(B) shall not be immune under any other doc20 trine of sovereign immunity from suit in Federal 

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

22 provisions of law by any officer or employee of the 

23 Postal Service. 

24 ‘‘(2) This subsection applies with respect to—
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1 ‘‘(A) the Act of July 5, 1946 (commonly referred 

2 to as the ‘Trademark Act of 1946’ (15 U.S.C. 1051 

3 and following)); and 

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

5 Trade Commission Act to the extent that such section 

6 5 applies to unfair or deceptive acts or practices. 

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

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

9 Postal Service, engages in conduct with respect to any prod10 uct which is not reserved to the United States under section 

11 1696 of title 18, the Postal Service or other Federal agency 

12 (as the case may be)—

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

14 sovereign immunity from suit in Federal court by 

15 any person for any violation of Federal law by such 

16 agency or any officer or employee thereof; and 

17 ‘‘(B) shall be considered to be a person (as de18 fined in subsection (a) of the first section of the Clay19 ton Act) for purposes of—

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

21 subsection); and 

22 ‘‘(ii) section 5 of the Federal Trade Com23 mission Act to the extent that such section 5 ap24 plies to unfair methods of competition.
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1 For purposes of the preceding sentence, any private carriage 

2 of mail allowable by virtue of section 601 shall not be con3 sidered a service reserved to the United States under section 

4 1696 of title 18. 

5 ‘‘(2) No damages, interest on damages, costs or attor6 ney’s fees may be recovered, and no criminal liability may 

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

8 any officer or employee of the Postal Service, or other Fed9 eral agency acting on behalf of or in concert with the Postal 

10 Service, acting in an official capacity. 

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

12 conduct occurring before the date of the enactment of this 

13 subsection. 

14 ‘‘(f) To the extent that the Postal Service engages in 

15 conduct with respect to the provision of competitive prod16 ucts, it shall be considered a person for the purposes of the 

17 Federal bankruptcy laws. 

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

19 Postal Service shall be constructed or altered, to the max20 imum extent feasible as determined by the Postal Service, 

21 in compliance with 1 of the nationally recognized model 

22 building codes and with other applicable nationally recog23 nized codes. 

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

25 Service shall be constructed or altered only after consider-
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1 ation of all requirements (other than procedural require2 ments) of zoning laws, land use laws, and applicable envi3 ronmental laws of a State or subdivision of a State which 

4 would apply to the building if it were not a building con5 structed or altered by an establishment of the Government 

6 of the United States. 

7 ‘‘(3) For purposes of meeting the requirements of para8 graphs (1) and (2) with respect to a building, the Postal 

9 Service shall—

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

11 with appropriate officials of the State or political 

12 subdivision, or both, in which the building will be lo13 cated; 

14 ‘‘(B) upon request, submit such plans in a time15 ly manner to such officials for review by such officials 

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

17 and 

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

19 construction or alteration of the building, in accord20 ance with the customary schedule of inspections for 

21 construction or alteration of buildings in the locality, 

22 if such officials provide to the Postal Service—

23 ‘‘(i) a copy of such schedule before construc24 tion of the building is begun; and
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1 ‘‘(ii) reasonable notice of their intention to 

2 conduct any inspection before conducting such 

3 inspection. 

4 Nothing in this subsection shall impose an obligation on 

5 any State or political subdivision to take any action under 

6 the preceding sentence, nor shall anything in this subsection 

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

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

9 carry out this subsection (including reviewing plans, car10 rying out on-site inspections, issuing building permits, and 

11 making recommendations). 

12 ‘‘(4) Appropriate officials of a State or a political sub13 division of a State may make recommendations to the Post14 al Service concerning measures necessary to meet the re15 quirements of paragraphs (1) and (2). Such officials may 

16 also make recommendations to the Postal Service con17 cerning measures which should be taken in the construction 

18 or alteration of the building to take into account local con19 ditions. The Postal Service shall give due consideration to 

20 any such recommendations. 

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

22 officials under paragraph (3), the Postal Service shall estab23 lish procedures for soliciting, assessing, and incorporating 

24 local community input on real property and land use deci25 sions. 
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1 ‘‘(6) For purposes of this subsection, the term ‘State’ 

2 includes the District of Columbia, the Commonwealth of 

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

4 States. 

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

6 legal representation may not be furnished by the Depart7 ment of Justice to the Postal Service in any action, suit, 

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

9 the following: 

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

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

12 to administrative subpoenas by the Postal Regulatory 

13 Commission). 

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

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

16 attorneys to obtain any legal representation that it is pre17 cluded from obtaining from the Department of Justice 

18 under this paragraph. 

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

20 (1), the Department of Justice shall, under section 411, fur21 nish the Postal Service such legal representation as it may 

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

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

24 employ attorneys by contract or otherwise to conduct litiga-
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1 tion brought by or against the Postal Service or its officers 

2 or employees in matters affecting the Postal Service. 

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

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

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

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

7 not otherwise a party, the Commission shall be permitted 

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

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

10 terms and conditions as the Commission and the Attorney 

11 General shall consider appropriate, furnish the Commission 

12 such legal representation as it may require in connection 

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

14 the prior consent of the Attorney General, the Commission 

15 may employ attorneys by contract or otherwise for that pur16 pose. 

17 ‘‘(i) A judgment against the Government of the United 

18 States arising out of activities of the Postal Service shall 

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

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

21 section 2011(g).’’. 

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

23 39, United States Code, is amended by striking ‘‘Except as 

24 provided in section 3628 of this title,’’ and inserting ‘‘Ex25 cept as otherwise provided in this title,’’.
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1 SEC. 405. INTERNATIONAL POSTAL ARRANGEMENTS. 

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

3 States Code, is amended to read as follows: 

4 ‘‘§ 407. International postal arrangements 

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

6 ‘‘(1) to promote and encourage communications 

7 between peoples by efficient operation of international 

8 postal services and other international delivery serv9 ices for cultural, social, and economic purposes; 

10 ‘‘(2) to promote and encourage unrestricted and 

11 undistorted competition in the provision of inter12 national postal services and other international deliv13 ery services, except where provision of such services by 

14 private companies may be prohibited by law of the 

15 United States; 

16 ‘‘(3) to promote and encourage a clear distinc17 tion between governmental and operational respon18 sibilities with respect to the provision of international 

19 postal services; and 

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

21 agreements with other countries to accomplish these 

22 objectives. 

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

24 formulation, coordination, and oversight of foreign policy 

25 related to international postal services and shall have the 

26 power to conclude postal treaties and conventions, except 
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1 that the Secretary may not conclude any postal treaty or 

2 convention if such treaty or convention would, with respect 

3 to any competitive product, grant an undue or unreason4 able preference to the Postal Service, a private provider of 

5 international postal services, or any other person. 

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

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

8 authority for the conduct of foreign policy with respect to 

9 international postal services, including the determination 

10 of United States positions and the conduct of United States 

11 participation in negotiations with foreign governments and 

12 international bodies. In exercising this authority, the Sec13 retary—

14 ‘‘(A) shall coordinate with other agencies as ap15 propriate, and in particular, should consider the au16 thority vested by law or Executive order in the Postal 

17 Regulatory Commission, the Department of Com18 merce, the Department of Transportation, and the Of19 fice of the United States Trade Representative in this 

20 area; 

21 ‘‘(B) shall maintain continuing liaison with 

22 other executive branch agencies concerned with postal 

23 and delivery services;

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

25 Committee on Governmental Affairs of the Senate and 
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1 the Committee on Government Reform of the House of 

2 Representatives; 

3 ‘‘(D) shall maintain appropriate liaison with 

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

8 problems, and to provide such assistance as may be 

9 needed to ensure that matters of concern are promptly 

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

12 branch agencies; and 

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

14 public sector advisory groups as may be established to 

15 advise the Department of State and other executive 

16 branch agencies in connection with international 

17 postal services and international delivery services. 

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

19 committee (within the meaning of the Federal Advisory 

20 Committee Act) to perform such functions as the Secretary 

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

23 ‘‘(c) Before concluding any postal treaty or convention 

24 that establishes a rate or classification for a product subject 

25 to subchapter I of chapter 36, the Secretary of State shall 
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1 request the Postal Regulatory Commission to submit its 

2 views on whether such rate or classification is consistent 

3 with the standards and criteria established by the Commis4 sion under section 3622. 

5 ‘‘(d) Nothing in this section shall be considered to pre6 vent the Postal Service from entering into such commercial 

7 or operational contracts related to providing international 

8 postal services as it deems appropriate, except that—

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

10 a foreign government (whether under authority of this 

11 subsection or otherwise) shall be solely contractual in 

12 nature and may not purport to be binding under 

13 international law; and 

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

15 Postal Service and an agency of a foreign government 

16 shall be transmitted to the Secretary of State and the 

17 Postal Regulatory Commission not later than the ef18 fective date of such contract. 

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

20 that are competitive products within the meaning of section 

21 3631 that are exported or imported by the Postal Service, 

22 the Customs Service and other appropriate Federal agencies 

23 shall apply the customs laws of the United States and all 

24 other laws relating to the importation or exportation of such 
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1 shipments in the same manner to both shipments by the 

2 Postal Service and similar shipments by private companies. 

3 ‘‘(2) In exercising the authority under subsection (b) 

4 to conclude new postal treaties and conventions related to 

5 international postal services and to renegotiate such treaties 

6 and conventions, the Secretary of State shall, to the max7 imum extent practicable, take such measures as are within 

8 the Secretary’s control to encourage the governments of 

9 other countries to make available to the Postal Service and 

10 private companies a range of nondiscriminatory customs 

11 procedures that will fully meet the needs of all types of 

12 American shippers. The Secretary of State shall consult 

13 with the United States Trade Representative and the Com14 missioner of Customs in carrying out this paragraph. 

15 ‘‘(3) The provisions of this subsection shall take effect 

16 6 months after the date of the enactment of this subsection 

17 or such earlier date as the Customs Service may determine 

18 in writing.’’. 

19 (b) EFFECTIVE DATE.—Notwithstanding any provi20 sion of the amendment made by subsection (a), the author21 ity of the United States Postal Service to establish the rates 

22 of postage or other charges on mail matter conveyed between 

23 the United States and other countries shall remain avail24 able to the Postal Service until—
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1 (1) with respect to market-dominant products, 

2 the date as of which the regulations promulgated 

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

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

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

6 as of which the regulations promulgated under section 

7 3633 of title 39, United States Code (as amended by 

8 section 202) take effect. 

9 TITLE V—GENERAL PROVISIONS 

10 SEC. 501. QUALIFICATION AND TERM REQUIREMENTS FOR 

11 GOVERNORS. 

12 (a) QUALIFICATIONS.—

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

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

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

16 and inserting the following: ‘‘The Governors shall rep17 resent the public interest generally, and shall be cho18 sen solely on the basis of their demonstrated ability 

19 in managing organizations or corporations (in either 

20 the public or private sector) of substantial size. The 

21 Governors shall not be representatives of specific in22 terests using the Postal Service, and may be removed 

23 only for cause.’’. 

24 (2) APPLICABILITY.—The amendment made by 

25 paragraph (1) shall not affect the appointment or ten-
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1 ure of any person serving as a Governor of the United 

2 States Postal Service under an appointment made be3 fore the date of the enactment of this Act however, 

4 when any such office becomes vacant, the appointment 

5 of any person to fill that office shall be made in ac6 cordance with such amendment. The requirement set 

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

8 title 39, United States Code (as amended by sub9 section (a)) shall be met beginning not later than 9 

10 years after the date of the enactment of this Act. 

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

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

13 end the following: 

14 ‘‘(2) In selecting the individuals described in para15 graph (1) for nomination for appointment to the position 

16 of Governor, the President should consult with the Speaker 

17 of the House of Representatives, the minority leader of the 

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

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

20 (c) 5-YEAR TERMS.—

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

22 United States code, is amended in the first sentence 

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

24 (2) APPLICABILITY.—
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1 (A) CONTINUATION BY INCUMBENTS.—The 

2 amendment made by paragraph (1) shall not af3 fect the tenure of any person serving as a Gov4 ernor of the United States Postal Service on the 

5 date of enactment of this Act and such person 

6 may continue to serve the remainder of the ap7 plicable term. 

8 (B) VACANCY BY INCUMBENT BEFORE 5

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

10 as a Governor of the United States Postal Serv11 ice on the date of enactment of this Act resigns, 

12 is removed, or dies before the expiration of the 9-

13 year term of that Governor, and that Governor 

14 has served less than 5 years of that term, the re15 sulting vacancy in office shall be treated as a va16 cancy in a 5-year term. 

17 (C) VACANCY BY INCUMBENT AFTER 5

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

19 as a Governor of the United States Postal Serv20 ice on the date of enactment of this Act resigns, 

21 is removed, or dies before the expiration of the 9-

22 year term of that Governor, and that Governor 

23 has served 5 years or more of that term, that 

24 term shall be deemed to have been a 5-year term 

25 beginning on its commencement date for pur-
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1 poses of determining vacancies in office. Any ap2 pointment to the vacant office shall be for a 5-

3 year term beginning at the end of the original 9-

4 year term determined without regard to the 

5 deeming under the preceding sentence. Nothing 

6 in this subparagraph shall be construed to affect 

7 any action or authority of any Governor or the 

8 Board of Governors during any portion of a 9-

9 year term deemed to be 5-year term under this 

10 subparagraph. 

11 (d) TERM LIMITATION.—

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

13 United States Code, is amended—

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

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

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

17 a Governor.’’. 

18 (2) APPLICABILITY.—The amendments made by 

19 paragraph (1) shall not affect the tenure of any per20 son serving as a Governor of the United States Postal 

21 Service on the date of enactment of this Act with re22 spect to the term which that person is serving on that 

23 date. Such person may continue to serve the remain24 der of the applicable term, after which the amend25 ments made by paragraph (1) shall apply. 
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1 SEC. 502. OBLIGATIONS. 

2 (a) PURPOSES FOR WHICH OBLIGATIONS MAY BE

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

4 39, United States Code, is amended by striking ‘‘title.’’ and 

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

6 the corresponding authority is available to the Postal Serv7 ice under section 2011.’’. 

8 (b) INCREASE RELATING TO OBLIGATIONS ISSUED FOR

9 CAPITAL IMPROVEMENTS.—Section 2005(a)(1) of title 39, 

10 United States Code, is amended by striking the third sen11 tence. 

12 (c) AMOUNTS WHICH MAY BE PLEDGED.—

13 (1) OBLIGATIONS TO WHICH PROVISIONS

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

15 39, United States Code, is amended by striking ‘‘such 

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

17 Postal Service under this section,’’. 

18 (2) ASSETS, REVENUES, AND RECEIPTS TO

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

20 2005 of title 39, United States Code, is amended by 

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

22 at the end the following: 

23 ‘‘(2) Notwithstanding any other provision of this sec24 tion—

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

26 Service under this subsection shall be available only
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1 to the extent that such assets are not related to the 

2 provision of competitive products (as determined 

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

4 before accounting practices and principles under sec5 tion 2011(h) have been established and applied, the 

6 best information available from the Postal Service, 

7 including the audited statements required by section 

8 2008(e)); and 

9 ‘‘(B) any authority under this subsection relat10 ing to the pledging or other use of revenues or receipts 

11 of the Postal Service shall be available only to the ex12 tent that they are not revenues or receipts of the Com13 petitive Products Fund.’’. 

14 SEC. 503. PRIVATE CARRIAGE OF LETTERS. 

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

16 States Code, is amended by striking subsection (b) and in17 serting the following: 

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

19 when—

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

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

22 rate then currently charged for the 1st ounce of a sin23 gle-piece first class letter; 

‘‘(2) the letter weighs at least 121 24 ⁄2 ounces; or 
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1 ‘‘(3) such carriage is within the scope of services 

2 described by regulations of the United States Postal 

3 Service (as in effect on July 1, 2001) that permit pri4 vate carriage by suspension of the operation of this 

5 section (as then in effect). 

6 ‘‘(c) Any regulations necessary to carry out this section 

7 shall be promulgated by the Postal Regulatory Commis8 sion.’’. 

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

10 on the date as of which the regulations promulgated under 

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

12 by section 202) take effect. 

13 SEC. 504. RULEMAKING AUTHORITY. 

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

15 Code, is amended to read as follows: 

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

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

18 necessary in the execution of its functions under this 

19 title and such other functions as may be assigned to 

20 the Postal Service under any provisions of law out21 side of this title;’’. 

22 SEC. 505. NONINTERFERENCE WITH COLLECTIVE BAR23 GAINING AGREEMENTS. 

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

25 United States Code, is amended to read as follows: 
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1 ‘‘§ 1207. Labor disputes 

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

3 effect, no party to such agreement shall terminate or modify 

4 such agreement unless the party desiring such termination 

5 or modification serves written notice upon the other party 

6 to the agreement of the proposed termination or modifica7 tion not less than 90 days prior to the expiration date there8 of, or not less than 90 days prior to the time it is proposed 

9 to make such termination or modification. The party serv10 ing such notice shall notify the Federal Mediation and Con11 ciliation Service of the existence of a dispute within 45 days 

12 of such notice, if no agreement has been reached by that 

13 time. 

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

15 a procedure providing for a binding resolution of a dispute 

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

17 of the proposed termination or modification, the Director 

18 of the Federal Mediation and Conciliation Service shall 

19 within 10 days appoint a mediator of nationwide reputa20 tion and professional stature, and who is also a member 

21 of the National Academy of Arbitrators. The parties shall 

22 cooperate with the mediator in an effort to reach an agree23 ment and shall meet and negotiate in good faith at such 

24 times and places that the mediator, in consultation with 

25 the parties, shall direct. 
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1 ‘‘(c)(1) If no agreement is reached within 60 days after 

2 the expiration or termination of the agreement or the date 

3 on which the agreement became subject to modification 

4 under subsection (a) of this section, or if the parties decide 

5 upon arbitration but do not agree upon the procedures 

6 therefore, an arbitration board shall be established con7 sisting of 3 members, 1 of whom shall be selected by the 

8 Postal Service, 1 by the bargaining representative of the 

9 employees, and the third by the 2 thus selected. If either 

10 of the parties fails to select a member, or if the members 

11 chosen by the parties fail to agree on the third person with12 in 5 days after their first meeting, the selection shall be 

13 made from a list of names provided by the Director. This 

14 list shall consist of not less then 9 names of arbitrators of 

15 nationwide reputation and professional nature, who are 

16 also members of the National Academy of Arbitrators, and 

17 whom the Director has determined are available and will18 ing to serve. 

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

20 and fair hearing, including an opportunity to present evi21 dence in support of their claims, and an opportunity to 

22 present their case in person, by counsel or by other rep23 resentative as they may elect. Decisions of the arbitration 

24 board shall be conclusive and binding upon the parties. The 
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1 arbitration board shall render its decision within 45 days 

2 after its appointment. 

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

4 be shared equally by the Postal Service and the bargaining 

5 representative. 

6 ‘‘(d) In the case of a bargaining unit whose recognized 

7 collective-bargaining representative does not have an agree8 ment with the Postal Service, if the parties fail to reach 

9 the agreement within 90 days of the commencement of col10 lective bargaining, a mediator shall be appointed in accord11 ance with the terms in subsection (b) of this section, unless 

12 the parties have previously agreed to another procedure for 

13 a binding resolution of their differences. If the parties fail 

14 to reach agreement within 180 days of the commencement 

15 of collective bargaining, and if they have not agreed to an16 other procedure for binding resolution, an arbitration board 

17 shall be established to provide conclusive and binding arbi18 tration in accordance with the terms of subsection (c) of 

19 this section.’’. 

20 (b) NONINTERFERENCE WITH COLLECTIVE BAR21 GAINING AGREEMENTS.—Except as otherwise provided by 

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

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

24 privileges, or benefits of either employees of or labor organi25 zations representing employees of the United States Postal
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1 Service under chapter 12 of title 39, United States Code, 

2 the National Labor Relations Act, any handbook or manual 

3 affecting employee labor relations within the United States 

4 Postal Service, or any collective bargaining agreement. 

5 (c) FREE MAILING PRIVILEGES CONTINUE UN6 CHANGED.—Nothing in this Act or any amendment made 

7 by this Act shall affect any free mailing privileges accorded 

8 under section 3217 or sections 3403 through 3406 of title 

9 39, United States Code. 

10 TITLE VI—ENHANCED 

11 REGULATORY COMMISSION 

12 SEC. 601. REORGANIZATION AND MODIFICATION OF CER13 TAIN PROVISIONS RELATING TO THE POSTAL 

14 REGULATORY COMMISSION. 

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

16 United States Code, is amended—

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

18 ‘‘CHAPTER 5—POSTAL REGULATORY 

19 COMMISSION

‘‘Sec. 

‘‘501. Establishment. 

‘‘502. Commissioners. 

‘‘503. Rules; regulations; procedures. 

‘‘504. Administration. 

‘‘505. Officer of the Postal Regulatory Commission representing the general public.
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1 ‘‘§ 501. Establishment 

2 ‘‘The Postal Regulatory Commission is an independent 

3 establishment of the executive branch of the Government of 

4 the United States. 

5 ‘‘§ 502. Commissioners 

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

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

8 with the advice and consent of the Senate. The Commis9 sioners shall be chosen solely on the basis of their technical 

10 qualifications, professional standing, and demonstrated ex11 pertise in economics, accounting, law, or public adminis12 tration, and may be removed by the President only for

13 cause. Each individual appointed to the Commission shall 

14 have the qualifications and expertise necessary to carry out 

15 the enhanced responsibilities accorded Commissioners under 

16 the Postal Accountability and Enhancement Act. Not more 

17 than 3 of the Commissioners may be adherents of the same 

18 political party. 

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

20 in any enterprise in the private sector of the economy en21 gaged in the delivery of mail matter. 

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

23 expiration of his term until his successor has qualified, ex24 cept that a Commissioner may not so continue to serve for 

25 more than 1 year after the date upon which his term other26 wise would expire under subsection (f). 
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1 ‘‘(d) One of the Commissioners shall be designated as 

2 Chairman by, and shall serve in the position of Chairman 

3 at the pleasure of, the President. 

4 ‘‘(e) The Commissioners shall by majority vote des5 ignate a Vice Chairman of the Commission. The Vice Chair6 man shall act as Chairman of the Commission in the ab7 sence of the Chairman. 

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

9 years.’’; 

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

11 in effect before the amendment made by section 

12 201(c)), the heading for such subchapter I and all 

13 that follows through section 3602; 

14 (3) by redesignating sections 3603 and 3604 as 

15 sections 503 and 504, respectively, and transferring 

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

17 paragraph (1)); and 

18 (4) by adding after such section 504 the fol19 lowing: 

20 ‘‘§ 505. Officer of the Postal Regulatory Commission 

21 representing the general public 

22 ‘‘The Postal Regulatory Commission shall designate an 

23 officer of the Postal Regulatory Commission in all public 

24 proceedings who shall represent the interests of the general 

25 public.’’. 
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1 (b) APPLICABILITY.—The amendment made by sub2 section (a)(1) shall not affect the appointment or tenure of 

3 any person serving as a Commissioner on the Postal Regu4 latory Commission (as so redesignated by section 604) 

5 under an appointment made before the date of the enact6 ment of this Act or any nomination made before that date, 

7 but, when any such office becomes vacant, the appointment 

8 of any person to fill that office shall be made in accordance 

9 with such amendment. 

10 (c) CLERICAL AMENDMENT.—The analysis for part I 

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

12 after the item relating to chapter 4 the following:

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

13 SEC. 602. AUTHORITY FOR POSTAL REGULATORY COMMIS14 SION TO ISSUE SUBPOENAS. 

15 Section 504 of title 39, United States Code (as so redes16 ignated by section 601) is amended by adding at the end 

17 the following: 

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

19 Commission, any administrative law judge appointed by 

20 the Commission under section 3105 of title 5, and any em21 ployee of the Commission designated by the Commission 

22 may administer oaths, examine witnesses, take depositions, 

23 and receive evidence. 

24 ‘‘(2) The Chairman of the Commission, any Commis25 sioner designated by the Chairman, and any administrative 
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1 law judge appointed by the Commission under section 3105 

2 of title 5 may, with respect to any proceeding conducted 

3 by the Commission under this title or to obtain information 

4 to be used to prepare a report under this title—

5 ‘‘(A) issue subpoenas requiring the attendance 

6 and presentation of testimony by, or the production 

7 of documentary or other evidence in the possession of, 

8 any covered person; and 

9 ‘‘(B) order the taking of depositions and re10 sponses to written interrogatories by a covered person. 

11 The written concurrence of a majority of the Commissioners 

12 then holding office shall, with respect to each subpoena 

13 under subparagraph (A), be required in advance of its 

14 issuance. 

15 ‘‘(3) In the case of contumacy or failure to obey a sub16 poena issued under this subsection, upon application by the 

17 Commission, the district court of the United States for the 

18 district in which the person to whom the subpoena is ad19 dressed resides or is served may issue an order requiring 

20 such person to appear at any designated place to testify 

21 or produce documentary or other evidence. Any failure to 

22 obey the order of the court may be punished by the court 

23 as a contempt thereof.
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1 ‘‘(4) For purposes of this subsection, the term ‘covered 

2 person’ means an officer, employee, agent, or contractor of 

3 the Postal Service. 

4 ‘‘(g)(1) If the Postal Service determines that any docu5 ment or other matter it provides to the Postal Regulatory 

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

7 or otherwise at the request of the Commission in connection 

8 with any proceeding or other purpose under this title, con9 tains information which is described in section 410(c) of 

10 this title, or exempt from public disclosure under section 

11 552(b) of title 5, the Postal Service shall, at the time of 

12 providing such matter to the Commission, notify the Com13 mission, in writing, of its determination (and the reasons 

14 therefor). 

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

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

17 information as to which the Commission has been notified 

18 under paragraph (1)—

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

20 than the purposes for which it is supplied; or 

21 ‘‘(B) permit anyone who is not an officer or em22 ployee of the Commission to have access to any such 

23 information. 

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

25 Commission from publicly disclosing relevant infor-
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1 mation in furtherance of its duties under this title, 

2 provided that the Commission has adopted regula3 tions under section 553 of title 5, that establish a pro4 cedure for according appropriate confidentiality to 

5 information identified by the Postal Service under 

6 paragraph (1). In determining the appropriate degree 

7 of confidentiality to be accorded information identi8 fied by the Postal Service under paragraph (1), the 

9 Commission shall balance the nature and extent of the 

10 likely commercial injury to the Postal Service against 

11 the public interest in maintaining the financial 

12 transparency of a government establishment com13 peting in commercial markets. 

14 ‘‘(B) Paragraph (2) shall not prevent the Com15 mission from requiring production of information in 

16 the course of any discovery procedure established in 

17 connection with a proceeding under this title. The 

18 Commission shall, by regulations based on rule 26(c) 

19 of the Federal Rules of Civil Procedure, establish pro20 cedures for ensuring appropriate confidentiality for 

21 information furnished to any party.’’. 

22 SEC. 603. APPROPRIATIONS FOR THE POSTAL REGULATORY 

23 COMMISSION. 

24 (a) AUTHORIZATION OF APPROPRIATIONS.—Sub25 section (d) of section 504 of title 39, United States Code 
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1 (as so redesignated by section 601) is amended to read as 

2 follows: 

3 ‘‘(d) There are authorized to be appropriated, out of 

4 the Postal Service Fund, such sums as may be necessary 

5 for the Postal Regulatory Commission. In requesting an ap6 propriation under this subsection for a fiscal year, the Com7 mission shall prepare and submit to the Congress under sec8 tion 2009 a budget of the Commission’s expenses, including 

9 expenses for facilities, supplies, compensation, and em10 ployee benefits.’’.

11 (b) BUDGET PROGRAM.—

12 (1) IN GENERAL.—The next to last sentence of 

13 section 2009 of title 39, United States Code, is 

14 amended to read as follows: ‘‘The budget program 

15 shall also include separate statements of the amounts 

16 which (1) the Postal Service requests to be appro17 priated under subsections (b) and (c) of section 2401, 

18 (2) the Office of Inspector General of the United 

19 States Postal Service requests to be appropriated, out 

20 of the Postal Service Fund, under section 8G(f) of the 

21 Inspector General Act of 1978, and (3) the Postal 

22 Regulatory Commission requests to be appropriated, 

23 out of the Postal Service Fund, under section 504(d) 

24 of this title.’’. 
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1 (2) CONFORMING AMENDMENT.—Section 

2 2003(e)(1) of title 39, United States Code, is amended 

3 by striking the first sentence and inserting the fol4 lowing: ‘‘The Fund shall be available for the payment 

5 of (A) all expenses incurred by the Postal Service in 

6 carrying out its functions as provided by law, subject 

7 to the same limitation as set forth in the parenthet8 ical matter under subsection (a); (B) all expenses of 

9 the Postal Regulatory Commission, subject to the 

10 availability of amounts appropriated under section 

11 504(d); and (C) all expenses of the Office of Inspector 

12 General, subject to the availability of amounts appro13 priated under section 8G(f) of the Inspector General 

14 Act of 1978.’’. 

15 (c) EFFECTIVE DATE.—

16 (1) IN GENERAL.—The amendments made by 

17 this section shall apply with respect to fiscal years be18 ginning on or after October 1, 2002. 

19 (2) SAVINGS PROVISION.—The provisions of title 

20 39, United States Code, that are amended by this sec21 tion shall, for purposes of any fiscal year before the 

22 first fiscal year to which the amendments made by 

23 this section apply, continue to apply in the same way 

24 as if this section had never been enacted. 
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1 SEC. 604. REDESIGNATION OF THE POSTAL RATE COMMIS2 SION. 

3 (a) AMENDMENTS TO TITLE 39, UNITED STATES

4 CODE.—Title 39, United States Code, is amended in sec5 tions 404, 503 and 504 (as so redesignated by section 601), 

6 1001 and 1002, by striking ‘‘Postal Rate Commission’’ each 

7 place it appears and inserting ‘‘Postal Regulatory Commis8 sion’’;

9 (b) AMENDMENTS TO TITLE 5, UNITED STATES

10 CODE.—Title 5, United States Code, is amended in sections 

11 104(1), 306(f), 2104(b), 3371(3), 5314 (in the item relating 

12 to Chairman, Postal Rate Commission), 5315 (in the item 

13 relating to Members, Postal Rate Commission), 

14 5514(a)(5)(B), 7342(a)(1)(A), 7511(a)(1)(B)(ii), 

15 8402(c)(1), 8423(b)(1)(B), and 8474(c)(4) by striking 

16 ‘‘Postal Rate Commission’’ and inserting ‘‘Postal Regu17 latory Commission’’. 

18 (c) AMENDMENT TO THE ETHICS IN GOVERNMENT ACT

19 OF 1978.—Section 101(f)(6) of the Ethics in Government 

20 Act of 1978 (5 U.S.C. App.) is amended by striking ‘‘Postal 

21 Rate Commission’’ and inserting ‘‘Postal Regulatory Com22 mission’’. 

23 (d) AMENDMENT TO THE REHABILITATION ACT OF

24 1973.—Section 501(b) of the Rehabilitation Act of 1973 (29 

25 U.S.C. 791(b)) is amended by striking ‘‘Postal Rate Office’’ 

26 and inserting ‘‘Postal Regulatory Commission’’.
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1 (e) AMENDMENT TO TITLE 44, UNITED STATES

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

3 amended by striking ‘‘Postal Rate Commission’’ and insert4 ing ‘‘Postal Regulatory Commission’’. 

5 (f) OTHER REFERENCES.—Whenever a reference is 

6 made in any provision of law (other than this Act or a 

7 provision of law amended by this Act), regulation, rule, doc8 ument, or other record of the United States to the Postal 

9 Rate Commission, such reference shall be considered a ref10 erence to the Postal Regulatory Commission. 

11 SEC. 605. FINANCIAL TRANSPARENCY. 

12 Section 101 of title 39, United States Code, is amend13 ed— 

14 (1) by redesignating subsections (d) through (g) 

15 as subsections (e) through (h), respectively; and 

16 (2) by inserting after subsection (c) the fol17 lowing: 

18 ‘‘(d) As an independent establishment of the executive 

19 branch of the Government of the United States, the Postal 

20 Service shall be subject to a high degree of transparency 

21 to ensure fair treatment of customers of the Postal Service’s 

22 market-dominant products and companies competing with 

23 the Postal Service’s competitive products.’’.
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1 TITLE VII—EVALUATIONS 

2 SEC. 701. ASSESSMENTS OF RATEMAKING, CLASSIFICATION, 

3 AND OTHER PROVISIONS. 

4 (a) IN GENERAL.—The Postal Regulatory Commission 

5 shall, at least every 3 years, submit a report to the President 

6 and Congress concerning—

7 (1) the operation of the amendments made by 

8 this Act; and 

9 (2) recommendations for any legislation or other 

10 measures necessary to improve the effectiveness or effi11 ciency of the postal laws of the United States. 

12 (b) POSTAL SERVICE VIEWS.—A report under this sec13 tion shall be submitted only after reasonable opportunity 

14 has been afforded to the Postal Service to review the report 

15 and to submit written comments on the report. Any com16 ments timely received from the Postal Service under the pre17 ceding sentence shall be attached to the report submitted 

18 under subsection (a). 

19 SEC. 702. REPORT ON UNIVERSAL POSTAL SERVICE AND 

20 THE POSTAL MONOPOLY. 

21 (a) REPORT BY THE POSTAL REGULATORY COMMIS22 SION.—

23 (1) IN GENERAL.—Not later than 12 months 

24 after the date of enactment of this Act, the Postal Reg25 ulatory Commission shall submit a report to the 
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1 President and Congress on universal postal service 

2 and the postal monopoly in the United States (in this 

3 section referred to as ‘‘universal service and the postal 

4 monopoly’’), including the monopoly on the delivery 

5 of mail and on access to mailboxes. 

6 (2) CONTENTS.—The report under this subsection 

7 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 mo12 nopoly have evolved over time for the Nation and 

13 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 rules, 

18 regulations, policy statements, and practices of 

19 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 re-
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1 ceiving 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, in7 cluding all types of mail users, based on discus8 sion of such assumptions, alternative sets of as9 sumptions, and analyses as the Postal Service 

10 considers plausible. 

11 (b) RECOMMENDED CHANGES TO UNIVERSAL SERVICE

12 AND THE MONOPOLY.—The Postal Regulatory Commission 

13 shall include in the report under subsection (a), and in all 

14 reports submitted under section 701 of this Act—

15 (1) any recommended changes to universal serv16 ice and the postal monopoly as the Commission con17 siders appropriate, including changes that the Com18 mission may implement under current law and 

19 changes that would require changes to current law, 

20 with estimated effects of the recommendations on the 

21 service, financial condition, rates, and security of 

22 mail provided by the Postal Service; 

23 (2) with respect to each recommended change de24 scribed under paragraph (1)—
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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 COM17 PETITIVE 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 comprehensive 

22 report identifying Federal and State laws that apply dif23 ferently to the United States Postal Service with respect to 

24 the competitive category of mail (within the meaning of sec25 tion 102 of title 39, United States Code, as amended by
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1 section 101) and similar products provided by private com2 panies. 

3 (b) RECOMMENDATIONS.—The Federal Trade Commis4 sion shall include such recommendations as it considers ap5 propriate for bringing such legal discrimination to an end, 

6 and in the interim, to account under section 3633 of title 

7 39, United States Code (as added by this Act), for the net 

8 economic advantages provided by those laws. 

9 (c) CONSULTATION.—In preparing its report, the Fed10 eral Trade Commission shall consult with the United States 

11 Postal Service, the Postal Regulatory Commission, other 

12 Federal agencies, mailers, private companies that provide 

13 delivery services, and the general public, and shall append 

14 to such report any written comments received under this 

15 subsection. 

16 (d) COMPETITIVE PRODUCT REGULATION.—The Postal 

17 Regulatory Commission shall take into account the rec18 ommendations of the Federal Trade Commission in promul19 gating or revising the regulations required under section 

20 3633 of title 39, United States Code. 

21 SEC. 704. REPORT ON POSTAL WORKPLACE SAFETY AND 

22 WORKPLACE-RELATED INJURIES. 

23 (a) REPORT BY THE INSPECTOR GENERAL.—

24 (1) IN GENERAL.—No later than 6 months after 

25 the enactment of this Act, the Inspector General of the 
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1 United States Postal Service shall submit a report to 

2 Congress and the Postal Service that—

3 (A) details and assesses any progress the 

4 Postal Service has made in improving workplace 

5 safety and reducing workplace-related injuries 

6 nationwide; and 

7 (B) identifies opportunities for improve8 ment that remain with respect to such improve9 ments and reductions. 

10 (2) CONTENTS.—The report under this subsection 

11 shall also—

12 (A) discuss any injury reduction goals es13 tablished by the Postal Service; 

14 (B) describe the actions that the Postal 

15 Service has taken to improve workplace safety 

16 and reduce workplace-related injuries, and assess 

17 how successful the Postal Service has been in 

18 meeting its injury reduction goal; and 

19 (C) identify areas where the Postal Service 

20 has failed to meet its injury reduction goals, ex21 plain the reasons why these goals were not met, 

22 and identify opportunities for making further 

23 progress in meeting these goals. 

24 (b) REPORT BY THE POSTAL SERVICE.—
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1 (1) REPORT TO CONGRESS.—Not later than 6 

2 months after receiving the report under subsection (a), 

3 the Postal Service shall submit a report to Congress 

4 detailing how it plans to improve workplace safety 

5 and reduce workplace-related injuries nationwide, in6 cluding goals and metrics. 

7 (2) PROBLEM AREAS.—The report under this 

8 subsection shall also include plans, developed in con9 sultation with the Inspector General and employee 

10 representatives, including representatives of each post11 al labor union and management association, for ad12 dressing the problem areas identified by the Inspector 

13 General in the report under subsection (a)(2)(C). 

14 SEC. 705. STUDY ON RECYCLED PAPER. 

15 (a) IN GENERAL.—Within 12 months after the date 

16 of enactment of this Act, the General Accounting Office shall 

17 study and submit to the Congress, the Board of Governors 

18 of the Postal Service, and to the Postal Regulatory Commis19 sion a report concerning—

20 (1) the economic and environmental efficacy of 

21 establishing rate incentives for mailers linked to the 

22 use of recycled paper; 

23 (2) a description of the accomplishments of the 

24 Postal Service in each of the preceding 5 years involv25 ing recycling activities, including the amount of an-
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1 nual revenue generated and savings achieved by the 

2 Postal Service as a result of its use of recycled paper 

3 and other recycled products and its efforts to recycle 

4 undeliverable and discarded mail and other mate5 rials; and 

6 (3) additional opportunities that may be avail7 able for the United States Postal Service to engage in 

8 recycling initiatives and the projected costs and reve9 nues of undertaking such opportunities. 

10 (b) RECOMMENDATIONS.—The report shall include rec11 ommendations for any administrative or legislative actions 

12 that may be appropriate.

13 TITLE VIII—POSTAL SERVICE RE14 TIREMENT AND HEALTH BEN15 EFITS FUNDING 

16 SEC. 801. SHORT TITLE. 

17 This title may be cited as the ‘‘Postal Civil Service 

18 Retirement and Health Benefits Funding Amendments of 

19 2004’’. 

20 SEC. 802. CIVIL SERVICE RETIREMENT SYSTEM. 

21 (a) IN GENERAL.—Chapter 83 of title 5, United States 

22 Code, is amended—

23 (1) in section 8334(a)(1)(B), by striking clause 

24 (ii) and inserting the following: 
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1 ‘‘(ii) In the case of an employee of the United States 

2 Postal Service, no amount shall be contributed under this 

3 subparagraph.’’; and 

4 (2) by amending section 8348(h) to read as fol5 lows: 

6 ‘‘(h)(1) In this subsection, the term ‘Postal surplus or 

7 supplemental liability’ means the estimated difference, as 

8 determined by the Office, between—

9 ‘‘(A) the actuarial present value of all future 

10 benefits payable from the Fund under this subchapter 

11 to current or former employees of the United States 

12 Postal Service and attributable to civilian employ13 ment with the United States Postal Service; and 

14 ‘‘(B) the sum of—

15 ‘‘(i) the actuarial present value of deduc16 tions to be withheld from the future basic pay of 

17 employees of the United States Postal Service 

18 currently subject to this subchapter under section 

19 8334; 

20 ‘‘(ii) that portion of the Fund balance, as of 

21 the date the Postal surplus or supplemental li22 ability is determined, attributable to payments 

23 to the Fund by the United States Postal Service 

24 and its employees, minus benefit payments at25 tributable to civilian employment with the 
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1 United States Postal Service, plus the earnings 

2 on such amounts while in the Fund; and 

3 ‘‘(iii) any other appropriate amount, as de4 termined by the Office in accordance with gen5 erally accepted actuarial practices and prin6 ciples. 

7 ‘‘(2)(A) Not later than June 30, 2006, the Office shall 

8 determine the Postal surplus or supplemental liability, as 

9 of September 30, 2005. If that result is a surplus, the 

10 amount of the surplus shall be transferred to the Postal 

11 Service Retiree Health Benefits Fund established under sec12 tion 8909a. If the result is a supplemental liability, the Of13 fice shall establish an amortization schedule, including a 

14 series of annual installments commencing September 30, 

15 2006, which provides for the liquidation of such liability 

16 by September 30, 2043. 

17 ‘‘(B) The Office shall redetermine the Postal surplus 

18 or supplemental liability as of the close of the fiscal year, 

19 for each fiscal year beginning after September 30, 2006, 

20 through the fiscal year ending September 30, 2038. If the 

21 result is a surplus, that amount shall remain in the Fund 

22 until distribution is authorized under subparagraph (C), 

23 and any prior amortization schedule for payments shall be 

24 terminated. If the result is a supplemental liability, the Of25 fice shall establish a new amortization schedule, including
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1 a series of annual installments commencing on September 

2 30 of the subsequent fiscal year, which provides for the liq3 uidation of such liability by September 30, 2043. 

4 ‘‘(C) As of the close of the fiscal years ending Sep5 tember 30, 2015, 2025, 2035, and 2039, if the result is a 

6 surplus, that amount shall be transferred to the Postal Serv7 ice Retiree Health Benefits Fund, and any prior amortiza8 tion schedule for payments shall be terminated. 

9 ‘‘(D) Amortization schedules established under this 

10 paragraph shall be set in accordance with generally accept11 ed actuarial practices and principles, with interest com12 puted at the rate used in the most recent valuation of the 

13 Civil Service Retirement System. 

14 ‘‘(E) The United States Postal Service shall pay the 

15 amounts so determined to the Office, with payments due 

16 not later than the date scheduled by the Office. 

17 ‘‘(3) Notwithstanding any other provision of law, in 

18 computing the amount of any payment under any other 

19 subsection of this section that is based upon the amount 

20 of the unfunded liability, such payment shall be computed 

21 disregarding that portion of the unfunded liability that the 

22 Office determines will be liquidated by payments under this 

23 subsection.’’. 

24 (b) CREDIT ALLOWED FOR MILITARY SERVICE.—In 

25 the application of section 8348(g)(2) of title 5, United 
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1 States Code, for the fiscal year 2006, the Office of Personnel 

2 Management shall include, in addition to the amount other3 wise computed under that paragraph, the amounts that 

4 would have been included for the fiscal years 2003 through 

5 2005 with respect to credit for military service of former 

6 employees of the United States Postal Service as though the 

7 Postal Civil Service Retirement System Funding Reform 

8 Act of 2003 (Public Law 108–18) had not been enacted, 

9 and the Secretary of the Treasury shall make the required 

10 transfer to the Civil Service Retirement and Disability 

11 Fund based on that amount. 

12 SEC. 803. HEALTH INSURANCE. 

13 (a) IN GENERAL.—Chapter 89 of title 5, United States 

14 Code, is amended—

15 (1) in section 8906(g)(2)(A), by striking ‘‘shall 

16 be paid by the United States Postal Service.’’ and in17 serting ‘‘shall be paid first from the Postal Service 

18 Retiree Health Benefits Fund up to the amount con19 tained in the Fund, with any remaining amount 

20 paid by the United States Postal Service.’’; and 

21 (2) by inserting after section 8909 the following: 

22 ‘‘§ 8909a. Postal Service Retiree Health Benefit Fund 

23 ‘‘(a) There is in the Treasury of the United States a 

24 Postal Service Retiree Health Benefits Fund which is ad25 ministered by the Office of Personnel Management. 
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1 ‘‘(b) The Fund is available without fiscal year limita2 tion for payments required under section 8906(g)(2)(A). 

3 ‘‘(c) The Secretary of the Treasury shall immediately 

4 invest, in interest-bearing securities of the United States 

5 such currently available portions of the Fund as are not 

6 immediately required for payments from the Fund. Such 

7 investments shall be made in the same manner as invest8 ments for the Civil Service Retirement and Disability Fund 

9 under section 8348. 

10 ‘‘(d)(1) Not later than December 31, 2006, and by De11 cember 31 of each succeeding year, the Office shall compute 

12 the net present value of the future payments required under 

13 section 8906(g)(2)(A) and attributable to the service of Post14 al Service employees during the most recently ended fiscal 

15 year. 

16 ‘‘(2)(A) Not later than December 31, 2006, the Office 

17 shall compute, and by December 31 of each succeeding year, 

18 the Office shall recompute the difference between—

19 ‘‘(i) the net present value of the excess of future 

20 payments required under section 8906(g)(2)(A) for 

21 current and future United States Postal Service an22 nuitants as of the end of the fiscal year ending on 

23 September 30 of that year; and 
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1 ‘‘(ii)(I) the value of the assets of the Postal Re2 tiree Health Benefits Fund as of the end of the fiscal 

3 year ending on September 30 of that year; and 

4 ‘‘(II) the net present value computed under para5 graph (1). 

6 ‘‘(B) Not later than December 31, 2006, the Office shall 

7 compute, and by December 31 of each succeeding year shall 

8 recompute, an amortization schedule including a series of 

9 annual installments which provide for the liquidation by 

10 January 31, 2046, or within 15 years, whichever is later, 

11 of the net present value determined under subparagraph 

12 (A), including interest at the rate used in that computation. 

13 ‘‘(3) Not later than January 31, 2007, and by Janu14 ary 31 of each succeeding year, the United States Postal 

15 Service shall pay into such Fund—

16 ‘‘(A) the net present value computed under para17 graph (1); and 

18 ‘‘(B) the annual installment computed under 

19 paragraph (2)(B). 

20 ‘‘(4) Computations under this subsection shall be made 

21 consistent with the assumptions and methodology used by 

22 the Office for financial reporting under subchapter II of 

23 chapter 35 of title 31. 
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1 ‘‘(5) After consultation with the United States Postal 

2 Service, the Office shall promulgate any regulations the Of3 fice determines necessary under this subsection.’’. 

4 (b) TECHNICAL AND CONFORMING AMENDMENT.—The 

5 table of sections for chapter 89 of title 5, United States 

6 Code, is amended by inserting after the item relating to 

7 section 8909 the following:

‘‘8909a. Postal Service Retiree Health Benefits Fund.’’.

8 SEC. 804. REPEAL OF DISPOSITION OF SAVINGS PROVISION. 

9 Section 3 of the Postal Civil Service Retirement Sys10 tem Funding Reform Act of 2003 (Public Law 108–18) is 

11 repealed. 

12 SEC. 805. EFFECTIVE DATES. 

13 (a) IN GENERAL.—Except as provided under sub14 section (b), this title shall take effect on October 1, 2005. 

15 (b) TERMINATION OF EMPLOYER CONTRIBUTION.—The 

16 amendment made by paragraph (1) of section 802(a) shall 

17 take effect on the first day of the first pay period beginning 

18 on or after October 1, 2005. 

19 TITLE IX—COMPENSATION FOR 

20 WORK INJURIES 

21 SEC. 901. TEMPORARY DISABILITY; CONTINUATION OF PAY. 

22 (a) TIME OF ACCRUAL OF RIGHT.—Section 8117 of 

23 title 5, United States Code, is amended—
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1 (1) by striking ‘‘An employee’’ and inserting 

2 ‘‘(a) An employee other than a Postal Service em3 ployee’’; and 

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

5 ‘‘(b) A Postal Service employee is not entitled to com6 pensation or continuation of pay for the first 3 days of tem7 porary disability, except as provided under paragraph (3) 

8 of subsection (a). A Postal Service employee may use an9 nual leave, sick leave, or leave without pay during that 3-

10 day period, except that if the disability exceeds 14 days or 

11 is followed by permanent disability, the employee may have 

12 their sick leave or annual leave reinstated or receive pay 

13 for the time spent on leave without pay under this section.’’. 

14 (b) TECHNICAL AND CONFORMING AMENDMENT.—Sec15 tion 8118(b)(1) of title 5, United States Code, is amended 

16 to read as follows: 

17 ‘‘(1) without a break in time, except as provided 

18 under section 8117(b), unless controverted under regu19 lations of the Secretary’’. 

20 SEC. 902. DISABILITY RETIREMENT FOR POSTAL EMPLOY21 EES. 

22 (a) TOTAL DISABILITY.—Section 8105 of title 5, 

23 United States Code, is amended—

24 (1) in subsection (a), by adding at the end the 

25 following: ‘‘This section applies to a Postal Service 
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1 employee, except as provided under subsection (c).’’; 

2 and 

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

4 ‘‘(c)(1) In this subsection, the term ‘retirement age’ has 

5 the meaning given under section 216(l)(1) of the Social Se6 curity Act (42 U.S.C. 416(l)(1)). 

7 ‘‘(2) Notwithstanding any other provision of law, for 

8 any injury occurring on or after the date of enactment of 

9 the Postal Accountability and Enhancement Act, and for 

10 any new claim for a period of disability commencing on 

11 or after that date, the compensation entitlement for total 

12 disability is converted to 50 percent of the monthly pay of 

13 the employee on the later of—

14 ‘‘(A) the date on which the injured employee 

15 reaches retirement age; or 

16 ‘‘(B) 1 year after the employee begins receiving 

17 compensation.’’. 

18 (b) PARTIAL DISABILITY.—Section 8106 of title 5, 

19 United States Code, is amended—

20 (1) in subsection (a), by adding at the end the 

21 following: ‘‘This section applies to a Postal Service 

22 employee, except as provided under subsection (d).’’; 

23 and 

24 (2) by adding at the end the following: 
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1 ‘‘(d)(1) In this subsection, the term ‘retirement age’ has 

2 the meaning given under section 216(l)(1) of the Social Se3 curity Act (42 U.S.C. 416(l)(1)). 

4 ‘‘(2) Notwithstanding any other provision of law, 

5 for any injury occurring on or after the date of enact6 ment of this subsection, and for any new claim for a 

7 period of disability commencing on or after that date, 

8 the compensation entitlement for partial disability is 

9 converted to 50 percent of the difference between the 

10 monthly pay of an employee and the monthly wage 

11 earning capacity of the employee after the beginning 

12 of partial disability on the later of—

13 ‘‘(A) the date on which the injured employee 

14 reaches retirement age; or 

15 ‘‘(B) 1 year after the employee begins re16 ceiving compensation.’’. 

17 TITLE X—MISCELLANEOUS 

18 SEC. 1001. EMPLOYMENT OF POSTAL POLICE OFFICERS. 

19 Section 404 of title 39, United States Code (as amend20 ed by this Act), is further amended by adding at the end 

21 the following: 

22 ‘‘(d) The Postal Service may employ guards for all 

23 buildings and areas owned or occupied by the Postal Service 

24 or under the charge and control of the Postal Service, and 

25 may give such guards, with respect to such property, any 
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1 of the powers of special policemen provided under section 

2 1315 of title 40. The Postmaster General, or the designee 

3 of the Postmaster General, may take any action that the 

4 Secretary of Homeland Security may take under section 

5 1315 of title 40, with respect to that property.’’. 

6 SEC. 1002. EXPANDED CONTRACTING AUTHORITY. 

7 (a) AMENDMENT TO TITLE 39, UNITED STATES

8 CODE.—

9 (1) CONTRACTS WITH AIR CARRIERS.—Sub10 section (d) of section 5402 of title 39, United States 

11 Code, is amended to read as follows: 

12 ‘‘(d)(1) The Postal Service may contract with any air 

13 carrier for the transportation of mail by aircraft in inter14 state air transportation, including the rates therefor, either 

15 through negotiations or competitive bidding. 

16 ‘‘(2) Notwithstanding subsections (a) through (c), the 

17 Postal Service may contract with any air carrier or foreign 

18 air carrier for the transportation of mail by aircraft in for19 eign air transportation, including the rates therefor, either 

20 through negotiations or competitive bidding, except that—

21 ‘‘(A) any such contract may be awarded only to 

22 (i) an air carrier holding a certificate required by 

23 section 41101 of title 49 or an exemption therefrom 

24 issued by the Secretary of Transportation, (ii) a for25 eign air carrier holding a permit required by section 
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1 41301 of title 49 or an exemption therefrom issued by 

2 the Secretary of Transportation, or (iii) a combina3 tion of such air carriers or foreign air carriers (or 

4 both); 

5 ‘‘(B) mail transported under any such contract 

6 shall not be subject to any duty-to-carry requirement 

7 imposed by any provision of subtitle VII of title 49 

8 or by any certificate, permit, or corresponding exemp9 tion authority issued by the Secretary of Transpor10 tation under that subtitle; 

11 ‘‘(C) every contract that the Postal Service 

12 awards to a foreign air carrier under this paragraph 

13 shall be subject to the continuing requirement that air 

14 carriers shall be afforded the same opportunity to 

15 carry the mail of the country to and from which the 

16 mail is transported and the flag country of the for17 eign air carrier, if different, as the Postal Service has 

18 afforded the foreign air carrier; and 

19 ‘‘(D) the Postmaster General shall consult with 

20 the Secretary of Defense concerning actions that affect 

21 the carriage of military mail transported in foreign 

22 air transportation. 

23 ‘‘(3) Paragraph (2) shall not be interpreted as sus24 pending or otherwise diminishing the authority of the Sec25 retary of Transportation under section 41310 of title 49.’’.
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1 (2) DEFINITIONS.—Subsection (e) of section 5402 

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

3 follows: 

4 ‘‘(e) For purposes of this section, the terms ‘air car5 rier’, ‘air transportation’, ‘foreign air carrier’, ‘foreign air 

6 transportation’, ‘interstate air transportation’, and ‘mail’ 

7 shall have the meanings given such terms in section 40102 

8 of title 49.’’. 

9 (b) AMENDMENTS TO TITLE 49, UNITED STATES

10 CODE.—

11 (1) AUTHORITY OF POSTAL SERVICE TO PROVIDE

12 FOR INTERSTATE AIR TRANSPORTATION OF MAIL.—

13 Section 41901(a) of title 49, United States Code, is 

14 amended to read as follows: 

15 ‘‘(a) TITLE 39.—The United States Postal Service 

16 may provide for the transportation of mail by aircraft in 

17 air transportation under this chapter and under chapter 

18 54 of title 39.’’. 

19 (2) SCHEDULES FOR CERTAIN TRANSPORTATION

20 OF MAIL.—Section 41902(b)(1) of title 49, United 

21 States Code, is amended by inserting before the semi22 colon at the end the following: ‘‘(other than foreign 

23 air transportation of mail)’’. 
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1 (3) PRICES FOR FOREIGN TRANSPORTATION OF

2 MAIL.—Section 41907 of title 49, United States Code, 

3 is amended—

4 (A) by striking ‘‘(a) LIMITATIONS.—’’; and 

5 (B) by striking subsection (b). 

6 (4) CONFORMING AMENDMENTS.—Sections 

7 41107, 41901(b)(1), 41902(a), 41903(a), and 41903(b) 

8 of title 49, United States Code, are amended by strik9 ing ‘‘in foreign air transportation or’’.
Calendar No. 674

108TH CONGRESS 

2D SESSION S. 2468

[Report No. 108–318] 

A BILL

To reform the postal laws of the United States. 

AUGUST 25, 2004

Reported with an amendment