I 

108TH CONGRESS 

2D SESSION H. R. 4341

To reform the postal laws of the United States. 

IN THE HOUSE OF REPRESENTATIVES 

MAY 12, 2004

Mr. MCHUGH (for himself, Mr. DAVIS of Illinois, Mr. TOM DAVIS of Virginia, 

Mr. WAXMAN, Mrs. MILLER of Michigan, Mr. BURTON of Indiana, Mr. 

SCHROCK, Mr. SHAYS, Mr. OWENS, Mrs. MALONEY, Mr. MICA, Mr. 

LATOURETTE, Mr. LEWIS of Kentucky, Mr. PLATTS, Mr. CANNON, Mr. 

PUTNAM, Mr. DUNCAN, Mr. DEAL of Georgia, Ms. WATSON, Mr. LYNCH, 

Ms. NORTON, Mr. MURPHY, Mr. TURNER of Ohio, Mr. CARTER, Mrs. 

BLACKBURN, Mr. TIBERI, and Ms. HARRIS) introduced the following bill; 

which was referred to the Committee on Government Reform 

A BILL

To reform the postal laws of the United States.

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

3 SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 

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

5 ‘‘Postal Accountability and Enhancement Act’’. 

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

7 this Act is as follows:

Sec. 1. Short title; table of contents. 
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TITLE I—DEFINITIONS; POSTAL SERVICES 

Sec. 101. Definitions. 

Sec. 102. Postal services. 

Sec. 103. Financial transparency. 

TITLE II—MODERN RATE REGULATION 

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

Sec. 202. Provisions relating to competitive products. 

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

Sec. 204. Reporting requirements and related provisions. 

Sec. 205. Complaints; appellate review and enforcement. 

Sec. 206. Workshare discounts. 

Sec. 207. Clerical amendment. 

TITLE III—PROVISIONS RELATING TO FAIR COMPETITION 

Sec. 301. Postal Service Competitive Products Fund. 

Sec. 302. Assumed Federal income tax on competitive products income. 

Sec. 303. Unfair competition prohibited. 

Sec. 304. Suits by and against the Postal Service. 

Sec. 305. International postal arrangements. 

Sec. 306. Redesignation. 

Sec. 307. Clarification. 

TITLE IV—GENERAL PROVISIONS 

Sec. 401. Qualification requirements for Governors. 

Sec. 402. Obligations. 

Sec. 403. Private carriage of letters. 

Sec. 404. Rulemaking authority. 

Sec. 405. Noninterference with collective bargaining agreements, etc. 

Sec. 406. Bonus authority. 

Sec. 407. Mediation in collective-bargaining disputes. 

TITLE V—ENHANCED REGULATORY COMMISSION 

Sec. 501. Reorganization and modification of certain provisions relating to the 

Postal Regulatory Commission. 

Sec. 502. Authority for Postal Regulatory Commission to issue subpoenas. 

Sec. 503. Appropriations for the Postal Regulatory Commission. 

Sec. 504. Redesignation of the Postal Rate Commission. 

Sec. 505. Officer of the Postal Regulatory Commission representing the general 

public. 

TITLE VI—INSPECTORS GENERAL 

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

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

by the President. 

TITLE VII—EVALUATIONS 

Sec. 701. Universal postal service study. 

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

Sec. 703. Study on equal application of laws to competitive products. 
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Sec. 704. Greater diversity in Postal Service Executive and administrative 

schedule management positions. 

Sec. 705. Plan for assisting displaced workers. 

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

Sec. 707. Rates for periodicals. 

Sec. 708. Assessment of certain rate deficiencies. 

Sec. 709. Postal processing and distribution network study. 

Sec. 710. Definition. 

TITLE VIII—MISCELLANEOUS; TECHNICAL AND CONFORMING 

AMENDMENTS 

Sec. 801. Employment of postal police officers. 

Sec. 802. Date of postmark to be treated as date of appeal in connection with 

the closing or consolidation of post offices. 

Sec. 803. Provisions relating to benefits under chapter 81 of title 5, United 

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

Sec. 804. Obsolete provisions. 

Sec. 805. Expanded contracting authority. 

Sec. 806. Investments. 

Sec. 807. Repeal of section 5403. 

Sec. 808. Reduced rates. 

Sec. 809. Hazardous matter. 

Sec. 810. Provisions relating to cooperative mailings. 

Sec. 811. Technical and conforming amendments. 

TITLE IX—POSTAL PENSION FUNDING REFORM AMENDMENTS 

Sec. 901. Civil Service Retirement System. 

Sec. 902. Health insurance. 

Sec. 903. Repealer. 

Sec. 904. Ensuring appropriate use of escrow and military savings. 

Sec. 905. Effective dates.

1 TITLE I—DEFINITIONS; POSTAL 

2 SERVICES 

3 SEC. 101. DEFINITIONS. 

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

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

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’ means the carriage of let10 ters, printed matter, or mailable packages, including 
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1 acceptance, collection, processing, delivery, or other 

2 services supportive or ancillary thereto; 

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

4 distinct cost or market characteristic for which a 

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

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

7 includes fees for postal services; 

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

9 the market-dominant category of mail’ means a 

10 product subject to subchapter I of chapter 36; 

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

12 competitive category of mail’ means a product sub13 ject to subchapter II of chapter 36; 

14 ‘‘(10) ‘Consumer Price Index’ means the Con15 sumer Price Index for All Urban Consumers pub16 lished monthly by the Bureau of Labor Statistics of 

17 the Department of Labor; and 

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

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

20 SEC. 102. POSTAL SERVICES. 

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

22 States Code, is amended—

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

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

25 paragraphs (6) through (8), respectively; and 
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1 (2) by adding at the end the following: 

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

3 or require that the Postal Service provide any special non4 postal or similar services, except that nothing in this sub5 section shall prevent the Postal Service from providing any 

6 special nonpostal or similar services provided by the Postal 

7 Service as of May 12, 2004.’’. 

8 (b) CONFORMING AMENDMENT.—Section 

9 1402(b)(1)(B)(ii) of the Victims of Crime Act of 1984 (98 

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

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

12 SEC. 103. FINANCIAL TRANSPARENCY. 

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

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

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

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

17 ‘‘(d) As an establishment that provides both market18 dominant and competitive products, the Postal Service 

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

20 in its finances and operations, to ensure fair treatment 

21 of customers of the Postal Service’s market-dominant 

22 products and companies competing with the Postal Serv23 ice’s competitive products.’’. 
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1 (b) CONFORMING AMENDMENT.—Section 5001 of 

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

3 ‘‘101(e) and (f)’’ and inserting ‘‘101(f) and (g)’’. 

4 TITLE II—MODERN RATE 

5 REGULATION 

6 SEC. 201. PROVISIONS RELATING TO MARKET-DOMINANT 

7 PRODUCTS. 

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

9 States Code, is amended by striking sections 3621 and 

10 3622 and inserting the following: 

11 ‘‘§ 3621. Applicability; definitions 

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

13 with respect to—

14 ‘‘(1)(A) single piece first-class letters (both do15 mestic and international); 

16 ‘‘(B) single piece first-class cards (both domes17 tic and international); and 

18 ‘‘(C) special services; 

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

20 paragraph (1); 

21 ‘‘(3) periodicals; 

22 ‘‘(4) standard mail; 

23 ‘‘(5) media mail; 

24 ‘‘(6) library mail; and 

25 ‘‘(7) bound printed matter, 
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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 re4 ferred to in subsection (a) shall, for purposes of this sub5 chapter, be considered to have the meaning given to such 

6 mail matter under the mail classification schedule. 

7 ‘‘§ 3622. Modern rate regulation 

8 ‘‘(a) AUTHORITY GENERALLY.—The Postal Regu9 latory Commission shall, within 24 months after the date 

10 of the enactment of this section, by regulation establish 

11 (and may from time to time thereafter by regulation re12 vise) a modern system for regulating rates and classes for 

13 market-dominant products. 

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

15 achieve the following objectives: 

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

17 and increase efficiency. 

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

19 rates. 

20 ‘‘(3) To maintain high quality service stand21 ards. 

22 ‘‘(4) To allow the Postal Service pricing flexi23 bility. 

24 ‘‘(5) To assure adequate revenues, including re25 tained earnings, to maintain financial stability. 
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1 ‘‘(6) To reduce the administrative burden of the 

2 ratemaking process. 

3 ‘‘(c) FACTORS.—In establishing or revising such sys4 tem, the Postal Regulatory Commission shall take into ac5 count—

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

7 fair and equitable schedule for rates and classifica8 tion system; 

9 ‘‘(2) the value of the mail service actually pro10 vided each class or type of mail service to both the 

11 sender and the recipient, including but not limited to 

12 the collection, mode of transportation, and priority 

13 of delivery; 

14 ‘‘(3) the direct and indirect postal costs attrib15 utable to each class or type of mail service plus that 

16 portion of all other costs of the Postal Service rea17 sonably assignable to such class or type; 

18 ‘‘(4) the effect of rate increases upon the gen19 eral public, business mail users, and enterprises in 

20 the private sector of the economy engaged in the de21 livery of mail matter other than letters; 

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

23 and receiving letters and other mail matter at rea24 sonable costs; 
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1 ‘‘(6) the degree of preparation of mail for deliv2 ery into the postal system performed by the mailer 

3 and its effect upon reducing costs to the Postal 

4 Service; 

5 ‘‘(7) simplicity of structure for the entire sched6 ule and simple, identifiable relationships between the 

7 rates or fees charged the various classes of mail for 

8 postal services; 

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

10 kinds of mail matter entered into the postal system 

11 and the desirability and justification for special clas12 sifications and services of mail; 

13 ‘‘(9) the importance of providing classifications 

14 with extremely high degrees of reliability and speed 

15 of delivery and of providing those that do not re16 quire high degrees of reliability and speed of deliv17 ery; 

18 ‘‘(10) the desirability of special classifications 

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

20 Postal Service;

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

22 informational value to the recipient of mail matter; 

23 and 

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

25 other factors as the Commission deems appropriate. 
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1 ‘‘(d) ALLOWABLE PROVISIONS.—The system for reg2 ulating rates and classes for market-dominant products 

3 may include one or more of the following: 

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

5 of incentive regulation. 

6 ‘‘(2) Cost-of-service regulation. 

7 ‘‘(3) Such other form of regulation as the Com8 mission considers appropriate to achieve, consistent 

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

10 ‘‘(e) LIMITATION.—In the administration of this sec11 tion, the Commission shall not permit the average rate in 

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

13 than the comparable increase in the Consumer Price 

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

15 public hearing and comment, determined that such in16 crease is reasonable and equitable and necessary to enable 

17 the Postal Service, under best practices of honest, effi18 cient, and economical management, to maintain and con19 tinue the development of postal services of the kind and 

20 quality adapted to the needs of the United States. 

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

22 this section first take effect, rates and classes for market23 dominant products shall remain subject to modification in 

24 accordance with the provisions of this chapter and section 
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1 407, as such provisions were last in effect before the date 

2 of the enactment of this section.’’. 

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

4 3625, and 3628 of title 39, United States Code, are re5 pealed. 

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

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

8 section 501(a)(2), but before the amendment made by sec9 tion 202) is amended by striking the heading for sub10 chapter II and inserting the following: 

11 ‘‘SUBCHAPTER I—PROVISIONS RELATING TO 

12 MARKET-DOMINANT PRODUCTS’’. 

13 SEC. 202. PROVISIONS RELATING TO COMPETITIVE PROD14 UCTS. 

15 Chapter 36 of title 39, United States Code, is amend16 ed by inserting after section 3629 the following: 

17 ‘‘SUBCHAPTER II—PROVISIONS RELATING TO 

18 COMPETITIVE PRODUCTS 

19 ‘‘§ 3631. Applicability; definitions and updates 

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

21 with respect to—

22 ‘‘(1) priority mail; 

23 ‘‘(2) expedited mail; 

24 ‘‘(3) mailgrams; 

25 ‘‘(4) international mail; and 
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1 ‘‘(5) parcel post, 

2 subject to any changes the Postal Regulatory Commission 

3 may make under section 3642. 

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

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

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

8 ‘‘(c) RULE OF CONSTRUCTION.—Mail matter re9 ferred to in subsection (a) shall, for purposes of this sub10 chapter, be considered to have the meaning given to such 

11 mail matter under the mail classification schedule. 

12 ‘‘§ 3632. Action of the Governors 

13 ‘‘(a) AUTHORITY TO ESTABLISH RATES AND CLASS14 ES.—The Governors shall establish rates and classes for 

15 products in the competitive category of mail in accordance 

16 with the requirements of this subchapter and regulations 

17 promulgated under section 3633. 

18 ‘‘(b) PROCEDURES.—

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

20 established in writing, complete with a statement of 

21 explanation and justification, and the date as of 

22 which each such rate or class takes effect. 

23 ‘‘(2) RATES OR CLASSES OF GENERAL APPLICA24 BILITY.—In the case of rates or classes of general 

25 applicability in the Nation as a whole or in any sub-
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1 stantial region of the Nation, the Governors shall 

2 cause each rate and class decision under this section 

3 and the record of the Governors’ proceedings in con4 nection with such decision to be published in the 

5 Federal Register at least 30 days before the effective 

6 date of any new rates or classes. 

7 ‘‘(3) RATES OR CLASSES NOT OF GENERAL AP8 PLICABILITY.—In the case of rates or classes not of 

9 general applicability in the Nation as a whole or in 

10 any substantial region of the Nation, the Governors 

11 shall cause each rate and class decision under this 

12 section and the record of the proceedings in connec13 tion with such decision to be filed with the Postal 

14 Regulatory Commission by such date before the ef15 fective date of any new rates or classes as the Gov16 ernors consider appropriate, but in no case less than 

17 15 days. 

18 ‘‘(4) CRITERIA.—As part of the regulations re19 quired under section 3633, the Postal Regulatory 

20 Commission shall establish criteria for determining 

21 when a rate or class established under this sub22 chapter is or is not of general applicability in the 

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

24 Nation. 
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1 ‘‘(c) TRANSITION RULE.—Until regulations under 

2 section 3633 first take effect, rates and classes for com3 petitive products shall remain subject to modification in 

4 accordance with the provisions of this chapter and section 

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

6 date of the enactment of this section. 

7 ‘‘§ 3633. Provisions applicable to rates for competitive 

8 products 

9 ‘‘The Postal Regulatory Commission shall, within 18 

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

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

12 regulations—

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

14 products by market-dominant products; 

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

16 covers its costs attributable; and 

17 ‘‘(3) to ensure that all competitive products col18 lectively make a reasonable contribution to the insti19 tutional costs of the Postal Service.’’.

20 SEC. 203. PROVISIONS RELATING TO EXPERIMENTAL AND 

21 NEW PRODUCTS. 

22 Subchapter III of chapter 36 of title 39, United 

23 States 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 

6 conduct market tests of experimental products in ac7 cordance with this section. 

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

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

10 subject to the requirements of sections 3622, 3633, 

11 or 3642, or regulations promulgated under those 

12 sections. 

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

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

15 ‘‘(1) SIGNIFICANTLY DIFFERENT PRODUCT.—

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

17 significantly different from all products offered by 

18 the Postal Service within the 2-year period preceding 

19 the start of the test. 

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

21 or continued offering of the product will not create 

22 an unfair or otherwise inappropriate competitive ad23 vantage for the Postal Service or any mailer, par24 ticularly in regard to small business concerns (as de25 fined under subsection (h)). 
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1 ‘‘(3) CORRECT CATEGORIZATION.—The Postal 

2 Service identifies the product, for the purpose of a 

3 test under this section, as either market dominant or 

4 competitive, consistent with the criteria under sec5 tion 3642(b)(1). Costs and revenues attributable to 

6 a product identified as competitive shall be included 

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

8 to provisions applicable to competitive products col9 lectively). 

10 ‘‘(c) NOTICE.—

11 ‘‘(1) IN GENERAL.—At least 30 days before ini12 tiating a market test under this section, the Postal 

13 Service shall file with the Postal Regulatory Com14 mission and publish in the Federal Register a no15 tice—

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

17 Service’s determination that the market test is 

18 covered by this section; and 

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

20 the market test. 

21 ‘‘(2) SAFEGUARDS.—For a competitive experi22 mental product, the provisions of section 504(g) 

23 shall be available with respect to any information re24 quired to be filed under paragraph (1) to the same 

25 extent and in the same manner as in the case of any 
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1 matter described in section 504(g)(1). Nothing in 

2 paragraph (1) shall be considered to permit or re3 quire the publication of any information as to which 

4 confidential treatment is accorded under the pre5 ceding sentence (subject to the same exception as set 

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

7 ‘‘(d) DURATION.—

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

9 under this section may be conducted over a period 

10 of not to exceed 24 months. 

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

12 order to determine the feasibility or desirability of a 

13 product being tested under this section, the Postal 

14 Regulatory Commission may, upon written applica15 tion of the Postal Service (filed not later than 60 

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

17 product would otherwise be scheduled to terminate 

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

19 product for not to exceed an additional 12 months. 

20 ‘‘(e) DOLLAR-AMOUNT LIMITATION.—

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

22 under this section only if the total revenues that are 

23 anticipated, or in fact received, by the Postal Service 

24 from such product do not exceed $10,000,000 na25 tionwide in any year, subject to paragraph (2) and 
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1 subsection (g). In carrying out the preceding sen2 tence, the Postal Regulatory Commission may limit 

3 the amount of revenues the Postal Service may ob4 tain from any particular geographic market as nec5 essary to prevent market disruption (as defined in 

6 subsection (b)(2)). 

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

8 Regulatory Commission may, upon written applica9 tion of the Postal Service, exempt the market test 

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

11 that are anticipated, or in fact received, by the Post12 al Service from such product do not exceed 

13 $50,000,000 in any year, subject to subsection (g). 

14 In reviewing an application under this paragraph, 

15 the Postal Regulatory Commission shall approve 

16 such application if it determines that—

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

18 public and meet an expected demand; 

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

20 the financial stability of the Postal Service; and 

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

22 unfair or otherwise inappropriate competition. 

23 ‘‘(f) CANCELLATION.—If the Postal Regulatory Com24 mission at any time determines that a market test under 

25 this section fails, with respect to any particular product, 
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1 to meet one or more of the requirements of this section, 

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

3 such other action as it considers appropriate. A determina4 tion under this subsection shall be made in accordance 

5 with such procedures as the Commission shall by regula6 tion prescribe. 

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

8 of each year following the year in which occurs the dead9 line for the Postal Service’s first report to the Postal Reg10 ulatory Commission under section 3652(a), each dollar 

11 amount contained in this section shall be adjusted by the 

12 change in the Consumer Price Index for such year (as de13 termined under regulations of the Commission). 

14 ‘‘(h) DEFINITION OF A SMALL BUSINESS CON15 CERN.—The criteria used in defining small business con16 cerns or otherwise categorizing business concerns as small 

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

18 established by the Postal Regulatory Commission in con19 formance with the requirements of section 3 of the Small 

20 Business Act. 

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

22 subchapter may be conducted in any year beginning with

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

24 Service’s first report to the Postal Regulatory Commission 

25 under 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 Serv5 ice or users of the mails, or upon its own initiative, the 

6 Postal Regulatory Commission may change the list of 

7 market-dominant products under section 3621 and the list 

8 of competitive products under section 3631 by adding new 

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

10 transferring products between the lists. 

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

12 Regulatory Commission under subsection (a) shall be 

13 made in accordance with the following criteria: 

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

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

16 Postal Service exercises sufficient market power that 

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

20 losing 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 post25 al monopoly shall not be subject to transfer under 

26 this section from the market-dominant category of 
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1 mail. For purposes of the preceding sentence, the 

2 term ‘product covered by the postal monopoly’ 

3 means any product the conveyance or transmission 

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

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

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

9 be given to—

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

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

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

18 meaning of section 3641(h)). 

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

21 shall be considered to prevent transfers under this section 

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

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

24 subordinate units of the class of mail or type of postal 
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1 service involved (without regard to satisfaction of min2 imum quantity requirements standing alone). 

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

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

8 with the Postal Regulatory Commission and publish 

9 in the Federal Register a notice setting out the basis 

10 for its determination that the product satisfies the 

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

12 request to add a product or transfer a product to 

13 the competitive category of mail, that the product 

14 meets the regulations promulgated by the Postal 

15 Regulatory Commission pursuant to section 3633. 

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

17 with respect to any information required to be filed. 

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

19 Regulatory Commission shall, whenever it changes 

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

23 any previous lists (including the lists under sections 

24 3621 and 3631) are superseded, and shall be pub25 lished in the Federal Register. 
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1 ‘‘(e) NOTIFICATION REQUIREMENT.—The Postal 

2 Regulatory Commission shall, whenever it reaches a con3 clusion that a product or products should be transferred 

4 between the list of market-dominant products under sec5 tion 3621 and the list of competitive products under sec6 tion 3631, immediately notify the appropriate committees 

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

8 than 12 months after such conclusion. 

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

10 3641, no product that involves the carriage of letters, 

11 printed matter, or mailable packages may be offered by 

12 the Postal Service unless it has been assigned to the mar13 ket-dominant or competitive category of mail (as appro14 priate) either—

15 ‘‘(1) under this subchapter; or 

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

17 SEC. 204. REPORTING REQUIREMENTS AND RELATED PRO18 VISIONS. 

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

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

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

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

2 COMPLAINTS, AND JUDICIAL REVIEW’’. 

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

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

6 ‘‘SUBCHAPTER IV—REPORTING 

7 REQUIREMENTS AND RELATED PROVISIONS 

8 ‘‘§ 3651. Annual reports by the Commission 

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

11 the Congress concerning the operations of the Commission 

12 under this title, including the extent to which regulations 

13 are achieving the objectives under sections 3622 and 3633, 

14 respectively. 

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

16 information required under subsection (a), each report 

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

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

19 incurred by the Postal Service in providing—

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

21 where, in the judgment of the Postal Regulatory 

22 Commission, the Postal Service either would not 

23 provide services at all or would not provide such 

24 services in accordance with the requirements of this 

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

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

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

5 required by this title; and 

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

7 the judgment of the Postal Regulatory Commission, 

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

10 The Commission shall detail the bases for its estimates 

11 and the statutory requirements giving rise to the costs 

12 identified in each report under this section. 

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

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

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

18 ‘‘§ 3652. Annual reports to the Commission 

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

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

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

22 submit to the Postal Regulatory Commission a report (to23 gether with such nonpublic annex thereto as the Commis24 sion may require under subsection (e))—
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•HR 4341 IH 

1 ‘‘(1) which shall analyze costs, revenues, and 

2 rates, using such methodologies as the Commission 

3 shall by regulation prescribe, and in sufficient detail 

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

6 requirements of this title; and 

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

8 product provided in such year, provide—

9 ‘‘(A) market information, including mail 

10 volumes; and 

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

13 such product, including—

14 ‘‘(i) the service standard applicable to 

15 such product; 

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

17 terms of speed of delivery and reliability) 

18 provided; and 

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

21 Before submitting a report under this subsection (includ22 ing any annex thereto and the information required under 

23 subsection (b)), the Postal Service shall have the informa24 tion contained in such report (and annex) audited by the 
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•HR 4341 IH 

1 Inspector General. The results of any such audit shall be 

2 submitted along with the report to which it pertains. 

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

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

9 effect during the period covered by such report: 

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

11 Postal Service by virtue of such discount. 

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

13 avoided that the per-item workshare discount 

14 represents. 

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

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

18 purposes of this subsection, the term ‘workshare dis19 count’ refers to presorting, barcoding, dropshipping, 

20 and other similar discounts, as further defined under 

21 regulations which the Postal Regulatory Commission 

22 shall prescribe. 

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

24 (a) and (b) with respect to experimental products offered 
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•HR 4341 IH 

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

2 Postal Service—

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

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

5 ‘‘(2) shall report such data as the Postal Regu6 latory Commission requires. 

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

8 Commission shall have access, in accordance with such 

9 regulations as the Commission shall prescribe, to the 

10 working papers and any other supporting matter of the 

11 Postal Service and the Inspector General in connection 

12 with any information submitted under this section. 

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

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

15 Commission shall, by regulation, prescribe the con16 tent and form of the public reports (and any non17 public annex and supporting matter relating thereto) 

18 to be provided by the Postal Service under this sec19 tion. In carrying out this subsection, the Commis20 sion shall give due consideration to—

21 ‘‘(A) providing the public with adequate in22 formation to assess the lawfulness of rates 

23 charged;
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•HR 4341 IH 

1 ‘‘(B) avoiding unnecessary or unwarranted 

2 administrative effort and expense on the part of 

3 the Postal Service; and 

4 ‘‘(C) protecting the confidentiality of com5 mercially sensitive information. 

6 ‘‘(2) REVISED REQUIREMENTS.—The Commis7 sion may, on its own motion or on request of an in8 terested party, initiate proceedings (to be conducted 

9 in accordance with regulations that the Commission 

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

11 completeness of Postal Service data required by the 

12 Commission under this subsection whenever it shall 

13 appear that—

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

15 products has become significantly inaccurate or 

16 can be significantly improved; 

17 ‘‘(B) the quality of service data has be18 come significantly inaccurate or can be signifi19 cantly improved; or 

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

21 the Commission, otherwise necessitated by the 

22 public interest. 

23 ‘‘(f) CONFIDENTIAL INFORMATION.—

24 ‘‘(1) IN GENERAL.—If the Postal Service deter25 mines that any document or portion of a document, 
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•HR 4341 IH 

1 or other matter, which it provides to the Postal Reg2 ulatory Commission in a nonpublic annex under this 

3 section or pursuant to subsection (d) contains infor4 mation which is described in section 410(c) of this 

5 title, or exempt from public disclosure under section 

6 552(b) of title 5, the Postal Service shall, at the 

7 time of providing such matter to the Commission, 

8 notify the Commission of its determination, in writ9 ing, and describe with particularity the documents 

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

11 confidentiality is sought and the reasons therefor. 

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

13 matter described in paragraph (1) to which the 

14 Commission gains access under this section shall be 

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

16 in the same way as if the Commission had received 

17 notification with respect to such matter under sec18 tion 504(g)(1). 

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

20 submit to the Postal Regulatory Commission, together 

21 with any other submission that it is required to make 

22 under this section in a year, copies of its then most re23 cent—

24 ‘‘(1) comprehensive statement under section 

25 2401(e); 
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•HR 4341 IH 

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

2 ‘‘(3) program performance reports under sec3 tion 2804. 

4 ‘‘§ 3653. Annual determination of compliance 

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

6 receiving the reports required under section 3652 for any 

7 year, the Postal Regulatory Commission shall promptly 

8 provide an opportunity for comment on such reports by 

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

10 Commission who shall be required to represent the inter11 ests of the general public. 

12 ‘‘(b) DETERMINATION OF COMPLIANCE OR NON13 COMPLIANCE.—Not later than 90 days after receiving the 

14 submissions required under section 3652 with respect to 

15 a year, the Postal Regulatory Commission shall make a 

16 written determination as to—

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

18 such year (for products individually or collectively) 

19 were not in compliance with applicable provisions of 

20 this chapter (or regulations promulgated there21 under); 

22 ‘‘(2) whether any performance goals established 

23 under section 2803 or 2804 for such year were not 

24 met; and 
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•HR 4341 IH 

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

2 failed to meet any service standard during such 

3 year. 

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

5 is found under this subsection to have occurred in such 

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

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

8 year, a timely written determination of noncompliance is 

9 made under subsection (b), the Postal Regulatory Com10 mission shall take appropriate action in accordance with 

11 subsections (c)–(e) of section 3662 (as if a complaint aver12 ring such noncompliance had been duly filed and found 

13 under such section to be justified). 

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

15 determination described in the last sentence of subsection 

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

17 3662, create a rebuttable presumption of compliance by 

18 the Postal Service (with regard to the matters described 

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

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

21 SEC. 205. COMPLAINTS; APPELLATE REVIEW AND EN22 FORCEMENT. 

23 Chapter 36 of title 39, United States Code, is amend24 ed by striking sections 3662 and 3663 and inserting the 

25 following: 
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•HR 4341 IH 

1 ‘‘§ 3662. Rate and service complaints 

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

3 officer of the Postal Regulatory Commission representing 

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

5 Service is not operating in conformance with the require6 ments of chapter 1, 4, or 6, or this chapter (or regulations 

7 promulgated under any of those chapters) may lodge a 

8 complaint with the Postal Regulatory Commission in such 

9 form and manner as the Commission may prescribe. 

10 ‘‘(b) PROMPT RESPONSE REQUIRED.—

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

12 Commission shall, within 90 days after receiving a 

13 complaint under subsection (a), either—

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

15 or 

16 ‘‘(B) issue an order dismissing the com17 plaint (together with a statement of the reasons 

18 therefor). 

19 ‘‘(2) TREATMENT OF COMPLAINTS NOT TIMELY

20 ACTED ON.—For purposes of section 3663, any com21 plaint under subsection (a) on which the Commis22 sion fails to act in the time and manner required by 

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

24 if it had been dismissed pursuant to an order issued 

25 by the Commission on the last day allowable for the 

26 issuance of such order under paragraph (1).
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•HR 4341 IH 

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

2 BE JUSTIFIED.—If the Postal Regulatory Commission 

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

4 Postal Service take such action as the Commission con5 siders appropriate in order to achieve compliance with the 

6 applicable requirements and to remedy the effects of any 

7 noncompliance (such as ordering unlawful rates to be ad8 justed to lawful levels, ordering the cancellation of market 

9 tests, ordering the Postal Service to discontinue providing 

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

11 make up for revenue shortfalls in competitive products). 

12 ‘‘(d) SUSPENSION AUTHORITY.—The Postal Regu13 latory Commission may suspend implementation of rates 

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

15 period of time pending expedited proceedings under this 

16 section. In evaluating whether circumstances warrant sus17 pension, the Commission shall consider factors such as (1) 

18 whether there is a substantial likelihood that such rate or 

19 classification will violate the requirements of chapter 1, 

20 4, or 6, or this chapter (or regulations promulgated under 

21 any of those chapters), (2) whether any persons would suf22 fer substantial injury, loss, or damage absent a suspen23 sion, (3) whether the Postal Service or any other persons 

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

25 suspension, and (4) the public interest. 
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•HR 4341 IH 

1 ‘‘(e) AUTHORITY TO ORDER FINES IN CASES OF DE2 LIBERATE NONCOMPLIANCE.—In addition, in cases of de3 liberate noncompliance by the Postal Service with the re4 quirements of this title, the Postal Regulatory Commission 

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

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

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

8 incidence of noncompliance. Fines resulting from the pro9 vision of competitive products shall be paid out of the 

10 Competitive Products Fund established in section 2011. 

11 All receipts from fines imposed under this subsection shall 

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

13 United States. 

14 ‘‘§ 3663. Appellate review 

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

16 order or decision of the Postal Regulatory Commission 

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

18 final, institute proceedings for review thereof by filing a 

19 petition in the United States Court of Appeals for the Dis20 trict of Columbia. The court shall review the order or deci21 sion in accordance with section 706 of title 5, and chapter 

22 158 and section 2112 of title 28, on the basis of the record 

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

24 term ‘person’ includes the Postal Service. 
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1 ‘‘§ 3664. Enforcement of orders 

2 ‘‘The several district courts have jurisdiction specifi3 cally to enforce, and to enjoin and restrain the Postal 

4 Service from violating, any order issued by the Postal Reg5 ulatory Commission.’’.

6 SEC. 206. WORKSHARE DISCOUNTS. 

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

8 amended by adding after section 3686 (as added by sec9 tion 406) the following:

10 ‘‘§ 3687. Workshare discounts 

11 ‘‘(a) IN GENERAL.—As part of the regulations estab12 lished under section 3622(a), the Postal Regulatory Com13 mission shall establish rules for workshare discounts that 

14 ensure that workshare discounts do not exceed the cost 

15 that the Postal Service avoids as the result of private sec16 tor workshare activity, except—

17 ‘‘(1) where the discount is associated with a 

18 new product or service or with a change to an exist19 ing product or service and is necessary, over a pe20 riod of time not to exceed 4 years, to induce mailer 

21 behavior that will enable the new or changed product 

22 or service in furtherance of the overall economically 

23 efficient operation of the Postal Service; 

24 ‘‘(2) to the extent that a reduction in the dis25 count would lead to a loss of volume in the affected 

26 category and reduce the aggregate contribution to 
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•HR 4341 IH 

1 institutional costs of the Postal Service, from the 

2 mail matter subject to the discount, below what it 

3 otherwise would have been if the discount had not 

4 been reduced to costs avoided; would result in a fur5 ther increase in the rates paid by mailers not able 

6 to take advantage of the discount; or would impede 

7 the efficient operation of the Postal Service; 

8 ‘‘(3) where the amount of the discount above 

9 costs avoided is necessary to mitigate rate shock and 

10 will be phased out over time; or 

11 ‘‘(4) where the workshare discount is provided 

12 in connection with subclasses of mail consisting ex13 clusively of mail matter of educational, cultural, or 

14 scientific value. 

15 ‘‘(b) REPORTING REQUIREMENT.—Whenever the 

16 Postal Service establishes or maintains a workshare dis17 count, the Postal Service shall, at the time it publishes 

18 the workshare discount rate, file with the Postal Regu19 latory Commission a detailed report and explanation of its 

20 reasons for establishing or maintaining the rate, setting 

21 forth the data, economic analyses, and other information 

22 relied on by the Postal Service to justify the rate. 

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

24 term ‘workshare discount’ refers to rate discounts pro25 vided to mailers for presorting, prebarcoding, handling, or 
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1 transportation, as further defined by the Postal Regu2 latory Commission as part of regulations established 

3 under section 3622(a).’’. 

4 (b) CLERICAL AMENDMENT.—The analysis for chap5 ter 36 of title 39, United States Code (as amended by 

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

7 to section 3686 the following:

‘‘3687. Workshare discounts.’’.

8 SEC. 207. CLERICAL AMENDMENT. 

9 Chapter 36 of title 39, United States Code, is amend10 ed by striking the heading and analysis for such chapter 

11 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. Repealed]. 

‘‘[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.’’.

1 TITLE III—PROVISIONS RELAT2 ING TO FAIR COMPETITION 

3 SEC. 301. POSTAL SERVICE COMPETITIVE PRODUCTS 

4 FUND. 

5 (a) PROVISIONS RELATING TO POSTAL SERVICE

6 COMPETITIVE PRODUCTS FUND AND RELATED MAT7 TERS.—

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

9 United States Code, is amended by adding at the 

10 end the following: 

11 ‘‘§ 2011. Provisions relating to competitive products 

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

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

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

16 for the payment of—
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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 attrib6 utable’ has the meaning given such term by section 3631. 

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

8 Products Fund, subject to withdrawal by the Postal Serv9 ice—

10 ‘‘(1) revenues from competitive products; 

11 ‘‘(2) amounts received from obligations issued 

12 by the Postal Service under subsection (e); 

13 ‘‘(3) interest and dividends earned on invest14 ments of the Competitive Products Fund; and 

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

16 (including from the sale of assets), to the extent al17 locable to competitive products. 

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

19 of the Competitive Products Fund are in excess of current 

20 needs, it may invest such amounts as it considers appro21 priate in—

22 ‘‘(1) obligations of, or obligations guaranteed 

23 by, the Government of the United States; and 

24 ‘‘(2) in accordance with regulations which the 

25 Secretary of the Treasury shall prescribe (by not 
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1 later than 18 months after the date of the enact2 ment of the Postal Accountability and Enhancement 

3 Act), such other obligations or securities as it deems 

4 appropriate. 

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

6 provide that moneys of the Competitive Products Fund be 

7 deposited in a Federal Reserve bank or a depository for 

8 public funds. 

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

10 2005(a), the Postal Service is authorized to borrow money 

11 and to issue and sell such obligations as it determines nec12 essary to provide for competitive products and deposit 

13 such amounts in the Competitive Products Fund, except 

14 that the Postal Service may pledge only assets related to 

15 the provision of competitive products (as determined 

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

17 accounting practices and principles under subsection (h) 

18 have been established and applied, the best information 

19 available from the Postal Service, including the audited 

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

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

22 principal of or interest on such obligations, for the pur23 chase or redemption thereof, and for other purposes inci24 dental thereto, including creation of reserve, sinking, and 

25 other funds which may be similarly pledged and used, to 
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1 such extent and in such manner as it deems necessary or 

2 desirable. 

3 ‘‘(2) The Postal Service may enter into binding cov4 enants with the holders of such obligations, and with the 

5 trustee, if any, under any agreement entered into in con6 nection with the issuance thereof with respect to—

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

8 other funds; 

9 ‘‘(B) application and use of revenues and re10 ceipts of the Competitive Products Fund; 

11 ‘‘(C) stipulations concerning the subsequent 

12 issuance of obligations or the execution of leases or 

13 lease purchases relating to properties of the Postal 

14 Service; and 

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

16 considers necessary or desirable to enhance the mar17 ketability of such obligations. 

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

19 this subsection—

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

21 the Treasury; 

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

23 or interest from any taxation now or hereafter im24 posed by any State or local taxing authority; 
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1 ‘‘(C) shall not be obligations of, nor shall pay2 ment of the principal thereof or interest thereon be 

3 guaranteed by, the Government of the United 

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

5 ‘‘(D) notwithstanding the provisions of the Fed6 eral Financing Bank Act of 1973 or any other provi7 sion of law (except as specifically provided by ref8 erence to this subparagraph in a law enacted after 

9 this subparagraph takes effect), shall not be eligible 

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

11 or issuance to, the Federal Financing Bank. 

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

13 period beginning on the date of the enactment of this 

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

15 which begins on the date on which the Postal Service 

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

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

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

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

20 to any obligations sought to be issued by the Postal Serv21 ice under this subsection, be considered to affect such obli22 gations’ eligibility for purchase by, commitment to pur23 chase by, or sale or issuance to, the Federal Financing 

24 Bank.
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1 ‘‘(C) The Federal Financing Bank may elect to pur2 chase such obligations under such terms, including rates 

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

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

5 outstanding marketable securities of comparable maturity 

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

7 then most recently obtained by the Postal Service under 

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

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

10 paragraph, the Postal Service shall first obtain a credit 

11 rating from a nationally recognized credit rating organiza12 tion. Such rating—

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

14 only those assets and activities of the Postal Service 

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

16 to the Postal Service’s assumed taxable income from 

17 competitive products); and 

18 ‘‘(ii) may, before final rules of the Postal Regu19 latory Commission under subsection (h) are issued 

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

21 best information available from the Postal Service, 

22 including the audited statements required by section 

23 2008(e). 

24 ‘‘(f) The receipts and disbursements of the Competi25 tive Products Fund shall be accorded the same budgetary 
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1 treatment as is accorded to receipts and disbursements of 

2 the Postal Service Fund under section 2009a. 

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

4 Government of the United States (or settlement of a 

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

6 of the Postal Service in the provision of competitive prod7 ucts, be paid out of the Competitive Products Fund.

8 ‘‘(h)(1) The Secretary of the Treasury, in consulta9 tion with the Postal Service and an independent, certified 

10 public accounting firm and such other advisors as the Sec11 retary considers appropriate, shall develop recommenda12 tions regarding—

13 ‘‘(A) the accounting practices and principles 

14 that should be followed by the Postal Service with 

15 the objectives of (i) identifying and valuing the as16 sets and liabilities of the Postal Service associated 

17 with providing, and the capital and operating costs 

18 incurred by the Postal Service in providing, competi19 tive products, and (ii) preventing the subsidization 

20 of such products by market-dominant products; and 

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

22 should be followed in determining the Postal Serv23 ice’s assumed Federal income tax on competitive 

24 products income for any year (within the meaning of 

25 section 3634). 
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1 Such recommendations shall be submitted to the Postal 

2 Regulatory Commission no earlier than 6 months, and no 

3 later than 12 months, after the effective date of this sec4 tion. 

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

6 Secretary of the Treasury under paragraph (1), the Com7 mission shall give interested parties, including the Postal 

8 Service, users of the mails, and an officer of the Commis9 sion who shall be required to represent the interests of 

10 the general public, an opportunity to present their views 

11 on those recommendations through submission of written 

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

13 oral presentation, or in such other manner as the Commis14 sion considers appropriate. 

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

16 information received under subparagraph (A), the Com17 mission shall by rule—

18 ‘‘(i) provide for the establishment and applica19 tion of the accounting practices and principles which 

20 shall be followed by the Postal Service; 

21 ‘‘(ii) provide for the establishment and applica22 tion of the substantive and procedural rules de23 scribed in paragraph (1)(B); and 

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

25 Service to the Postal Regulatory Commission of an-
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•HR 4341 IH 

1 nual and other periodic reports setting forth such in2 formation as the Commission may require. 

3 Final rules under this subparagraph shall be issued not 

4 later than 12 months after the date on which the Sec5 retary of the Treasury makes his submission to the Com6 mission under paragraph (1) (or by such later date as the 

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

8 Commission is authorized to promulgate regulations revis9 ing such rules. 

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

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

12 include such information, as the Commission by rule re13 quires. The Commission may, on its own motion or on re14 quest of an interested party, initiate proceedings (to be 

15 conducted in accordance with such rules as the Commis16 sion shall prescribe) to improve the quality, accuracy, or 

17 completeness of Postal Service data under such subpara18 graph whenever it shall appear that—

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

20 those reports has become significantly inaccurate or 

21 can be significantly improved; or 

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

23 Commission, otherwise necessitated by the public in24 terest. 
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1 ‘‘(D) A copy of each report described in subpara2 graph (B)(iii) shall also be transmitted by the Postal Serv3 ice to the Secretary of the Treasury and the Inspector 

4 General of the United States Postal Service. 

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

6 to the Secretary of the Treasury concerning the operation 

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

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

11 of its then most recent report under this subsection shall 

12 be included with any other submission that it is required 

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

15 (2) CLERICAL AMENDMENT.—The analysis for 

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

17 amended by adding after the item relating to section 

18 2010 the following:

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

19 (b) TECHNICAL AND CONFORMING AMENDMENTS.—

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

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

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

24 paragraph (1) the following:
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1 ‘‘(2) ‘Competitive Products Fund’ means the 

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

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

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

7 and the balance in the Competitive Products 

8 Fund,’’. 

9 (3) POSTAL SERVICE FUND.—

10 (A) PURPOSES FOR WHICH AVAILABLE.—

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

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

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

15 Products Fund is available).’’. 

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

17 39, United States Code, is amended by striking 

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

19 provided in section 2011, there’’. 

20 (4) RELATIONSHIP BETWEEN THE TREASURY

21 AND THE POSTAL SERVICE.—Section 2006 of title 

22 39, United States Code, is amended—

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

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

25 considered to permit or require the Secretary of 
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1 the Treasury to purchase any obligations of the 

2 Postal Service other than those issued under 

3 section 2005.’’; and 

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

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

6 SEC. 302. ASSUMED FEDERAL INCOME TAX ON COMPETI7 TIVE PRODUCTS INCOME. 

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

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

10 at the end the following: 

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

12 products income 

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

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

15 competitive products income’ means the net income 

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

18 assumed taxable income from competitive products 

19 for the year; and 

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

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

22 to the amount representing what would be the tax23 able income of a corporation under the Internal Rev24 enue Code of 1986 for the year, if—
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1 ‘‘(A) the only activities of such corporation 

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

4 products; and 

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

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

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

11 Service’s first report to the Postal Regulatory Commission 

12 under section 3652(a)—

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

14 on competitive products income for such year; and 

15 ‘‘(2) transfer from the Competitive Products 

16 Fund to the Postal Service Fund the amount of that 

17 assumed tax. 

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

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

21 the close of such year.’’. 

22 SEC. 303. UNFAIR COMPETITION PROHIBITED. 

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

24 United States Code, is amended by adding after section 

25 404 the following: 
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1 ‘‘§ 404a. Specific Limitations 

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

3 Postal Service may not—

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

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

7 the Postal Service demonstrates that the regulation 

8 does not create an unfair competitive advantage for 

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

10 the Postal Service; 

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

13 as patents, copyrights, trademarks, trade secrets, 

14 and proprietary information); or 

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

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

18 whole or in part on such information, without the 

19 consent of the person providing that information, 

20 unless substantially the same information is obtained 

21 (or obtainable) from an independent source or is 

22 otherwise obtained (or obtainable). 

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

25 ‘‘(c) Any party (including an officer of the Commis26 sion representing the interests of the general public) who 
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1 believes that the Postal Service has violated this section 

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

3 (b) CONFORMING AMENDMENTS.—

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

5 39, United States Code, is amended by striking 

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

7 section 404a, the’’. 

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

9 39, United States Code, is amended by striking 

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

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

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

‘‘404a. Specific limitations.’’.

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

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

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

18 (e) and inserting the following: 

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

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

21 Service—

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

23 used in the provisions of law involved; and 

24 ‘‘(B) shall not be immune under any other doc25 trine of sovereign immunity from suit in Federal
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1 court by any person for any violation of any of those 

2 provisions of law by any officer or employee of the 

3 Postal Service. 

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

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

7 1051 and following)); and 

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

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

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

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

14 Postal Service, engages in conduct with respect to any 

15 competitive product, the Postal Service or other Federal 

16 agency (as the case may be)—

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

18 sovereign immunity from suit in Federal court by 

19 any person for any violation of Federal law by such 

20 agency or any officer or employee thereof; and 

21 ‘‘(B) shall be considered to be a person (as de22 fined in subsection (a) of the first section of the 

23 Clayton Act) for purposes of—

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

25 subsection); and 
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1 ‘‘(ii) section 5 of the Federal Trade Com2 mission Act to the extent that such section 5 

3 applies to unfair methods of competition. 

4 ‘‘(2) No damages, interest on damages, costs or at5 torney’s fees may be recovered, and no criminal liability 

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

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

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

9 the Postal Service, acting in an official capacity. 

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

11 conduct occurring before the date of the enactment of this 

12 subsection. 

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

14 in conduct with respect to the provision of competitive 

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

16 of the Federal bankruptcy laws. 

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

18 Postal Service shall be constructed or altered, to the max19 imum extent feasible as determined by the Postal Service, 

20 in compliance with one of the nationally recognized model 

21 building codes and with other applicable nationally recog22 nized codes. 

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

24 Postal Service shall be constructed or altered only after 

25 consideration of all requirements (other than procedural 
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1 requirements) of zoning laws, land use laws, and applica2 ble environmental laws of a State or subdivision of a State 

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

4 constructed or altered by an establishment of the Govern5 ment of the United States. 

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

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

8 Postal Service shall—

9 ‘‘(A) in preparing plans for the building, con10 sult with appropriate officials of the State or polit11 ical subdivision, or both, in which the building will 

12 be located; 

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

14 timely manner to such officials for review by such 

15 officials for a reasonable period of time not exceed16 ing 30 days; and 

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

18 construction or alteration of the building, in accord19 ance with the customary schedule of inspections for 

20 construction or alteration of buildings in the locality, 

21 if such officials provide to the Postal Service—

22 ‘‘(i) a copy of such schedule before con23 struction 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 sub7 section require the Postal Service or any of its contractors 

8 to pay for any action taken by a State or political subdivi9 sion to carry out this subsection (including reviewing 

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

11 permits, and making recommendations). 

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

13 subdivision of a State may make recommendations to the 

14 Postal Service concerning measures necessary to meet the 

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

16 may also make recommendations to the Postal Service 

17 concerning measures which should be taken in the con18 struction or alteration of the building to take into account 

19 local conditions. The Postal Service shall give due consid20 eration to any such recommendations. 

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

22 officials under paragraph (3), the Postal Service shall es23 tablish procedures for soliciting, assessing, and incor24 porating local community input on real property and land 

25 use decisions. 
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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 (relat12 ing to administrative subpoenas by the Postal Regu13 latory Commission). 

14 ‘‘(C) Section 3663 (relating to appellate re15 view). 

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

17 attorneys to obtain any legal representation that it is pre18 cluded from obtaining from the Department of Justice 

19 under this paragraph. 

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

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

22 furnish the Postal Service such legal representation as it 

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

24 Attorney General, the Postal Service may, in any such cir25 cumstance, employ attorneys by contract or otherwise to
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1 conduct litigation brought by or against the Postal Service 

2 or its officers or employees in matters affecting the Postal 

3 Service. 

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

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

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

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

8 is not otherwise a party, the Commission shall be per9 mitted to appear as a party on its own motion and as 

10 of right. 

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

12 terms and conditions as the Commission and the Attorney 

13 General shall consider appropriate, furnish the Commis14 sion such legal representation as it may require in connec15 tion with any such action, suit, or proceeding, except that, 

16 with the prior consent of the Attorney General, the Com17 mission may employ attorneys by contract or otherwise for 

18 that purpose. 

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

20 United States arising out of activities of the Postal Service 

21 shall be paid by the Postal Service out of any funds avail22 able to the Postal Service, subject to the restriction speci23 fied in section 2011(g).’’. 

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

25 title 39, United States Code, is amended by striking ‘‘Ex-
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1 cept as provided in section 3628 of this title,’’ and insert2 ing ‘‘Except as otherwise provided in this title,’’. 

3 SEC. 305. INTERNATIONAL POSTAL ARRANGEMENTS. 

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

5 States Code, is amended to read as follows: 

6 ‘‘§ 407. International postal arrangements 

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

8 ‘‘(1) to promote and encourage communications 

9 between peoples by efficient operation of inter10 national postal services and other international deliv11 ery services for cultural, social, and economic pur12 poses; 

13 ‘‘(2) to promote and encourage unrestricted and 

14 undistorted competition in the provision of inter15 national postal services and other international deliv16 ery services, except where provision of such services 

17 by private companies may be prohibited by law of 

18 the United States; 

19 ‘‘(3) to promote and encourage a clear distinc20 tion between governmental and operational respon21 sibilities with respect to the provision of inter22 national postal services and other international deliv23 ery services by the Government of the United States 

24 and by intergovernmental organizations of which the 

25 United States is a member; and 
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1 ‘‘(4) to participate in multilateral and bilateral 

2 agreements with other countries to accomplish these 

3 objectives. 

4 ‘‘(b)(1) The Secretary of State shall be responsible 

5 for formulation, coordination, and oversight of foreign pol6 icy related to international postal services and other inter7 national delivery services, and shall have the power to con8 clude treaties, conventions and amendments related to 

9 international postal services and other international deliv10 ery services, except that the Secretary may not conclude 

11 any treaty, convention, or other international agreement 

12 (including those regulating international postal services) 

13 if such treaty, convention, or agreement would, with re14 spect to any competitive product, grant an undue or un15 reasonable preference to the Postal Service, a private pro16 vider of international postal or delivery services, or any 

17 other person. 

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

19 paragraph (1), the Secretary of State shall exercise pri20 mary authority for the conduct of foreign policy with re21 spect to international postal services and international de22 livery services, including the determination of United 

23 States positions and the conduct of United States partici24 pation in negotiations with foreign governments and inter-
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1 national bodies. In exercising this authority, the Sec2 retary—

3 ‘‘(A) shall coordinate with other agencies as ap4 propriate, and in particular, shall give full consider5 ation to the authority vested by law or Executive 

6 order in the Postal Regulatory Commission, the De7 partment of Commerce, the Department of Trans8 portation, and the Office of the United States Trade 

9 Representative in this area; 

10 ‘‘(B) shall maintain continuing liaison with 

11 other executive branch agencies concerned with post12 al and delivery services; 

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

14 Committee on Government Reform of the House of 

15 Representatives and the Committee on Govern16 mental Affairs of the Senate; 

17 ‘‘(D) shall maintain appropriate liaison with 

18 both representatives of the Postal Service and rep19 resentatives of users and private providers of inter20 national postal services and other international deliv21 ery services to keep informed of their interests and 

22 problems, and to provide such assistance as may be 

23 needed to ensure that matters of concern are 

24 promptly considered by the Department of State or 
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1 (if applicable, and to the extent practicable) other 

2 executive branch agencies; and 

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

4 public sector advisory groups as may be established 

5 to advise the Department of State and other execu6 tive branch agencies in connection with international 

7 postal services and international delivery services. 

8 ‘‘(3) The Secretary of State shall establish an advi9 sory committee (within the meaning of the Federal Advi10 sory Committee Act) to perform such functions as the Sec11 retary considers appropriate in connection with carrying 

12 out subparagraphs (A) through (D) of paragraph (2). 

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

14 amendment that establishes a rate or classification for a 

15 product subject to subchapter I of chapter 36, the Sec16 retary of State shall request the Postal Regulatory Com17 mission to submit a decision on whether such rate or clas18 sification is consistent with the standards and criteria es19 tablished by the Commission under section 3622. 

20 ‘‘(2) The Secretary shall ensure that each treaty, con21 vention, or amendment concluded under subsection (b) is 

22 consistent with a decision of the Commission adopted 

23 under paragraph (1), except if, or to the extent, the Sec24 retary determines, by written order, that considerations of
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1 foreign policy or national security require modification of 

2 the Commission’s decision. 

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

4 prevent the Postal Service from entering into such com5 mercial or operational contracts related to providing inter6 national postal services and other international delivery 

7 services as it deems appropriate, except that—

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

9 a foreign government (whether under authority of 

10 this subsection or otherwise) shall be solely contrac11 tual in nature and may not purport to be inter12 national law; and 

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

14 Postal Service and an agency of a foreign govern15 ment shall be transmitted to the Secretary of State 

16 and the Postal Regulatory Commission not later 

17 than the effective date of such contract. 

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

19 mail that are competitive products within the meaning of 

20 section 3631 that are exported or imported by the Postal 

21 Service, the Bureau of Customs and Border Protection of 

22 the Department of Homeland Security and other appro23 priate Federal agencies shall apply the customs laws of 

24 the United States and all other laws relating to the impor25 tation or exportation of such shipments in the same man-
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1 ner to both shipments by the Postal Service and similar 

2 shipments by private companies. 

3 ‘‘(2) For purposes of this subsection, the term ‘pri4 vate company’ means a private company substantially 

5 owned or controlled by persons who are citizens of the 

6 United States. 

7 ‘‘(3) In exercising the authority pursuant to sub8 section (b) to conclude new treaties, conventions and 

9 amendments related to international postal services and 

10 to renegotiate such treaties, conventions and amendments, 

11 the Secretary of State shall, to the maximum extent prac12 ticable, take such measures as are within the Secretary’s 

13 control to encourage the governments of other countries 

14 to make available to the Postal Service and private compa15 nies a range of nondiscriminatory customs procedures that 

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

17 The Secretary of State shall consult with the United 

18 States Trade Representative and the Commissioner of 

19 Customs, Department of Homeland Security in carrying 

20 out this paragraph. 

21 ‘‘(4) The provisions of this subsection shall take ef22 fect 6 months after the date of the enactment of this sub23 section or such earlier date as the Bureau of Customs and 

24 Border Protection of the Department of Homeland Secu25 rity may determine in writing.’’. 
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1 (b) EFFECTIVE DATE.—Notwithstanding any provi2 sion of the amendment made by subsection (a), the au3 thority of the United States Postal Service to establish 

4 the rates of postage or other charges on mail matter con5 veyed between the United States and other countries shall 

6 remain available to the Postal Service until—

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

8 the date as of which the regulations promulgated 

9 under section 3622 of title 39, United States Code 

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

11 (2) with respect to competitive products, the 

12 date as of which the regulations promulgated under 

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

14 amended by section 202) take effect. 

15 SEC. 306. REDESIGNATION. 

16 Chapter 36 of title 39, United States Code (as in ef17 fect before the amendment made by section 204(a)) is 

18 amended by striking the heading for subchapter V and in19 serting the following: 

20 ‘‘SUBCHAPTER VI—GENERAL’’. 

21 SEC. 307. CLARIFICATION. 

22 Section 403(c) of title 39, United States Code, is 

23 amended by adding after ‘‘user.’’ the following: ‘‘The pro24 hibition in this subsection shall not be construed to pre25 vent the establishment of rates that vary with volume if 
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1 such rates will be made available to similarly situated per2 sons and will increase the aggregate contribution to the 

3 institutional costs of the Postal Service.’’. 

4 TITLE IV—GENERAL 

5 PROVISIONS 

6 SEC. 401. QUALIFICATION REQUIREMENTS FOR GOV7 ERNORS. 

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

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

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

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

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

13 be chosen solely on the basis of their demonstrated ability 

14 in managing organizations or corporations (in either the 

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

16 of this sentence, an organization or corporation shall be 

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

18 50,000 employees. The Governors shall not be representa19 tives of specific interests using the Postal Service, and 

20 may be removed only for cause.’’. 

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

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

23 the end the following: 

24 ‘‘(2) In selecting the individuals described in para25 graph (1) for nomination for appointment to the position
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1 of Governor, the President should consult with the Speak2 er of the House of Representatives, the minority leader 

3 of the House of Representatives, the majority leader of 

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

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

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

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

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

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

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

11 months after the date of the enactment of this para12 graph—

13 ‘‘(i) such office may not, in the case of any per14 son commencing service after that expiration date, 

15 be filled by any person other than an individual cho16 sen from among persons nominated for such office 

17 with the unanimous concurrence of all labor organi18 zations described in section 206(a)(1); and 

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

20 apply under the first sentence of paragraph (1), the 

21 term of any person so appointed to such office shall 

22 be 3 years. 

23 ‘‘(B) Except as provided in subparagraph (A), an ap24 pointment under this paragraph shall be made in conform-
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1 ance with all provisions of this section that would other2 wise apply.’’. 

3 (d) APPLICABILITY.—The amendment made by sub4 section (a) shall not affect the appointment or tenure of 

5 any person serving as a Governor of the Board of Gov6 ernors of the United States Postal Service pursuant to an 

7 appointment made before the date of the enactment of this 

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

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

10 however, when any such office becomes vacant, the ap11 pointment of any person to fill that office shall be made 

12 in accordance with such amendment. The requirement set 

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

14 39, United States Code (as amended by subsection (a)) 

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

16 date of the enactment of this Act. 

17 SEC. 402. OBLIGATIONS. 

18 (a) PURPOSES FOR WHICH OBLIGATIONS MAY BE

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

20 39, United States Code, is amended by striking ‘‘title.’’ 

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

22 which the corresponding authority is available to the Post23 al Service under section 2011.’’. 

24 (b) LIMITATION ON NET ANNUAL INCREASE IN OB25 LIGATIONS ISSUED FOR CERTAIN PURPOSES.—The third 
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1 sentence of section 2005(a)(1) of title 39, United States 

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

3 year, the net increase in the amount of obligations out4 standing issued for the purpose of capital improvements 

5 and the net increase in the amount of obligations out6 standing issued for the purpose of defraying operating ex7 penses of the Postal Service shall not exceed a combined 

8 total of $3,000,000,000.’’ . 

9 (c) LIMITATIONS ON OBLIGATIONS OUTSTANDING.—

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

11 2005 of title 39, United States Code, is amended by 

12 adding at the end the following: 

13 ‘‘(3) For purposes of applying the respective limita14 tions under this subsection, the aggregate amount of obli15 gations issued by the Postal Service which are outstanding 

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

17 of obligations outstanding issued by the Postal Service for 

18 the purpose of capital improvements or for the purpose 

19 of defraying operating expenses of the Postal Service in 

20 any fiscal year, shall be determined by aggregating the 

21 relevant obligations issued by the Postal Service under this 

22 section with the relevant obligations issued by the Postal 

23 Service under section 2011.’’. 

24 (2) CONFORMING AMENDMENT.—The second 

25 sentence of section 2005(a)(1) of title 39, United 
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1 States Code, is amended by striking ‘‘any such obli2 gations’’ and inserting ‘‘obligations issued by the 

3 Postal Service which may be’’. 

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

5 (1) OBLIGATIONS TO WHICH PROVISIONS

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

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

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

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

10 (2) ASSETS, REVENUES, AND RECEIPTS TO

11 WHICH PROVISIONS APPLY.—Subsection (b) of sec12 tion 2005 of title 39, United States Code, is amend13 ed by striking ‘‘(b)’’ and inserting ‘‘(b)(1)’’, and by 

14 adding at the end the following: 

15 ‘‘(2) Notwithstanding any other provision of this sec16 tion—

17 ‘‘(A) the authority to pledge assets of the Post18 al Service under this subsection shall be available 

19 only to the extent that such assets are not related 

20 to the provision of competitive products (as deter21 mined under section 2011(h) or, for purposes of any 

22 period before accounting practices and principles 

23 under section 2011(h) have been established and ap24 plied, the best information available from the Postal 
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1 Service, including the audited statements required 

2 by section 2008(e)); and 

3 ‘‘(B) any authority under this subsection relat4 ing to the pledging or other use of revenues or re5 ceipts of the Postal Service shall be available only to 

6 the extent that they are not revenues or receipts of 

7 the Competitive Products Fund.’’. 

8 SEC. 403. PRIVATE CARRIAGE OF LETTERS. 

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

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

11 inserting the following: 

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

13 when—

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

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

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

17 single-piece first class letter; 

‘‘(2) the letter weighs at least 121 18 ⁄2 ounces; or 

19 ‘‘(3) such carriage is within the scope of serv20 ices described by regulations of the Postal Service 

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

22 320.8 of title 39 of the Code of Federal Regulations, 

23 as in effect on July 1, 2003) that purport to permit 

24 private carriage by suspension of the operation of 

25 this section (as then in effect).
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1 ‘‘(c) Any regulations necessary to carry out this sec2 tion shall be promulgated by the Postal Regulatory Com3 mission.’’. 

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

5 on the date as of which the regulations promulgated under 

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

7 by section 202) take effect. 

8 SEC. 404. RULEMAKING AUTHORITY. 

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

10 States Code, is amended to read as follows: 

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

12 and regulations, not inconsistent with this title, as 

13 may be necessary in the execution of its functions 

14 under this title and such other functions as may be 

15 assigned to the Postal Service under any provisions 

16 of law outside of this title;’’. 

17 SEC. 405. NONINTERFERENCE WITH COLLECTIVE BAR18 GAINING AGREEMENTS, ETC. 

19 (a) NONINTERFERENCE WITH COLLECTIVE BAR20 GAINING AGREEMENTS.—Except as provided in section 

21 407, nothing in this Act or any amendment made by this 

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

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

24 labor organizations representing employees of the United 

25 States Postal Service under chapter 12 of title 39, United 
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1 States Code, the National Labor Relations Act, any hand2 book or manual affecting employee labor relations within 

3 the United States Postal Service, or any collective bar4 gaining agreement. 

5 (b) FREE MAILING PRIVILEGES CONTINUE UN6 CHANGED.—Nothing in this Act or any amendment made 

7 by this Act shall affect any free mailing privileges ac8 corded under section 3217 or sections 3403 through 3406 

9 of title 39, United States Code. 

10 SEC. 406. BONUS AUTHORITY. 

11 Subchapter VI of chapter 36 of title 39, United 

12 States Code (as so redesignated by section 306) is amend13 ed by adding at the end the following: 

14 ‘‘§ 3686. Bonus authority 

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

16 one or more programs to provide bonuses or other rewards 

17 to officers and employees of the Postal Service to achieve 

18 the objectives of this chapter. 

19 ‘‘(b) WAIVER OF LIMITATION ON COMPENSATION.—

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

21 the Postal Service may award a bonus or other re22 ward in excess of the limitation set forth in the last 

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

24 been approved under paragraph (2). 
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1 ‘‘(2) APPROVAL PROCESS.—If the Postal Serv2 ice wishes to have the authority, under any program 

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

4 other rewards in excess of the limitation referred to 

5 in paragraph (1)—

6 ‘‘(A) the Postal Service shall make an ap7 propriate request to the Postal Regulatory 

8 Commission, in such form and manner as the 

9 Commission requires; and 

10 ‘‘(B) the Postal Regulatory Commission 

11 shall approve any such request if it finds that 

12 the program is likely to achieve the objectives of 

13 this chapter. 

14 ‘‘(3) REVOCATION AUTHORITY.—If the Postal 

15 Regulatory Commission finds that a program pre16 viously approved under paragraph (2) is not achiev17 ing the objectives of this chapter, the Commission 

18 may revoke or suspend the authority of the Postal 

19 Service to continue such program until such time as 

20 appropriate corrective measures have, in the judg21 ment of the Commission, been taken. 

22 ‘‘(c) REPORTING REQUIREMENT RELATING TO BO23 NUSES OR OTHER REWARDS.—Included in its comprehen24 sive statement under section 2401(e) for any period shall 

25 be—
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1 ‘‘(1) the name of each person receiving a bonus 

2 or other reward during such period which would not 

3 have been allowable but for the provisions of sub4 section (b); 

5 ‘‘(2) the amount of the bonus or other reward; 

6 and 

7 ‘‘(3) the amount by which the limitation re8 ferred to in subsection (b)(1) was exceeded as a re9 sult of such bonus or other reward.’’. 

10 SEC. 407. MEDIATION IN COLLECTIVE-BARGAINING DIS11 PUTES. 

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

13 United States Code, is amended by striking all that follows 

14 ‘‘the Director of the Federal Mediation and Conciliation 

15 Service shall’’ and inserting ‘‘, within 10 days appoint a 

16 mediator of nationwide reputation and professional stat17 ure, and who is also a member of the National Academy 

18 of Arbitrators. The parties shall cooperate with the medi19 ator in an effort to reach an agreement and shall meet 

20 and negotiate in good faith at such times and places that 

21 the mediator, in consultation with the parties, shall di22 rect.’’. 

23 (b) PROVISIONS RELATING TO ARBITRATION

24 BOARDS.—Section 1207(c) of title 39, United States 

25 Code, is amended—
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1 (1) in paragraph (1)—

2 (A) by striking ‘‘90’’ and inserting ‘‘60’’; 

3 (B) by striking ‘‘not members of the fact4 finding panel,’’; and 

5 (C) by striking all that follows ‘‘shall be 

6 made’’ and inserting ‘‘from a list of names pro7 vided by the Director. This list shall consist of 

8 not less than 9 names of arbitrators of nation9 wide reputation and professional stature, who 

10 are also members of the National Academy of 

11 Arbitrators, and whom the Director has deter12 mined are available and willing to serve.’’; and 

13 (2) in paragraph (3), by striking ‘‘factfinding 

14 panel’’ and inserting ‘‘mediation’’. 

15 (c) CONFORMING AMENDMENT.—Section 1207(d) of 

16 title 39, United States Code, is amended by striking ‘‘fact17 finding panel will be established’’ and inserting ‘‘mediator 

18 shall be appointed’’. 

19 TITLE V—ENHANCED 

20 REGULATORY COMMISSION 

21 SEC. 501. REORGANIZATION AND MODIFICATION OF CER22 TAIN PROVISIONS RELATING TO THE POSTAL 

23 REGULATORY COMMISSION. 

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

25 United States Code, is amended—
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1 (1) by inserting after chapter 4 the following: 

2 ‘‘CHAPTER 5—POSTAL REGULATORY 

3 COMMISSION

‘‘Sec. 

‘‘501. Establishment. 

‘‘502. Commissioners. 

‘‘503. Rules; regulations; procedures. 

‘‘504. Administration.

4 ‘‘§ 501. Establishment 

5 ‘‘The Postal Regulatory Commission is an inde6 pendent establishment of the executive branch of the Gov7 ernment of the United States. 

8 ‘‘§ 502. Commissioners 

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

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

11 with the advice and consent of the Senate. The Commis12 sioners shall be chosen solely on the basis of their technical 

13 qualifications, professional standing, and demonstrated 

14 expertise in economics, accounting, law, or public adminis15 tration, and may be removed by the President only for 

16 cause. Each individual appointed to the Commission shall 

17 have the qualifications and expertise necessary to carry 

18 out the responsibilities accorded Commissioners under the 

19 Postal Accountability and Enhancement Act. Not more 

20 than 3 of the Commissioners may be adherents of the 

21 same political party. 
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1 ‘‘(b) A Commissioner may continue to serve after the 

2 expiration of his term until his successor has qualified, 

3 except that a Commissioner may not so continue to serve 

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

5 otherwise would expire under subsection (e). 

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

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

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

11 Chairman shall act as Chairman of the Commission in the 

12 absence of the Chairman. 

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

14 years.’’; 

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

16 (as in effect before the amendment made by section 

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

18 that follows through section 3602; and 

19 (3) by redesignating sections 3603 and 3604 as 

20 sections 503 and 504, respectively, and transferring 

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

22 paragraph (1)). 

23 (b) DETERMINATIONS.—Section 503 of title 39, 

24 United States Code, as so redesignated by subsection 

25 (a)(3), is amended by adding at the end the following: 
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1 ‘‘Such rules shall include procedures which balance, inter 

2 alia, the need for protecting due process rights and ensur3 ing expeditious decision-making.’’. 

4 (c) APPLICABILITY.—The amendment made by sub5 section (a)(1) shall not affect the appointment or tenure 

6 of any person serving as a Commissioner on the Postal 

7 Regulatory Commission (as so redesignated by section 

8 504) pursuant to an appointment made before the date 

9 of the enactment of this Act or any nomination made be10 fore that date, but, when any such office becomes vacant, 

11 the appointment of any person to fill that office shall be 

12 made in accordance with such amendment. 

13 (d) CLERICAL AMENDMENT.—The analysis for part 

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

15 after the item relating to chapter 4 the following:

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

16 SEC. 502. AUTHORITY FOR POSTAL REGULATORY COMMIS17 SION TO ISSUE SUBPOENAS. 

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

19 redesignated by section 501) is amended by adding at the 

20 end the following: 

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

22 Commission, any administrative law judge appointed by 

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

24 employee of the Commission designated by the Commis-
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1 sion may administer oaths, examine witnesses, take depo2 sitions, and receive evidence. 

3 ‘‘(2) The Chairman of the Commission, any Commis4 sioner designated by the Chairman, and any administra5 tive law judge appointed by the Commission under section 

6 3105 of title 5 may, with respect to any proceeding con7 ducted by the Commission under this title—

8 ‘‘(A) issue subpoenas requiring the attendance 

9 and presentation of testimony by, or the production 

10 of documentary or other evidence in the possession 

11 of, any covered person; and 

12 ‘‘(B) order the taking of depositions and re13 sponses to written interrogatories by a covered per14 son. 

15 The written concurrence of a majority of the Commis16 sioners then holding office shall, with respect to each sub17 poena under subparagraph (A), be required in advance of 

18 its issuance. 

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

20 subpoena issued under this subsection, upon application 

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

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

23 is addressed resides or is served may issue an order requir24 ing such person to appear at any designated place to tes25 tify or produce documentary or other evidence. Any failure 
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1 to obey the order of the court may be punished by the 

2 court as a contempt thereof. 

3 ‘‘(4) For purposes of this subsection, the term ‘cov4 ered person’ means an officer, employee, agent, or con5 tractor of the Postal Service. 

6 ‘‘(g)(1) If the Postal Service determines that any doc7 ument or other matter it provides to the Postal Regulatory 

8 Commission pursuant to a subpoena issued under sub9 section (f), or otherwise at the request of the Commission 

10 in connection with any proceeding or other purpose under 

11 this title, contains information which is described in sec12 tion 410(c) of this title, or exempt from public disclosure 

13 under section 552(b) of title 5, the Postal Service shall, 

14 at the time of providing such matter to the Commission, 

15 notify the Commission, in writing, of its determination 

16 (and the reasons therefor). 

17 ‘‘(2) No officer or employee of the Commission may, 

18 with respect to any information as to which the Commis19 sion has been notified under paragraph (1)—

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

21 than the purposes for which it is supplied; or 

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

23 employee of the Commission to have access to any 

24 such information.
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1 ‘‘(3) Paragraph (2) shall not prevent information 

2 from being furnished under any process of discovery estab3 lished under this title in connection with a proceeding 

4 under this title. The Commission shall, by regulations 

5 based on rule 26(c) of the Federal Rules of Civil Proce6 dure, establish procedures for ensuring appropriate con7 fidentiality for any information furnished under the pre8 ceding sentence.’’. 

9 SEC. 503. APPROPRIATIONS FOR THE POSTAL REGU10 LATORY COMMISSION. 

11 (a) AUTHORIZATION OF APPROPRIATIONS.—Sub12 section (d) of section 504 of title 39, United States Code 

13 (as so redesignated by section 501) is amended to read 

14 as follows: 

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

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

17 for the Postal Regulatory Commission. In requesting an 

18 appropriation under this subsection for a fiscal year, the 

19 Commission shall prepare and submit to the Congress 

20 under section 2009 a budget of the Commission’s ex21 penses, including expenses for facilities, supplies, com22 pensation, and employee benefits.’’. 

23 (b) BUDGET PROGRAM.—

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

25 section 2009 of title 39, United States Code, is 
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1 amended to read as follows: ‘‘The budget program 

2 shall also include separate statements of the 

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

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

5 2401, (2) the Office of Inspector General of the 

6 United States Postal Service requests to be appro7 priated, out of the Postal Service Fund, under sec8 tion 8J(e) of the Inspector General Act of 1978, and 

9 (3) the Postal Regulatory Commission requests to be 

10 appropriated, out of the Postal Service Fund, under 

11 section 504(d) of this title.’’. 

12 (2) CONFORMING AMENDMENT.—Section 

13 2003(e)(1) of title 39, United States Code, is 

14 amended by striking the first sentence and inserting 

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

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

17 Service in carrying out its functions as provided by 

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

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

20 all expenses of the Postal Regulatory Commission, 

21 subject to the availability of amounts appropriated 

22 pursuant to section 504(d); and (C) all expenses of 

23 the Office of Inspector General, subject to the avail24 ability of amounts appropriated pursuant to section 

25 8J(e) of the Inspector General Act of 1978.’’. 
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1 (c) EFFECTIVE DATE.—

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

3 this section shall apply with respect to fiscal years 

4 beginning on or after October 1, 2004. 

5 (2) SAVINGS PROVISION.—The provisions of 

6 title 39, United States Code, that are amended by 

7 this section shall, for purposes of any fiscal year be8 fore the first fiscal year to which the amendments 

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

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

11 SEC. 504. REDESIGNATION OF THE POSTAL RATE COMMIS12 SION. 

13 (a) AMENDMENTS TO TITLE 39, UNITED STATES

14 CODE.—Title 39, United States Code, is amended in sec15 tions 404, 503–504 (as so redesignated by section 501), 

16 1001, and 1002 by striking ‘‘Postal Rate Commission’’ 

17 each place it appears and inserting ‘‘Postal Regulatory 

18 Commission’’. 

19 (b) AMENDMENTS TO TITLE 5, UNITED STATES

20 CODE.—Title 5, United States Code, is amended in sec21 tions 104(1), 306(f), 2104(b), 3371(3), 5314 (in the item 

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

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

24 5514(a)(5)(B), 7342(a)(1)(A), 7511(a)(1)(B)(ii), 

25 8402(c)(1), 8423(b)(1)(B), and 8474(c)(4) by striking 
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1 ‘‘Postal Rate Commission’’ and inserting ‘‘Postal Regu2 latory Commission’’. 

3 (c) AMENDMENT TO THE ETHICS IN GOVERNMENT

4 ACT OF 1978.—Section 101(f)(6) of the Ethics in Govern5 ment Act of 1978 (5 U.S.C. App.) is amended by striking 

6 ‘‘Postal Rate Commission’’ and inserting ‘‘Postal Regu7 latory Commission’’. 

8 (d) AMENDMENT TO THE REHABILITATION ACT OF

9 1973.—Section 501(b) of the Rehabilitation Act of 1973 

10 (29 U.S.C. 791(b)) is amended by striking ‘‘Postal Rate 

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

12 (e) AMENDMENT TO TITLE 44, UNITED STATES

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

14 is amended by striking ‘‘Postal Rate Commission’’ and in15 serting ‘‘Postal Regulatory Commission’’. 

16 (f) OTHER REFERENCES.—Whenever a reference is 

17 made in any provision of law (other than this Act or a 

18 provision of law amended by this Act), regulation, rule, 

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

20 Postal Rate Commission, such reference shall be consid21 ered a reference to the Postal Regulatory Commission. 
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1 SEC. 505. OFFICER OF THE POSTAL REGULATORY COMMIS2 SION REPRESENTING THE GENERAL PUBLIC. 

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

4 States Code (as added by this Act) is amended by adding 

5 after section 504 the following: 

6 ‘‘§ 505. Officer of the Postal Regulatory Commission 

7 representing the general public 

8 ‘‘The Postal Regulatory Commission shall designate 

9 an officer of the Postal Regulatory Commission in all pub10 lic proceedings (such as developing rules, regulations, and 

11 procedures) who shall represent the interests of the gen12 eral public.’’. 

13 (b) CLERICAL AMENDMENT.—The analysis for chap14 ter 5 of title 39, United States Code (as amended by sec15 tion 501(a)(1)) is amended by adding after the item relat16 ing to section 504 the following:

‘‘505. Officer of the Postal Regulatory Commission representing the general 

public.’’.

17 TITLE VI—INSPECTORS 

18 GENERAL 

19 SEC. 601. INSPECTOR GENERAL OF THE POSTAL REGU20 LATORY COMMISSION. 

21 (a) IN GENERAL.—Paragraph (2) of section 8G(a) 

22 of the Inspector General Act of 1978 is amended by insert23 ing ‘‘the Postal Regulatory Commission,’’ after ‘‘the 

24 United States International Trade Commission,’’.
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1 (b) ADMINISTRATION.—Section 504 of title 39, 

2 United States Code (as so redesignated by section 501) 

3 is amended by adding after subsection (g) (as added by 

4 section 502) the following: 

5 ‘‘(h)(1) Notwithstanding any other provision of this 

6 title or of the Inspector General Act of 1978, the authority 

7 to select, appoint, and employ officers and employees of 

8 the Office of Inspector General of the Postal Regulatory 

9 Commission, and to obtain any temporary or intermittent 

10 services of experts or consultants (or an organization of 

11 experts or consultants) for such Office, shall reside with 

12 the Inspector General of the Postal Regulatory Commis13 sion. 

14 ‘‘(2) Except as provided in paragraph (1), any exer15 cise of authority under this subsection shall, to the extent 

16 practicable, be in conformance with the applicable laws 

17 and regulations that govern selections, appointments and 

18 employment, and the obtaining of any such temporary or 

19 intermittent services, within the Postal Regulatory Com20 mission.’’. 

21 (c) DEADLINE.—No later than 180 days after the 

22 date of the enactment of this Act—

23 (1) the first Inspector General of the Postal 

24 Regulatory Commission shall be appointed; and 
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1 (2) the Office of Inspector General of the Post2 al Regulatory Commission shall be established. 

3 SEC. 602. INSPECTOR GENERAL OF THE UNITED STATES 

4 POSTAL SERVICE TO BE APPOINTED BY THE 

5 PRESIDENT. 

6 (a) DEFINITIONAL AMENDMENTS TO THE INSPEC7 TOR GENERAL ACT OF 1978.—Section 11 of the Inspector 

8 General Act of 1978 is amended—

9 (1) in paragraph (1)—

10 (A) by striking ‘‘or’’ before ‘‘the President 

11 of the Export-Import Bank;’’ and 

12 (B) by inserting ‘‘or the Governors of the 

13 United States Postal Service (within the mean14 ing of section 102(3) of title 39, United States 

15 Code);’’ after ‘‘the President of the Export-Im16 port Bank;’’; and 

17 (2) in paragraph (2)—

18 (A) by striking ‘‘or’’ before ‘‘the Export19 Import Bank,’’; and 

20 (B) by inserting ‘‘or the United States 

21 Postal Service,’’ after ‘‘the Export-Import 

22 Bank,’’. 

23 (b) SPECIAL PROVISIONS CONCERNING THE UNITED

24 STATES POSTAL SERVICE.—
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1 (1) IN GENERAL.—The Inspector General Act 

2 of 1978 is amended—

3 (A) by redesignating section 8J as section 

4 8K; and 

5 (B) by inserting after section 8I the fol6 lowing: 

7 ‘‘SPECIAL PROVISIONS CONCERNING THE UNITED STATES

8 POSTAL SERVICE

9 ‘‘SEC. 8J. (a) In carrying out the duties and respon10 sibilities specified in this Act, the Inspector General of the 

11 United States Postal Service shall have oversight responsi12 bility for all activities of the Postal Inspection Service, in13 cluding any internal investigation performed by the Postal 

14 Inspection Service. The Chief Postal Inspector shall 

15 promptly report any significant activities being carried out 

16 by the Postal Inspection Service to such Inspector Gen17 eral. The Postmaster General shall promptly report to 

18 such Inspector General all allegations of theft, fraud, or 

19 misconduct by Postal Service officers or employees, and 

20 entities or individuals doing business with the Postal Serv21 ice. 

22 ‘‘(b) In the case of any report that the Governors of 

23 the United States Postal Service (within the meaning of 

24 section 102(3) of title 39, United States Code) are re25 quired to transmit under the second sentence of section 

26 5(d), such sentence shall be applied by deeming the term 
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1 ‘appropriate committees of Congress’ to mean the Com2 mittee on Government Reform of the House of Represent3 atives, the Committee on Governmental Affairs of the Sen4 ate, and such other committees or subcommittees of Con5 gress as may be appropriate. 

6 ‘‘(c) Notwithstanding any provision of paragraph (7) 

7 or (8) of section 6(a), the Inspector General of the United 

8 States Postal Service may select, appoint, and employ 

9 such officers and employees as may be necessary for car10 rying out the functions, powers, and duties of the Office 

11 of Inspector General and to obtain the temporary or inter12 mittent services of experts or consultants or an organiza13 tion of experts or consultants, subject to the applicable 

14 laws and regulations that govern such selections, appoint15 ments, and employment, and the obtaining of such serv16 ices, within the United States Postal Service. 

17 ‘‘(d) Nothing in this Act shall restrict, eliminate, or 

18 otherwise adversely affect any of the rights, privileges, or 

19 benefits of employees of the United States Postal Service, 

20 or labor organizations representing employees of the 

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

22 United States Code, the National Labor Relations Act, 

23 any handbook or manual affecting employee labor rela24 tions with the United States Postal Service, or any collec25 tive bargaining agreement. 
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1 ‘‘(e) There are authorized to be appropriated, out of 

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

3 for the Office of Inspector General of the United States 

4 Postal Service.’’. 

5 (2) RELATED PROVISIONS.—For certain related 

6 provisions, see section 503(b). 

7 (c) EXERCISE OF CERTAIN POWERS.—Section 

8 6(e)(3) of the Inspector General Act of 1978 is amended—

9 (1) by striking ‘‘and the’’ before ‘‘Tennessee 

10 Valley Authority’’; and 

11 (2) by inserting ‘‘, and United States Postal 

12 Service’’ after ‘‘Tennessee Valley Authority’’. 

13 (d) PUBLIC CONTRACTS.—

14 (1) ADDITIONAL PROVISIONS APPLICABLE.—

15 Section 410(b)(5) of title 39, United States Code, is 

16 amended—

17 (A) in subparagraph (A), by striking 

18 ‘‘and’’ after the semicolon; and 

19 (B) by adding after subparagraph (B) the 

20 following: 

21 ‘‘(C) the Anti-Kickback Act of 1986 (41 

22 U.S.C. 51 and following), other than sub23 sections (a) and (b) of 7 and section 8 of that 

24 Act; and
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1 ‘‘(D) section 315 of the Federal Property 

2 and Administrative Services Act of 1949 (41 

3 U.S.C. 265) (relating to protecting contractor 

4 employees from reprisal for disclosure of certain 

5 information);’’. 

6 (2) REGULATIONS ON ALLOWABLE COSTS.—

7 Section 410 of title 39, United States Code, is 

8 amended by adding at the end the following: 

9 ‘‘(e) The Postal Service shall develop and issue pur10 chasing regulations that prohibit contract costs not allow11 able under section 5.2.5 of the United States Postal Serv12 ice Procurement Manual (Publication 41), as in effect on 

13 July 12, 1995.’’. 

14 (e) AUDITS OF THE POSTAL SERVICE.—

15 (1) AUDITS.—Subsection (e) of section 2008 of 

16 title 39, United States Code, is amended to read as 

17 follows: 

18 ‘‘(e)(1) At least once each year beginning with the 

19 fiscal year commencing after the date of the enactment 

20 of the Postal Accountability and Enhancement Act, the 

21 financial statements of the Postal Service (including those 

22 used in determining and establishing postal rates) shall 

23 be audited by the Inspector General or by an independent 

24 external auditor selected by the Inspector General. 
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1 ‘‘(2) Audits under this section shall be conducted in 

2 accordance with applicable generally accepted government 

3 auditing standards. 

4 ‘‘(3) Upon completion of the audit required by this 

5 subsection, the person who audits the statement shall sub6 mit a report on the audit to the Postmaster General.’’. 

7 (2) RESULTS OF INSPECTOR GENERAL’S AUDIT

8 TO BE INCLUDED IN ANNUAL REPORT.—Section 

9 2402 of title 39, United States Code, is amended by 

10 inserting after the first sentence the following: 

11 ‘‘Each report under this section shall include a copy 

12 of the report most recently received by the Post13 master General under section 2008(e)(3).’’. 

14 (3) COORDINATION PROVISIONS.—Section 

15 2008(d) of title 39, United States Code, is amend16 ed—

17 (A) by striking ‘‘(d) Nothing’’ and insert18 ing ‘‘(d)(1) Except as provided in paragraph 

19 (2), nothing’’; and 

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

21 ‘‘(2) An audit or report under paragraph (1) may not 

22 be obtained without the prior written approval of the In23 spector General.’’. 

24 (4) TRANSITION PROVISION.—For purposes of 

25 any fiscal year preceding the first fiscal year com-
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1 mencing after the date of the enactment of this Act, 

2 the provisions of title 39, United States Code, shall 

3 be applied as if the amendments made by this sub4 section had never been enacted. 

5 (f) REPORTS.—Section 3013 of title 39, United 

6 States Code, is amended by striking ‘‘Postmaster Gen7 eral’’ each place it appears and inserting ‘‘Chief Postal 

8 Inspector’’. 

9 (g) TECHNICAL AND CONFORMING AMENDMENTS.—

10 (1) RELATING TO THE INSPECTOR GENERAL

11 ACT OF 1978.—(A) Subsection (a) of section 8G of 

12 the Inspector General Act of 1978 (as amended by 

13 section 601(a)) is further amended—

14 (i) in paragraph (2), by striking ‘‘the Post15 al Regulatory Commission, and the United 

16 States Postal Service;’’ and inserting ‘‘and the 

17 Postal Regulatory Commission;’’ and 

18 (ii) in paragraph (4), by striking ‘‘except 

19 that’’ and all that follows through ‘‘Code);’’ and 

20 inserting ‘‘except that, with respect to the Na21 tional Science Foundation, such term means the 

22 National Science Board;’’. 

23 (B)(i) Subsection (f) of section 8G of such Act 

24 is repealed. 
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1 (ii) Subsection (c) of section 8G of such Act is 

2 amended by striking ‘‘Except as provided under sub3 section (f) of this section, the’’ and inserting ‘‘The’’. 

4 (C) Section 8K of such Act (as so redesignated 

5 by subsection (b)(1)(A)) is amended by striking the 

6 matter after ‘‘8D,’’ and before ‘‘of this Act’’ and in7 serting ‘‘8E, 8F, 8H, or 8J’’. 

8 (2) RELATING TO TITLE 39, UNITED STATES

9 CODE.—(A) Subsection (e) of section 202 of title 39, 

10 United States Code, is repealed. 

11 (B) Paragraph (4) of section 102 of such title 

12 39 (as amended by section 101) is amended to read 

13 as follows: 

14 ‘‘(4) ‘Inspector General’ means the Inspector 

15 General of the United States Postal Service, ap16 pointed under section 3(a) of the Inspector General 

17 Act of 1978;’’. 

18 (C) The first sentence of section 1003(a) of 

19 such title 39 is amended by striking ‘‘chapters 2 and 

20 12 of this title, section 8G of the Inspector General 

21 Act of 1978, or other provision of law,’’ and insert22 ing ‘‘chapter 2 or 12 of this title, subsection (b) or 

23 (c) of this section, or any other provision of law,’’. 

24 (D) Section 1003(b) of such title 39 is amended 

25 by striking ‘‘respective’’ and inserting ‘‘other’’. 
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1 (E) Section 1003(c) of such title 39 is amended 

2 by striking ‘‘included’’ and inserting ‘‘includes’’. 

3 (3) RELATING TO THE ENERGY POLICY ACT OF

4 1992.—Section 160(a) of the Energy Policy Act of 

5 1992 (42 U.S.C. 8262f(a)) is amended (in the mat6 ter before paragraph (1)) by striking all that follows 

7 ‘‘(5 U.S.C. App.)’’ and before ‘‘shall—’’. 

8 (h) EFFECTIVE DATE; TRANSITION PROVISIONS.—

9 (1) EFFECTIVE DATE.—Except as provided in 

10 paragraph (2) or subsection (c), this section and the 

11 amendments made by this section shall take effect 

12 on the date of the enactment of this Act. 

13 (2) TRANSITION PROVISIONS.—

14 (A) PRESIDENTIAL APPOINTMENT AU15 THORITY AVAILABLE IMMEDIATELY.—The au16 thority to appoint an Inspector General of the 

17 United States Postal Service in accordance with 

18 the amendments made by this section shall be 

19 available as of the effective date of this section. 

20 (B) CONTINUATION IN OFFICE.—Pending 

21 the appointment of an Inspector General of the 

22 United States Postal Service in accordance with 

23 the amendments made by this section, the indi24 vidual serving as the Inspector General of the 

25 United States Postal Service on the day before
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1 the effective date of this section may continue 

2 to serve—

3 (i) in accordance with applicable pro4 visions of the Inspector General Act of 

5 1978 and (except as provided in clause 

6 (ii)) of title 39, United States Code, as last 

7 in effect before the effective date of this 

8 Act; but 

9 (ii) subject to the provisions of such 

10 title 39 as amended by subsections (e) and 

11 (f) of this section (deeming any reference 

12 to the ‘‘Inspector General’’ in such provi13 sions, as so amended, to refer to the indi14 vidual continuing to serve under authority 

15 of this subparagraph) and subparagraph 

16 (C). 

17 (C) AUTHORIZATION OF APPROPRIA18 TIONS.—

19 (i) IN GENERAL.—Notwithstanding 

20 any other provision of this subsection, sec21 tion 8J(e) of the Inspector General Act of 

22 1978 (as amended by this section) shall be 

23 effective for purposes of fiscal years begin24 ning on or after October 1, 2004. 
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1 (ii) SAVINGS PROVISION.—For pur2 poses of the fiscal year ending on Sep3 tember 30, 2004, funding for the Office of 

4 Inspector General of the United States 

5 Postal Service shall be made available in 

6 the same manner as if this Act had never 

7 been enacted. 

8 (D) ELIGIBILITY OF PRIOR INSPECTOR

9 GENERAL.—Nothing in this Act shall prevent 

10 any individual who has served as Inspector 

11 General of the United States Postal Service at 

12 any time before the date of the enactment of 

13 this Act from being appointed to that position 

14 pursuant to the amendments made by this sec15 tion. 

16 TITLE VII—EVALUATIONS 

17 SEC. 701. UNIVERSAL POSTAL SERVICE STUDY. 

18 (a) REPORT BY THE POSTAL SERVICE.—The United 

19 States Postal Service shall, within 12 months after the 

20 date of the enactment of this Act, submit to the President, 

21 the Congress, and the Postal Regulatory Commission, a 

22 written report on universal postal service in the United 

23 States (hereinafter in this section referred to as ‘‘universal 

24 service’’). Such report shall include at least the following: 
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1 (1) A comprehensive review of the history and 

2 development of universal service, including how the 

3 scope and standards of universal service have 

4 evolved over time. 

5 (2) The scope and standards of universal serv6 ice provided under current law (including sections 

7 101 and 403 of title 39, United States Code) and 

8 current rules, regulations, policy statements, and 

9 practices of the Postal Service. 

10 (3) A description of any geographic areas, pop11 ulations, communities, organizations, or other 

12 groups or entities not currently covered by universal 

13 service or that are covered but that are receiving 

14 services deficient in scope or quality or both. 

15 (4) The scope and standards of universal serv16 ice likely to be required in the future in order to 

17 meet the needs and expectations of the American 

18 public, including all types of mail users, based on 

19 such assumptions or alternative sets of assumptions 

20 as the Postal Service considers plausible. 

21 (5) Such recommendations as the Postal Serv22 ice considers appropriate. 

23 (b) REPORT BY THE POSTAL REGULATORY COMMIS24 SION.—The Postal Regulatory Commission shall, within 

25 12 months after receiving the report of the Postal Service 
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1 under subsection (a), submit to the President and the 

2 Congress a written report evaluating the report of the 

3 Postal Service. The report of the Commission shall include 

4 at least the following: 

5 (1) Such comments and observations relating to 

6 the matters addressed in the Postal Service’s report 

7 as the Commission considers appropriate. 

8 (2) An estimate of the cost attributable to the 

9 obligation to provide universal service under prior 

10 and current law, respectively. 

11 (3) An estimate of the likely cost of fulfilling 

12 the obligation to provide universal service under—

13 (A) the assumptions or respective sets of 

14 assumptions of the Postal Service described in 

15 subsection (a)(4); and 

16 (B) such other assumptions or sets of as17 sumptions as the Commission considers plau18 sible. 

19 (4) Such additional topics and recommenda20 tions as the Commission considers appropriate. 

21 (c) CONSULTATION.—In preparing the reports re22 quired by this section, the Postal Service and the Postal 

23 Regulatory Commission—

24 (1) shall consult with each other, other Federal 

25 agencies, users of the mails, enterprises in the pri-
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1 vate sector engaged in the delivery of mail, and the 

2 general public; and 

3 (2) shall address in their respective reports any 

4 written comments received under this section. 

5 (d) CLARIFYING PROVISION.—Nothing in this section 

6 shall be considered to relate to any services that are not 

7 postal services (within the meaning of section 102 of title 

8 39, United States Code, as amended by section 101). 

9 SEC. 702. ASSESSMENTS OF RATEMAKING, CLASSIFICA10 TION, AND OTHER PROVISIONS. 

11 (a) IN GENERAL.—The Postal Regulatory Commis12 sion shall, at least every 5 years, submit a report to the 

13 President and the Congress concerning—

14 (1) the operation of the amendments made by 

15 the Postal Accountability and Enhancement Act; 

16 and 

17 (2) recommendations for any legislation or 

18 other measures necessary to improve the effective19 ness or efficiency of the postal laws of the United 

20 States. 

21 (b) POSTAL SERVICE VIEWS.—A report under this 

22 section shall be submitted only after reasonable oppor23 tunity has been afforded to the Postal Service to review 

24 such report and to submit written comments thereon. Any 

25 comments timely received from the Postal Service under
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1 the preceding sentence shall be attached to the report sub2 mitted under subsection (a). 

3 (c) SPECIFIC INFORMATION REQUIRED.—The Postal 

4 Regulatory Commission shall include, as part of at least 

5 its first report under subsection (a), the following: 

6 (1) COST-COVERAGE REQUIREMENT RELATING

7 TO COMPETITIVE PRODUCTS COLLECTIVELY.—With 

8 respect to section 3633 of title 39, United States 

9 Code (as amended by this Act)—

10 (A) a description of how such section has 

11 operated; and 

12 (B) recommendations as to whether or not 

13 such section should remain in effect and, if so, 

14 any suggestions as to how it might be improved. 

15 (2) COMPETITIVE PRODUCTS FUND.—With re16 spect to the Postal Service Competitive Products 

17 Fund (under section 2011 of title 39, United States 

18 Code, as amended by section 301), in consultation 

19 with the Secretary of the Treasury—

20 (A) a description of how such Fund has 

21 operated; 

22 (B) any suggestions as to how the oper23 ation of such Fund might be improved; and 

24 (C) a description and assessment of alter25 native accounting or financing mechanisms that 
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1 might be used to achieve the objectives of such 

2 Fund. 

3 (3) ASSUMED FEDERAL INCOME TAX ON COM4 PETITIVE PRODUCTS FUND.—With respect to section 

5 3634 of title 39, United States Code (as amended by 

6 this Act), in consultation with the Secretary of the 

7 Treasury—

8 (A) a description of how such section has 

9 operated; and 

10 (B) recommendations as to whether or not 

11 such section should remain in effect and, if so, 

12 any suggestions as to how it might be improved. 

13 SEC. 703. STUDY ON EQUAL APPLICATION OF LAWS TO 

14 COMPETITIVE PRODUCTS.

15 (a) IN GENERAL.—The Federal Trade Commission 

16 shall prepare and submit to the President, the Congress, 

17 and the Postal Regulatory Commission, within 1 year 

18 after the date of the enactment of this Act, a comprehen19 sive report identifying Federal and State laws that apply 

20 differently to the United States Postal Service with re21 spect to the competitive category of mail (within the mean22 ing of section 102 of title 39, United States Code, as 

23 amended by section 101) and private companies providing 

24 similar products. 
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1 (b) RECOMMENDATIONS; ADJUSTMENTS.—The Fed2 eral Trade Commission shall include such recommenda3 tions as it considers appropriate for bringing such legal 

4 differences to an end and, in the interim, to account under 

5 section 3633, for the net economic effects provided by 

6 those laws. 

7 (c) CONSULTATION.—In preparing its report, the 

8 Federal Trade Commission shall consult with the United 

9 States Postal Service, the Postal Regulatory Commission, 

10 other Federal agencies, mailers, private companies that 

11 provide delivery services, and the general public, and shall 

12 append to such report any written comments received 

13 under this subsection. 

14 (d) COMPETITIVE PRODUCT RATE REGULATION.—

15 The Postal Regulatory Commission shall take into account 

16 the recommendations of the Federal Trade Commission, 

17 and subsequent events that affect the continuing validity 

18 of the estimate of the net economic effect, in promulgating 

19 or revising the regulations required by section 3633 of title 

20 39, United States Code. 

21 SEC. 704. GREATER DIVERSITY IN POSTAL SERVICE EXECU22 TIVE AND ADMINISTRATIVE SCHEDULE MAN23 AGEMENT POSITIONS. 

24 (a) STUDY.—The Board of Governors shall study 

25 and, within 1 year after the date of the enactment of this 
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1 Act, submit to the President and Congress a report con2 cerning the extent to which women and minorities are rep3 resented in supervisory and management positions within 

4 the United States Postal Service. Any data included in the 

5 report shall be presented in the aggregate and by pay level. 

6 (b) PERFORMANCE EVALUATIONS.—The United 

7 States Postal Service shall, as soon as practicable, take 

8 such measures as may be necessary to ensure that, for 

9 purposes of conducting performance appraisals of super10 visory or managerial employees, appropriate consideration 

11 shall be given to meeting affirmative action goals, achiev12 ing equal employment opportunity requirements, and im13 plementation of plans designed to achieve greater diversity 

14 in the workforce. 

15 SEC. 705. PLAN FOR ASSISTING DISPLACED WORKERS. 

16 (a) PLAN.—The United States Postal Service shall, 

17 before the deadline specified in subsection (b), develop and 

18 be prepared to implement, whenever necessary, a com19 prehensive plan under which reemployment assistance 

20 shall be afforded to employees displaced as a result of the 

21 automation or privatization of any of its functions. 

22 (b) REPORT.—Not later than 1 year after the date 

23 of the enactment of this Act, the United States Postal 

24 Service shall submit to its Board of Governors and Con-
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1 gress a written report describing its plan under this sec2 tion. 

3 SEC. 706. CONTRACTS WITH WOMEN, MINORITIES, AND 

4 SMALL BUSINESSES. 

5 The Board of Governors shall study and, within 1 

6 year after the date of the enactment of this Act, submit 

7 to the President and the Congress a report concerning the 

8 number and value of contracts and subcontracts the Post9 al Service has entered into with women, minorities, and 

10 small businesses. 

11 SEC. 707. RATES FOR PERIODICALS. 

12 (a) IN GENERAL.—The United States Postal Service, 

13 acting jointly with the Postal Regulatory Commission and 

14 the General Accounting Office, shall study and submit to 

15 the President and Congress a report concerning—

16 (1) the quality, accuracy, and completeness of 

17 the information used by the Postal Service in deter18 mining the direct and indirect postal costs attrib19 utable to periodicals; and 

20 (2) any opportunities that might exist for im21 proving efficiencies in the collection, handling, trans22 portation, or delivery of periodicals by the Postal 

23 Service, including any pricing incentives for mailers 

24 that might be appropriate.
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1 (b) RECOMMENDATIONS.—The report shall include 

2 recommendations for any administrative action or legisla3 tion that might be appropriate. 

4 SEC. 708. ASSESSMENT OF CERTAIN RATE DEFICIENCIES. 

5 (a) IN GENERAL.—Within 12 months after the date 

6 of the enactment of this Act, the Office of Inspector Gen7 eral of the United States Postal Service shall study and 

8 submit to the President, the Congress, and the United 

9 States Postal Service, a report concerning the administra10 tion of section 3626(k) of title 39, United States Code. 

11 (b) SPECIFIC REQUIREMENTS.—The study and re12 port shall specifically address the adequacy and fairness 

13 of the process by which assessments under section 3626(k) 

14 of title 39, United States Code, are determined and ap15 pealable, including—

16 (1) whether the Postal Regulatory Commission 

17 or any other body outside the Postal Service should 

18 be assigned a role; and 

19 (2) whether a statute of limitations should be 

20 established for the commencement of proceedings by 

21 the Postal Service thereunder.

22 SEC. 709. POSTAL PROCESSING AND DISTRIBUTION NET23 WORK STUDY. 

24 The United States Postal Service shall, within 16 

25 months after the date of the enactment of this Act, submit 
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1 to the President, the Congress, and the Board of Gov2 ernors of the United States Postal Service a written report 

3 on the postal processing and distribution network. Such 

4 report shall include at least the following: 

5 (1) Recommendations to improve the efficiency 

6 and effectiveness of the processing and distribution 

7 network while preserving the timely delivery of post8 al services. 

9 (2) Identification of excess capacity (if any) 

10 within the processing and distribution network and 

11 opportunities for savings through realignment or 

12 consolidation of facilities. 

13 (3) Report of the Postal Service’s plans for 

14 dealing with the recommendations and findings iden15 tified in paragraphs (1) and (2). 

16 (4) Statutory or regulatory obstacles preventing 

17 the Postal Service from taking action to realign or 

18 consolidate facilities identified in paragraph (2). 

19 (5) Such additional topics and recommenda20 tions as the Postal Service considers appropriate. 

21 SEC. 710. DEFINITION. 

22 For purposes of this title, the term ‘‘Board of Gov23 ernors’’ has the meaning given such term by section 102 

24 of title 39, United States Code. 
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1 TITLE VIII—MISCELLANEOUS; 

2 TECHNICAL AND CON3 FORMING AMENDMENTS 

4 SEC. 801. EMPLOYMENT OF POSTAL POLICE OFFICERS. 

5 Section 404 of title 39, United States Code, as 

6 amended by sections 102 and 811(e), is further amended 

7 by adding at the end the following: 

8 ‘‘(f) The Postal Service may employ police officers for 

9 duty in connection with the protection of property owned 

10 or occupied by the Postal Service or under the charge and 

11 control of the Postal Service, and persons on the property, 

12 including duty in areas outside the property to the extent 

13 necessary to protect the property and persons on the prop14 erty. Such officers shall have, with respect to such prop15 erty, the powers available under section 1315 of title 40, 

16 and, as to such property, the Postal Service may take any 

17 action that the Secretary of Homeland Security may take 

18 under such section, attaching thereto penalties under the 

19 authority and within the limits provided in subsection 

20 (c)(2) of such section.’’. 
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1 SEC. 802. DATE OF POSTMARK TO BE TREATED AS DATE OF 

2 APPEAL IN CONNECTION WITH THE CLOSING 

3 OR CONSOLIDATION OF POST OFFICES. 

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

5 States Code, is amended by adding at the end the fol6 lowing: 

7 ‘‘(6) For purposes of paragraph (5), any appeal re8 ceived by the Commission shall—

9 ‘‘(A) if sent to the Commission through the 

10 mails, be considered to have been received on the 

11 date of the Postal Service postmark on the envelope 

12 or other cover in which such appeal is mailed; or 

13 ‘‘(B) if otherwise lawfully delivered to the Com14 mission, be considered to have been received on the 

15 date determined based on any appropriate docu16 mentation or other indicia (as determined under reg17 ulations of the Commission).’’. 

18 (b) EFFECTIVE DATE.—This section and the amend19 ments made by this section shall apply with respect to any 

20 determination to close or consolidate a post office which 

21 is first made available, in accordance with paragraph (3) 

22 of section 404(b) of title 39, United States Code, after 

23 the end of the 3-month period beginning on the date of 

24 the enactment of this Act. 
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1 SEC. 803. PROVISIONS RELATING TO BENEFITS UNDER 

2 CHAPTER 81 OF TITLE 5, UNITED STATES 

3 CODE, FOR OFFICERS AND EMPLOYEES OF 

4 THE FORMER POST OFFICE DEPARTMENT. 

5 (a) IN GENERAL.—Section 8 of the Postal Reorga6 nization Act (39 U.S.C. 1001 note) is amended by insert7 ing ‘‘(a)’’ after ‘‘8.’’ and by adding at the end the fol8 lowing: 

9 ‘‘(b) For purposes of chapter 81 of title 5, United 

10 States Code, the Postal Service shall, with respect to any 

11 individual receiving benefits under such chapter as an offi12 cer or employee of the former Post Office Department, 

13 have the same authorities and responsibilities as it has 

14 with respect to an officer or employee of the Postal Service 

15 receiving such benefits.’’. 

16 (b) EFFECTIVE DATE.—This section and the amend17 ments made by this section shall be effective as of the first 

18 day of the fiscal year in which this Act is enacted. 

19 SEC. 804. OBSOLETE PROVISIONS. 

20 (a) REPEAL.—

21 (1) IN GENERAL.—Chapter 52 of title 39, 

22 United States Code, is repealed. 

23 (2) CONFORMING AMENDMENTS.—(A) Section 

24 5005(a) of title 39, United States Code, is amend25 ed—
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1 (i) by striking paragraph (1), and by re2 designating paragraphs (2) through (4) as 

3 paragraphs (1) through (3), respectively; and 

4 (ii) in paragraph (3) (as so designated by 

5 clause (i)), by striking ‘‘(as defined in section 

6 5201(6) of this title)’’. 

7 (B) Section 5005(b) of such title 39 is amended 

8 by striking ‘‘(a)(4)’’ each place it appears and in9 serting ‘‘(a)(3)’’. 

10 (C) Section 5005(c) of such title 39 is amended 

11 by striking ‘‘by carrier or person under subsection 

12 (a)(1) of this section, by contract under subsection 

13 (a)(4) of this section, or’’ and inserting ‘‘by contract 

14 under subsection (a)(3) of this section or’’. 

15 (b) ELIMINATING RESTRICTION ON LENGTH OF CON16 TRACTS.—(1) Section 5005(b)(1) of title 39, United 

17 States Code, is amended by striking ‘‘(or where the Postal 

18 Service determines that special conditions or the use of 

19 special equipment warrants, not in excess of 6 years)’’ and 

20 inserting ‘‘(or such longer period of time as may be deter21 mined by the Postal Service to be advisable or appro22 priate)’’. 

23 (2) Section 5402(d) of such title 39 is amended by 

24 striking ‘‘for a period of not more than 4 years’’. 
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1 (3) Section 5605 of such title 39 is amended by strik2 ing ‘‘for periods of not in excess of 4 years’’. 

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

4 V of title 39, United States Code, is amended by repealing 

5 the item relating to chapter 52. 

6 SEC. 805. 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, ei15 ther 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 

19 foreign air transportation, including the rates therefor, ei20 ther through negotiations or competitive bidding, except 

21 that—

22 ‘‘(A) any such contract may be awarded only to 

23 (i) an air carrier holding a certificate required by 

24 section 41101 of title 49 or an exemption therefrom 

25 issued by the Secretary of Transportation, (ii) a for-
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1 eign air carrier holding a permit required by section 

2 41301 of title 49 or an exemption therefrom issued 

3 by the Secretary of Transportation, or (iii) a com4 bination of such air carriers or foreign air carriers 

5 (or both); 

6 ‘‘(B) mail transported under any such contract 

7 shall not be subject to any duty-to-carry requirement 

8 imposed by any provision of subtitle VII of title 49 

9 or by any certificate, permit, or corresponding ex10 emption authority issued by the Secretary of Trans11 portation under that subtitle; 

12 ‘‘(C) every contract that the Postal Service 

13 awards to a foreign air carrier under this paragraph 

14 shall be subject to the continuing requirement that 

15 air carriers shall be afforded the same opportunity 

16 to carry the mail of the country to and from which 

17 the mail is transported and the flag country of the 

18 foreign air carrier, if different, as the Postal Service 

19 has afforded the foreign air carrier; and 

20 ‘‘(D) the Postmaster General shall consult with 

21 the Secretary of Defense concerning actions that af22 fect the carriage of military mail transported in for23 eign air transportation. 
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1 ‘‘(3) Paragraph (2) shall not be interpreted as sus2 pending or otherwise diminishing the authority of the Sec3 retary of Transportation under section 41310 of title 49.’’. 

4 (2) DEFINITIONS.—Subsection (e) of section 

5 5402 of title 39, United States Code, is amended to 

6 read as follows: 

7 ‘‘(e) For purposes of this section, the terms ‘air car8 rier’, ‘air transportation’, ‘foreign air carrier’, ‘foreign air 

9 transportation’, ‘interstate air transportation’, and ‘mail’ 

10 shall have the meanings given such terms in section 40102 

11 of title 49.’’. 

12 (b) AMENDMENTS TO TITLE 49, UNITED STATES

13 CODE.—

14 (1) AUTHORITY OF POSTAL SERVICE TO PRO15 VIDE FOR INTERSTATE AIR TRANSPORTATION OF

16 MAIL.—Section 41901(a) of title 49, United States 

17 Code, is amended to read as follows: 

18 ‘‘(a) TITLE 39.—The United States Postal Service 

19 may provide for the transportation of mail by aircraft in 

20 air transportation under this chapter and under chapter 

21 54 of title 39.’’. 

22 (2) SCHEDULES FOR CERTAIN TRANSPOR23 TATION OF MAIL.—Section 41902(b)(1) of title 49, 

24 United States Code, is amended by inserting before 
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1 the semicolon at the end the following: ‘‘(other than 

2 foreign air transportation of mail)’’. 

3 (3) PRICES FOR FOREIGN TRANSPORTATION OF

4 MAIL.—Section 41907 of title 49, United States 

5 Code, is amended—

6 (A) by striking ‘‘(a) LIMITATIONS.—’’; and 

7 (B) by striking subsection (b). 

8 (4) CONFORMING AMENDMENTS.—Sections 

9 41107, 41901(b)(1), 41902(a), 41903(a), and 

10 41903(b) of title 49, United States Code, are 

11 amended by striking ‘‘in foreign air transportation 

12 or’’. 

13 SEC. 806. INVESTMENTS. 

14 Subsection (c) of section 2003 of title 39, United 

15 States Code, is amended—

16 (1) by striking ‘‘(c) If’’ and inserting ‘‘(c)(1) 

17 Except as provided in paragraph (2), if’’; and 

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

19 ‘‘(2)(A) Nothing in this section shall be considered 

20 to authorize any investment in any obligations or securi21 ties of a commercial entity. 

22 ‘‘(B) For purposes of this paragraph, the term ‘com23 mercial entity’ means any corporation, company, associa24 tion, partnership, joint stock company, firm, society, or
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1 other similar entity, as further defined under regulations 

2 prescribed by the Postal Regulatory Commission.’’. 

3 SEC. 807. REPEAL OF SECTION 5403. 

4 (a) IN GENERAL.—Section 5403 of title 39, United 

5 States Code, is repealed. 

6 (b) CLERICAL AMENDMENT.—The analysis for chap7 ter 54 of title 39, United States Code, is amended by re8 pealing the item relating to section 5403. 

9 SEC. 808. REDUCED RATES. 

10 Section 3626 of title 39, United States Code, is 

11 amended—

12 (1) in subsection (a)—

13 (A) by striking all before paragraph (4) 

14 and inserting the following: 

15 ‘‘(a)(1) Except as otherwise provided in this section, 

16 rates of postage for a class of mail or kind of mailer under 

17 former section 4358, 4452(b), 4452(c), 4554(b), or 

18 4554(c) of this title shall be established in accordance with 

19 section 3622. 

20 ‘‘(2) For the purpose of this subsection, the term 

21 ‘regular-rate category’ means any class of mail or kind of 

22 mailer, other than a class or kind referred to in section 

23 2401(c).’’; and 
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1 (B) by redesignating paragraphs (4) 

2 through (7) as paragraphs (3) through (6), re3 spectively; 

4 (2) in subsection (g), by adding at the end the 

5 following: 

6 ‘‘(3) For purposes of this section and former section 

7 4358(a) through (c) of this title, those copies of an issue 

8 of a publication entered within the county in which it is 

9 published, but distributed outside such county on postal 

10 carrier routes originating in the county of publication, 

11 shall be treated as if they were distributed within the 

12 county of publication. 

13 ‘‘(4)(A) In the case of an issue of a publication, any 

14 number of copies of which are mailed at the rates of post15 age for a class of mail or kind of mailer under former 

16 section 4358(a) through (c) of this title, any copies of such 

17 issue which are distributed outside the county of publica18 tion (excluding any copies subject to paragraph (3)) shall 

19 be subject to rates of postage provided for under this para20 graph. 

21 ‘‘(B) The rates of postage applicable to mail under 

22 this paragraph shall be established in accordance with sec23 tion 3622. 

24 ‘‘(C) This paragraph shall not apply with respect to 

25 an issue of a publication unless the total paid circulation 
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1 of such issue outside the county of publication (not count2 ing recipients of copies subject to paragraph (3)) is less 

3 than 5,000.’’; and 

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

5 ‘‘(n) In the administration of this section, matter that 

6 satisfies the circulation standards for requester publica7 tions shall not be excluded from being mailed at the rates 

8 for mail under former section 4358 solely because such 

9 matter is designed primarily for free circulation or for cir10 culation at nominal rates, or fails to meet the require11 ments of former section 4354(a)(5).’’. 

12 SEC. 809. HAZARDOUS MATTER. 

13 (a) NONMAILABILITY GENERALLY.—Section 3001 of 

14 title 39, United States Code, is amended—

15 (1) by redesignating subsection (n) as sub16 section (o); and 

17 (2) by inserting after subsection (m) the fol18 lowing: 

19 ‘‘(o)(1) Except as otherwise authorized by law or reg20 ulations of the Postal Service, hazardous material is non21 mailable. 

22 ‘‘(2) In this subsection, the term ‘hazardous material’ 

23 means a substance or material designated by the Secretary 

24 of Transportation under section 5103(a) of title 49.’’. 
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1 (b) MAILABILITY.—Chapter 30 of title 39, United 

2 States Code, is amended by adding at the end the fol3 lowing: 

4 ‘‘§ 3018. Hazardous material 

5 ‘‘(a) IN GENERAL.—The Postal Service shall pre6 scribe regulations for the safe transportation of hazardous 

7 material in the mail. 

8 ‘‘(b) PROHIBITIONS.—No person may—

9 ‘‘(1) mail or cause to be mailed hazardous ma10 terial that has been declared by statute or Postal 

11 Service regulation to be nonmailable; 

12 ‘‘(2) mail or cause to be mailed hazardous ma13 terial in violation of any statute or Postal Service 

14 regulation restricting the time, place, or manner in 

15 which hazardous material may be mailed; or 

16 ‘‘(3) manufacture, distribute, or sell any con17 tainer, packaging kit, or similar device that—

18 ‘‘(A) is represented, marked, certified, or 

19 sold by such person for use in the mailing of 

20 hazardous material; and 

21 ‘‘(B) fails to conform with any statute or 

22 Postal Service regulation setting forth stand23 ards for a container, packaging kit, or similar 

24 device used for the mailing of hazardous mate25 rial. 
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1 ‘‘(c) CIVIL PENALTY; CLEAN-UP COSTS AND DAM2 AGES.—

3 ‘‘(1) IN GENERAL.—A person who knowingly 

4 violates this section or a regulation prescribed under 

5 this section shall be liable for—

6 ‘‘(A) a civil penalty of at least $250, but 

7 not more than $100,000, for each violation; 

8 ‘‘(B) the costs of any clean-up associated 

9 with each violation; and 

10 ‘‘(C) damages. 

11 ‘‘(2) KNOWING ACTION.—A person acts know12 ingly for purposes of paragraph (1) when—

13 ‘‘(A) the person has actual knowledge of 

14 the facts giving rise to the violation; or 

15 ‘‘(B) a reasonable person acting in the cir16 cumstances and exercising reasonable care 

17 would have had that knowledge. 

18 ‘‘(3) SEPARATE VIOLATIONS.—

19 ‘‘(A) VIOLATIONS OVER TIME.—A separate 

20 violation under this subsection occurs for each 

21 day hazardous material, mailed or caused to be 

22 mailed in noncompliance with this section, is in 

23 the mail. 

24 ‘‘(B) SEPARATE ITEMS.—A separate viola25 tion under this subsection occurs for each item
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1 containing hazardous material that is mailed or 

2 caused to be mailed in noncompliance with this 

3 section. 

4 ‘‘(d) HEARINGS.—The Postal Service may determine 

5 that a person has violated this section or a regulation pre6 scribed under this section only after notice and an oppor7 tunity for a hearing. Proceedings under this section shall 

8 be conducted in accordance with section 3001(m). 

9 ‘‘(e) PENALTY CONSIDERATIONS.—In determining 

10 the amount of a civil penalty for a violation of this section, 

11 the Postal Service shall consider—

12 ‘‘(1) the nature, circumstances, extent, and 

13 gravity of the violation; 

14 ‘‘(2) with respect to the person who committed 

15 the violation, the degree of culpability, any history of 

16 prior violations, the ability to pay, and any effect on 

17 the ability to continue in business; 

18 ‘‘(3) the impact on Postal Service operations; 

19 and 

20 ‘‘(4) any other matters that justice requires. 

21 ‘‘(f) CIVIL ACTIONS TO COLLECT.—

22 ‘‘(1) IN GENERAL.—In accordance with section 

23 409(d), a civil action may be commenced in an ap24 propriate district court of the United States to col-
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1 lect a civil penalty, clean-up costs, and damages as2 sessed under subsection (c). 

3 ‘‘(2) COMPROMISE.—The Postal Service may 

4 compromise the amount of a civil penalty, clean-up 

5 costs, and damages assessed under subsection (c) be6 fore commencing a civil action with respect to such 

7 civil penalty, clean-up costs, and damages under 

8 paragraph (1). 

9 ‘‘(g) CIVIL JUDICIAL PENALTIES.—

10 ‘‘(1) IN GENERAL.—At the request of the Post11 al Service, the Attorney General may bring a civil 

12 action in an appropriate district court of the United 

13 States to enforce this section or a regulation pre14 scribed under this section. 

15 ‘‘(2) RELIEF.—The court in a civil action under 

16 paragraph (1) may award appropriate relief, includ17 ing a temporary or permanent injunction, civil pen18 alties as determined in accordance with this section, 

19 or punitive damages. 

20 ‘‘(3) CONSTRUCTION.—A civil action under this 

21 subsection shall be in lieu of civil penalties for the 

22 same violation under subsection (c)(1)(A). 

23 ‘‘(h) DEPOSIT OF AMOUNTS COLLECTED.—

24 ‘‘(1) POSTAL SERVICE FUND.—Except as pro25 vided under paragraph (2), amounts collected under 
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1 subsection (c)(1)(B) and (C) shall be deposited into 

2 the Postal Service Fund under section 2003. 

3 ‘‘(2) TREASURY.—Amounts collected under sub4 section (c)(1)(A) and any punitive damages collected 

5 under subsection (c)(1)(C) shall be deposited into 

6 the Treasury of the United States.’’. 

7 (c) CONFORMING AMENDMENTS.—(1) Section 

8 2003(b) of title 39, United States Code, is amended—

9 (A) in paragraph (7), by striking ‘‘and’’ after 

10 the semicolon; 

11 (B) in paragraph (8), by striking ‘‘purposes.’’ 

12 and inserting ‘‘purposes; and’’; and 

13 (C) by adding at the end the following: 

14 ‘‘(9) any amounts collected under section 

15 3018.’’. 

16 (2) The analysis for chapter 30 of title 39, United 

17 States Code, is amended by adding at the end the fol18 lowing:

‘‘3018. Hazardous material.’’.

19 SEC. 810. PROVISIONS RELATING TO COOPERATIVE MAIL20 INGS. 

21 (a) DETERMINATION.—The Postal Regulatory Com22 mission shall examine section E670.5.3 of the Domestic 

23 Mail Manual to determine whether it contains adequate 

24 safeguards to protect against (1) abuses of rates for non25 profit mail and (2) deception of consumers. 
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1 (b) REGULATIONS.—If the Postal Regulatory Com2 mission determines that section E670.5.3 of the Domestic 

3 Mail Manual does not contain adequate safeguards as de4 scribed in the preceding subsection, the Commission shall 

5 promulgate such regulations as may be necessary to en6 sure such safeguards. 

7 (c) TIMING.—The Postal Regulatory Commission 

8 shall complete the examination required by subsection (a) 

9 and the promulgation of any necessary regulations re10 quired by subsection (b) within one year after the date 

11 of the enactment of this section.

12 SEC. 811. TECHNICAL AND CONFORMING AMENDMENTS. 

13 (a) REIMBURSEMENT.—Section 3681 of title 39, 

14 United States Code, is amended by striking ‘‘section 

15 3628’’ and inserting ‘‘sections 3662 through 3664’’. 

16 (b) SIZE AND WEIGHT LIMITS.—Section 3682 of title 

17 39, United States Code, is amended to read as follows: 

18 ‘‘§ 3682. Size and weight limits 

19 ‘‘The Postal Service may establish size and weight 

20 limitations for mail matter in the market-dominant cat21 egory of mail consistent with regulations the Postal Regu22 latory Commission may prescribe under section 3622. The 

23 Postal Service may establish size and weight limitations 

24 for mail matter in the competitive category of mail con25 sistent with its authority under section 3632.’’. 
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1 (c) REVENUE FOREGONE, ETC.—Title 39, United 

2 States Code, is amended—

3 (1) in section 503 (as so redesignated by sec4 tion 501), by striking ‘‘this chapter.’’ and inserting 

5 ‘‘this title.’’; and 

6 (2) in section 2401(d), by inserting ‘‘(as last in 

7 effect before enactment of the Postal Accountability 

8 and Enhancement Act)’’ after ‘‘3626(a)’’ and after 

9 ‘‘3626(a)(3)(B)(ii)’’. 

10 (d) APPROPRIATIONS AND REPORTING REQUIRE11 MENTS.—

12 (1) APPROPRIATIONS.—Subsection (e) of sec13 tion 2401 of title 39, United States Code, is amend14 ed—

15 (A) by striking ‘‘Committee on Post Office 

16 and Civil Service’’ each place it appears and in17 serting ‘‘Committee on Government Reform’’; 

18 and 

19 (B) by striking ‘‘Not later than March 15 

20 of each year,’’ and inserting ‘‘Each year,’’. 

21 (2) REPORTING REQUIREMENTS.—Sections 

22 2803(a) and 2804(a) of title 39, United States 

23 Code, are amended by striking ‘‘2401(g)’’ and in24 serting ‘‘2401(e)’’.
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1 (e) AUTHORITY TO FIX RATES AND CLASSES GEN2 ERALLY; REQUIREMENT RELATING TO LETTERS SEALED

3 AGAINST INSPECTION.—Section 404 of title 39, United 

4 States Code (as amended by section 102, but before the 

5 amendment made by section 801) is further amended by 

6 redesignating subsections (b) and (c) as subsections (d) 

7 and (e), respectively, and by inserting after subsection (a) 

8 the following: 

9 ‘‘(b) Except as otherwise provided, the Governors are 

10 authorized to establish reasonable and equitable classes of 

11 mail and reasonable and equitable rates of postage and 

12 fees for postal services in accordance with the provisions 

13 of chapter 36. Postal rates and fees shall be reasonable 

14 and equitable and sufficient to enable the Postal Service, 

15 under best practices of honest, efficient, and economical 

16 management, to maintain and continue the development 

17 of postal services of the kind and quality adapted to the 

18 needs of the United States. 

19 ‘‘(c) The Postal Service shall maintain one or more 

20 classes of mail for the transmission of letters sealed 

21 against inspection. The rate for each such class shall be 

22 uniform throughout the United States, its territories, and 

23 possessions. One such class shall provide for the most ex24 peditious handling and transportation afforded mail mat25 ter by the Postal Service. No letter of such a class of do-
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1 mestic origin shall be opened except under authority of 

2 a search warrant authorized by law, or by an officer or 

3 employee of the Postal Service for the sole purpose of de4 termining an address at which the letter can be delivered, 

5 or pursuant to the authorization of the addressee.’’. 

6 (f) LIMITATIONS.—Section 3684 of title 39, United 

7 States Code, is amended by striking all that follows ‘‘any 

8 provision’’ and inserting ‘‘of this title.’’. 

9 (g) MISCELLANEOUS.—Title 39, United States Code, 

10 is amended—

11 (1) in section 1005(d)(2)—

12 (A) by striking ‘‘subsection (g) of section 

13 5532,’’; and 

14 (B) by striking ‘‘8344,’’ and inserting 

15 ‘‘8344’’; 

16 (2) in the analysis for part III, by striking the 

17 item relating to chapter 28 and inserting the fol18 lowing:

‘‘28. Strategic Planning and Performance Management .......................... 2801’’;

19 (3) in section 3005(a)—

20 (A) in the matter before paragraph (1), by 

21 striking all that follows ‘‘nonmailable’’ and pre22 cedes ‘‘(h),’’ and inserting ‘‘under section 

23 3001(d),’’; and 

24 (B) in the sentence following paragraph 

25 (3), by striking all that follows ‘‘nonmailable’’ 
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1 and precedes ‘‘(h),’’ and inserting ‘‘under such 

2 section 3001(d),’’; 

3 (4) in section 3210(a)(6)(C), by striking the 

4 matter after ‘‘if such mass mailing’’ and before 

5 ‘‘than 60 days’’ and inserting ‘‘is postmarked 

6 fewer’’; and 

7 (5) by striking the heading for section 3627 

8 and inserting the following: 

9 ‘‘§ 3627. Adjusting free rates’’.

10 TITLE IX—POSTAL PENSION 

11 FUNDING REFORM AMEND12 MENTS 

13 SEC. 901. CIVIL SERVICE RETIREMENT SYSTEM. 

14 (a) TERMINATION OF OBLIGATION TO PAY GOVERN15 MENT CONTRIBUTIONS.—Section 8334(a)(1)(B)(ii) of 

16 title 5, United States Code, is amended by striking all that 

17 follows ‘‘be equal to’’ and inserting ‘‘zero’’. 

18 (b) DETERMINATION AND DISPOSITION OF POSTAL

19 SURPLUS OR SUPPLEMENTAL LIABILITY.—Section 

20 8348(h) of title 5, United States Code, is amended to read 

21 as follows: 

22 ‘‘(h)(1) For purposes of this subsection, the ‘Postal 

23 surplus or supplemental liability’ means the estimated dif24 ference, as determined by the Office, between—
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1 ‘‘(A) the actuarial present value of all future 

2 benefits which are payable from the Fund under this 

3 subchapter to current or former employees of the 

4 United States Postal Service, or their survivors, and 

5 attributable to civilian employment with the Postal 

6 Service, and 

7 ‘‘(B) the sum of—

8 ‘‘(i) the actuarial present value of deduc9 tions to be withheld from the future basic pay 

10 of employees of the Postal Service currently 

11 subject to this subchapter pursuant to section 

12 8334; 

13 ‘‘(ii) that portion of the Fund balance, as 

14 of the date the Postal surplus or supplemental 

15 liability is determined, attributable to payments 

16 to the Fund by the Postal Service and its em17 ployees, plus the earnings on such amounts 

18 while in the Fund; and 

19 ‘‘(iii) any other appropriate amount, as de20 termined by the Office in accordance with gen21 erally accepted actuarial practices and prin22 ciples. 

23 ‘‘(2)(A)(i) Not later than June 15, 2006, the Office 

24 shall determine the Postal surplus or supplemental liabil25 ity as of September 30, 2005. 
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1 ‘‘(ii) If a supplemental liability is determined under 

2 this subparagraph for fiscal year 2005, the Office shall 

3 establish an amortization schedule, including a series of 

4 equal annual installments commencing September 30, 

5 2006, which provides for the liquidation of such liability 

6 by September 30, 2043. 

7 ‘‘(iii) If a surplus is determined under this subpara8 graph for fiscal year 2005, the amount of the surplus shall 

9 be transferred to the Postal Service Retiree Health Bene10 fits Fund by June 30, 2006. 

11 ‘‘(B)(i) For each of fiscal years 2006 through 2038, 

12 the Office shall determine the Postal surplus or supple13 mental liability as of the close of such fiscal year, with 

14 each such determination to be made by June 15th of the 

15 following fiscal year. 

16 ‘‘(ii) If a supplemental liability is determined under 

17 this subparagraph for a fiscal year, the Office shall estab18 lish an amortization schedule, including a series of equal 

19 annual installments commencing on September 30 of the 

20 following fiscal year, which provides for the liquidation of 

21 such liability by September 30, 2043. 

22 ‘‘(iii)(I) If a surplus of $500,000,000 or more is de23 termined under this subparagraph for a fiscal year, the 

24 amount of the surplus shall be transferred to the Postal 
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1 Service Retiree Health Benefits Fund by June 30th of the 

2 following fiscal year. 

3 ‘‘(II) If a surplus of less than $500,000,000 is deter4 mined under this subparagraph for a fiscal year, the sur5 plus shall remain in the Fund, subject to transfer in a 

6 subsequent fiscal year under subclause (I) or subpara7 graph (C)(iii). 

8 ‘‘(C)(i) Not later than June 15, 2040, the Office shall 

9 determine the Postal surplus or supplemental liability as 

10 of September 30, 2039. 

11 ‘‘(ii) If a supplemental liability is determined under 

12 this subparagraph for fiscal year 2039, the Office shall 

13 establish an amortization schedule, including a series of 

14 equal annual installments commencing September 30, 

15 2040, which provides for the liquidation of such liability 

16 by September 30, 2043. 

17 ‘‘(iii) If a surplus is determined under this subpara18 graph for fiscal year 2039, the amount of the surplus—

19 ‘‘(I) shall be applied first toward reducing the 

20 amount of any supplemental liability described in 

21 section 8423(b)(1)(B); and 

22 ‘‘(II) to the extent that any portion of such sur23 plus remains after the application of subclause (I), 

24 shall, not later than June 30, 2040, be transferred 

25 to the Postal Service Retiree Health Benefits Fund. 
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1 ‘‘(D) An amortization schedule under this para2 graph—

3 ‘‘(i) shall be established in accordance with gen4 erally accepted actuarial practices and principles, 

5 with interest computed at the rate used in the most 

6 recent valuation of the Civil Service Retirement Sys7 tem; 

8 ‘‘(ii) shall supersede any amortization schedule 

9 previously established under this paragraph; and 

10 ‘‘(iii) shall not be taken into account, for pur11 poses of any determination of Postal surplus or sup12 plemental liability, except to the extent of any 

13 amounts under such schedule actually paid. 

14 ‘‘(E) The Postal Service shall pay to the Office the 

15 amounts due under any amortization schedule established 

16 under this paragraph that has not been superseded. 

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 on the amount of 

20 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 

23 this subsection. 

24 ‘‘(4) As used in this subsection, ‘Postal Service Re25 tiree Health Benefits Fund’ refers to the Postal Service 
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1 Retiree Health Benefits Fund, as established by section 

2 8909a.’’. 

3 (c) PROVISIONS RELATING TO AMOUNTS FOR MILI4 TARY SERVICE.—In the application of paragraph (2) of 

5 section 8348(g) of title 5, United States Code, for fiscal 

6 year 2006, the Office of Personnel Management shall in7 clude, in addition to the amount otherwise computed 

8 under that paragraph, the amounts that would have been 

9 included for fiscal years 2003 through 2005 with respect 

10 to credit for military service of former employees of the 

11 United States Postal Service if Public Law 108-18 had 

12 not been enacted (including earnings thereon) and the 

13 Secretary of the Treasury shall make the required transfer 

14 to the Civil Service Retirement and Disability Fund based 

15 on that amount. 

16 (d) REVIEW.—

17 (1) IN GENERAL.—Notwithstanding any other 

18 provision of this section, any determination or rede19 termination made by the Office of Personnel Man20 agement under this section shall, upon request of 

21 the United States Postal Service, be subject to re22 view by the Postal Regulatory Commission. The 

23 Commission shall submit a report containing the re24 sults of any such review to the Postal Service, the 

25 Office of Personnel Management, and the Congress. 
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1 (2) RESPONSE.—Upon receiving the report of 

2 the Postal Regulatory Commission, the Office of 

3 Personnel Management shall reconsider its deter4 mination or redetermination in light of such report, 

5 and shall make any appropriate adjustments. The 

6 Office shall submit a report containing the results of 

7 its reconsideration to the Commission, the Postal 

8 Service, and the Congress. 

9 SEC. 902. HEALTH INSURANCE. 

10 (a) IN GENERAL.—Chapter 89 of title 5, United 

11 States Code, is amended—

12 (1) in section 8906(g)(2)(A), by striking ‘‘by 

13 the United States Postal Service.’’ and inserting 

14 ‘‘first from the Postal Service Retiree Health Bene15 fits Fund up to the amount contained therein, with 

16 any remaining amount paid by the United States 

17 Postal Service.’’; 

18 (2) by inserting after section 8909 the fol19 lowing: 

20 ‘‘§ 8909a. Postal Service Retiree Health Benefits Fund 

21 ‘‘(a) There is in the Treasury of the United States 

22 a Postal Service Retiree Health Benefits Fund (herein23 after in this section referred to as the ‘Fund’) which is 

24 administered by the Office of Personnel Management. Any 

25 amounts transferred to the Fund under section 
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1 8348(h)(2) shall yield interest at a rate equal to the 

2 weighted average yield of all the investments in the Civil 

3 Service Retirement and Disability Fund as of the date of 

4 transfer. All other investments of amounts in the Fund 

5 shall be made in accordance with subsections (c)–(e) of 

6 section 8348. 

7 ‘‘(b) The Fund is available without fiscal year limita8 tion for payments required by section 8906(g)(2). 

9 ‘‘(c)(1) Not later than June 30, 2006, and by June 

10 30 of each succeeding year, the Office of Personnel Man11 agement shall compute the net present value of the excess 

12 of future payments required by section 8906(g)(2)(A) for 

13 current and future United States Postal Service annu14 itants over the value of the assets of the Fund as of the 

15 end of the fiscal year ending on September 30 of that year. 

16 The actuarial costing method to be used by the Office and 

17 all actuarial assumptions shall be established by the Office 

18 after consultation with the United States Postal Service 

19 and must be in accordance with generally accepted actu20 arial practices and principles. 

21 ‘‘(2) Not later than September 30, 2006, and by Sep22 tember 30 of each succeeding year, the Office shall com23 pute and the United States Postal Service shall pay into 

24 such Fund—
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1 ‘‘(A) the portion of the net present value de2 scribed in paragraph (1) attributable to the current 

3 year’s service of Postal Service employees; and 

4 ‘‘(B) interest on the net present value described 

5 in paragraph (1) for that fiscal year, at the interest 

6 rate used in computing that net present value. 

7 ‘‘(3)(A) Any computation or other determination of 

8 the Office under this subsection shall, upon request of the 

9 Postal Service, be subject to review by the Postal Regu10 latory Commission. The Commission shall submit a report 

11 containing the results of any such review to the Postal 

12 Service, the Office of Personnel Management, and the 

13 Congress. 

14 ‘‘(B) Upon receiving the report of the Postal Regu15 latory Commission, the Office of Personnel Management 

16 shall reconsider its computation or other determination in 

17 light of such report, and shall make any appropriate ad18 justments. The Office shall submit a report containing the 

19 results of its reconsideration to the Commission, the Post20 al Service, and the Congress. 

21 ‘‘(4) The Office shall promulgate, after consultation 

22 with the United States Postal Service, any regulations it 

23 deems necessary under this subsection.’’; and 

24 (3) in the analysis by inserting after the item 

25 relating to section 8909 the following:

‘‘8909a. Postal Service Retiree Health Benefits Fund.’’.
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1 (b) REVIEW.—

2 (1) IN GENERAL.—Any regulation established 

3 under section 8909a(c)(4) of title 5, United States 

4 Code (as amended by subsection (a)) shall, upon re5 quest of the Postal Service, be subject to review by 

6 the Postal Regulatory Commission. The Commission 

7 shall submit a report containing the results of any 

8 such review to the Postal Service, the Office of Per9 sonnel Management, and the Congress. 

10 (2) RESPONSE.—Upon receiving the report of 

11 the Postal Regulatory Commission, the Office of 

12 Personnel Management shall reconsider its regula13 tion in light of such report, and shall take such ac14 tion as it considers appropriate. The Office shall 

15 submit a report containing the results of its recon16 sideration to the Commission, the Postal Service, 

17 and the Congress. 

18 SEC. 903. REPEALER. 

19 Section 3 of Public Law 108–18 is repealed. 

20 SEC. 904. ENSURING APPROPRIATE USE OF ESCROW AND 

21 MILITARY SAVINGS. 

22 (a) DEFINITION.—For purposes of this section, the 

23 term ‘‘total savings’’ means, for any fiscal year, the 

24 amount equal to—
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1 (1) the amount of contributions that the Postal 

2 Service would otherwise have been required to make 

3 to the Civil Service Retirement and Disability Fund 

4 under subchapter III of chapter 83 of title 5, United 

5 States Code, for such fiscal year if Public Law 108-

6 18 and this Act had not been enacted, minus 

7 (2) the amount of amortization payments (if 

8 any) required under section 8348(h)(2) of title 5, 

9 United States Code, for such fiscal year. 

10 (b) CALCULATIONS.—The following calculations shall 

11 be made for each of fiscal years 2006 through 2015: 

12 (1) Not later than January 31 of the fiscal year 

13 following the fiscal year involved, the Office of Per14 sonnel Management (in consultation with the Postal 

15 Service) shall determine the total savings for the fis16 cal year. 

17 (2) On the date of making its determination 

18 under paragraph (1), the Office shall also determine 

19 (in consultation with the Postal Service) the amount 

20 by which—

21 (A) the amount the Postal Service paid for 

22 that fiscal year into the Postal Service Retiree 

23 Health Benefits Fund in accordance with 

24 8909a(c)(2) of title 5, United States Code, ex25 ceeds (if at all) 
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1 (B) the amount of payments made by the 

2 Postal Service for that fiscal year from such 

3 Fund in order to satisfy the requirements of 

4 section 8906(g)(2) of such title 5. 

5 (c) REQUIREMENTS.—

6 (1) IF THRESHOLD IS MET.—If the amount cal7 culated under subsection (b)(2) for a fiscal year is 

8 greater than or equal to two-thirds of the total sav9 ings in such fiscal year, no further action under this 

10 section is necessary with respect to such fiscal year. 

11 (2) IF THRESHOLD IS NOT MET.—

12 (A) IN GENERAL.—If the amount cal13 culated under subsection (b)(2) for a fiscal year 

14 is less than two-thirds of the total savings in 

15 such fiscal year, the Postal Service shall pay 

16 into the Postal Service Retiree Health Benefits 

17 Fund, by June 30 of the following fiscal year, 

18 an amount equal to the difference. 

19 (B) ALLOWABLE ALTERNATIVE.—

20 (i) IN GENERAL.—Notwithstanding 

21 subparagraph (A), and subject to clause 

22 (ii), the Postal Service may instead use the 

23 amount that it would otherwise be required 

24 to pay into the Postal Service Retiree 
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1 Health Benefits Fund for a year (or any 

2 portion thereof) to reduce the postal debt. 

3 (ii) LIMITATION.—Amounts used to 

4 reduce the postal debt under this subpara5 graph may not exceed a total of 

6 $3,000,000,000. 

7 (3) AGGREGATION ALLOWED.—Notwithstanding 

8 paragraph (2), if the amount calculated under sub9 section (b)(2) for a fiscal year is less than two-thirds 

10 of the total savings in such fiscal year, but the sum 

11 of the amounts calculated under subsection (b)(2) 

12 for all fiscal years from 2006 to the fiscal year in13 volved is greater than or equal to two-thirds of the 

14 sum of the total savings for such years, no further 

15 action under this section is necessary with respect to 

16 such fiscal year. 

17 (d) REPORTING REQUIREMENT.—The Office of Per18 sonnel Management shall submit a report containing the 

19 results of its calculations under subsection (b) to the Post20 al Service, the Postal Regulatory Commission, and the 

21 Congress. 

22 (e) WAIVER AUTHORITY.—The requirements of sub23 section (c)(2)(A) may, upon application of the Postal Serv24 ice, be waived by the Postal Regulatory Commission, to 

25 the extent that the Commission determines that such 
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1 waiver is reasonable and equitable and necessary to enable 

2 the Postal Service, under best practices of honest, effi3 cient, and economical management, to maintain and con4 tinue the development of postal services of the kind and 

5 quality adapted to the needs of the United States. 

6 SEC. 905. EFFECTIVE DATES. 

7 (a) IN GENERAL.—Except as otherwise provided, this 

8 title shall take effect on October 1, 2005. 

9 (b) GOVERNMENT CONTRIBUTIONS.—Section 

10 901(a)(1) shall take effect on the first day of the first 

11 pay period beginning on or after October 1, 2005.

Æ