II 

Calendar No. 164 

109TH CONGRESS 

1ST SESSION S. 662 

To reform the postal laws of the United States. 

IN THE SENATE OF THE UNITED STATES 

MARCH 17, 2005 

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

DORGAN, Mr. KENNEDY, Mrs. MURRAY, Mr. LEAHY, Mr. STEVENS, Mr. 

BINGAMAN, Mr. COLEMAN, Mr. ALLEN, Mr. LEVIN, Mrs. LINCOLN, Mr. 

LIEBERMAN, Mr. AKAKA, Mr. LAUTENBERG, Mr. WARNER, Mr. BURNS, 

Mr. PRYOR, and Mr. NELSON of Nebraska) introduced the following bill; 

which was read twice and referred to the Committee on Homeland Security and Governmental Affairs 

JULY 14, 2005 

Reported by Ms. COLLINS, with an amendment 

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

A BILL 

To reform the postal laws of the United States. 

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

3 SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 

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

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

2 this Act is as follows: 

Sec. 1. Short title; table of contents. 

TITLE I—DEFINITIONS; POSTAL SERVICES 

Sec. 101. Definitions. 

Sec. 102. Postal services. 

TITLE II—MODERN RATE REGULATION 

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

Sec. 202. Provisions relating to competitive products. 

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

Sec. 204. Reporting requirements and related provisions. 

Sec. 205. Complaints; appellate review and enforcement. 

Sec. 206. Clerical amendment. 

TITLE III—MODERN SERVICE STANDARDS 

Sec. 301. Establishment of modern service standards. 

Sec. 302. Postal service plan. 

TITLE IV—PROVISIONS RELATING TO FAIR COMPETITION 

Sec. 401. Postal Service Competitive Products Fund. 

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

Sec. 403. Unfair competition prohibited. 

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

Sec. 405. International postal arrangements. 

TITLE V—GENERAL PROVISIONS 

Sec. 501. Qualification and term requirements for Governors. 

Sec. 502. Obligations. 

Sec. 503. Private carriage of letters. 

Sec. 504. Rulemaking authority. 

Sec. 505. Noninterference with collective bargaining agreements. 

Sec. 506. Bonus authority. 

TITLE VI—ENHANCED REGULATORY COMMISSION 

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

Postal Regulatory Commission. 

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

Sec. 603. Appropriations for the Postal Regulatory Commission. 

Sec. 604. Redesignation of the Postal Rate Commission. 

Sec. 605. Financial transparency. 

TITLE VII—EVALUATIONS 

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

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

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

Sec. 704. Report on postal workplace safety and workplace-related injuries. 

Sec. 705. Study on recycled paper. 
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TITLE VIII—POSTAL SERVICE RETIREMENT AND HEALTH 

BENEFITS FUNDING 

Sec. 801. Short title. 

Sec. 802. Civil Service Retirement System. 

Sec. 803. Health insurance. 

Sec. 804. Repeal of disposition of savings provision. 

Sec. 805. Effective dates. 

TITLE IX—COMPENSATION FOR WORK INJURIES 

Sec. 901. Temporary disability; continuation of pay. 

Sec. 902. Disability retirement for postal employees. 

TITLE X—MISCELLANEOUS 

Sec. 1001. Employment of postal police officers. 

Sec. 1002. Expanded contracting authority. 

Sec. 1003. Report on the United States Postal Inspection Service and the Office of the Inspector General of the United States Postal Service. 

Sec. 1004. Sense of Congress regarding Postal Service purchasing reform. 

1 TITLE I—DEFINITIONS; POSTAL 

2 SERVICES 

3 SEC. 101. DEFINITIONS. 

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

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

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

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

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

11 up to 70 pounds, including physical acceptance, col12 lection, sorting, transportation, or other functions 

13 ancillary thereto; 

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

15 distinct cost or market characteristic for which a 

16 rate or rates are applied; 
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1 ‘‘(7) ‘rates’, as used with respect to products, 

2 includes fees for postal services; 

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

4 the market-dominant category of mail’ means a 

5 product subject to subchapter I of chapter 36; and 

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

7 competitive category of mail’ means a product sub8 ject to subchapter II of chapter 36; and 

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

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

11 SEC. 102. POSTAL SERVICES. 

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

13 States Code, is amended— 

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

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

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

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

18 ‘‘(c) Except as provided in section 411, nothing in 

19 this title shall be considered to permit or require that the 

20 Postal Service provide any special nonpostal or similar 

21 services.’’. 

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

23 1402(b)(1)(B)(ii) of the Victims of Crime Act of 1984 (98 

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

25 striking ‘‘404(a)(8)’’ and inserting ‘‘404(a)(7)’’. 
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1 (2) Section 2003(b)(1) of title 39, United States 

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

3 TITLE II—MODERN RATE 

4 REGULATION 

5 SEC. 201. PROVISIONS RELATING TO MARKET-DOMINANT 

6 PRODUCTS. 

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

8 States Code, is amended by striking sections 3621 and 

9 3622 and inserting the following: 

10 ‘‘§ 3621. Applicability; definitions 

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

12 with respect to— 

13 ‘‘(1) first-class mail letters and sealed parcels; 

14 ‘‘(2) first-class mail cards; 

15 ‘‘(3) periodicals; 

16 ‘‘(4) standard mail; 

17 ‘‘(5) single-piece parcel post; 

18 ‘‘(6) media mail; 

19 ‘‘(7) bound printed matter; 

20 ‘‘(8) library mail; 

21 ‘‘(9) special services; and 

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

23 subject to any changes the Postal Regulatory Commission 

24 may make under section 3642. 
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1 ‘‘(b) RULE OF CONSTRUCTION.—Mail matter re2 ferred to in subsection (a) shall, for purposes of this sub3 chapter, be considered to have the meaning given to such 

4 mail matter under the mail classification schedule. 

5 ‘‘§ 3622. Modern rate regulation 

6 ‘‘(a) AUTHORITY GENERALLY.—The Postal Regu7 latory Commission shall, within 12 months after the date 

8 of enactment of this section, by regulation establish (and 

9 may from time to time thereafter by regulation revise) a 

10 modern system for regulating rates and classes for mar11 ket-dominant products. 

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

13 achieve the following objectives: 

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

15 increase the transparency of the ratemaking process 

16 while affording reasonable opportunities for inter17 ested parties to participate in that process. 

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

19 rates. 

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

21 and increase efficiency. 

22 ‘‘(4) To enhance mail security and deter ter23 rorism by promoting secure, sender-identified mail. 

24 ‘‘(5) To allow the Postal Service pricing flexi25 bility, including the ability to use pricing to promote 
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1 intelligent mail and encourage increased mail volume 

2 during nonpeak periods. 

3 ‘‘(6) To assure adequate revenues, including re4 tained earnings, to maintain financial stability and 

5 meet the service standards established under section 

6 3691. 

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

8 the Postal Service equitably between market-domi9 nant and competitive products. 

10 ‘‘(c) FACTORS.—In establishing or revising such sys11 tem, the Postal Regulatory Commission shall take into ac12 count— 

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

14 fair and equitable schedule for rates and classifica15 tion system; 

16 ‘‘(2) the value of the mail service actually pro17 vided each class or type of mail service to both the 

18 sender and the recipient, including but not limited to 

19 the collection, mode of transportation, and priority 

20 of delivery; 

21 ‘‘(3) the requirement that each class of mail or 

22 type of mail service bear the direct and indirect 

23 postal costs attributable to each class or type of mail 

24 service plus that portion of all other costs of the 
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1 Postal Service reasonably assignable to such class or 

2 type; 

3 ‘‘(4) the effect of rate increases upon the gen4 eral public, business mail users, and enterprises in 

5 the private sector of the economy engaged in the de6 livery of mail matter other than letters; 

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

8 and receiving letters and other mail matter at rea9 sonable costs; 

10 ‘‘(6) the degree of preparation of mail for deliv11 ery into the postal system performed by the mailer 

12 and its effect upon reducing costs to the Postal 

13 Service; 

14 ‘‘(7) simplicity of structure for the entire sched15 ule and simple, identifiable relationships between the 

16 rates or fees charged the various classes of mail for 

17 postal services; 

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

19 kinds of mail matter entered into the postal system 

20 and the desirability and justification for special clas21 sifications and services of mail; 

22 ‘‘(9) the importance of providing classifications 

23 with extremely high degrees of reliability and speed 

24 of delivery and of providing those that do not re-
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1 quire high degrees of reliability and speed of deliv2 ery; 

3 ‘‘(10) the desirability of special classifications 

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

5 Postal Service; 

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

7 informational value to the recipient of mail matter; 

8 ‘‘(12) the need for the Postal Service to in9 crease its efficiency and reduce its costs, including 

10 infrastructure costs, to help maintain high quality, 

11 affordable, universal postal service; and 

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

13 other factors as the Commission determines appro14 priate. 

15 ‘‘(d) REQUIREMENTS.— 

16 ‘‘(1) IN GENERAL.—The system for regulating 

17 rates and classes for market-dominant products 

18 shall— 

19 ‘‘(A) require the Postal Regulatory Com20 mission to set annual limitations on the per21 centage changes in rates based on the Con22 sumer Price Index for All Urban Consumers 

23 unadjusted for seasonal variation over the 12- 

24 month period preceding the date the Postal 

25 Service proposes to increase rates; 
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1 ‘‘(B) establish a schedule whereby rates, 

2 when necessary and appropriate, would change 

3 at regular intervals by predictable amounts; 

4 ‘‘(C) not later than 45 days before the im5 plementation of any adjustment in rates under 

6 this section— 

7 ‘‘(i) require the Postal Service to pro8 vide public notice of the adjustment; 

9 ‘‘(ii) provide an opportunity for review 

10 by the Postal Regulatory Commission; 

11 ‘‘(iii) provide for the Postal Regu12 latory Commission to notify the Postal 

13 Service of any noncompliance of the ad14 justment with the limitation under sub15 paragraph (A); and 

16 ‘‘(iv) require the Postal Service to re17 spond to the notice provided under clause 

18 (iii) and describe the actions to be taken to 

19 comply with the limitation under subpara20 graph (A); and 

21 ‘‘(D) notwithstanding any limitation set 

22 under subparagraphs (A) and (C), establish 

23 procedures whereby rates may be adjusted on 

24 an expedited basis due to unexpected and ex25 traordinary circumstances. 
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1 ‘‘(2) LIMITATIONS.— 

2 ‘‘(A) CLASSES OF MAIL.—The annual limi3 tations under paragraph (1)(A) shall apply to a 

4 class of mail, as defined in the Domestic Mail 

5 Classification Schedule as in effect on the date 

6 of enactment of the Postal Accountability and 

7 Enhancement Act. 

8 ‘‘(B) ROUNDING OF RATES AND FEES.— 

9 Nothing in this subsection shall preclude the 

10 Postal Service from rounding rates and fees to 

11 the nearest whole integer, if the effect of such 

12 rounding does not cause the overall rate in13 crease for any class to exceed the Consumer 

14 Price Index for All Urban Consumers. 

15 ‘‘(e) WORKSHARE DISCOUNTS.— 

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

17 ‘workshare discount’ refers to rate discounts pro18 vided to mailers for the presorting, prebarcoding, 

19 handling, or transportation of mail, as further de20 fined by the Postal Regulatory Commission under 

21 subsection (a). 

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

23 established under subsection (a), the Postal Regu24 latory Commission shall establish rules for 

25 workshare discounts that ensure that such discounts 
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1 do not exceed the cost that the Postal Service avoids 

2 as a result of workshare activity, unless— 

3 ‘‘(A) the discount is— 

4 ‘‘(i) associated with a new postal serv5 ice, a change to an existing postal service, 

6 or with a new workshare initiative related 

7 to an existing postal service; and 

8 ‘‘(ii) necessary to induce mailer behav9 ior that furthers the economically efficient 

10 operation of the Postal Service and the 

11 portion of the discount in excess of the 

12 cost that the Postal Service avoids as a re13 sult of the workshare activity will be 

14 phased out over a limited period of time; 

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

16 ‘‘(i) lead to a loss of volume in the af17 fected category or subclass of mail and re18 duce the aggregate contribution to the in19 stitutional costs of the Postal Service from 

20 the category or subclass subject to the dis21 count below what it otherwise would have 

22 been if the discount had not been reduced 

23 to costs avoided; 
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1 ‘‘(ii) result in a further increase in the 

2 rates paid by mailers not able to take ad3 vantage of the discount; or 

4 ‘‘(iii) impede the efficient operation of 

5 the Postal Service; 

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

7 costs avoided— 

8 ‘‘(i) is necessary to mitigate rate 

9 shock; and 

10 ‘‘(ii) will be phased out over time; or 

11 ‘‘(D) the discount is provided in connection 

12 with subclasses of mail consisting exclusively of 

13 mail matter of educational, cultural, scientific, 

14 or informational value. 

15 ‘‘(3) REPORT.—Whenever the Postal Service es16 tablishes or maintains a workshare discount, the 

17 Postal Service shall, at the time it publishes the 

18 workshare discount rate, submit to the Postal Regu19 latory Commission a detailed report that— 

20 ‘‘(A) explains the Postal Service’s reasons 

21 for establishing or maintaining the rate; 

22 ‘‘(B) sets forth the data, economic anal23 yses, and other information relied on by the 

24 Postal Service to justify the rate; and 
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1 ‘‘(C) certifies that the discount will not ad2 versely affect rates or services provided to users 

3 of postal services who do not take advantage of 

4 the discount rate. 

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

6 this section first take effect, rates and classes for market7 dominant products shall remain subject to modification in 

8 accordance with the provisions of this chapter and section 

9 407, as such provisions were last in effect before the date 

10 of enactment of this section.’’. 

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

12 3625, and 3628 of title 39, United States Code, are re13 pealed. 

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

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

16 section 601, but before the amendment made by section 

17 202) is amended by striking the heading for subchapter 

18 II and inserting the following: 

19 ‘‘SUBCHAPTER I—PROVISIONS RELATING TO 

20 MARKET-DOMINANT PRODUCTS’’. 

21 SEC. 202. PROVISIONS RELATING TO COMPETITIVE PROD22 UCTS. 

23 Chapter 36 of title 39, United States Code, is amend24 ed by inserting after section 3629 the following: 
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1 ‘‘SUBCHAPTER II—PROVISIONS RELATING TO 

2 COMPETITIVE PRODUCTS 

3 ‘‘§ 3631. Applicability; definitions and updates 

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

5 with respect to— 

6 ‘‘(1) priority mail; 

7 ‘‘(2) expedited mail; 

8 ‘‘(3) bulk parcel post; 

9 ‘‘(4) bulk international mail; and 

10 ‘‘(5) mailgrams; 

11 subject to subsection (d) and any changes the Postal Reg12 ulatory Commission may make under section 3642. 

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

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

15 product, means the direct and indirect postal costs attrib16 utable to such product. 

17 ‘‘(c) RULE OF CONSTRUCTION.—Mail matter re18 ferred to in subsection (a) shall, for purposes of this sub19 chapter, be considered to have the meaning given to such 

20 mail matter under the mail classification schedule. 

21 ‘‘(d) LIMITATION.—Notwithstanding any other provi22 sion of this section, nothing in this subchapter shall be 

23 considered to apply with respect to any product then cur24 rently in the market-dominant category of mail. 
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1 ‘‘§ 3632. Action of the Governors 

2 ‘‘(a) AUTHORITY TO ESTABLISH RATES AND CLASS3 ES.—The Governors, with the written concurrence of a 

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

5 establish rates and classes for products in the competitive 

6 category of mail in accordance with the requirements of 

7 this subchapter and regulations promulgated under sec8 tion 3633. 

9 ‘‘(b) PROCEDURES.— 

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

11 established in writing, complete with a statement of 

12 explanation and justification, and the date as of 

13 which each such rate or class takes effect. 

14 ‘‘(2) PUBLIC NOTICE; REVIEW; AND COMPLI15 ANCE.—Not later than 30 days before the date of 

16 implementation of any adjustment in rates under 

17 this section— 

18 ‘‘(A) the Governors shall provide public no19 tice of the adjustment and an opportunity for 

20 review by the Postal Regulatory Commission; 

21 ‘‘(B) the Postal Regulatory Commission 

22 shall notify the Governors of any noncompliance 

23 of the adjustment with section 3633; and 

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

25 notice provided under subparagraph (B) and 
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1 describe the actions to be taken to comply with 

2 section 3633. 

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

4 section 3633 first take effect, rates and classes for com5 petitive products shall remain subject to modification in 

6 accordance with the provisions of this chapter and section 

7 407, as such provisions were as last in effect before the 

8 date of enactment of this section. 

9 ‘‘§ 3633. Provisions applicable to rates for competitive 

10 products 

11 ‘‘(a) IN GENERAL.—The Postal Regulatory Commis12 sion shall, within 180 days after the date of enactment 

13 of this section, promulgate (and may from time to time 

14 thereafter revise) regulations to— 

15 ‘‘(1) prohibit the subsidization of competitive 

16 products by market-dominant products; 

17 ‘‘(2) ensure that each competitive product cov18 ers its costs attributable; and 

19 ‘‘(3) ensure that all competitive products collec20 tively cover their share of the institutional costs of 

21 the Postal Service. 

22 ‘‘(b) REVIEW OF MINIMUM CONTRIBUTION.—Five 

23 years after the date of enactment of this section, and every 

24 5 years thereafter, the Postal Regulatory Commission 

25 shall conduct a review to determine whether the institu-
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1 tional costs contribution requirement under subsection 

2 (a)(3) should be retained in its current form, modified, 

3 or eliminated. In making its determination, the Commis4 sion shall consider all relevant circumstances, including 

5 the prevailing competitive conditions in the market, and 

6 the degree to which any costs are uniquely or dispropor7 tionately associated with any competitive products.’’. 

8 SEC. 203. PROVISIONS RELATING TO EXPERIMENTAL AND 

9 NEW PRODUCTS. 

10 Subchapter III of chapter 36 of title 39, United 

11 States Code, is amended to read as follows: 

12 ‘‘SUBCHAPTER III—PROVISIONS RELATING TO 

13 EXPERIMENTAL AND NEW PRODUCTS 

14 ‘‘§ 3641. Market tests of experimental products 

15 ‘‘(a) AUTHORITY.— 

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

17 conduct market tests of experimental products in ac18 cordance with this section. 

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

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

21 subject to the requirements of sections 3622, 3633, 

22 or 3642, or regulations promulgated under those 

23 sections. 

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

25 under this section unless it satisfies each of the following: 
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1 ‘‘(1) SIGNIFICANTLY DIFFERENT PRODUCT.— 

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

3 significantly different from all products offered by 

4 the Postal Service within the 2-year period preceding 

5 the start of the test. 

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

7 or continued offering of the product will not create 

8 an unfair or otherwise inappropriate competitive ad9 vantage for the Postal Service or any mailer, par10 ticularly in regard to small business concerns (as de11 fined under subsection (h)). 

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

13 Service identifies the product, for the purpose of a 

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

15 competitive, consistent with the criteria under sec16 tion 3642(b)(1). Costs and revenues attributable to 

17 a product identified as competitive shall be included 

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

19 to provisions applicable to competitive products col20 lectively). Any test that solely affects products cur21 rently classified as competitive, or which provides 

22 services ancillary to only competitive products, shall 

23 be presumed to be in the competitive product cat24 egory without regard to whether a similar ancillary 

25 product exists for market-dominant products. 
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1 ‘‘(c) NOTICE.— 

2 ‘‘(1) IN GENERAL.—At least 30 days before ini3 tiating a market test under this section, the Postal 

4 Service shall file with the Postal Regulatory Com5 mission and publish in the Federal Register a no6 tice— 

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

8 Service’s determination that the market test is 

9 covered by this section; and 

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

11 the market test. 

12 ‘‘(2) SAFEGUARDS.—For a competitive experi13 mental product, the provisions of section 504(g) 

14 shall be available with respect to any information re15 quired to be filed under paragraph (1) to the same 

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

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

18 paragraph (1) shall be considered to permit or re19 quire the publication of any information as to which 

20 confidential treatment is accorded under the pre21 ceding sentence (subject to the same exception as set 

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

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

2 under this section may be conducted over a period 

3 of not to exceed 24 months. 

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

5 order to determine the feasibility or desirability of a 

6 product being tested under this section, the Postal 

7 Regulatory Commission may, upon written applica8 tion of the Postal Service (filed not later than 60 days 

9 before the date as of which the testing of such prod10 uct would otherwise be scheduled to terminate under 

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

12 for not to exceed an additional 12 months. 

13 ‘‘(e) DOLLAR-AMOUNT LIMITATION.— 

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

15 tested under this section if the total revenues that 

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

17 Service from such product do not exceed 

18 $10,000,000 in any year, subject to paragraph (2) 

19 and subsection (g). 

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

21 Regulatory Commission may, upon written applica22 tion of the Postal Service, exempt the market test 

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

24 that are anticipated, or in fact received, by the Post25 al Service from such product do not exceed 
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1 $50,000,000 in any year, subject to subsection (g). 

2 In reviewing an application under this paragraph, 

3 the Postal Regulatory Commission shall approve 

4 such application if it determines that— 

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

6 public and meet an expected demand; 

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

8 the financial stability of the Postal Service; and 

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

10 unfair or otherwise inappropriate competition. 

11 ‘‘(f) CANCELLATION.—If the Postal Regulatory Com12 mission at any time determines that a market test under 

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

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

15 involved or take such other action as it considers appro16 priate. A determination under this subsection shall be 

17 made in accordance with such procedures as the Commis18 sion shall by regulation prescribe. 

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

20 of each year following the year in which occurs the dead21 line for the Postal Service’s first report to the Postal Reg22 ulatory Commission under section 3652(a), each dollar 

23 amount contained in this section shall be adjusted by the 

24 change in the Consumer Price Index for such year (as de25 termined under regulations of the Commission). 
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1 ‘‘(h) DEFINITION OF A SMALL BUSINESS CON2 CERN.—The criteria used in defining small business con3 cerns or otherwise categorizing business concerns as small 

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

5 established by the Postal Regulatory Commission in con6 formance with the requirements of section 3 of the Small 

7 Business Act. 

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

9 subchapter may be conducted in any year beginning with 

10 the first 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 ‘‘§ 3642. New products and transfers of products be14 tween the market-dominant and competi15 tive categories of mail 

16 ‘‘(a) IN GENERAL.—Upon request of the Postal Serv17 ice or users of the mails, or upon its own initiative, the 

18 Postal Regulatory Commission may change the list of 

19 market-dominant products under section 3621 and the list 

20 of competitive products under section 3631 by adding new 

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

22 transferring products between the lists. 

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

24 Regulatory Commission under subsection (a) shall be 

25 made in accordance with the following criteria: 
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1 ‘‘(1) The market-dominant category of products 

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

3 Postal Service exercises sufficient market power that 

4 it can effectively set the price of such product sub5 stantially above costs, raise prices significantly, de6 crease quality, or decrease output, without risk of 

7 losing substantial business to other firms offering 

8 similar products. The competitive category of prod9 ucts shall consist of all other products. 

10 ‘‘(2) EXCLUSION OF PRODUCTS COVERED BY

11 POSTAL MONOPOLY.—A product covered by the post12 al monopoly shall not be subject to transfer under 

13 this section from the market-dominant category of 

14 mail. For purposes of the preceding sentence, the 

15 term ‘product covered by the postal monopoly’ 

16 means any product the conveyance or transmission 

17 of which is reserved to the United States under sec18 tion 1696 of title 18, subject to the same exception 

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

20 ‘‘(3) ADDITIONAL CONSIDERATIONS.—In mak21 ing any decision under this section, due regard shall 

22 be given to— 

23 ‘‘(A) the availability and nature of enter24 prises in the private sector engaged in the deliv25 ery of the product involved; 
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1 ‘‘(B) the views of those who use the prod2 uct involved on the appropriateness of the pro3 posed action; and 

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

6 meaning of section 3641(h)). 

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

9 shall be considered to prevent transfers under this section 

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

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

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

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

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

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

20 with the Postal Regulatory Commission and publish 

21 in the Federal Register a notice setting out the basis 

22 for its determination that the product satisfies the 

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

24 request to add a product or transfer a product to 

25 the competitive category of mail, that the product 
26 

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1 meets the regulations promulgated by the Postal 

2 Regulatory Commission under section 3633. The 

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

4 respect to any information required to be filed. 

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

6 Regulatory Commission shall, whenever it changes 

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

10 any previous lists (including the lists under sections 

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

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

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

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

18 either— 

19 ‘‘(1) under this subchapter; or 

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

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

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

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

25 subsection (b)) is amended— 
27 

•S 662 RS 

1 (1) by striking the heading for subchapter IV 

2 and inserting the following: 

3 ‘‘SUBCHAPTER V—POSTAL SERVICES, 

4 COMPLAINTS, AND JUDICIAL REVIEW’’; and 

5 (2) by striking the heading for subchapter V 

6 and inserting the following: 

7 ‘‘SUBCHAPTER VI—GENERAL’’. 

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

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

11 ‘‘SUBCHAPTER IV—REPORTING 

12 REQUIREMENTS AND RELATED PROVISIONS 

13 ‘‘§ 3651. Annual reports by the Commission 

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

16 the Congress concerning the operations of the Commission 

17 under this title, including the extent to which regulations 

18 are achieving the objectives under sections 3622, 3633, 

19 and 3691. 

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

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

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

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

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

5 and submit to the Postal Regulatory Commission a report 

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

7 Commission may require under subsection (e))— 

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

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

11 with all applicable requirements of this title; and 

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

13 product provided in such year, provide— 

14 ‘‘(A) product information, including mail 

15 volumes; and 

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

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

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

20 terms of speed of delivery and reliability) 

21 provided; and 

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

24 Before submitting a report under this subsection (in25 cluding any annex to the report and the information 

26 required under subsection (b)), the Postal Service 
29 

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1 shall have the information contained in such report 

2 (and annex) audited by the Inspector General. The 

3 results of any such audit shall be submitted along 

4 with the report to which it pertains. 

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

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

9 workshare discount was in effect during the period covered 

10 by such report: 

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

12 Service by virtue of such discount. 

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

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

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

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

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

20 service agreements and experimental products offered 

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

22 Postal Service— 

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

24 revenues, and quality of service by service agreement 

25 and market test; and 
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1 ‘‘(2) shall report such data as the Postal Regu2 latory Commission requires. 

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

4 Commission shall have access, in accordance with such 

5 regulations as the Commission shall prescribe, to the 

6 working papers and any other supporting matter of the 

7 Postal Service and the Inspector General in connection 

8 with any information submitted under this section. 

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

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

11 Commission shall, by regulation, prescribe the con12 tent and form of the public reports (and any non13 public annex and supporting matter relating to the 

14 report) to be provided by the Postal Service under 

15 this section. In carrying out this subsection, the 

16 Commission shall give due consideration to— 

17 ‘‘(A) providing the public with timely, ade18 quate information to assess the lawfulness of 

19 rates charged; 

20 ‘‘(B) avoiding unnecessary or unwarranted 

21 administrative effort and expense on the part of 

22 the Postal Service; and 

23 ‘‘(C) protecting the confidentiality of com24 mercially sensitive information. 
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1 ‘‘(2) REVISED REQUIREMENTS.—The Commis2 sion may, on its own motion or on request of an in3 terested party, initiate proceedings (to be conducted 

4 in accordance with regulations that the Commission 

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

6 completeness of Postal Service data required by the 

7 Commission under this subsection whenever it shall 

8 appear that— 

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

10 products has become significantly inaccurate or 

11 can be significantly improved; 

12 ‘‘(B) the quality of service data has be13 come significantly inaccurate or can be signifi14 cantly improved; or 

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

16 the Commission, otherwise necessitated by the 

17 public interest. 

18 ‘‘(f) CONFIDENTIAL INFORMATION.— 

19 ‘‘(1) IN GENERAL.—If the Postal Service deter20 mines that any document or portion of a document, 

21 or other matter, which it provides to the Postal Reg22 ulatory Commission in a nonpublic annex under this 

23 section or under subsection (d) contains information 

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

25 exempt from public disclosure under section 552(b) 
32 

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

2 providing such matter to the Commission, notify the 

3 Commission of its determination, in writing, and de4 scribe with particularity the documents (or portions 

5 of documents) or other matter for which confiden6 tiality is sought and the reasons therefor. 

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

8 matter described in paragraph (1) to which the 

9 Commission gains access under this section shall be 

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

11 in the same way as if the Commission had received 

12 notification with respect to such matter under sec13 tion 504(g)(1). 

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

15 submit to the Postal Regulatory Commission, together 

16 with any other submission that the Postal Service is re17 quired to make under this section in a year, copies of its 

18 then most recent— 

19 ‘‘(1) comprehensive statement under section 

20 2401(e); 

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

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

23 ‘‘(4) program performance reports under sec24 tion 2804. 
33 

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1 ‘‘§ 3653. Annual determination of compliance 

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

3 receiving the reports required under section 3652 for any 

4 year, the Postal Regulatory Commission shall promptly 

5 provide an opportunity for comment on such reports by 

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

7 Commission who shall be required to represent the inter8 ests of the general public. 

9 ‘‘(b) DETERMINATION OF COMPLIANCE OR NON10 COMPLIANCE.—Not later than 90 days after receiving the 

11 submissions required under section 3652 with respect to 

12 a year, the Postal Regulatory Commission shall make a 

13 written determination as to— 

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

15 such year (for products individually or collectively) 

16 were not in compliance with applicable provisions of 

17 this chapter (or regulations promulgated there18 under); or 

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

20 during such year were not met. 

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

22 is found under this subsection to have occurred in such 

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

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

25 year, a timely written determination of noncompliance is 

26 made under subsection (b), the Postal Regulatory Com-
34 

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1 mission shall take any appropriate remedial action author2 ized by section 3662(c). 

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

4 determination described in the last sentence of subsection 

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

6 3662, create a rebuttable presumption of compliance by 

7 the Postal Service (with regard to the matters described 

8 under paragraphs (1) and (2) of subsection (b)) during 

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

10 SEC. 205. COMPLAINTS; APPELLATE REVIEW AND EN11 FORCEMENT. 

12 Chapter 36 of title 39, United States Code, is amend13 ed by striking sections 3662 and 3663 and inserting the 

14 following: 

15 ‘‘§ 3662. Rate and service complaints 

16 ‘‘(a) IN GENERAL.—Any person (including an officer 

17 of the Postal Regulatory Commission representing the in18 terests of the general public) who believes the Postal Serv19 ice is not operating in conformance with the requirements 

20 of chapter 1, 4, or 6, or this chapter (or regulations pro21 mulgated under any of those chapters) may lodge a com22 plaint with the Postal Regulatory Commission in such 

23 form and manner as the Commission may prescribe. 

24 ‘‘(b) PROMPT RESPONSE REQUIRED.— 
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1 ‘‘(1) IN GENERAL.—The Postal Regulatory 

2 Commission shall, within 90 days after receiving a 

3 complaint under subsection (a), either— 

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

5 or 

6 ‘‘(B) issue an order dismissing the com7 plaint (together with a statement of the reasons 

8 therefor). 

9 ‘‘(2) TREATMENT OF COMPLAINTS NOT TIMELY

10 ACTED ON.—For purposes of section 3663, any com11 plaint under subsection (a) on which the Commis12 sion fails to act in the time and manner required by 

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

14 if it had been dismissed under an order issued by 

15 the Commission on the last day allowable for the 

16 issuance of such order under paragraph (1). 

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

18 BE JUSTIFIED.—If the Postal Regulatory Commission 

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

20 Postal Service take such action as the Commission con21 siders appropriate in order to achieve compliance with the 

22 applicable requirements and to remedy the effects of any 

23 noncompliance including ordering unlawful rates to be ad24 justed to lawful levels, ordering the cancellation of market 

25 tests, ordering the Postal Service to discontinue providing 
36 

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

2 make up for revenue shortfalls in competitive products. 

3 ‘‘(d) AUTHORITY TO ORDER FINES IN CASES OF DE4 LIBERATE NONCOMPLIANCE.—In addition, in cases of de5 liberate noncompliance by the Postal Service with the re6 quirements of this title, the Postal Regulatory Commission 

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

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

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

10 incidence of noncompliance. Fines resulting from the pro11 vision of competitive products shall be paid out of the 

12 Competitive Products Fund established in section 2011. 

13 All receipts from fines imposed under this subsection shall 

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

15 United States. 

16 ‘‘§ 3663. Appellate review 

17 ‘‘A person, including the Postal Service, adversely af18 fected or aggrieved by a final order or decision of the Post19 al Regulatory Commission may, within 30 days after such 

20 order or decision becomes final, institute proceedings for 

21 review thereof by filing a petition in the United States 

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

23 shall review the order or decision in accordance with sec24 tion 706 of title 5, and chapter 158 and section 2112 of 

25 title 28, on the basis of the record before the Commission. 
37 

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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. CLERICAL AMENDMENT. 

7 Chapter 36 of title 39, United States Code, is amend8 ed by striking the heading and analysis for such chapter 

9 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. 

‘‘SUBCHAPTER IV—REPORTING REQUIREMENTS AND RELATED 

PROVISIONS 

‘‘3651. Annual reports by the Commission. 

‘‘3652. Annual reports to the Commission. 

‘‘3653. Annual determination of compliance. 
38 

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‘‘SUBCHAPTER V—POSTAL SERVICES, COMPLAINTS, AND 

JUDICIAL REVIEW 

‘‘3661. Postal Services. 

‘‘3662. Rate and service complaints. 

‘‘3663. Appellate review. 

‘‘3664. Enforcement of orders. 

‘‘SUBCHAPTER VI—GENERAL 

‘‘3681. Reimbursement. 

‘‘3682. Size and weight limits. 

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

‘‘3684. Limitations. 

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

‘‘3686. Bonus authority. 

‘‘SUBCHAPTER VII—MODERN SERVICE STANDARDS 

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

1 TITLE III—MODERN SERVICE 

2 STANDARDS 

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

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

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

7 end the following: 

8 ‘‘SUBCHAPTER VII—MODERN SERVICE 

9 STANDARDS 

10 ‘‘§ 3691. Establishment of modern service standards 

11 ‘‘(a) AUTHORITY GENERALLY.—Not later than 12 

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

13 Postal Service shall, in consultation with the Postal Regu14 latory Commission, by regulation establish (and may from 

15 time to time thereafter by regulation revise) a set of serv16 ice standards for market-dominant products consistent 
39 

•S 662 RS 

1 with the Postal Service’s universal service obligation as de2 fined in sections 101 (a) and (b) and 403. 

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

4 to achieve the following objectives: 

5 ‘‘(1) To enhance the value of postal services to 

6 both senders and recipients. 

7 ‘‘(2) To preserve regular and effective access to 

8 postal services in all communities, including those in 

9 rural areas or where post offices are not self-sus10 taining. 

11 ‘‘(3) To reasonably assure Postal Service cus12 tomers delivery reliability, speed and frequency con13 sistent with reasonable rates and best business prac14 tices. 

15 ‘‘(4) To provide a system of objective external 

16 performance measurements for each market-domi17 nant product as a basis for measurement of Postal 

18 Service performance. 

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

20 standards, the Postal Service shall take into account— 

21 ‘‘(1) the actual level of service that Postal Serv22 ice customers receive under any service guidelines 

23 previously established by the Postal Service or serv24 ice standards established under this section; 
40 

•S 662 RS 

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

2 Postal Service performance in the acceptance, proc3 essing and delivery of mail; 

4 ‘‘(3) the needs of Postal Service customers, in5 cluding those with physical impairments; 

6 ‘‘(4) mail volume and revenues projected for fu7 ture years; 

8 ‘‘(5) the projected growth in the number of ad9 dresses the Postal Service will be required to serve 

10 in future years; 

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

12 serving Postal Service customers; 

13 ‘‘(7) the effect of changes in technology, demo14 graphics, and population distribution on the efficient 

15 and reliable operation of the postal delivery system; 

16 and 

17 ‘‘(8) the policies of this title and such other fac18 tors as the Commission determines appropriate. 

19 ‘‘(d) REVIEW.—The regulations promulgated pursu20 ant to this section (and any revisions thereto) shall be sub21 ject to review upon complaint under sections 3662 and 

22 3663. 

23 SEC. 302. POSTAL SERVICE PLAN. 

24 (a) IN GENERAL.—Within 6 months after the estab25 lishment of the service standards under section 3691 of 
41 

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

2 Postal Service shall, in consultation with the Postal Regu3 latory Commission, develop and submit to Congress a plan 

4 for meeting those standards. 

5 (b) CONTENTS.—The plan under this section shall— 

6 (1) establish performance goals; 

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

8 processing, transportation, delivery, and retail net9 works necessary to allow the Postal Service to meet 

10 the performance goals; 

11 (3) describe any changes to planning and per12 formance management documents previously sub13 mitted to Congress to reflect new performance goals; 

14 and 

15 (4) contain the matters relating to postal facili16 ties provided under subsection (c). 

17 (c) POSTAL FACILITIES.— 

18 (1) FINDINGS.—Congress finds that— 

19 (A) the Postal Service has more than 400 

20 logistics facilities, separate from its post office 

21 network; 

22 (B) as noted by the President’s Commis23 sion on the United States Postal Service, the 

24 Postal Service has more facilities than it needs 

25 and the streamlining of this distribution net-
42 

•S 662 RS 

1 work can pave the way for the potential consoli2 dation of sorting facilities and the elimination 

3 of excess costs; 

4 (C) the Postal Service has always revised 

5 its distribution network to meet changing condi6 tions and is best suited to address its oper7 ational needs; and 

8 (D) Congress strongly encourages the 

9 Postal Service to— 

10 (i) expeditiously move forward in its 

11 streamlining efforts; and 

12 (ii) keep unions, management associa13 tions, and local elected officials informed 

14 as an essential part of this effort and abide 

15 by any procedural requirements contained 

16 in the national bargaining agreements. 

17 (2) IN GENERAL.—The Postal Service plan 

18 shall include a description of— 

19 (A) the long-term vision of the Postal 

20 Service for rationalizing its infrastructure and 

21 workforce; and 

22 (B) how the Postal Service intends to im23 plement that vision. 

24 (3) CONTENT OF FACILITIES PLAN.—The plan 

25 under this subsection shall include— 
43 

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1 (A) a strategy for how the Postal Service 

2 intends to rationalize the postal facilities net3 work and remove excess processing capacity and 

4 space from the network, including estimated 

5 timeframes, criteria, and processes to be used 

6 for making changes to the facilities network, 

7 and the process for engaging policy makers and 

8 the public in related decisions; 

9 (B) a discussion of what impact any facil10 ity changes may have on the postal workforce 

11 and whether the Postal Service has sufficient 

12 flexibility to make needed workforce changes; 

13 and 

14 (C) an identification of anticipated costs, 

15 cost savings, and other benefits associated with 

16 the infrastructure rationalization alternatives 

17 discussed in the plan. 

18 (4) ANNUAL REPORTS.— 

19 (A) IN GENERAL.—Not later than 90 days 

20 after the end of each fiscal year, the Postal 

21 Service shall prepare and submit a report to 

22 Congress on how postal decisions have impacted 

23 or will impact rationalization plans. 

24 (B) CONTENTS.—Each report under this 

25 paragraph shall include— 
44 

•S 662 RS 

1 (i) an account of actions taken during 

2 the preceding fiscal year to improve the ef3 ficiency and effectiveness of its processing, 

4 transportation, and distribution networks 

5 while preserving the timely delivery of 

6 postal services, including overall estimated 

7 costs and cost savings; 

8 (ii) an account of actions taken to 

9 identify any excess capacity within its 

10 processing, transportation, and distribution 

11 networks and implement savings through 

12 realignment or consolidation of facilities 

13 including overall estimated costs and cost 

14 savings; 

15 (iii) an estimate of how postal deci16 sions related to mail changes, security, au17 tomation initiatives, worksharing, informa18 tion technology systems, excess capacity, 

19 consolidating and closing facilities, and 

20 other areas will impact rationalization 

21 plans; 

22 (iv) identification of any statutory or 

23 regulatory obstacles that prevented or will 

24 prevent or hinder the Postal Service from 
45 

•S 662 RS 

1 taking action to realign or consolidate fa2 cilities; and 

3 (v) such additional topics and rec4 ommendations as the Postal Service con5 siders appropriate. 

6 (d) ALTERNATE RETAIL OPTIONS.—The Postal Serv7 ice plan shall include plans to expand and market retail 

8 access to postal services, in addition to post offices, includ9 ing— 

10 (1) vending machines; 

11 (2) the Internet; 

12 (3) Postal Service employees on delivery routes; 

13 (4) retail facilities in which overhead costs are 

14 shared with private businesses and other government 

15 agencies; or 

16 (5) any other nonpost office access channel pro17 viding market retail access to postal services. 

18 (e) REEMPLOYMENT ASSISTANCE AND RETIREMENT

19 BENEFITS.—The Postal Service plan shall include— 

20 (1) a plan under which reemployment assist21 ance shall be afforded to employees displaced as a 

22 result of the automation of any of its functions or 

23 the closing and consolidation of any of its facilities; 

24 and 
46 

•S 662 RS 

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

2 Office of Personnel Management, to offer early re3 tirement benefits. 

4 (f) INSPECTOR GENERAL REPORT.— 

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

6 under subsection (a) and each annual report under 

7 subsection (c) to Congress, the Postal Service shall 

8 submit the plan and each annual report to the In9 spector General of the United States Postal Service 

10 in a timely manner to carry out this subsection. 

11 (2) REPORT.—The Inspector General shall pre12 pare a report describing the extent to which the 

13 Postal Service plan and each annual report under 

14 subsection (c)— 

15 (A) are consistent with the continuing obli16 gations of the Postal Service under title 39, 

17 United States Code; 

18 (B) provide for the Postal Service to meet 

19 the service standards established under section 

20 3691 of title 39, United States Code; and 

21 (C) allow progress toward improving over22 all efficiency and effectiveness consistent with 

23 the need to maintain universal postal service at 

24 affordable rates. 
47 

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1 (g) CONTINUED AUTHORITY.—Nothing in this sec2 tion shall be construed to prohibit the Postal Service from 

3 implementing any change to its processing, transportation, 

4 delivery, and retail networks under any authority granted 

5 to the Postal Service for those purposes. 

6 TITLE IV—PROVISIONS RELAT7 ING TO FAIR COMPETITION 

8 SEC. 401. POSTAL SERVICE COMPETITIVE PRODUCTS 

9 FUND. 

10 (a) PROVISIONS RELATING TO POSTAL SERVICE

11 COMPETITIVE PRODUCTS FUND AND RELATED MAT12 TERS.— 

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

14 United States Code, is amended by adding at the 

15 end the following: 

16 ‘‘§ 2011. Provisions relating to competitive products 

17 ‘‘(a)(1) In this subsection, the term ‘costs attrib18 utable’ has the meaning given such term by section 3631. 

19 ‘‘(2) There is established in the Treasury of the 

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

21 Service Competitive Products Fund, which shall be avail22 able to the Postal Service without fiscal year limitation 

23 for the payment of— 

24 ‘‘(A) costs attributable to competitive products; 

25 and 
48 

•S 662 RS 

1 ‘‘(B) all other costs incurred by the Postal 

2 Service, to the extent allocable to competitive prod3 ucts. 

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

5 Products Fund, subject to withdrawal by the Postal Serv6 ice— 

7 ‘‘(1) revenues from competitive products; 

8 ‘‘(2) amounts received from obligations issued 

9 by Postal Service under subsection (e); 

10 ‘‘(3) interest and dividends earned on invest11 ments of the Competitive Products Fund; and 

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

13 (including from the sale of assets), to the extent al14 locable to competitive products. 

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

16 of the Competitive Products Fund are in excess of current 

17 needs, the Postal Service may request the investment of 

18 such amounts as the Postal Service determines advisable 

19 by the Secretary of the Treasury in obligations of, or obli20 gations guaranteed by, the Government of the United 

21 States, and, with the approval of the Secretary, in such 

22 other obligations or securities as the Postal Service deter23 mines appropriate. 

24 ‘‘(d) With the approval of the Secretary of the Treas25 ury, the Postal Service may deposit moneys of the Com-
49 

•S 662 RS 

1 petitive Products Fund in any Federal Reserve bank, any 

2 depository for public funds, or in such other places and 

3 in such manner as the Postal Service and the Secretary 

4 may mutually agree. 

5 ‘‘(e)(1)(A) Subject to the limitations specified in sec6 tion 2005(a), the Postal Service is authorized to borrow 

7 money and to issue and sell such obligations as the Postal 

8 Service determines necessary to provide for competitive 

9 products and deposit such amounts in the Competitive 

10 Products Fund. 

11 ‘‘(B) Subject to paragraph (5), any borrowings by the 

12 Postal Service under subparagraph (A) shall be supported 

13 and serviced by— 

14 ‘‘(i) the revenues and receipts from competitive 

15 products and the assets related to the provision of 

16 competitive products (as determined under sub17 section (h)); or 

18 ‘‘(ii) for purposes of any period before account19 ing practices and principles under subsection (h) 

20 have been established and applied, the best informa21 tion available from the Postal Service, including the 

22 audited statements required by section 2008(e). 

23 ‘‘(2) The Postal Service may enter into binding cov24 enants with the holders of such obligations, and with any 
50 

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1 trustee under any agreement entered into in connection 

2 with the issuance of such obligations with respect to— 

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

4 other funds; 

5 ‘‘(B) application and use of revenues and re6 ceipts of the Competitive Products Fund; 

7 ‘‘(C) stipulations concerning the subsequent 

8 issuance of obligations or the execution of leases or 

9 lease purchases relating to properties of the Postal 

10 Service; and 

11 ‘‘(D) such other matters as the Postal Service, 

12 considers necessary or desirable to enhance the mar13 ketability of such obligations. 

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

15 this subsection— 

16 ‘‘(A) shall be in such forms and denominations; 

17 ‘‘(B) shall be sold at such times and in such 

18 amounts; 

19 ‘‘(C) shall mature at such time or times; 

20 ‘‘(D) shall be sold at such prices; 

21 ‘‘(E) shall bear such rates of interest; 

22 ‘‘(F) may be redeemable before maturity in 

23 such manner, at such times, and at such redemption 

24 premiums; 
51 

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1 ‘‘(G) may be entitled to such relative priorities 

2 of claim on the assets of the Postal Service with re3 spect to principal and interest payments; and 

4 ‘‘(H) shall be subject to such other terms and 

5 conditions, 

6 as the Postal Service determines. 

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

8 this subsection— 

9 ‘‘(A) shall be negotiable or nonnegotiable and 

10 bearer or registered instruments, as specified therein 

11 and in any indenture or covenant relating thereto; 

12 ‘‘(B) shall contain a recital that such obliga13 tions are issued under this subsection, and such re14 cital shall be conclusive evidence of the regularity of 

15 the issuance and sale of such obligations and of their 

16 validity; 

17 ‘‘(C) shall be lawful investments and may be ac18 cepted as security for all fiduciary, trust, and public 

19 funds, the investment or deposit of which shall be 

20 under the authority or control of any officer or agen21 cy of the Government of the United States, and the 

22 Secretary of the Treasury or any other officer or 

23 agency having authority over or control of any such 

24 fiduciary, trust, or public funds, may at any time 
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1 sell any of the obligations of the Postal Service ac2 quired under this section; 

3 ‘‘(D) shall not be exempt either as to principal 

4 or interest from any taxation now or hereafter im5 posed by any State or local taxing authority; and 

6 ‘‘(E) except as provided in section 2006(c), 

7 shall not be obligations of, nor shall payment of the 

8 principal thereof or interest thereon be guaranteed 

9 by, the Government of the United States, and the 

10 obligations shall so plainly state. 

11 ‘‘(5)(A) Subject to subparagraph (B), the Postal 

12 Service shall make payments of principal, or interest, or 

13 both on obligations issued under this subsection from— 

14 ‘‘(i) revenues and receipts from competitive 

15 products and assets related to the provision of com16 petitive products (as determined under subsection 

17 (h)); or 

18 ‘‘(ii) for purposes of any period before account19 ing practices and principles under subsection (h) 

20 have been established and applied, the best informa21 tion available, including the audited statements re22 quired by section 2008(e). 

23 ‘‘(B) Based on the audited financial statements for 

24 the most recently completed fiscal year, the total assets 
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1 of the Competitive Products Fund may not be less than 

2 the amount determined by multiplying— 

3 ‘‘(i) the quotient resulting from the total rev4 enue of the Competitive Products Fund divided by 

5 the total revenue of the Postal Service; and 

6 ‘‘(ii) the total assets of the Postal Service. 

7 ‘‘(f) The receipts and disbursements of the Competi8 tive Products Fund shall be accorded the same budgetary 

9 treatment as is accorded to receipts and disbursements of 

10 the Postal Service Fund under section 2009a. 

11 ‘‘(g) A judgment (or settlement of a claim) against 

12 the Postal Service or the Government of the United States 

13 shall be paid out of the Competitive Products Fund to the 

14 extent that the judgment or claim arises out of activities 

15 of the Postal Service in the provision of competitive prod16 ucts. 

17 ‘‘(h)(1)(A) The Secretary of the Treasury, in con18 sultation with the Postal Service and an independent, cer19 tified public accounting firm and other advisors as the 

20 Secretary considers appropriate, shall develop rec21 ommendations regarding— 

22 ‘‘(i) the accounting practices and principles that 

23 should be followed by the Postal Service with the ob24 jectives of— 
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1 ‘‘(I) identifying and valuing the assets and 

2 liabilities of the Postal Service associated with 

3 providing competitive products, including the 

4 capital and operating costs incurred by the 

5 Postal Service in providing such competitive 

6 products; and 

7 ‘‘(II) subject to subsection (e)(5), pre8 venting the subsidization of such products by 

9 market-dominant products; and 

10 ‘‘(ii) the substantive and procedural rules that 

11 should be followed in determining the assumed Fed12 eral income tax on competitive products income of 

13 the Postal Service for any year (within the meaning 

14 of section 3634). 

15 ‘‘(B) Not earlier than 6 months after the date of en16 actment of this section, and not later than 12 months 

17 after such date, the Secretary of the Treasury shall submit 

18 the recommendations under subparagraph (A) to the Post19 al Regulatory Commission. 

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

21 Secretary of the Treasury under paragraph (1), the Com22 mission shall give interested parties, including the Postal 

23 Service, users of the mails, and an officer of the Commis24 sion who shall be required to represent the interests of 

25 the general public, an opportunity to present their views 
55 

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1 on those recommendations through submission of written 

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

3 oral presentation, or in such other manner as the Commis4 sion considers appropriate. 

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

6 information received under subparagraph (A), the Com7 mission shall by rule— 

8 ‘‘(I) provide for the establishment and applica9 tion of the accounting practices and principles which 

10 shall be followed by the Postal Service; 

11 ‘‘(II) provide for the establishment and applica12 tion of the substantive and procedural rules de13 scribed under paragraph (1)(A)(ii); and 

14 ‘‘(III) provide for the submission by the Postal 

15 Service to the Postal Regulatory Commission of an16 nual and other periodic reports setting forth such in17 formation as the Commission may require. 

18 ‘‘(ii) Final rules under this subparagraph shall be 

19 issued not later than 12 months after the date on which 

20 recommendations are submitted under paragraph (1) (or 

21 by such later date on which the Commission and the Post22 al Service may agree). The Commission may revise such 

23 rules. 

24 ‘‘(C)(i) Reports described under subparagraph 

25 (B)(i)(III) shall be submitted at such time and in such 
56 

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1 form, and shall include such information, as the Commis2 sion by rule requires. 

3 ‘‘(ii) The Commission may, on its own motion or on 

4 request of an interested party, initiate proceedings (to be 

5 conducted in accordance with such rules as the Commis6 sion shall prescribe) to improve the quality, accuracy, or 

7 completeness of Postal Service information under subpara8 graph (B)(i)(III) whenever it shall appear that— 

9 ‘‘(I) the quality of the information furnished in 

10 those reports has become significantly inaccurate or 

11 can be significantly improved; or 

12 ‘‘(II) such revisions are, in the judgment of the 

13 Commission, otherwise necessitated by the public in14 terest. 

15 ‘‘(D) A copy of each report described under subpara16 graph (B)(i)(III) shall be submitted by the Postal Service 

17 to the Secretary of the Treasury and the Inspector Gen18 eral of the United States Postal Service. 

19 ‘‘(i)(1) The Postal Service shall submit an annual re20 port to the Secretary of the Treasury concerning the oper21 ation of the Competitive Products Fund. The report shall 

22 address such matters as risk limitations, reserve balances, 

23 allocation or distribution of moneys, liquidity require24 ments, and measures to safeguard against losses. 
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1 ‘‘(2) A copy of the most recent report submitted 

2 under paragraph (1) shall be included in the annual report 

3 submitted by the Postal Regulatory Commission under 

4 section 3652(g).’’. 

5 (2) CLERICAL AMENDMENT.—The table of sec6 tions for chapter 20 of title 39, United States Code, 

7 is amended by adding after the item relating to sec8 tion 2010 the following: 

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

9 (b) TECHNICAL AND CONFORMING AMENDMENTS.— 

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

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

12 at the end of paragraph (1), by redesignating para13 graph (2) as paragraph (3), and by inserting after 

14 paragraph (1) the following: 

15 ‘‘(2) COMPETITIVE PRODUCTS FUND.—The 

16 term ‘Competitive Products Fund’ means the Postal 

17 Service Competitive Products Fund established by 

18 section 2011; and’’. 

19 (2) CAPITAL OF THE POSTAL SERVICE.—Sec20 tion 2002(b) of title 39, United States Code, is 

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

22 and the balance in the Competitive Products 

23 Fund,’’. 

24 (3) POSTAL SERVICE FUND.— 
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1 (A) PURPOSES FOR WHICH AVAILABLE.— 

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

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

4 ‘‘title (other than any of the purposes, func5 tions, or powers for which the Competitive 

6 Products Fund is available).’’. 

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

8 39, United States Code, is amended by striking 

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

10 provided in section 2011, there’’. 

11 (4) RELATIONSHIP BETWEEN THE TREASURY

12 AND THE POSTAL SERVICE.—Section 2006 of title 

13 39, United States Code, is amended— 

14 (A) in subsection (a), in the first sentence, 

15 by inserting ‘‘or 2011’’ after ‘‘section 2005’’; 

16 (B) in subsection (b)— 

17 (i) in the first sentence, by inserting 

18 ‘‘under section 2005’’ before ‘‘in such 

19 amounts’’; and 

20 (ii) in the second sentence, by insert21 ing ‘‘under section 2005’’ before ‘‘in excess 

22 of such amount.’’; and 

23 (C) in subsection (c), by inserting ‘‘or 

24 2011(e)(4)(E)’’ after ‘‘section 2005(d)(5)’’. 
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1 SEC. 402. ASSUMED FEDERAL INCOME TAX ON COMPETI2 TIVE PRODUCTS INCOME. 

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

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

5 at the end the following: 

6 ‘‘§ 3634. Assumed Federal income tax on competitive 

7 products income 

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

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

10 competitive products income’ means the net income 

11 tax that would be imposed by chapter 1 of the Inter12 nal Revenue Code of 1986 on the Postal Service’s 

13 assumed taxable income from competitive products 

14 for the year; and 

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

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

17 to the amount representing what would be the tax18 able income of a corporation under the Internal Rev19 enue Code of 1986 for the year, if— 

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

21 were the activities of the Postal Service allo22 cable under section 2011(h) to competitive 

23 products; and 

24 ‘‘(B) the only assets held by such corpora25 tion were the assets of the Postal Service allo26 cable under section 2011(h) to such activities. 
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1 ‘‘(b) COMPUTATION AND TRANSFER REQUIRE2 MENTS.—The Postal Service shall, for each year beginning 

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

4 Service’s first report to the Postal Regulatory Commission 

5 under section 3652(a)— 

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

7 on competitive products income for such year; and 

8 ‘‘(2) transfer from the Competitive Products 

9 Fund to the Postal Service Fund the amount of that 

10 assumed tax. 

11 ‘‘(c) DEADLINE FOR TRANSFERS.—Any transfer re12 quired to be made under this section for a year shall be 

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

14 the close of such year.’’. 

15 SEC. 403. UNFAIR COMPETITION PROHIBITED. 

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

17 United States Code, is amended by adding after section 

18 404 the following: 

19 ‘‘§ 404a. Specific limitations 

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

21 Postal Service may not— 

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

23 any standard) the effect of which is to preclude com24 petition or establish the terms of competition unless 

25 the Postal Service demonstrates that the regulation 
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1 does not create an unfair competitive advantage for 

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

3 the Postal Service; 

4 ‘‘(2) compel the disclosure, transfer, or licens5 ing of intellectual property to any third party (such 

6 as patents, copyrights, trademarks, trade secrets, 

7 and proprietary information); or 

8 ‘‘(3) obtain information from a person that pro9 vides (or seeks to provide) any product, and then 

10 offer any postal service that uses or is based in 

11 whole or in part on such information, without the 

12 consent of the person providing that information, 

13 unless substantially the same information is obtained 

14 (or obtainable) from an independent source or is 

15 otherwise obtained (or obtainable). 

16 ‘‘(b) The Postal Regulatory Commission shall pre17 scribe regulations to carry out this section. 

18 ‘‘(c) Any party (including an officer of the Commis19 sion representing the interests of the general public) who 

20 believes that the Postal Service has violated this section 

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

22 (b) CONFORMING AMENDMENTS.— 

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

24 39, United States Code, is amended by striking 
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1 ‘‘The’’ and inserting ‘‘Subject to the provisions of 

2 section 404a, the’’. 

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

4 39, United States Code, is amended by striking 

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

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

7 (c) CLERICAL AMENDMENT.—The analysis for chap8 ter 4 of title 39, United States Code, is amended by insert9 ing after the item relating to section 404 the following: 

‘‘404a. Specific limitations.’’. 

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

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

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

13 (e) and inserting the following: 

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

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

16 Service— 

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

18 used in the provisions of law involved; and 

19 ‘‘(B) shall not be immune under any other doc20 trine of sovereign immunity from suit in Federal 

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

22 provisions of law by any officer or employee of the 

23 Postal Service. 

24 ‘‘(2) This subsection applies with respect to— 
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1 ‘‘(A) the Act of July 5, 1946 (commonly re2 ferred to as the ‘Trademark Act of 1946’ (15 U.S.C. 

3 1051 and following)); and 

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

5 Trade Commission Act to the extent that such sec6 tion 5 applies to unfair or deceptive acts or prac7 tices. 

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

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

10 Postal Service, engages in conduct with respect to any 

11 product which is not reserved to the United States under 

12 section 1696 of title 18, the Postal Service or other Fed13 eral agency (as the case may be)— 

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

15 sovereign immunity from suit in Federal court by 

16 any person for any violation of Federal law by such 

17 agency or any officer or employee thereof; and 

18 ‘‘(B) shall be considered to be a person (as de19 fined in subsection (a) of the first section of the 

20 Clayton Act) for purposes of— 

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

22 subsection); and 

23 ‘‘(ii) section 5 of the Federal Trade Com24 mission Act to the extent that such section 5 

25 applies to unfair methods of competition. 
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1 For purposes of the preceding sentence, any private car2 riage of mail allowable by virtue of section 601 shall not 

3 be considered a service reserved to the United States 

4 under section 1696 of title 18. 

5 ‘‘(2) No damages, interest on damages, costs or at6 torney’s fees may be recovered, and no criminal liability 

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

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

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

10 the Postal Service, acting in an official capacity. 

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

12 conduct occurring before the date of enactment of this 

13 subsection. 

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

15 in conduct with respect to the provision of competitive 

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

17 of the Federal bankruptcy laws. 

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

19 Postal Service shall be constructed or altered, to the max20 imum extent feasible as determined by the Postal Service, 

21 in compliance with 1 of the nationally recognized model 

22 building codes and with other applicable nationally recog23 nized codes. To the extent practicable, model building 

24 codes should meet the voluntary consensus criteria estab25 lished for codes and standards as required in the National 
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1 Technology Transfer and Advancement Act of 1995 as de2 fined in Office of Management and Budget Circular 

3 A1190. For purposes of life safety, the Postal Service shall 

4 continue to comply with the most current edition of the 

5 Life Safety Code of the National Fire Protection Associa6 tion (NFPA 101). 

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

8 Postal Service shall be constructed or altered only after 

9 consideration of all requirements (other than procedural 

10 requirements) of zoning laws, land use laws, and applica11 ble environmental laws of a State or subdivision of a State 

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

13 constructed or altered by an establishment of the Govern14 ment of the United States. 

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

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

17 Postal Service shall— 

18 ‘‘(A) in preparing plans for the building, con19 sult with appropriate officials of the State or polit20 ical subdivision, or both, in which the building will 

21 be located; 

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

23 timely manner to such officials for review by such 

24 officials for a reasonable period of time not exceed25 ing 30 days; and 
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1 ‘‘(C) permit inspection by such officials during 

2 construction or alteration of the building, in accord3 ance with the customary schedule of inspections for 

4 construction or alteration of buildings in the locality, 

5 if such officials provide to the Postal Service— 

6 ‘‘(i) a copy of such schedule before con7 struction of the building is begun; and 

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

9 conduct any inspection before conducting such 

10 inspection. 

11 Nothing in this subsection shall impose an obligation 

12 on any State or political subdivision to take any ac13 tion under the preceding sentence, nor shall any14 thing in this subsection require the Postal Service or 

15 any of its contractors to pay for any action taken by 

16 a State or political subdivision to carry out this sub17 section (including reviewing plans, carrying out on18 site inspections, issuing building permits, and mak19 ing recommendations). 

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

21 subdivision of a State may make recommendations to the 

22 Postal Service concerning measures necessary to meet the 

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

24 may also make recommendations to the Postal Service 

25 concerning measures which should be taken in the con-
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1 struction or alteration of the building to take into account 

2 local conditions. The Postal Service shall give due consid3 eration to any such recommendations. 

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

5 officials under paragraph (3), the Postal Service shall es6 tablish procedures for soliciting, assessing, and incor7 porating local community input on real property and land 

8 use decisions. 

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

10 includes the District of Columbia, the Commonwealth of 

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

12 States. 

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

14 legal representation may not be furnished by the Depart15 ment of Justice to the Postal Service in any action, suit, 

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

17 the following: 

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

19 ‘‘(B) Subsection (f) or (g) of section 504 (relat20 ing to administrative subpoenas by the Postal Regu21 latory Commission). 

22 ‘‘(C) Section 3663 (relating to appellate re23 view). 

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

25 attorneys to obtain any legal representation that it is pre-
68 

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1 cluded from obtaining from the Department of Justice 

2 under this paragraph. 

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

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

5 furnish the Postal Service such legal representation as it 

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

7 Attorney General, the Postal Service may, in any such cir8 cumstance, employ attorneys by contract or otherwise to 

9 conduct litigation brought by or against the Postal Service 

10 or its officers or employees in matters affecting the Postal 

11 Service. 

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

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

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

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

16 is not otherwise a party, the Commission shall be per17 mitted to appear as a party on its own motion and as 

18 of right. 

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

20 terms and conditions as the Commission and the Attorney 

21 General shall consider appropriate, furnish the Commis22 sion such legal representation as it may require in connec23 tion with any such action, suit, or proceeding, except that, 

24 with the prior consent of the Attorney General, the Com-
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1 mission may employ attorneys by contract or otherwise for 

2 that purpose. 

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

4 United States arising out of activities of the Postal Service 

5 shall be paid by the Postal Service out of any funds avail6 able to the Postal Service, subject to the restriction speci7 fied in section 2011(g).’’. 

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

9 title 39, United States Code, is amended by striking ‘‘Ex10 cept as provided in section 3628 of this title,’’ and insert11 ing ‘‘Except as otherwise provided in this title,’’. 

12 SEC. 405. INTERNATIONAL POSTAL ARRANGEMENTS. 

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

14 States Code, is amended to read as follows: 

15 ‘‘§ 407. International postal arrangements 

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

17 ‘‘(1) to promote and encourage communications 

18 between peoples by efficient operation of inter19 national postal services and other international deliv20 ery services for cultural, social, and economic pur21 poses; 

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

23 undistorted competition in the provision of inter24 national postal services and other international deliv25 ery services, except where provision of such services 
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1 by private companies may be prohibited by law of 

2 the United States; 

3 ‘‘(3) to promote and encourage a clear distinc4 tion between governmental and operational respon5 sibilities with respect to the provision of inter6 national postal services; and 

7 ‘‘(4) to participate in multilateral and bilateral 

8 agreements with other countries to accomplish these 

9 objectives. 

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

11 for formulation, coordination, and oversight of foreign pol12 icy related to international postal services and shall have 

13 the power to conclude postal treaties and conventions, ex14 cept that the Secretary may not conclude any postal treaty 

15 or convention if such treaty or convention would, with re16 spect to any competitive product, grant an undue or un17 reasonable preference to the Postal Service, a private pro18 vider of international postal services, or any other person. 

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

20 paragraph (1), the Secretary of State shall exercise pri21 mary authority for the conduct of foreign policy with re22 spect to international postal services, including the deter23 mination of United States positions and the conduct of 

24 United States participation in negotiations with foreign 
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1 governments and international bodies. In exercising this 

2 authority, the Secretary— 

3 ‘‘(A) shall coordinate with other agencies as ap4 propriate, and in particular, should consider the au5 thority vested by law or Executive order in the Post6 al Regulatory Commission, the Department of Com7 merce, the Department of Transportation, and the 

8 Office of the United States Trade Representative in 

9 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 Homeland Security and Governmental 

15 Affairs of the Senate and the Committee on Govern16 ment Reform of the House of Representatives; 

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) Before concluding any postal treaty or conven14 tion that establishes a rate or classification for a product 

15 subject to subchapter I of chapter 36, the Secretary of 

16 State shall request the Postal Regulatory Commission to 

17 submit its views on whether such rate or classification is 

18 consistent with the standards and criteria established by 

19 the Commission under section 3622. 

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

21 prevent the Postal Service from entering into such com22 mercial or operational contracts related to providing inter23 national postal services as it deems appropriate, except 

24 that— 
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1 ‘‘(1) any such contract made with an agency of 

2 a foreign government (whether under authority of 

3 this subsection or otherwise) shall be solely contrac4 tual in nature and may not purport to be binding 

5 under international law; and 

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

7 Postal Service and an agency of a foreign govern8 ment shall be transmitted to the Secretary of State 

9 and the Postal Regulatory Commission not later 

10 than the effective date of such contract. 

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

12 mail that are competitive products within the meaning of 

13 section 3631 that are exported or imported by the Postal 

14 Service, the Customs Service and other appropriate Fed15 eral agencies shall apply the customs laws of the United 

16 States and all other laws relating to the importation or 

17 exportation of such shipments in the same manner to both 

18 shipments by the Postal Service and similar shipments by 

19 private companies. 

20 ‘‘(2) In exercising the authority under subsection (b) 

21 to conclude new postal treaties and conventions related to 

22 international postal services and to renegotiate such trea23 ties and conventions, the Secretary of State shall, to the 

24 maximum extent practicable, take such measures as are 

25 within the Secretary’s control to encourage the govern-
74 

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1 ments of other countries to make available to the Postal 

2 Service and private companies a range of nondiscrim3 inatory customs procedures that will fully meet the needs 

4 of all types of American shippers. The Secretary of State 

5 shall consult with the United States Trade Representative 

6 and the Commissioner of Customs in carrying out this 

7 paragraph. 

8 ‘‘(3) The provisions of this subsection shall take ef9 fect 6 months after the date of enactment of this sub10 section or such earlier date as the Customs Service may 

11 determine in writing.’’. 

12 (b) EFFECTIVE DATE.—Notwithstanding any provi13 sion of the amendment made by subsection (a), the au14 thority of the United States Postal Service to establish 

15 the rates of postage or other charges on mail matter con16 veyed between the United States and other countries shall 

17 remain available to the Postal Service until— 

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

19 the date as of which the regulations promulgated 

20 under section 3622 of title 39, United States Code 

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

22 (2) with respect to competitive products, the 

23 date as of which the regulations promulgated under 

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

25 amended by section 202) take effect. 
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1 TITLE V—GENERAL PROVISIONS 

2 SEC. 501. QUALIFICATION AND TERM REQUIREMENTS FOR 

3 GOVERNORS. 

4 (a) QUALIFICATIONS.— 

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

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

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

8 sentence and inserting the following: ‘‘The Gov9 ernors shall represent the public interest generally, 

10 and shall be chosen solely on the basis of their dem11 onstrated ability in managing organizations or cor12 porations (in either the public or private sector) of 

13 substantial size. Experience in the fields of law and 

14 accounting shall be considered in making appoint15 ments of Governors. The Governors shall not be rep16 resentatives of specific interests using the Postal 

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

18 (2) APPLICABILITY.—The amendment made by 

19 paragraph (1) shall not affect the appointment or 

20 tenure of any person serving as a Governor of the 

21 United States Postal Service under an appointment 

22 made before the date of enactment of this Act how23 ever, when any such office becomes vacant, the ap24 pointment of any person to fill that office shall be 

25 made in accordance with such amendment. The re-
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1 quirement set forth in the fourth sentence of section 

2 202(a)(1) of title 39, United States Code (as amend3 ed by subsection (a)) shall be met beginning not 

4 later than 9 years after the date of enactment of 

5 this Act. 

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

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

8 the end the following: 

9 ‘‘(2) In selecting the individuals described in para10 graph (1) for nomination for appointment to the position 

11 of Governor, the President should consult with the Speak12 er of the House of Representatives, the minority leader 

13 of the House of Representatives, the majority leader of 

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

15 (c) 5-YEAR TERMS.— 

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

17 United States code, is amended in the first sentence 

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

19 (2) APPLICABILITY.— 

20 (A) CONTINUATION BY INCUMBENTS.— 

21 The amendment made by paragraph (1) shall 

22 not affect the tenure of any person serving as 

23 a Governor of the United States Postal Service 

24 on the date of enactment of this Act and such 
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1 person may continue to serve the remainder of 

2 the applicable term. 

3 (B) VACANCY BY INCUMBENT BEFORE 5

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

5 as a Governor of the United States Postal Serv6 ice on the date of enactment of this Act resigns, 

7 is removed, or dies before the expiration of the 

8 9-year term of that Governor, and that Gov9 ernor has served less than 5 years of that term, 

10 the resulting vacancy in office shall be treated 

11 as a vacancy in a 5-year term. 

12 (C) VACANCY BY INCUMBENT AFTER 5

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

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

16 is removed, or dies before the expiration of the 

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

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

20 term beginning on its commencement date for 

21 purposes of determining vacancies in office. Any 

22 appointment to the vacant office shall be for a 

23 5-year term beginning at the end of the original 

24 9-year term determined without regard to the 

25 deeming under the preceding sentence. Nothing 
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1 in this subparagraph shall be construed to af2 fect any action or authority of any Governor or 

3 the Board of Governors during any portion of 

4 a 9-year term deemed to be 5-year term under 

5 this subparagraph. 

6 (d) TERM LIMITATION.— 

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

8 United States Code, is amended— 

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

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

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

12 as a Governor.’’. 

13 (2) APPLICABILITY.—The amendments made 

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

15 person serving as a Governor of the United States 

16 Postal Service on the date of enactment of this Act 

17 with respect to the term which that person is serving 

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

19 remainder of the applicable term, after which the 

20 amendments made by paragraph (1) shall apply. 

21 SEC. 502. OBLIGATIONS. 

22 (a) PURPOSES FOR WHICH OBLIGATIONS MAY BE

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

24 39, United States Code, is amended by striking ‘‘title.’’ 

25 and inserting ‘‘title, other than any of the purposes for 
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1 which the corresponding authority is available to the Post2 al Service under section 2011.’’. 

3 (b) INCREASE RELATING TO OBLIGATIONS ISSUED

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

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

6 third sentence. 

7 (c) AMOUNTS WHICH MAY BE PLEDGED.— 

8 (1) OBLIGATIONS TO WHICH PROVISIONS

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

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

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

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

13 (2) ASSETS, REVENUES, AND RECEIPTS TO

14 WHICH PROVISIONS APPLY.—Subsection (b) of sec15 tion 2005 of title 39, United States Code, is amend16 ed by striking ‘‘(b)’’ and inserting ‘‘(b)(1)’’, and by 

17 adding at the end the following: 

18 ‘‘(2) Notwithstanding any other provision of this sec19 tion— 

20 ‘‘(A) the authority to pledge assets of the Post21 al Service under this subsection shall be available 

22 only to the extent that such assets are not related 

23 to the provision of competitive products (as deter24 mined under section 2011(h) or, for purposes of any 

25 period before accounting practices and principles 
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1 under section 2011(h) have been established and ap2 plied, the best information available from the Postal 

3 Service, including the audited statements required 

4 by section 2008(e)); and 

5 ‘‘(B) any authority under this subsection relat6 ing to the pledging or other use of revenues or re7 ceipts of the Postal Service shall be available only to 

8 the extent that they are not revenues or receipts of 

9 the Competitive Products Fund.’’. 

10 SEC. 503. PRIVATE CARRIAGE OF LETTERS. 

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

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

13 inserting the following: 

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

15 when— 

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

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

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

19 single-piece first class letter; 

‘‘(2) the letter weighs at least 121 20 ⁄2 ounces; or 

21 ‘‘(3) such carriage is within the scope of serv22 ices described by regulations of the United States 

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

24 permit private carriage by suspension of the oper25 ation of 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. 504. 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. 505. NONINTERFERENCE WITH COLLECTIVE BAR18 GAINING AGREEMENTS. 

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

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

21 ‘‘§ 1207. Labor disputes 

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

23 effect, no party to such agreement shall terminate or mod24 ify such agreement unless the party desiring such termi25 nation or modification serves written notice upon the other 
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1 party to the agreement of the proposed termination or 

2 modification not less than 90 days prior to the expiration 

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

4 it is proposed to make such termination or modification. 

5 The party serving such notice shall notify the Federal Me6 diation and Conciliation Service of the existence of a dis7 pute within 45 days after such notice, if no agreement has 

8 been reached by that time. 

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

10 a procedure providing for a binding resolution of a dispute 

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

12 date of the proposed termination or modification, the Di13 rector of the Federal Mediation and Conciliation Service 

14 shall within 10 days appoint a mediator of nationwide rep15 utation and professional stature, and who is also a mem16 ber of the National Academy of Arbitrators. The parties 

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

18 agreement and shall meet and negotiate in good faith at 

19 such times and places that the mediator, in consultation 

20 with the parties, shall direct. 

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

22 after the expiration or termination of the agreement or 

23 the date on which the agreement became subject to modi24 fication under subsection (a) of this section, or if the par25 ties decide upon arbitration but do not agree upon the pro-
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1 cedures therefore, an arbitration board shall be established 

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

3 the Postal Service, 1 by the bargaining representative of 

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

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

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

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

8 shall be made from a list of names provided by the Direc9 tor. This list shall consist of not less then 9 names of arbi10 trators of nationwide reputation and professional nature, 

11 who are also members of the National Academy of Arbi12 trators, and whom the Director has determined are avail13 able and willing to serve. 

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

15 full and fair hearing, including an opportunity to present 

16 evidence in support of their claims, and an opportunity 

17 to present their case in person, by counsel or by other rep18 resentative as they may elect. Decisions of the arbitration 

19 board shall be conclusive and binding upon the parties. 

20 The arbitration board shall render its decision within 45 

21 days after its appointment. 

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

23 shall be shared equally by the Postal Service and the bar24 gaining representative. 
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1 ‘‘(d) In the case of a bargaining unit whose recog2 nized collective-bargaining representative does not have an 

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

4 reach the agreement within 90 days after the commence5 ment of collective bargaining, a mediator shall be ap6 pointed in accordance with the terms in subsection (b) of 

7 this section, unless the parties have previously agreed to 

8 another procedure for a binding resolution of their dif9 ferences. If the parties fail to reach agreement within 180 

10 days after the commencement of collective bargaining, and 

11 if they have not agreed to another procedure for binding 

12 resolution, an arbitration board shall be established to pro13 vide conclusive and binding arbitration in accordance with 

14 the terms of subsection (c) of this section.’’. 

15 (b) NONINTERFERENCE WITH COLLECTIVE BAR16 GAINING AGREEMENTS.—Except as otherwise provided by 

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

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

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

20 labor organizations representing employees of the United 

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

22 States Code, the National Labor Relations Act, any hand23 book or manual affecting employee labor relations within 

24 the United States Postal Service, or any collective bar25 gaining agreement. 
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1 (c) FREE MAILING PRIVILEGES CONTINUE UN2 CHANGED.—Nothing in this Act or any amendment made 

3 by this Act shall affect any free mailing privileges ac4 corded under section 3217 or sections 3403 through 3406 

5 of title 39, United States Code. 

6 SEC. 506. BONUS AUTHORITY. 

7 Chapter 36 of title 39, United States Code, is amend8 ed by inserting after section 3685 the following: 

9 ‘‘§ 3686. Bonus authority 

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

11 1 or more programs to provide bonuses or other rewards 

12 to officers and employees of the Postal Service in senior 

13 executive or equivalent positions to achieve the objectives 

14 of this chapter. 

15 ‘‘(b) LIMITATION ON TOTAL COMPENSATION.— 

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

17 the Postal Service may award a bonus or other re18 ward in excess of the limitation set forth in the last 

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

20 been approved under paragraph (2). Any such award 

21 or bonus may not cause the total compensation of 

22 such officer or employee to exceed the total annual 

23 compensation payable to the Vice President under 

24 section 104 of title 3 as of the end of the calendar 

25 year in which the bonus or award is paid. 
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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 set forth in 

5 the last sentence of section 1003(a)— 

6 ‘‘(A) the Postal Service shall make an ap7 propriate request to the Board of Governors of 

8 the Postal Service in such form and manner as 

9 the Board requires; and 

10 ‘‘(B) the Board of Governors shall approve 

11 any such request if the Board certifies, for the 

12 annual appraisal period involved, that the per13 formance appraisal system for affected officers 

14 and employees of the Postal Service (as de15 signed and applied) makes meaningful distinc16 tions based on relative performance. 

17 ‘‘(3) REVOCATION AUTHORITY.—If the Board 

18 of Governors of the Postal Service finds that a per19 formance appraisal system previously approved 

20 under paragraph (2)(B) does not (as designed and 

21 applied) make meaningful distinctions based on rel22 ative performance, the Board may revoke or suspend 

23 the authority of the Postal Service to continue a pro24 gram approved under paragraph (2) until such time 
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1 as appropriate corrective measures have, in the judg2 ment of the Board, been taken. 

3 ‘‘(c) REPORTING REQUIREMENT RELATING TO BO4 NUSES OR OTHER REWARDS.—Included in its comprehen5 sive statement under section 2401(e) for any period shall 

6 be— 

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

8 or other reward during such period which would not 

9 have been allowable but for the provisions of sub10 section (b); 

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

12 and 

13 ‘‘(3) the amount by which the limitation re14 ferred to in subsection (b)(1) was exceeded as a re15 sult of such bonus or other reward.’’. 

16 TITLE VI—ENHANCED 

17 REGULATORY COMMISSION 

18 SEC. 601. REORGANIZATION AND MODIFICATION OF CER19 TAIN PROVISIONS RELATING TO THE POSTAL 

20 REGULATORY COMMISSION. 

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

22 United States Code, is amended— 

23 (1) by inserting after chapter 4 the following: 
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1 ‘‘CHAPTER 5—POSTAL REGULATORY 

2 COMMISSION 

‘‘Sec. 

‘‘501. Establishment. 

‘‘502. Commissioners. 

‘‘503. Rules; regulations; procedures. 

‘‘504. Administration. 

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

public. 

3 ‘‘§ 501. Establishment 

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

7 ‘‘§ 502. Commissioners 

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

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

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

12 qualifications, professional standing, and demonstrated 

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

15 cause. Each individual appointed to the Commission shall 

16 have the qualifications and expertise necessary to carry 

17 out the enhanced responsibilities accorded Commissioners 

18 under the Postal Accountability and Enhancement Act. 

19 Not more than 3 of the Commissioners may be adherents 

20 of the same political party. 
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1 ‘‘(b) No Commissioner shall be financially interested 

2 in any enterprise in the private sector of the economy en3 gaged in the delivery of mail matter. 

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

5 expiration of his term until his successor has qualified, 

6 except that a Commissioner may not so continue to serve 

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

8 otherwise would expire under subsection (f). 

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

10 as Chairman by, and shall serve in the position of Chair11 man at the pleasure of, the President. 

12 ‘‘(e) The Commissioners shall by majority vote des13 ignate a Vice Chairman of the Commission. The Vice 

14 Chairman shall act as Chairman of the Commission in the 

15 absence of the Chairman. 

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

17 years.’’; 

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

19 (as in effect before the amendment made by section 

20 201(c)), the heading for such subchapter I and all 

21 that follows through section 3602; 

22 (3) by redesignating sections 3603 and 3604 as 

23 sections 503 and 504, respectively, and transferring 

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

25 paragraph (1)); and 
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1 (4) by adding after such section 504 the fol2 lowing: 

3 ‘‘§ 505. Officer of the Postal Regulatory Commission 

4 representing the general public 

5 ‘‘The Postal Regulatory Commission shall designate 

6 an officer of the Postal Regulatory Commission in all pub7 lic proceedings who shall represent the interests of the 

8 general public.’’. 

9 (b) APPLICABILITY.—The amendment made by sub10 section (a)(1) shall not affect the appointment or tenure 

11 of any person serving as a Commissioner on the Postal 

12 Regulatory Commission (as so redesignated by section 

13 604) under an appointment made before the date of enact14 ment of this Act or any nomination made before that date, 

15 but, when any such office becomes vacant, the appoint16 ment of any person to fill that office shall be made in ac17 cordance with such amendment. 

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

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

20 after the item relating to chapter 4 the following: 

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

21 SEC. 602. AUTHORITY FOR POSTAL REGULATORY COMMIS22 SION TO ISSUE SUBPOENAS. 

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

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

25 end the following: 
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1 ‘‘(f)(1) Any Commissioner of the Postal Regulatory 

2 Commission, any administrative law judge appointed by 

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

4 employee of the Commission designated by the Commis5 sion may administer oaths, examine witnesses, take depo6 sitions, and receive evidence. 

7 ‘‘(2) The Chairman of the Commission, any Commis8 sioner designated by the Chairman, and any administra9 tive law judge appointed by the Commission under section 

10 3105 of title 5 may, with respect to any proceeding con11 ducted by the Commission under this title or to obtain 

12 information to be used to prepare a report under this 

13 title— 

14 ‘‘(A) issue subpoenas requiring the attendance 

15 and presentation of testimony by, or the production 

16 of documentary or other evidence in the possession 

17 of, any covered person; and 

18 ‘‘(B) order the taking of depositions and re19 sponses to written interrogatories by a covered per20 son. 

21 The written concurrence of a majority of the Commis22 sioners then holding office shall, with respect to each sub23 poena under subparagraph (A), be required in advance of 

24 its issuance. 
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1 ‘‘(3) In the case of contumacy or failure to obey a 

2 subpoena issued under this subsection, upon application 

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

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

5 is addressed resides or is served may issue an order requir6 ing such person to appear at any designated place to tes7 tify or produce documentary or other evidence. Any failure 

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

9 court as a contempt thereof. 

10 ‘‘(4) For purposes of this subsection, the term ‘cov11 ered person’ means an officer, employee, agent, or con12 tractor of the Postal Service. 

13 ‘‘(g)(1) If the Postal Service determines that any doc14 ument or other matter it provides to the Postal Regulatory 

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

16 or otherwise at the request of the Commission in connec17 tion with any proceeding or other purpose under this title, 

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

19 of this title, or exempt from public disclosure under sec20 tion 552(b) of title 5, the Postal Service shall, at the time 

21 of providing such matter to the Commission, notify the 

22 Commission, in writing, of its determination (and the rea23 sons therefor). 

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

25 or employee of the Commission may, with respect to any 
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1 information as to which the Commission has been notified 

2 under paragraph (1)— 

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

4 than the purposes for which it is supplied; or 

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

6 employee of the Commission to have access to any 

7 such information. 

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

9 Commission from publicly disclosing relevant infor10 mation in furtherance of its duties under this title, 

11 provided that the Commission has adopted regula12 tions under section 553 of title 5, that establish a 

13 procedure for according appropriate confidentiality 

14 to information identified by the Postal Service under 

15 paragraph (1). In determining the appropriate de16 gree of confidentiality to be accorded information 

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

18 the Commission shall balance the nature and extent 

19 of the likely commercial injury to the Postal Service 

20 against the public interest in maintaining the finan21 cial transparency of a government establishment 

22 competing in commercial markets. 

23 ‘‘(B) Paragraph (2) shall not prevent the Com24 mission from requiring production of information in 

25 the course of any discovery procedure established in 
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1 connection with a proceeding under this title. The 

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

3 of the Federal Rules of Civil Procedure, establish 

4 procedures for ensuring appropriate confidentiality 

5 for information furnished to any party.’’. 

6 SEC. 603. APPROPRIATIONS FOR THE POSTAL REGU7 LATORY COMMISSION. 

8 (a) AUTHORIZATION OF APPROPRIATIONS.—Sub9 section (d) of section 504 of title 39, United States Code 

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

11 as follows: 

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

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

14 for the Postal Regulatory Commission. In requesting an 

15 appropriation under this subsection for a fiscal year, the 

16 Commission shall prepare and submit to the Congress 

17 under section 2009 a budget of the Commission’s ex18 penses, including expenses for facilities, supplies, com19 pensation, and employee benefits.’’. 

20 (b) BUDGET PROGRAM.— 

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

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

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

24 shall also include separate statements of the 

25 amounts which (1) the Postal Service requests to be 
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1 appropriated under subsections (b) and (c) of section 

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

3 United States Postal Service requests to be appro4 priated, out of the Postal Service Fund, under sec5 tion 8G(f) of the Inspector General Act of 1978, and 

6 (3) the Postal Regulatory Commission requests to be 

7 appropriated, out of the Postal Service Fund, under 

8 section 504(d) of this title.’’. 

9 (2) CONFORMING AMENDMENT.—Section 

10 2003(e)(1) of title 39, United States Code, is 

11 amended by striking the first sentence and inserting 

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

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

14 Service in carrying out its functions as provided by 

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

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

17 all expenses of the Postal Regulatory Commission, 

18 subject to the availability of amounts appropriated 

19 under section 504(d); and (C) all expenses of the Of20 fice of Inspector General, subject to the availability 

21 of amounts appropriated under section 8G(f) of the 

22 Inspector General Act of 1978.’’. 

23 (c) EFFECTIVE DATE.— 
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1 (1) IN GENERAL.—The amendments made by 

2 this section shall apply with respect to fiscal years 

3 beginning on or after October 1, 2002. 

4 (2) SAVINGS PROVISION.—The provisions of 

5 title 39, United States Code, that are amended by 

6 this section shall, for purposes of any fiscal year be7 fore the first fiscal year to which the amendments 

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

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

10 SEC. 604. REDESIGNATION OF THE POSTAL RATE COMMIS11 SION. 

12 (a) AMENDMENTS TO TITLE 39, UNITED STATES

13 CODE.—Title 39, United States Code, is amended in sec14 tions 404, 503 and 504 (as so redesignated by section 

15 601), 1001 and 1002, by striking ‘‘Postal Rate Commis16 sion’’ each place it appears and inserting ‘‘Postal Regu17 latory Commission’’; 

18 (b) AMENDMENTS TO TITLE 5, UNITED STATES

19 CODE.—Title 5, United States Code, is amended in sec20 tions 104(1), 306(f), 2104(b), 3371(3), 5314 (in the item 

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

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

23 5514(a)(5)(B), 7342(a)(1)(A), 7511(a)(1)(B)(ii), 

24 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. 

22 SEC. 605. FINANCIAL TRANSPARENCY. 

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

24 States Code, is amended— 
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1 (1) by redesignating subsections (d) through (g) 

2 as subsections (e) through (h), respectively; and 

3 (2) by inserting after subsection (c) the fol4 lowing: 

5 ‘‘(d) As an independent establishment of the execu6 tive branch of the Government of the United States, the 

7 Postal Service shall be subject to a high degree of trans8 parency to ensure fair treatment of customers of the Post9 al Service’s market-dominant products and companies 

10 competing with the Postal Service’s competitive prod11 ucts.’’. 

12 (b) FINANCIAL REPORTING REQUIREMENTS AND EN13 FORCEMENT POWERS APPLICABLE TO POSTAL SERV14 ICE.—Section 503 of title 39, United States Code (as so 

15 redesignated by section 601 and 604) is amended by— 

16 (1) inserting ‘‘(a)’’ before ‘‘The Postal Regu17 latory Commission shall promulgate’’; and 

18 (2) adding at the end the following: 

19 ‘‘(b)(1) Beginning with the first full fiscal year fol20 lowing the date of enactment of the Postal Accountability 

21 and Enhancement Act, the Postal Service shall file with 

22 the Postal Regulatory Commission — 

23 ‘‘(A) within 35 days after the end of each fiscal 

24 quarter, a quarterly report containing the informa25 tion prescribed in Form 10–Q of the Securities and 
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1 Exchange Commission under section 13 of the Secu2 rities Exchange Act of 1934 (15 U.S.C. 78m), or 

3 any revised or successor form; 

4 ‘‘(B) within 60 days after the end of each fiscal 

5 year, an annual report containing the information 

6 prescribed in Form 10–K of the Securities and Ex7 change Commission under section 13 of the Securi8 ties Exchange Act of 1934 (15 U.S.C. 78m), or any 

9 revised or successor form; and 

10 ‘‘(C) periodic reports within the time frame and 

11 containing the information prescribed in Form 8–K 

12 of the Securities and Exchange Commission under 

13 section 13 of the Securities Exchange Act of 1934 

14 (15 U.S.C. 78m), or any revised or successor form. 

15 ‘‘(2) For purposes of preparing the reports required 

16 under paragraph (1), the Postal Service shall be deemed 

17 to be the registrant described in the Securities and Ex18 change Commission forms, and references contained in 

19 such forms to Securities and Exchange Commission regu20 lations are applicable. 

21 ‘‘(3) For purposes of preparing the reports required 

22 under paragraph (1), the Postal Service shall comply with 

23 the rules prescribed by the Securities and Exchange Com24 mission implementing section 404 of the Sarbanes-Oxley 

25 Act of 2002 (15 U.S.C. 7262; Public Law 107–204) be-
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1 ginning with fiscal year 2007 and in each fiscal year there2 after. 

3 ‘‘(c)(1) The reports required under subsection 

4 (b)(1)(B) shall include, with respect to the financial obli5 gations of the Postal Service under chapters 83, 84, and 

6 89 of title 5 for retirees of the Postal Service— 

7 ‘‘(A) the funded status of such obligations of 

8 the Postal Service; 

9 ‘‘(B) components of the net change in the fund 

10 balances and obligations and the nature and cause 

11 of any significant changes; 

12 ‘‘(C) components of net periodic costs; 

13 ‘‘(D) cost methods and assumptions underlying 

14 the relevant actuarial valuations; 

15 ‘‘(E) the effect of a one-percentage point in16 crease in the assumed health care cost trend rate for 

17 each future year on the service and interest costs 

18 components of net periodic cost and the accumulated 

19 obligation of the Postal Service under chapter 89 of 

20 title 5 for retirees of the Postal Service; 

21 ‘‘(F) actual contributions to and payments from 

22 the funds for the years presented and the estimated 

23 future contributions and payments for each of the 

24 following 5 years; 
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1 ‘‘(G) the composition of plan assets reflected in 

2 the fund balances; and 

3 ‘‘(H) the assumed rate of return on fund bal4 ances and the actual rates of return for the years 

5 presented. 

6 ‘‘(2)(A) Beginning with the fiscal year 2007 and in 

7 each fiscal year thereafter, for purposes of the reports re8 quired under subsection (b)(1) (A) and (B), the Postal 

9 Service shall include segment reporting. 

10 ‘‘(B) The Postal Service shall determine the appro11 priate segment reporting under subparagraph (A), after 

12 consultation with the Postal Regulatory Commission. 

13 ‘‘(d) For purposes of the annual reports required 

14 under subsection (b)(1)(B), the Postal Service shall obtain 

15 an opinion from an independent auditor on whether the 

16 information listed under subsection (c) is fairly stated in 

17 all material respects, either in relation to the basic finan18 cial statements as a whole or on a stand-alone basis. 

19 ‘‘(e) The Postal Regulatory Commission shall have 

20 access to the audit documentation and any other sup21 porting matter of the Postal Service and its independent 

22 auditor in connection with any information submitted 

23 under subsection (b)(1)(B). 

24 ‘‘(f) The Postal Regulatory Commission may, on its 

25 own motion or on request of an interested party, initiate 
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1 proceedings (to be conducted in accordance with regula2 tions that the Commission shall prescribe) to improve the 

3 quality, accuracy, or completeness of Postal Service data 

4 required by the Commission under this section whenever 

5 it shall appear that the data— 

6 ‘‘(1) have become significantly inaccurate; 

7 ‘‘(2) can be significantly improved; or 

8 ‘‘(3) are not cost beneficial.’’. 

9 TITLE VII—EVALUATIONS 

10 SEC. 701. ASSESSMENTS OF RATEMAKING, CLASSIFICA11 TION, AND OTHER PROVISIONS. 

12 (a) IN GENERAL.—The Postal Regulatory Commis13 sion shall, at least every 3 years, submit a report to the 

14 President and Congress concerning— 

15 (1) the operation of the amendments made by 

16 this Act; 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 the report and to submit written comments on the report. 

25 Any comments timely received from the Postal Service 
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1 under the preceding sentence shall be attached to the re2 port submitted under subsection (a). 

3 SEC. 702. REPORT ON UNIVERSAL POSTAL SERVICE AND 

4 THE POSTAL MONOPOLY. 

5 (a) REPORT BY THE POSTAL REGULATORY COMMIS6 SION.— 

7 (1) IN GENERAL.—Not later than 12 months 

8 after the date of enactment of this Act, the Postal 

9 Regulatory Commission shall submit a report to the 

10 President and Congress on universal postal service 

11 and the postal monopoly in the United States (in 

12 this section referred to as ‘‘universal service and the 

13 postal monopoly’’), including the monopoly on the 

14 delivery of mail and on access to mailboxes. 

15 (2) CONTENTS.—The report under this sub16 section shall include— 

17 (A) a comprehensive review of the history 

18 and development of universal service and the 

19 postal monopoly, including how the scope and 

20 standards of universal service and the postal 

21 monopoly have evolved over time for the Nation 

22 and its urban and rural areas; 

23 (B) the scope and standards of universal 

24 service and the postal monopoly provided under 

25 current law (including sections 101 and 403 of 
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1 title 39, United States Code), and current 

2 rules, regulations, policy statements, and prac3 tices of the Postal Service; 

4 (C) a description of any geographic areas, 

5 populations, communities (including both urban 

6 and rural communities), organizations, or other 

7 groups or entities not currently covered by uni8 versal service or that are covered but that are 

9 receiving services deficient in scope or quality 

10 or both; and 

11 (D) the scope and standards of universal 

12 service and the postal monopoly likely to be re13 quired in the future in order to meet the needs 

14 and expectations of the United States public, 

15 including all types of mail users, based on dis16 cussion of such assumptions, alternative sets of 

17 assumptions, and analyses as the Postal Service 

18 considers plausible. 

19 (b) RECOMMENDED CHANGES TO UNIVERSAL SERV20 ICE AND THE MONOPOLY.—The Postal Regulatory Com21 mission shall include in the report under subsection (a), 

22 and in all reports submitted under section 701 of this 

23 Act— 

24 (1) any recommended changes to universal serv25 ice and the postal monopoly as the Commission con-
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1 siders appropriate, including changes that the Com2 mission may implement under current law and 

3 changes that would require changes to current law, 

4 with estimated effects of the recommendations on 

5 the service, financial condition, rates, and security of 

6 mail provided by the Postal Service; 

7 (2) with respect to each recommended change 

8 described under paragraph (1)— 

9 (A) an estimate of the costs of the Postal 

10 Service attributable to the obligation to provide 

11 universal service under current law; and 

12 (B) an analysis of the likely benefit of the 

13 current postal monopoly to the ability of the 

14 Postal Service to sustain the current scope and 

15 standards of universal service, including esti16 mates of the financial benefit of the postal mo17 nopoly to the extent practicable, under current 

18 law; and 

19 (3) such additional topics and recommendations 

20 as the Commission considers appropriate, with esti21 mated effects of the recommendations on the service, 

22 financial condition, rates, and the security of mail 

23 provided by the Postal Service. 
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1 SEC. 703. STUDY ON EQUAL APPLICATION OF LAWS TO 

2 COMPETITIVE PRODUCTS. 

3 (a) IN GENERAL.—The Federal Trade Commission 

4 shall prepare and submit to the President and Congress, 

5 and to the Postal Regulatory Commission, within 1 year 

6 after the date of enactment of this Act, a comprehensive 

7 report identifying Federal and State laws that apply dif8 ferently to the United States Postal Service with respect 

9 to the competitive category of mail (within the meaning 

10 of section 102 of title 39, United States Code, as amended 

11 by section 101) and similar products provided by private 

12 companies. 

13 (b) RECOMMENDATIONS.—The Federal Trade Com14 mission shall include such recommendations as it con15 siders appropriate for bringing such legal discrimination 

16 to an end, and in the interim, to account under section 

17 3633 of title 39, United States Code (as added by this 

18 Act), for the net economic advantages provided by those 

19 laws. 

20 (c) CONSULTATION.—In preparing its report, the 

21 Federal Trade Commission shall consult with the United 

22 States Postal Service, the Postal Regulatory Commission, 

23 other Federal agencies, mailers, private companies that 

24 provide delivery services, and the general public, and shall 

25 append to such report any written comments received 

26 under this subsection. 
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1 (d) COMPETITIVE PRODUCT REGULATION.—The 

2 Postal Regulatory Commission shall take into account the 

3 recommendations of the Federal Trade Commission in 

4 promulgating or revising the regulations required under 

5 section 3633 of title 39, United States Code. 

6 SEC. 704. REPORT ON POSTAL WORKPLACE SAFETY AND 

7 WORKPLACE-RELATED INJURIES. 

8 (a) REPORT BY THE INSPECTOR GENERAL.— 

9 (1) IN GENERAL.—Not later than 6 months 

10 after the enactment of this Act, the Inspector Gen11 eral of the United States Postal Service shall submit 

12 a report to Congress and the Postal Service that— 

13 (A) details and assesses any progress the 

14 Postal Service has made in improving workplace 

15 safety and reducing workplace-related injuries 

16 nationwide; and 

17 (B) identifies opportunities for improve18 ment that remain with respect to such improve19 ments and reductions. 

20 (2) CONTENTS.—The report under this sub21 section shall also— 

22 (A) discuss any injury reduction goals es23 tablished by the Postal Service; 

24 (B) describe the actions that the Postal 

25 Service has taken to improve workplace safety 
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1 and reduce workplace-related injuries, and as2 sess how successful the Postal Service has been 

3 in meeting its injury reduction goal; and 

4 (C) identify areas where the Postal Service 

5 has failed to meet its injury reduction goals, ex6 plain the reasons why these goals were not met, 

7 and identify opportunities for making further 

8 progress in meeting these goals. 

9 (b) REPORT BY THE POSTAL SERVICE.— 

10 (1) REPORT TO CONGRESS.—Not later than 6 

11 months after receiving the report under subsection 

12 (a), the Postal Service shall submit a report to Con13 gress detailing how it plans to improve workplace 

14 safety and reduce workplace-related injuries nation15 wide, including goals and metrics. 

16 (2) PROBLEM AREAS.—The report under this 

17 subsection shall also include plans, developed in con18 sultation with the Inspector General and employee 

19 representatives, including representatives of each 

20 postal labor union and management association, for 

21 addressing the problem areas identified by the In22 spector General in the report under subsection 

23 (a)(2)(C). 
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1 SEC. 705. STUDY ON RECYCLED PAPER. 

2 (a) IN GENERAL.—Within 12 months after the date 

3 of enactment of this Act, the Government Accountability 

4 Office shall study and submit to the Congress, the Board 

5 of Governors of the Postal Service, and to the Postal Reg6 ulatory Commission a report concerning— 

7 (1) the economic and environmental efficacy of 

8 establishing rate incentives for mailers linked to the 

9 use of recycled paper; 

10 (2) a description of the accomplishments of the 

11 Postal Service in each of the preceding 5 years in12 volving recycling activities, including the amount of 

13 annual revenue generated and savings achieved by 

14 the Postal Service as a result of its use of recycled 

15 paper and other recycled products and its efforts to 

16 recycle undeliverable and discarded mail and other 

17 materials; and 

18 (3) additional opportunities that may be avail19 able for the United States Postal Service to engage 

20 in recycling initiatives and the projected costs and 

21 revenues of undertaking such opportunities. 

22 (b) RECOMMENDATIONS.—The report shall include 

23 recommendations for any administrative or legislative ac24 tions that may be appropriate. 
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1 TITLE VIII—POSTAL SERVICE 

2 RETIREMENT AND HEALTH 

3 BENEFITS FUNDING 

4 SEC. 801. SHORT TITLE. 

5 This title may be cited as the ‘‘Postal Civil Service 

6 Retirement and Health Benefits Funding Amendments of 

7 2004’’. 

8 SEC. 802. CIVIL SERVICE RETIREMENT SYSTEM. 

9 (a) IN GENERAL.—Chapter 83 of title 5, United 

10 States Code, is amended— 

11 (1) in section 8334(a)(1)(B), by striking clause 

12 (ii) and inserting the following: 

13 ‘‘(ii) In the case of an employee of the United States 

14 Postal Service, no amount shall be contributed under this 

15 subparagraph.’’; and 

16 (2) by amending section 8348(h) to read as fol17 lows: 

18 ‘‘(h)(1) In this subsection, the term ‘Postal surplus 

19 or supplemental liability’ means the estimated difference, 

20 as determined by the Office, between— 

21 ‘‘(A) the actuarial present value of all future 

22 benefits payable from the Fund under this sub23 chapter to current or former employees of the 

24 United States Postal Service and attributable to ci-
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1 vilian employment with the United States Postal 

2 Service; and 

3 ‘‘(B) the sum of— 

4 ‘‘(i) the actuarial present value of deduc5 tions to be withheld from the future basic pay 

6 of employees of the United States Postal Serv7 ice currently subject to this subchapter under 

8 section 8334; 

9 ‘‘(ii) that portion of the Fund balance, as 

10 of the date the Postal surplus or supplemental 

11 liability is determined, attributable to payments 

12 to the Fund by the United States Postal Serv13 ice and its employees, minus benefit payments 

14 attributable to civilian employment with the 

15 United States Postal Service, plus the earnings 

16 on such amounts while in the Fund; and 

17 ‘‘(iii) any other appropriate amount, as de18 termined by the Office in accordance with gen19 erally accepted actuarial practices and prin20 ciples. 

21 ‘‘(2)(A) Not later than June 15, 2006, the Office 

22 shall determine the Postal surplus or supplemental liabil23 ity, as of September 30, 2005. If that result is a surplus, 

24 the amount of the surplus shall be transferred to the Post25 al Service Retiree Health Benefits Fund established under 
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1 section 8909a by June 30, 2006. If the result is a supple2 mental liability, the Office shall establish an amortization 

3 schedule, including a series of annual installments com4 mencing September 30, 2006, which provides for the liq5 uidation of such liability by September 30, 2043. 

6 ‘‘(B) The Office shall redetermine the Postal surplus 

7 or supplemental liability as of the close of the fiscal year, 

8 for each fiscal year beginning after September 30, 2006, 

9 through the fiscal year ending September 30, 2038. If the 

10 result is a surplus, that amount shall remain in the Fund 

11 until distribution is authorized under subparagraph (C), 

12 and any prior amortization schedule for payments shall 

13 be terminated. If the result is a supplemental liability, the 

14 Office shall establish a new amortization schedule, includ15 ing a series of annual installments commencing on Sep16 tember 30 of the subsequent fiscal year, which provides 

17 for the liquidation of such liability by September 30, 2043. 

18 ‘‘(C) As of the close of the fiscal years ending Sep19 tember 30, 2015, 2025, 2035, and 2039, if the result is 

20 a surplus, that amount shall be transferred to the Postal 

21 Service Retiree Health Benefits Fund, and any prior am22 ortization schedule for payments shall be terminated. 

23 ‘‘(D) Amortization schedules established under this 

24 paragraph shall be set in accordance with generally accept25 ed actuarial practices and principles, with interest com-
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1 puted at the rate used in the most recent valuation of the 

2 Civil Service Retirement System. 

3 ‘‘(E) The United States Postal Service shall pay the 

4 amounts so determined to the Office, with payments due 

5 not later than the date scheduled by the Office. 

6 ‘‘(3) Notwithstanding any other provision of law, in 

7 computing the amount of any payment under any other 

8 subsection of this section that is based upon the amount 

9 of the unfunded liability, such payment shall be computed 

10 disregarding that portion of the unfunded liability that the 

11 Office determines will be liquidated by payments under 

12 this subsection.’’. 

13 (b) CREDIT ALLOWED FOR MILITARY SERVICE.—In 

14 the application of section 8348(g)(2) of title 5, United 

15 States Code, for the fiscal year 2006, the Office of Per16 sonnel Management shall include, in addition to the 

17 amount otherwise computed under that paragraph, the 

18 amounts that would have been included for the fiscal years 

19 2003 through 2005 with respect to credit for military serv20 ice of former employees of the United States Postal Serv21 ice as though the Postal Civil Service Retirement System 

22 Funding Reform Act of 2003 (Public Law 108–18) had 

23 not been enacted, and the Secretary of the Treasury shall 

24 make the required transfer to the Civil Service Retirement 

25 and Disability Fund based on that amount. 
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1 SEC. 803. HEALTH INSURANCE. 

2 (a) IN GENERAL.— 

3 (1) FUNDING.—Chapter 89 of title 5, United 

4 States Code, is amended— 

5 (A) in section 8906(g)(2)(A), by striking 

6 ‘‘shall be paid by the United States Postal 

7 Service.’’ and inserting ‘‘shall be paid first from 

8 the Postal Service Retiree Health Benefits 

9 Fund up to the amount contained in the Fund, 

10 with any remaining amount paid by the United 

11 States Postal Service.’’; and 

12 (B) by inserting after section 8909 the fol13 lowing: 

14 ‘‘§ 8909a. Postal Service Retiree Health Benefit Fund 

15 ‘‘(a) There is in the Treasury of the United States 

16 a Postal Service Retiree Health Benefits Fund which is 

17 administered by the Office of Personnel Management. 

18 ‘‘(b) The Fund is available without fiscal year limita19 tion for payments required under section 8906(g)(2)(A). 

20 ‘‘(c) The Secretary of the Treasury shall immediately 

21 invest, in interest-bearing securities of the United States 

22 such currently available portions of the Fund as are not 

23 immediately required for payments from the Fund. Such 

24 investments shall be made in the same manner as invest25 ments for the Civil Service Retirement and Disability 

26 Fund under section 8348. 
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1 ‘‘(d)(1) Not later than June 30, 2006, and by June 

2 30 of each succeeding year, the Office shall compute the 

3 net present value of the future payments required under 

4 section 8906(g)(2)(A) and attributable to the service of 

5 Postal Service employees during the most recently ended 

6 fiscal year. 

7 ‘‘(2)(A) Not later than June 30, 2006, the Office 

8 shall compute, and by June 30 of each succeeding year, 

9 the Office shall recompute the difference between— 

10 ‘‘(i) the net present value of the excess of fu11 ture payments required under section 8906(g)(2)(A) 

12 for current and future United States Postal Service 

13 annuitants as of the end of the fiscal year ending on 

14 September 30 of that year; and 

15 ‘‘(ii)(I) the value of the assets of the Postal Re16 tiree Health Benefits Fund as of the end of the fis17 cal year ending on September 30 of that year; and 

18 ‘‘(II) the net present value computed under 

19 paragraph (1). 

20 ‘‘(B) Not later than June 30, 2006, the Office shall 

21 compute, and by June 30 of each succeeding year shall 

22 recompute, an amortization schedule including a series of 

23 annual installments which provide for the liquidation by 

24 September 30, 2045, or within 15 years, whichever is 

25 later, of the net present value determined under subpara-
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1 graph (A), including interest at the rate used in that com2 putation. 

3 ‘‘(3) Not later than September 30, 2006, and by Sep4 tember 30 of each succeeding year, the United States 

5 Postal Service shall pay into such Fund— 

6 ‘‘(A) the net present value computed under 

7 paragraph (1); and 

8 ‘‘(B) the annual installment computed under 

9 paragraph (2)(B). 

10 ‘‘(4) Computations under this subsection shall be 

11 made consistent with the assumptions and methodology 

12 used by the Office for financial reporting under sub13 chapter II of chapter 35 of title 31. 

14 ‘‘(5) After consultation with the United States Postal 

15 Service, the Office shall promulgate any regulations the 

16 Office determines necessary under this subsection.’’. 

17 (2) TECHNICAL AND CONFORMING AMEND18 MENT.—The table of sections for chapter 89 of title 

19 5, United States Code, is amended by inserting after 

20 the item relating to section 8909 the following: 

‘‘8909a. Postal Service Retiree Health Benefits Fund.’’. 

21 (b) TRANSITIONAL ADJUSTMENT FOR FISCAL YEAR

22 2006.—For fiscal year 2006, the amounts paid by the 

23 Postal Service in Government contributions under section 

24 8906(g)(2)(A) of title 5, United States Code, for fiscal 

25 year 2006 contributions shall be deducted from the initial 
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1 payment otherwise due from the Postal Service to the 

2 Postal Service Retiree Health Benefits Fund under section 

3 8909a(d)(3) of such title as added by this section. 

4 SEC. 804. REPEAL OF DISPOSITION OF SAVINGS PROVISION. 

5 Section 3 of the Postal Civil Service Retirement Sys6 tem Funding Reform Act of 2003 (Public Law 108–18) 

7 is repealed. 

8 SEC. 805. EFFECTIVE DATES. 

9 (a) IN GENERAL.—Except as provided under sub10 section (b), this title shall take effect on October 1, 2005. 

11 (b) TERMINATION OF EMPLOYER CONTRIBUTION.— 

12 The amendment made by paragraph (1) of section 802(a) 

13 shall take effect on the first day of the first pay period 

14 beginning on or after October 1, 2005. 

15 TITLE IX—COMPENSATION FOR 

16 WORK INJURIES 

17 SEC. 901. TEMPORARY DISABILITY; CONTINUATION OF PAY. 

18 (a) TIME OF ACCRUAL OF RIGHT.—Section 8117 of 

19 title 5, United States Code, is amended— 

20 (1) by striking ‘‘An employee’’ and inserting 

21 ‘‘(a) An employee other than a Postal Service em22 ployee’’; and 

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

24 ‘‘(b) A Postal Service employee is not entitled to com25 pensation or continuation of pay for the first 3 days of 
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1 temporary disability, except as provided under paragraph 

2 (3) of subsection (a). A Postal Service employee may use 

3 annual leave, sick leave, or leave without pay during that 

4 3-day period, except that if the disability exceeds 14 days 

5 or is followed by permanent disability, the employee may 

6 have their sick leave or annual leave reinstated or receive 

7 pay for the time spent on leave without pay under this 

8 section.’’. 

9 (b) TECHNICAL AND CONFORMING AMENDMENT.— 

10 Section 8118(b)(1) of title 5, United States Code, is 

11 amended to read as follows: 

12 ‘‘(1) without a break in time, except as pro13 vided under section 8117(b), unless controverted 

14 under regulations of the Secretary’’. 

15 SEC. 902. DISABILITY RETIREMENT FOR POSTAL EMPLOY16 EES. 

17 (a) TOTAL DISABILITY.—Section 8105 of title 5, 

18 United States Code, is amended— 

19 (1) in subsection (a), by adding at the end the 

20 following: ‘‘This section applies to a Postal Service 

21 employee, except as provided under subsection (c).’’; 

22 and 

23 (2) by adding at the end the following: 
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1 ‘‘(c)(1) In this subsection, the term ‘retirement age’ 

2 has the meaning given under section 216(l)(1) of the So3 cial Security Act (42 U.S.C. 416(l)(1)). 

4 ‘‘(2) Notwithstanding any other provision of law, for 

5 any injury occurring on or after the date of enactment 

6 of the Postal Accountability and Enhancement Act, and 

7 for any new claim for a period of disability commencing 

8 on or after that date, the compensation entitlement for 

9 total disability is converted to 50 percent of the monthly 

10 pay of the employee on the later of— 

11 ‘‘(A) the date on which the injured employee 

12 reaches retirement age; or 

13 ‘‘(B) 1 year after the employee begins receiving 

14 compensation.’’. 

15 (b) PARTIAL DISABILITY.—Section 8106 of title 5, 

16 United States Code, is amended— 

17 (1) in subsection (a), by adding at the end the 

18 following: ‘‘This section applies to a Postal Service 

19 employee, except as provided under subsection (d).’’; 

20 and 

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

22 ‘‘(d)(1) In this subsection, the term ‘retirement age’ 

23 has the meaning given under section 216(l)(1) of the So24 cial Security Act (42 U.S.C. 416(l)(1)). 
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1 ‘‘(2) Notwithstanding any other provision of 

2 law, for any injury occurring on or after the date of 

3 enactment of this subsection, and for any new claim 

4 for a period of disability commencing on or after 

5 that date, the compensation entitlement for partial 

6 disability is converted to 50 percent of the difference 

7 between the monthly pay of an employee and the 

8 monthly wage earning capacity of the employee after 

9 the beginning of partial disability on the later of— 

10 ‘‘(A) the date on which the injured em11 ployee reaches retirement age; or 

12 ‘‘(B) 1 year after the employee begins re13 ceiving compensation.’’. 

14 TITLE X—MISCELLANEOUS 

15 SEC. 1001. EMPLOYMENT OF POSTAL POLICE OFFICERS. 

16 Section 404 of title 39, United States Code (as 

17 amended by this Act), is further amended by adding at 

18 the end the following: 

19 ‘‘(d) The Postal Service may employ guards for all 

20 buildings and areas owned or occupied by the Postal Serv21 ice or under the charge and control of the Postal Service, 

22 and may give such guards, with respect to such property, 

23 any of the powers of special policemen provided under sec24 tion 1315 of title 40. The Postmaster General, or the des25 ignee of the Postmaster General, may take any action that 
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1 the Secretary of Homeland Security may take under sec2 tion 1315 of title 40, with respect to that property. 

3 SEC. 1002. EXPANDED CONTRACTING AUTHORITY. 

4 (a) AMENDMENT TO TITLE 39, UNITED STATES

5 CODE.— 

6 (1) CONTRACTS WITH AIR CARRIERS.—Sub7 section (e) of section 5402 of title 39, United States 

8 Code, is amended— 

9 (A) by striking the matter preceding para10 graph (2) and inserting the following: 

11 ‘‘(e)(1) The Postal Service may contract with any air 

12 carrier for the transportation of mail by aircraft in inter13 state air transportation, including the rates for that trans14 portation, either through negotiations or competitive bid15 ding.’’; 

16 (B) by redesignating paragraph (2) as 

17 paragraph (4); and 

18 (C) by inserting after paragraph (1) the 

19 following: 

20 ‘‘(2) Notwithstanding subsections (b) through (d), 

21 the Postal Service may contract with any air carrier or 

22 foreign air carrier for the transportation of mail by air23 craft in foreign air transportation, including the rates for 

24 that transportation, either through negotiations or com25 petitive bidding, except that— 
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1 ‘‘(A) any such contract may be awarded only 

2 to— 

3 ‘‘(i) an air carrier holding a certificate re4 quired by section 41101 of title 49 or an ex5 emption therefrom issued by the Secretary of 

6 Transportation; 

7 ‘‘(ii) a foreign air carrier holding a permit 

8 required by section 41301 of title 49 or an ex9 emption therefrom issued by the Secretary of 

10 Transportation; or 

11 ‘‘(iii) a combination of such air carriers or 

12 foreign air carriers (or both); 

13 ‘‘(B) mail transported under any such contract 

14 shall not be subject to any duty-to-carry requirement 

15 imposed by any provision of subtitle VII of title 49 

16 or by any certificate, permit, or corresponding ex17 emption authority issued by the Secretary of Trans18 portation under that subtitle; 

19 ‘‘(C) during the 5-year period beginning 1 year 

20 after the date of enactment of the Postal Account21 ability and Enhancement Act, the Postal Service 

22 may not under this paragraph— 

23 ‘‘(i) contract for service between a pair or 

24 combination of pairs of points in foreign air 

25 transportation with— 
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1 ‘‘(I) a foreign air carrier; or 

2 ‘‘(II) an air carrier to the extent that 

3 service provided would be offered through 

4 a code sharing arrangement in which the 

5 air carrier’s designator code is used to 

6 identify a flight operated by a foreign air 

7 carrier; or 

8 ‘‘(ii) tender mail in foreign air transpor9 tation under contracts providing for the car10 riage of mail in foreign air transportation over 

11 all (or substantially all, as determined by the 

12 Postal Service) of a carrier’s routes or all or 

13 substantially all of a carrier’s routes within a 

14 geographic area determined by the Postal Serv15 ice on the basis of a common unit price per mile 

16 and a separate terminal price to— 

17 ‘‘(I) a foreign air carrier; or 

18 ‘‘(II) an air carrier to the extent that 

19 service provided would be offered through 

20 a code sharing arrangement in which the 

21 air carrier’s designator code is used to 

22 identify a flight operated by a foreign air 

23 carrier, unless— 

24 ‘‘(aa) with respect to clause (i) 

25 and this clause, fewer than 2 air car-
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1 riers capable of providing service to 

2 the Postal Service adequate for its 

3 purposes between the pair or combina4 tion of pairs of points in foreign air 

5 transportation offer scheduled service 

6 between the pair or combination of 

7 pairs of points in foreign air transpor8 tation which are the subject of the 

9 contract or tender; 

10 ‘‘(bb) with respect to clause (i), 

11 after competitive solicitation, the 

12 Postal Service has not received at 

13 least 2 offers from eligible air carriers 

14 capable of providing service to the 

15 Postal Service adequate for its pur16 poses between the pair of combination 

17 of pairs of points in foreign air trans18 portation; or 

19 ‘‘(cc) with respect to this clause, 

20 after competitive solicitation, fewer 

21 than 2 air carriers under contract 

22 with the Postal Service offer service 

23 adequate for the Postal Service’s pur24 poses between the pair or combination 

25 of pairs of points in foreign air trans-
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1 portation for which tender is being 

2 made; 

3 ‘‘(D) beginning 6 years after the date of enact4 ment of the Postal Accountability and Enhancement 

5 Act, every contract that the Postal Service awards to 

6 a foreign air carrier under this paragraph shall be 

7 subject to the continuing requirement that air car8 riers shall be afforded the same opportunity to carry 

9 the mail of the country to and from which the mail 

10 is transported and the flag country of the foreign air 

11 carrier, if different, as the Postal Service has af12 forded the foreign air carrier; and 

13 ‘‘(E) the Postmaster General shall consult with 

14 the Secretary of Defense concerning actions that af15 fect the carriage of military mail transported in for16 eign air transportation. 

17 ‘‘(3) Paragraph (2) shall not be interpreted as sus18 pending or otherwise diminishing the authority of the Sec19 retary of Transportation under section 41310 of title 49.’’. 

20 (2) DEFINITIONS.—Section 5402(a) of title 39, 

21 United States Code, is amended by striking para22 graph (2) and inserting the following: 

23 ‘‘(2) The terms ‘air carrier’, ‘air transportation’, ‘for24 eign air carrier’, ‘foreign air transportation’, ‘interstate 
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1 air transportation’, and ‘mail’ have the meanings given 

2 such terms in section 40102(a) of title 49.’’. 

3 (b) AMENDMENTS TO TITLE 49, UNITED STATES

4 CODE.— 

5 (1) AUTHORITY OF POSTAL SERVICE TO PRO6 VIDE FOR INTERSTATE AIR TRANSPORTATION OF

7 MAIL.—Section 41901(a) of title 49, United States 

8 Code, is amended to read as follows: 

9 ‘‘(a) TITLE 39.—The United States Postal Service 

10 may provide for the transportation of mail by aircraft in 

11 air transportation under this chapter and under chapter 

12 54 of title 39.’’. 

13 (2) SCHEDULES FOR CERTAIN TRANSPOR14 TATION OF MAIL.—Section 41902 of title 49, United 

15 States Code, is amended— 

16 (A) by striking subsection (b) and insert17 ing the following: 

18 ‘‘(b) STATEMENTS ON PLACES AND SCHEDULES.— 

19 Every air carrier shall file with the Secretary of Transpor20 tation and the United States Postal Service a statement 

21 showing— 

22 ‘‘(1) the places between which the carrier is au23 thorized to transport mail in Alaska; 

24 ‘‘(2) every schedule of aircraft regularly oper25 ated by the carrier between places described under 
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1 paragraph (1) and every change in each schedule; 

2 and 

3 ‘‘(3) for each schedule, the places served by the 

4 carrier and the time of arrival at, and departure 

5 from, each place.’’; 

6 (B) in subsection (c), by striking ‘‘(b)(3)’’ 

7 and inserting ‘‘(b)’’; and 

8 (C) in subsection (d), in the first sentence, 

9 by striking ‘‘(b)(3)’’ and inserting ‘‘(b)’’. 

10 (3) PRICES FOR FOREIGN TRANSPORTATION OF

11 MAIL.—Section 41907 of title 49, United States 

12 Code, is amended— 

13 (A) by striking ‘‘(a) LIMITATIONS.—’’; and 

14 (B) by striking subsection (b). 

15 (4) TECHNICAL AND CONFORMING AMEND16 MENTS.—Sections 41107, 41901(b)(1), 41902(a), 

17 and 41903 (a) and (b) of title 49, United States 

18 Code, are amended by striking ‘‘in foreign air trans19 portation or’’. 

20 (c) EFFECTIVE DATE.—The amendments made by 

21 this section shall take effect 1 year after the date of enact22 ment of this Act. 
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1 SEC. 1003. REPORT ON THE UNITED STATES POSTAL IN2 SPECTION SERVICE AND THE OFFICE OF THE 

3 INSPECTOR GENERAL OF THE UNITED 

4 STATES POSTAL SERVICE. 

5 (a) IN GENERAL.—Not later than 1 year after the 

6 date of enactment of this Act, the Government Account7 ability Office shall review the functions, responsibilities, 

8 and areas of possible duplication of the United States 

9 Postal Inspection Service and the Office of the Inspector 

10 General of the United States Postal Service and submit 

11 a report on the review to the Committee on Homeland Se12 curity and Governmental Affairs of the Senate. 

13 (b) CONTENTS.—The report under this section shall 

14 include recommendations for legislative actions necessary 

15 to clarify the roles of the United States Postal Inspection 

16 Service and the Office of the Inspector General of the 

17 United States Postal Service to strengthen oversight of 

18 postal operations. 

19 SEC. 1004. SENSE OF CONGRESS REGARDING POSTAL SERV20 ICE PURCHASING REFORM. 

21 It is the sense of Congress that the Postal Service 

22 should— 

23 (1) ensure the fair and consistent treatment of 

24 suppliers and contractors in its current purchasing 

25 policies and any revision or replacement of such poli26 cies, such as through the use of competitive contract 
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1 award procedures, effective dispute resolution mech2 anisms, and socioeconomic programs; and 

3 (2) implement commercial best practices in 

4 Postal Service purchasing policies to achieve greater 

5 efficiency and cost savings as recommended in July 

6 2003 by the President’s Commission on the United 

7 States Postal Service, in a manner that is compat8 ible with the fair and consistent treatment of sup9 pliers and contractors, as befitting an establishment 

10 in the United States Government. 

11 SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 

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

13 ‘‘Postal Accountability and Enhancement Act’’. 

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

15 this Act is as follows: 

Sec. 1. Short title; table of contents. 

TITLE I—DEFINITIONS; POSTAL SERVICES 

Sec. 101. Definitions. 

Sec. 102. Postal services. 

TITLE II—MODERN RATE REGULATION 

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

Sec. 202. Provisions relating to competitive products. 

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

Sec. 204. Reporting requirements and related provisions. 

Sec. 205. Complaints; appellate review and enforcement. 

Sec. 206. Clerical amendment. 

TITLE III—MODERN SERVICE STANDARDS 

Sec. 301. Establishment of modern service standards. 

Sec. 302. Postal service plan. 

TITLE IV—PROVISIONS RELATING TO FAIR COMPETITION 

Sec. 401. Postal Service Competitive Products Fund. 
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Sec. 402. Assumed Federal income tax on competitive products income. 

Sec. 403. Unfair competition prohibited. 

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

Sec. 405. International postal arrangements. 

TITLE V—GENERAL PROVISIONS 

Sec. 501. Qualification and term requirements for Governors. 

Sec. 502. Obligations. 

Sec. 503. Private carriage of letters. 

Sec. 504. Rulemaking authority. 

Sec. 505. Noninterference with collective bargaining agreements. 

Sec. 506. Bonus authority. 

TITLE VI—ENHANCED REGULATORY COMMISSION 

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

Postal Regulatory Commission. 

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

Sec. 603. Authorization of appropriations from the Postal Service Fund. 

Sec. 604. Redesignation of the Postal Rate Commission. 

Sec. 605. Financial transparency. 

TITLE VII—EVALUATIONS 

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

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

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

Sec. 704. Report on postal workplace safety and workplace-related injuries. 

Sec. 705. Study on recycled paper. 

TITLE VIII—POSTAL SERVICE RETIREMENT AND HEALTH 

BENEFITS FUNDING 

Sec. 801. Short title. 

Sec. 802. Civil Service Retirement System. 

Sec. 803. Health insurance. 

Sec. 804. Repeal of disposition of savings provision. 

Sec. 805. Effective dates. 

TITLE IX—COMPENSATION FOR WORK INJURIES 

Sec. 901. Temporary disability; continuation of pay. 

Sec. 902. Disability retirement for postal employees. 

TITLE X—MISCELLANEOUS 

Sec. 1001. Employment of postal police officers. 

Sec. 1002. Obsolete provisions. 

Sec. 1003. Reduced rates. 

Sec. 1004. Sense of Congress regarding Postal Service purchasing reform. 
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1 TITLE I—DEFINITIONS; POSTAL 

2 SERVICES 

3 SEC. 101. DEFINITIONS. 

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

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

6 the period at the end of paragraph (4) and inserting a semi7 colon, and by adding at the end the following: 

8 ‘‘(5) ‘postal service’ refers to the physical deliv9 ery of letters, printed matter, or packages weighing 

10 up to 70 pounds, including physical acceptance, col11 lection, sorting, transportation, or other functions an12 cillary thereto; 

13 ‘‘(6) ‘product’ means a postal service with a dis14 tinct cost or market characteristic for which a rate or 

15 rates are applied; 

16 ‘‘(7) ‘rates’, as used with respect to products, in17 cludes fees for postal services; 

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

19 the market-dominant category of mail’ means a prod20 uct subject to subchapter I of chapter 36; and 

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

22 competitive category of mail’ means a product subject 

23 to subchapter II of chapter 36; and 

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

25 subchapters I and VI thereof), means a fiscal year.’’. 
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1 SEC. 102. POSTAL SERVICES. 

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

3 States Code, is amended— 

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

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

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

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

8 ‘‘(c) Except as provided in section 411, nothing in this 

9 title shall be considered to permit or require that the Postal 

10 Service provide any special nonpostal or similar services.’’. 

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

12 1402(b)(1)(B)(ii) of the Victims of Crime Act of 1984 (98 

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

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

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

16 is amended by striking ‘‘and nonpostal’’. 

17 TITLE II—MODERN RATE 

18 REGULATION 

19 SEC. 201. PROVISIONS RELATING TO MARKET-DOMINANT 

20 PRODUCTS. 

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

22 States Code, is amended by striking sections 3621 and 3622 

23 and inserting the following: 

24 ‘‘§ 3621. Applicability; definitions 

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

26 with respect to— 
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1 ‘‘(1) first-class mail letters and sealed parcels; 

2 ‘‘(2) first-class mail cards; 

3 ‘‘(3) periodicals; 

4 ‘‘(4) standard mail; 

5 ‘‘(5) single-piece parcel post; 

6 ‘‘(6) media mail; 

7 ‘‘(7) bound printed matter; 

8 ‘‘(8) library mail; 

9 ‘‘(9) special services; and 

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

11 subject to any changes the Postal Regulatory Commission 

12 may make under section 3642. 

13 ‘‘(b) RULE OF CONSTRUCTION.—Mail matter referred 

14 to in subsection (a) shall, for purposes of this subchapter, 

15 be considered to have the meaning given to such mail matter 

16 under the mail classification schedule. 

17 ‘‘§ 3622. Modern rate regulation 

18 ‘‘(a) AUTHORITY GENERALLY.—The Postal Regulatory 

19 Commission shall, within 12 months after the date of enact20 ment of this section, by regulation establish (and may from 

21 time to time thereafter by regulation revise) a modern sys22 tem for regulating rates and classes for market-dominant 

23 products. 

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

25 achieve the following objectives: 
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1 ‘‘(1) To reduce the administrative burden and 

2 increase the transparency of the ratemaking process 

3 while affording reasonable opportunities for interested 

4 parties to participate in that process. 

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

6 rates. 

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

8 increase efficiency. 

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

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

13 intelligent mail and encourage increased mail volume 

14 during nonpeak periods. 

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

17 meet the service standards established under section 

18 3691. 

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

20 the Postal Service equitably between market-dominant 

21 and competitive products. 

22 ‘‘(c) FACTORS.—In establishing or revising such sys23 tem, the Postal Regulatory Commission shall take into ac24 count— 
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1 ‘‘(1) the establishment and maintenance of a fair 

2 and equitable schedule for rates and classification sys3 tem; 

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

6 sender and the recipient, including but not limited to 

7 the collection, mode of transportation, and priority of 

8 delivery; 

9 ‘‘(3) the requirement that each class of mail or 

10 type of mail service bear the direct and indirect post11 al costs attributable to each class or type of mail serv12 ice through reliably identified causal relationships 

13 plus that portion of all other costs of the Postal Serv14 ice reasonably assignable to such class or type; 

15 ‘‘(4) the effect of rate increases upon the general 

16 public, business mail users, and enterprises in the 

17 private sector of the economy engaged in the delivery 

18 of mail matter other than letters; 

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

20 and receiving letters and other mail matter at reason21 able costs; 

22 ‘‘(6) the degree of preparation of mail for deliv23 ery into the postal system performed by the mailer 

24 and its effect upon reducing costs to the Postal Serv25 ice; 
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1 ‘‘(7) simplicity of structure for the entire sched2 ule and simple, identifiable relationships between the 

3 rates or fees charged the various classes of mail for 

4 postal services; 

5 ‘‘(8) the importance of pricing flexibility to en6 courage increased mail volume and operational effi7 ciency; 

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

9 of mail matter entered into the postal system and the 

10 desirability and justification for special classifica11 tions and services of mail; 

12 ‘‘(10) the importance of providing classifications 

13 with extremely high degrees of reliability and speed of 

14 delivery and of providing those that do not require 

15 high degrees of reliability and speed of delivery; 

16 ‘‘(11) the desirability of special classifications 

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

18 Postal Service; 

19 ‘‘(12) the educational, cultural, scientific, and 

20 informational value to the recipient of mail matter; 

21 ‘‘(13) the need for the Postal Service to increase 

22 its efficiency and reduce its costs, including infra23 structure costs, to help maintain high quality, afford24 able, universal postal service; and 
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1 ‘‘(14) the policies of this title as well as such 

2 other factors as the Commission determines appro3 priate. 

4 ‘‘(d) REQUIREMENTS.— 

5 ‘‘(1) IN GENERAL.—The system for regulating 

6 rates and classes for market-dominant products 

7 shall— 

8 ‘‘(A) include an annual limitation on the 

9 percentage changes in rates to be set by the Post10 al Regulatory Commission that will be equal to 

11 the change in the Consumer Price Index for All 

12 Urban Consumers unadjusted for seasonal vari13 ation over the most recent available 12-month 

14 period preceding the date the Postal Service files 

15 notice of its intention to increase rates; 

16 ‘‘(B) establish a schedule whereby rates, 

17 when necessary and appropriate, would change 

18 at regular intervals by predictable amounts; 

19 ‘‘(C) not later than 45 days before the im20 plementation of any adjustment in rates under 

21 this section— 

22 ‘‘(i) require the Postal Service to pro23 vide public notice of the adjustment; 

24 ‘‘(ii) provide an opportunity for review 

25 by the Postal Regulatory Commission; 
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1 ‘‘(iii) provide for the Postal Regulatory 

2 Commission to notify the Postal Service of 

3 any noncompliance of the adjustment with 

4 the limitation under subparagraph (A); and 

5 ‘‘(iv) require the Postal Service to re6 spond to the notice provided under clause 

7 (iii) and describe the actions to be taken to 

8 comply with the limitation under subpara9 graph (A); 

10 ‘‘(D) establish procedures whereby the Post11 al Service may adjust rates not in excess of the 

12 annual limitations under subparagraph (A); and 

13 ‘‘(E) notwithstanding any limitation set 

14 under subparagraphs (A) and (C), establish pro15 cedures whereby rates may be adjusted on an ex16 pedited basis due to unexpected and extraor17 dinary circumstances. 

18 ‘‘(2) LIMITATIONS.— 

19 ‘‘(A) CLASSES OF MAIL.—The annual limi20 tations under paragraph (1)(A) shall apply to a 

21 class of mail, as defined in the Domestic Mail 

22 Classification Schedule as in effect on the date of 

23 enactment of the Postal Accountability and En24 hancement Act. 
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1 ‘‘(B) ROUNDING OF RATES AND FEES.— 

2 Nothing in this subsection shall preclude the 

3 Postal Service from rounding rates and fees to 

4 the nearest whole integer, if the effect of such 

5 rounding does not cause the overall rate increase 

6 for any class to exceed the Consumer Price Index 

7 for All Urban Consumers. 

8 ‘‘(C) BANKING UNUSED PRICING AUTHOR9 ITY.—Notwithstanding paragraph (1), for any 

10 class or service that failed to recover its attrib11 utable costs in the previous fiscal year, or for all 

12 classes and services when the Postal Service has 

13 operated at a loss for the last 2 years, rate in14 creases may exceed Consumer Price Index for All 

15 Urban Consumers by the amount rate increases 

16 in the previous year were less than Consumer 

17 Price Index for All Urban Consumers. 

18 ‘‘(e) WORKSHARE DISCOUNTS.— 

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

20 ‘workshare discount’ refers to rate discounts provided 

21 to mailers for the presorting, prebarcoding, handling, 

22 or transportation of mail, as further defined by the 

23 Postal Regulatory Commission under subsection (a). 

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

25 established under subsection (a), the Postal Regu-
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1 latory Commission shall establish rules for workshare 

2 discounts that ensure that such discounts do not ex3 ceed the cost that the Postal Service avoids as a result 

4 of workshare activity, unless— 

5 ‘‘(A) the discount is— 

6 ‘‘(i) associated with a new postal serv7 ice, a change to an existing postal service, 

8 or with a new workshare initiative related 

9 to an existing postal service; and 

10 ‘‘(ii) necessary to induce mailer behav11 ior that furthers the economically efficient 

12 operation of the Postal Service and the por13 tion of the discount in excess of the cost that 

14 the Postal Service avoids as a result of the 

15 workshare activity will be phased out over 

16 a limited period of time; 

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

18 ‘‘(i) lead to a loss of volume in the af19 fected category or subclass of mail and re20 duce the aggregate contribution to the insti21 tutional costs of the Postal Service from the 

22 category or subclass subject to the discount 

23 below what it otherwise would have been if 

24 the discount had not been reduced to costs 

25 avoided; 
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1 ‘‘(ii) result in a further increase in the 

2 rates paid by mailers not able to take ad3 vantage of the discount; or 

4 ‘‘(iii) impede the efficient operation of 

5 the Postal Service; 

6 ‘‘(C) the amount of the discount above costs 

7 avoided— 

8 ‘‘(i) is necessary to mitigate rate shock; 

9 and 

10 ‘‘(ii) will be phased out over time; or 

11 ‘‘(D) the discount is provided in connection 

12 with subclasses of mail consisting exclusively of 

13 mail matter of educational, cultural, scientific, 

14 or informational value. 

15 ‘‘(3) REPORT.—Whenever the Postal Service es16 tablishes or maintains a workshare discount, the Post17 al Service shall, at the time it publishes the workshare 

18 discount rate, submit to the Postal Regulatory Com19 mission a detailed report that— 

20 ‘‘(A) explains the Postal Service’s reasons 

21 for establishing or maintaining the rate; 

22 ‘‘(B) sets forth the data, economic analyses, 

23 and other information relied on by the Postal 

24 Service to justify the rate; and 
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1 ‘‘(C) certifies that the discount will not ad2 versely affect rates or services provided to users 

3 of postal services who do not take advantage of 

4 the discount rate. 

5 ‘‘(f) TRANSITION RULE.—Until regulations under this 

6 section first take effect, rates and classes for market-domi7 nant products shall remain subject to modification in ac8 cordance with the provisions of this chapter and section 

9 407, as such provisions were last in effect before the date 

10 of enactment of this section.’’. 

11 (b) REPEALED SECTIONS.—Sections 3623, 3624, 3625, 

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

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

14 States Code (as in effect after the amendment made by sec15 tion 601, but before the amendment made by section 202) 

16 is amended by striking the heading for subchapter II and 

17 inserting the following: 

18 ‘‘SUBCHAPTER I—PROVISIONS RELATING TO 

19 MARKET-DOMINANT PRODUCTS’’. 

20 SEC. 202. PROVISIONS RELATING TO COMPETITIVE PROD21 UCTS. 

22 Chapter 36 of title 39, United States Code, is amended 

23 by inserting after section 3629 the following: 
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1 ‘‘SUBCHAPTER II—PROVISIONS RELATING TO 

2 COMPETITIVE PRODUCTS 

3 ‘‘§ 3631. Applicability; definitions and updates 

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

5 with respect to— 

6 ‘‘(1) priority mail; 

7 ‘‘(2) expedited mail; 

8 ‘‘(3) bulk parcel post; 

9 ‘‘(4) bulk international mail; and 

10 ‘‘(5) mailgrams; 

11 subject to subsection (d) and any changes the Postal Regu12 latory Commission may make under section 3642. 

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

14 the term ‘costs attributable’, as used with respect to a prod15 uct, means the direct and indirect postal costs attributable 

16 to such product through reliably identified causal relation17 ships. 

18 ‘‘(c) RULE OF CONSTRUCTION.—Mail matter referred 

19 to in subsection (a) shall, for purposes of this subchapter, 

20 be considered to have the meaning given to such mail matter 

21 under the mail classification schedule. 

22 ‘‘(d) LIMITATION.—Notwithstanding any other provi23 sion of this section, nothing in this subchapter shall be con24 sidered to apply with respect to any product then currently 

25 in the market-dominant category of mail. 
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1 ‘‘§ 3632. Action of the Governors 

2 ‘‘(a) AUTHORITY TO ESTABLISH RATES AND CLASS3 ES.—The Governors, with the written concurrence of a ma4 jority of all of the Governors then holding office, shall estab5 lish rates and classes for products in the competitive cat6 egory of mail in accordance with the requirements of this 

7 subchapter and regulations promulgated under section 

8 3633. 

9 ‘‘(b) PROCEDURES.— 

10 ‘‘(1) IN GENERAL.—Rates and classes shall be es11 tablished in writing, complete with a statement of ex12 planation and justification, and the date as of which 

13 each such rate or class takes effect. 

14 ‘‘(2) PUBLIC NOTICE; REVIEW; AND COMPLI15 ANCE.—Not later than 30 days before the date of im16 plementation of any adjustment in rates under this 

17 section— 

18 ‘‘(A) the Governors shall provide public no19 tice of the adjustment and an opportunity for re20 view by the Postal Regulatory Commission; 

21 ‘‘(B) the Postal Regulatory Commission 

22 shall notify the Governors of any noncompliance 

23 of the adjustment with section 3633; and 

24 ‘‘(C) the Governors shall respond to the no25 tice provided under subparagraph (B) and de-
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1 scribe the actions to be taken to comply with sec2 tion 3633. 

3 ‘‘(c) TRANSITION RULE.—Until regulations under sec4 tion 3633 first take effect, rates and classes for competitive 

5 products shall remain subject to modification in accordance 

6 with the provisions of this chapter and section 407, as such 

7 provisions were as last in effect before the date of enactment 

8 of this section. 

9 ‘‘§ 3633. Provisions applicable to rates for competitive 

10 products 

11 ‘‘(a) IN GENERAL.—The Postal Regulatory Commis12 sion shall, within 180 days after the date of enactment of 

13 this section, promulgate (and may from time to time there14 after revise) regulations to— 

15 ‘‘(1) prohibit the subsidization of competitive 

16 products by market-dominant products; 

17 ‘‘(2) ensure that each competitive product covers 

18 its costs attributable; and 

19 ‘‘(3) ensure that all competitive products collec20 tively cover their share of the institutional costs of the 

21 Postal Service. 

22 ‘‘(b) REVIEW OF MINIMUM CONTRIBUTION.—Five 

23 years after the date of enactment of this section, and every 

24 5 years thereafter, the Postal Regulatory Commission shall 

25 conduct a review to determine whether the institutional 
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1 costs contribution requirement under subsection (a)(3) 

2 should be retained in its current form, modified, or elimi3 nated. In making its determination, the Commission shall 

4 consider all relevant circumstances, including the pre5 vailing competitive conditions in the market, and the degree 

6 to which any costs are uniquely or disproportionately asso7 ciated with any competitive products.’’. 

8 SEC. 203. PROVISIONS RELATING TO EXPERIMENTAL AND 

9 NEW PRODUCTS. 

10 Subchapter III of chapter 36 of title 39, United States 

11 Code, is amended to read as follows: 

12 ‘‘SUBCHAPTER III—PROVISIONS RELATING TO 

13 EXPERIMENTAL AND NEW PRODUCTS 

14 ‘‘§ 3641. Market tests of experimental products 

15 ‘‘(a) AUTHORITY.— 

16 ‘‘(1) IN GENERAL.—The Postal Service may con17 duct market tests of experimental products in accord18 ance with this section. 

19 ‘‘(2) PROVISIONS WAIVED.—A product shall not, 

20 while it is being tested under this section, be subject 

21 to the requirements of sections 3622, 3633, or 3642, 

22 or regulations promulgated under those sections. 

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

24 this section unless it satisfies each of the following: 
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1 ‘‘(1) SIGNIFICANTLY DIFFERENT PRODUCT.—The 

2 product is, from the viewpoint of the mail users, sig3 nificantly different from all products offered by the 

4 Postal Service within the 2-year period preceding the 

5 start of the test. 

6 ‘‘(2) MARKET DISRUPTION.—The introduction or 

7 continued offering of the product will not create an 

8 unfair or otherwise inappropriate competitive advan9 tage for the Postal Service or any mailer, particularly 

10 in regard to small business concerns (as defined under 

11 subsection (h)). 

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

13 Service identifies the product, for the purpose of a test 

14 under this section, as either market-dominant or com15 petitive, consistent with the criteria under section 

16 3642(b)(1). Costs and revenues attributable to a prod17 uct identified as competitive shall be included in any 

18 determination under section 3633(3)(relating to pro19 visions applicable to competitive products collec20 tively). Any test that solely affects products currently 

21 classified as competitive, or which provides services 

22 ancillary to only competitive products, shall be pre23 sumed to be in the competitive product category with24 out regard to whether a similar ancillary product ex25 ists for market-dominant products. 
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1 ‘‘(c) NOTICE.— 

2 ‘‘(1) IN GENERAL.—At least 30 days before initi3 ating a market test under this section, the Postal 

4 Service shall file with the Postal Regulatory Commis5 sion and publish in the Federal Register a notice— 

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

7 Service’s determination that the market test is 

8 covered by this section; and 

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

10 market test. 

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

13 be available with respect to any information required 

14 to be filed under paragraph (1) to the same extent 

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

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

17 (1) shall be considered to permit or require the publi18 cation of any information as to which confidential 

19 treatment is accorded under the preceding sentence 

20 (subject to the same exception as set forth in section 

21 504(g)(3)). 

22 ‘‘(d) DURATION.— 

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

24 under this section may be conducted over a period of 

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

2 order to determine the feasibility or desirability of a 

3 product being tested under this section, the Postal Reg4 ulatory Commission may, upon written application of 

5 the Postal Service (filed not later than 60 days before 

6 the date as of which the testing of such product would 

7 otherwise be scheduled to terminate under paragraph 

8 (1)), extend the testing of such product for not to exceed 

9 an additional 12 months. 

10 ‘‘(e) DOLLAR-AMOUNT LIMITATION.— 

11 ‘‘(1) IN GENERAL.—A product may only be test12 ed under this section if the total revenues that are an13 ticipated, or in fact received, by the Postal Service 

14 from such product do not exceed $10,000,000 in any 

15 year, subject to paragraph (2) and subsection (g). 

16 ‘‘(2) EXEMPTION AUTHORITY.—The Postal Regu17 latory Commission may, upon written application of 

18 the Postal Service, exempt the market test from the 

19 limit in paragraph (1) if the total revenues that are 

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

21 from such product do not exceed $50,000,000 in any 

22 year, subject to subsection (g). In reviewing an appli23 cation under this paragraph, the Postal Regulatory 

24 Commission shall approve such application if it de25 termines that— 
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1 ‘‘(A) the product is likely to benefit the pub2 lic and meet an expected demand; 

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

4 the financial stability of the Postal Service; and 

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

6 unfair or otherwise inappropriate competition. 

7 ‘‘(f) CANCELLATION.—If the Postal Regulatory Com8 mission at any time determines that a market test under 

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

10 this section, it may order the cancellation of the test in11 volved or take such other action as it considers appropriate. 

12 A determination under this subsection shall be made in ac13 cordance with such procedures as the Commission shall by 

14 regulation prescribe. 

15 ‘‘(g) ADJUSTMENT FOR INFLATION.—For purposes of 

16 each year following the year in which occurs the deadline 

17 for the Postal Service’s first report to the Postal Regulatory 

18 Commission under section 3652(a), each dollar amount con19 tained in this section shall be adjusted by the change in 

20 the Consumer Price Index for such year (as determined 

21 under regulations of the Commission). 

22 ‘‘(h) DEFINITION OF A SMALL BUSINESS CONCERN.— 

23 The criteria used in defining small business concerns or oth24 erwise categorizing business concerns as small business con25 cerns shall, for purposes of this section, be established by 
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1 the Postal Regulatory Commission in conformance with the 

2 requirements of section 3 of the Small Business Act. 

3 ‘‘(i) EFFECTIVE DATE.—Market tests under this sub4 chapter may be conducted in any year beginning with the 

5 first year in which occurs the deadline for the Postal Serv6 ice’s first report to the Postal Regulatory Commission under 

7 section 3652(a). 

8 ‘‘§ 3642. New products and transfers of products be9 tween the market-dominant and competi10 tive categories of mail 

11 ‘‘(a) IN GENERAL.—Upon request of the Postal Service 

12 or users of the mails, or upon its own initiative, the Postal 

13 Regulatory Commission may change the list of market-dom14 inant products under section 3621 and the list of competi15 tive products under section 3631 by adding new products 

16 to the lists, removing products from the lists, or transferring 

17 products between the lists. 

18 ‘‘(b) CRITERIA.—All determinations by the Postal Reg19 ulatory Commission under subsection (a) shall be made in 

20 accordance with the following criteria: 

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

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

23 Postal Service exercises sufficient market power that 

24 it can effectively set the price of such product substan25 tially above costs, raise prices significantly, decrease 
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1 quality, or decrease output, without risk of losing sub2 stantial business to other firms offering similar prod3 ucts. The competitive category of products shall con4 sist of all other products. 

5 ‘‘(2) EXCLUSION OF PRODUCTS COVERED BY

6 POSTAL MONOPOLY.—A product covered by the postal 

7 monopoly shall not be subject to transfer under this 

8 section from the market-dominant category of mail. 

9 For purposes of the preceding sentence, the term 

10 ‘product covered by the postal monopoly’ means any 

11 product the conveyance or transmission of which is 

12 reserved to the United States under section 1696 of 

13 title 18, subject to the same exception as set forth in 

14 the last sentence of section 409(e)(1). 

15 ‘‘(3) ADDITIONAL CONSIDERATIONS.—In making 

16 any decision under this section, due regard shall be 

17 given to— 

18 ‘‘(A) the availability and nature of enter19 prises in the private sector engaged in the deliv20 ery of the product involved; 

21 ‘‘(B) the views of those who use the product 

22 involved on the appropriateness of the proposed 

23 action; and 
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1 ‘‘(C) the likely impact of the proposed ac2 tion on small business concerns (within the 

3 meaning of section 3641(h)). 

4 ‘‘(c) TRANSFERS OF SUBCLASSES AND OTHER SUBOR5 DINATE UNITS ALLOWABLE.—Nothing in this title shall be 

6 considered to prevent transfers under this section from being 

7 made by reason of the fact that they would involve only 

8 some (but not all) of the subclasses or other subordinate 

9 units of the class of mail or type of postal service involved 

10 (without regard to satisfaction of minimum quantity re11 quirements standing alone). 

12 ‘‘(d) NOTIFICATION AND PUBLICATION REQUIRE13 MENTS.— 

14 ‘‘(1) NOTIFICATION REQUIREMENT.—The Postal 

15 Service shall, whenever it requests to add a product 

16 or transfer a product to a different category, file with 

17 the Postal Regulatory Commission and publish in the 

18 Federal Register a notice setting out the basis for its 

19 determination that the product satisfies the criteria 

20 under subsection (b) and, in the case of a request to 

21 add a product or transfer a product to the competi22 tive category of mail, that the product meets the regu23 lations promulgated by the Postal Regulatory Com24 mission under section 3633. The provisions of section 
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1 504(g) shall be available with respect to any informa2 tion required to be filed. 

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

4 Regulatory Commission shall, whenever it changes the 

5 list of products in the market-dominant or competi6 tive category of mail, prescribe new lists of products. 

7 The revised lists shall indicate how and when any 

8 previous lists (including the lists under sections 3621 

9 and 3631) are superseded, and shall be published in 

10 the Federal Register. 

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

12 3641, no product that involves the physical delivery of let13 ters, printed matter, or packages may be offered by the Post14 al Service unless it has been assigned to the market-domi15 nant or competitive category of mail (as appropriate) ei16 ther— 

17 ‘‘(1) under this subchapter; or 

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

19 SEC. 204. REPORTING REQUIREMENTS AND RELATED PRO20 VISIONS. 

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

22 States Code (as in effect before the amendment made by sub23 section (b)) is amended— 

24 (1) by striking the heading for subchapter IV 

25 and inserting the following: 
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1 ‘‘SUBCHAPTER V—POSTAL SERVICES, 

2 COMPLAINTS, AND JUDICIAL REVIEW’’; and 

3 (2) by striking the heading for subchapter V and 

4 inserting the following: 

5 ‘‘SUBCHAPTER VI—GENERAL’’. 

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

7 39, United States Code, is amended by inserting after sub8 chapter III the following: 

9 ‘‘SUBCHAPTER IV—REPORTING REQUIREMENTS 

10 AND RELATED PROVISIONS 

11 ‘‘§ 3651. Annual reports by the Commission 

12 ‘‘(a) IN GENERAL.—The Postal Regulatory Commis13 sion shall submit an annual report to the President and 

14 the Congress concerning the operations of the Commission 

15 under this title, including the extent to which regulations 

16 are achieving the objectives under sections 3622, 3633, and 

17 3691. 

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

19 Postal Service shall provide the Postal Regulatory Commis20 sion with such information as may, in the judgment of the 

21 Commission, be necessary in order for the Commission to 

22 prepare its reports under this section. 

23 ‘‘§ 3652. Annual reports to the Commission 

24 ‘‘(a) COSTS, REVENUES, RATES, AND SERVICE.—Ex25 cept as provided in subsection (c), the Postal Service shall, 
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1 no later than 90 days after the end of each year, prepare 

2 and submit to the Postal Regulatory Commission a report 

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

4 Commission may require under subsection (e))— 

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

6 and quality of service in sufficient detail to dem7 onstrate that all products during such year complied 

8 with all applicable requirements of this title; and 

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

10 product provided in such year, provide— 

11 ‘‘(A) product information, including mail 

12 volumes; and 

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

14 Postal Service in connection with such product, 

15 including— 

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

17 terms of speed of delivery and reliability) 

18 provided; and 

19 ‘‘(ii) the degree of customer satisfaction 

20 with the service provided. 

21 Before submitting a report under this subsection (in22 cluding any annex to the report and the information 

23 required under subsection (b)), the Postal Service 

24 shall have the information contained in such report 

25 (and annex) audited by the Inspector General. The re-
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1 sults of any such audit shall be submitted along with 

2 the report to which it pertains. 

3 ‘‘(b) INFORMATION RELATING TO WORKSHARE DIS4 COUNTS.—The Postal Service shall include, in each report 

5 under subsection (a), the following information with respect 

6 to each market-dominant product for which a workshare 

7 discount was in effect during the period covered by such 

8 report: 

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

10 Service by virtue of such discount. 

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

12 that the per-item workshare discount represents. 

13 ‘‘(3) The per-item contribution made to institu14 tional costs. 

15 ‘‘(c) SERVICE AGREEMENTS AND MARKET TESTS.—In 

16 carrying out subsections (a) and (b) with respect to service 

17 agreements and experimental products offered through mar18 ket tests under section 3641 in a year, the Postal Service— 

19 ‘‘(1) may report summary data on the costs, rev20 enues, and quality of service by service agreement and 

21 market test; and 

22 ‘‘(2) shall report such data as the Postal Regu23 latory Commission requires. 

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

25 Commission shall have access, in accordance with such reg-
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1 ulations as the Commission shall prescribe, to the working 

2 papers and any other supporting matter of the Postal Serv3 ice and the Inspector General in connection with any infor4 mation submitted under this section. 

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

6 ‘‘(1) IN GENERAL.—The Postal Regulatory Com7 mission shall, by regulation, prescribe the content and 

8 form of the public reports (and any nonpublic annex 

9 and supporting matter relating to the report) to be 

10 provided by the Postal Service under this section. In 

11 carrying out this subsection, the Commission shall 

12 give due consideration to— 

13 ‘‘(A) providing the public with timely, ade14 quate information to assess the lawfulness of 

15 rates charged; 

16 ‘‘(B) avoiding unnecessary or unwarranted 

17 administrative effort and expense on the part of 

18 the Postal Service; and 

19 ‘‘(C) protecting the confidentiality of com20 mercially sensitive information. 

21 ‘‘(2) REVISED REQUIREMENTS.—The Commis22 sion may, on its own motion or on request of an in23 terested party, initiate proceedings (to be conducted 

24 in accordance with regulations that the Commission 

25 shall prescribe) to improve the quality, accuracy, or 
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1 completeness of Postal Service data required by the 

2 Commission under this subsection whenever it shall 

3 appear that— 

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

5 products has become significantly inaccurate or 

6 can be significantly improved; 

7 ‘‘(B) the quality of service data has become 

8 significantly inaccurate or can be significantly 

9 improved; or 

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

11 the Commission, otherwise necessitated by the 

12 public interest. 

13 ‘‘(f) CONFIDENTIAL INFORMATION.— 

14 ‘‘(1) IN GENERAL.—If the Postal Service deter15 mines that any document or portion of a document, 

16 or other matter, which it provides to the Postal Regu17 latory Commission in a nonpublic annex under this 

18 section or under subsection (d) contains information 

19 which is described in section 410(c) of this title, or ex20 empt from public disclosure under section 552(b) of 

21 title 5, the Postal Service shall, at the time of pro22 viding such matter to the Commission, notify the 

23 Commission of its determination, in writing, and de24 scribe with particularity the documents (or portions 
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1 of documents) or other matter for which confiden2 tiality is sought and the reasons therefor. 

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

4 matter described in paragraph (1) to which the Com5 mission gains access under this section shall be sub6 ject to paragraphs (2) and (3) of section 504(g) in the 

7 same way as if the Commission had received notifica8 tion with respect to such matter under section 

9 504(g)(1). 

10 ‘‘(g) OTHER REPORTS.—The Postal Service shall sub11 mit to the Postal Regulatory Commission, together with any 

12 other submission that the Postal Service is required to make 

13 under this section in a year, copies of its then most recent— 

14 ‘‘(1) comprehensive statement under section 

15 2401(e); 

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

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

18 ‘‘(4) program performance reports under section 

19 2804. 

20 ‘‘§ 3653. Annual determination of compliance 

21 ‘‘(a) OPPORTUNITY FOR PUBLIC COMMENT.—After re22 ceiving the reports required under section 3652 for any 

23 year, the Postal Regulatory Commission shall promptly 

24 provide an opportunity for comment on such reports by 

25 users of the mails, affected parties, and an officer of the 
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1 Commission who shall be required to represent the interests 

2 of the general public. 

3 ‘‘(b) DETERMINATION OF COMPLIANCE OR NONCOMPLI4 ANCE.—Not later than 90 days after receiving the submis5 sions required under section 3652 with respect to a year, 

6 the Postal Regulatory Commission shall make a written de7 termination as to— 

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

9 such year (for products individually or collectively) 

10 were not in compliance with applicable provisions of 

11 this chapter (or regulations promulgated thereunder); 

12 or 

13 ‘‘(2) whether any service standards in effect dur14 ing such year were not met. 

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

16 is found under this subsection to have occurred in such year, 

17 the written determination shall be to that effect. 

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

19 year, a timely written determination of noncompliance is 

20 made under subsection (b), the Postal Regulatory Commis21 sion shall take any appropriate remedial action authorized 

22 by section 3662(c). 

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

24 determination described in the last sentence of subsection 

25 (b) shall, for purposes of any proceeding under section 3662, 
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1 create a rebuttable presumption of compliance by the Postal 

2 Service (with regard to the matters described under para3 graphs (1) and (2) of subsection (b)) during the year to 

4 which such determination relates.’’. 

5 SEC. 205. COMPLAINTS; APPELLATE REVIEW AND ENFORCE6 MENT. 

7 Chapter 36 of title 39, United States Code, is amended 

8 by striking sections 3662 and 3663 and inserting the fol9 lowing: 

10 ‘‘§ 3662. Rate and service complaints 

11 ‘‘(a) IN GENERAL.—Any person (including an officer 

12 of the Postal Regulatory Commission representing the inter13 ests of the general public) who believes the Postal Service 

14 is not operating in conformance with the requirements of 

15 chapter 1, 4, or 6, or this chapter (or regulations promul16 gated under any of those chapters) may lodge a complaint 

17 with the Postal Regulatory Commission in such form and 

18 manner as the Commission may prescribe. 

19 ‘‘(b) PROMPT RESPONSE REQUIRED.— 

20 ‘‘(1) IN GENERAL.—The Postal Regulatory Com21 mission shall, within 90 days after receiving a com22 plaint under subsection (a), either— 

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

24 or 
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1 ‘‘(B) issue an order dismissing the com2 plaint (together with a statement of the reasons 

3 therefor). 

4 ‘‘(2) TREATMENT OF COMPLAINTS NOT TIMELY

5 ACTED ON.—For purposes of section 3663, any com6 plaint under subsection (a) on which the Commission 

7 fails to act in the time and manner required by para8 graph (1) shall be treated in the same way as if it 

9 had been dismissed under an order issued by the 

10 Commission on the last day allowable for the issuance 

11 of such order under paragraph (1). 

12 ‘‘(c) ACTION REQUIRED IF COMPLAINT FOUND TO BE

13 JUSTIFIED.—If the Postal Regulatory Commission finds the 

14 complaint to be justified, it shall order that the Postal Serv15 ice take such action as the Commission considers appro16 priate in order to achieve compliance with the applicable 

17 requirements and to remedy the effects of any noncompli18 ance including ordering unlawful rates to be adjusted to 

19 lawful levels, ordering the cancellation of market tests, or20 dering the Postal Service to discontinue providing loss-mak21 ing products, and requiring the Postal Service to make up 

22 for revenue shortfalls in competitive products. 

23 ‘‘(d) AUTHORITY TO ORDER FINES IN CASES OF DE24 LIBERATE NONCOMPLIANCE.—In addition, in cases of delib25 erate noncompliance by the Postal Service with the require-
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1 ments of this title, the Postal Regulatory Commission may 

2 order, based on the nature, circumstances, extent, and seri3 ousness of the noncompliance, a fine (in the amount speci4 fied by the Commission in its order) for each incidence of 

5 noncompliance. Fines resulting from the provision of com6 petitive products shall be paid out of the Competitive Prod7 ucts Fund established in section 2011. All receipts from 

8 fines imposed under this subsection shall be deposited in 

9 the general fund of the Treasury of the United States. 

10 ‘‘§ 3663. Appellate review 

11 ‘‘A person, including the Postal Service, adversely af12 fected or aggrieved by a final order or decision of the Postal 

13 Regulatory Commission may, within 30 days after such 

14 order or decision becomes final, institute proceedings for re15 view thereof by filing a petition in the United States Court 

16 of Appeals for the District of Columbia. The court shall re17 view the order or decision in accordance with section 706 

18 of title 5, and chapter 158 and section 2112 of title 28, 

19 on the basis of the record before the Commission. 

20 ‘‘§ 3664. Enforcement of orders 

21 ‘‘The several district courts have jurisdiction specifi22 cally to enforce, and to enjoin and restrain the Postal Serv23 ice from violating, any order issued by the Postal Regu24 latory Commission.’’. 
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1 SEC. 206. CLERICAL AMENDMENT. 

2 Chapter 36 of title 39, United States Code, is amended 

3 by striking the heading and analysis for such chapter and 

4 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. 

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

‘‘3684. Limitations. 

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

‘‘3686. Bonus authority. 

‘‘SUBCHAPTER VII—MODERN SERVICE STANDARDS 

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

1 TITLE III—MODERN SERVICE 

2 STANDARDS 

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

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

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

7 following: 

8 ‘‘SUBCHAPTER VII—MODERN SERVICE 

9 STANDARDS 

10 ‘‘§ 3691. Establishment of modern service standards 

11 ‘‘(a) AUTHORITY GENERALLY.—Not later than 12 

12 months after the date of enactment of this section, the Postal 

13 Service shall, in consultation with the Postal Regulatory 

14 Commission, by regulation establish (and may from time 

15 to time thereafter by regulation revise) a set of service 

16 standards for market-dominant products consistent with the 

17 Postal Service’s universal service obligation as defined in 

18 sections 101 (a) and (b) and 403. 

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

20 to achieve the following objectives: 

21 ‘‘(1) To enhance the value of postal services to 

22 both senders and recipients. 
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1 ‘‘(2) To preserve regular and effective access to 

2 postal services in all communities, including those in 

3 rural areas or where post offices are not self-sus4 taining. 

5 ‘‘(3) To reasonably assure Postal Service cus6 tomers delivery reliability, speed and frequency con7 sistent with reasonable rates and best business prac8 tices. 

9 ‘‘(4) To provide a system of objective external 

10 performance measurements for each market-dominant 

11 product as a basis for measurement of Postal Service 

12 performance. 

13 ‘‘(c) FACTORS.—In establishing or revising such stand14 ards, the Postal Service shall take into account— 

15 ‘‘(1) the actual level of service that Postal Service 

16 customers receive under any service guidelines pre17 viously established by the Postal Service or service 

18 standards established under this section; 

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

20 Postal Service performance in the acceptance, proc21 essing and delivery of mail; 

22 ‘‘(3) the needs of Postal Service customers, in23 cluding those with physical impairments; 

24 ‘‘(4) mail volume and revenues projected for fu25 ture years; 
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1 ‘‘(5) the projected growth in the number of ad2 dresses the Postal Service will be required to serve in 

3 future years; 

4 ‘‘(6) the current and projected future cost of serv5 ing Postal Service customers; 

6 ‘‘(7) the effect of changes in technology, demo7 graphics, and population distribution on the efficient 

8 and reliable operation of the postal delivery system; 

9 and 

10 ‘‘(8) the policies of this title and such other fac11 tors as the Commission determines appropriate. 

12 ‘‘(d) REVIEW.—The regulations promulgated pursuant 

13 to this section (and any revisions thereto) shall be subject 

14 to review upon complaint under sections 3662 and 3663. 

15 SEC. 302. POSTAL SERVICE PLAN. 

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

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

19 Service shall, in consultation with the Postal Regulatory 

20 Commission, develop and submit to Congress a plan for 

21 meeting those standards. 

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

23 (1) establish performance goals; 

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

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

2 the performance goals; 

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

6 and 

7 (4) contain the matters relating to postal facili8 ties provided under subsection (c). 

9 (c) POSTAL FACILITIES.— 

10 (1) FINDINGS.—Congress finds that— 

11 (A) the Postal Service has more than 400 

12 logistics facilities, separate from its post office 

13 network; 

14 (B) as noted by the President’s Commission 

15 on the United States Postal Service, the Postal 

16 Service has more facilities than it needs and the 

17 streamlining of this distribution network can 

18 pave the way for the potential consolidation of 

19 sorting facilities and the elimination of excess 

20 costs; 

21 (C) the Postal Service has always revised its 

22 distribution network to meet changing conditions 

23 and is best suited to address its operational 

24 needs; and 
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1 (D) Congress strongly encourages the Postal 

2 Service to— 

3 (i) expeditiously move forward in its 

4 streamlining efforts; and 

5 (ii) keep unions, management associa6 tions, and local elected officials informed as 

7 an essential part of this effort and abide by 

8 any procedural requirements contained in 

9 the national bargaining agreements. 

10 (2) IN GENERAL.—The Postal Service plan shall 

11 include a description of— 

12 (A) the long-term vision of the Postal Serv13 ice for rationalizing its infrastructure and work14 force; and 

15 (B) how the Postal Service intends to im16 plement that vision. 

17 (3) CONTENT OF FACILITIES PLAN.—The plan 

18 under this subsection shall include— 

19 (A) a strategy for how the Postal Service 

20 intends to rationalize the postal facilities net21 work and remove excess processing capacity and 

22 space from the network, including estimated 

23 timeframes, criteria, and processes to be used for 

24 making changes to the facilities network, and the 
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1 process for engaging policy makers and the pub2 lic in related decisions; 

3 (B) a discussion of what impact any facil4 ity changes may have on the postal workforce 

5 and whether the Postal Service has sufficient 

6 flexibility to make needed workforce changes; and 

7 (C) an identification of anticipated costs, 

8 cost savings, and other benefits associated with 

9 the infrastructure rationalization alternatives 

10 discussed in the plan. 

11 (4) ANNUAL REPORTS.— 

12 (A) IN GENERAL.—Not later than 90 days 

13 after the end of each fiscal year, the Postal Serv14 ice shall prepare and submit a report to Con15 gress on how postal decisions have impacted or 

16 will impact rationalization plans. 

17 (B) CONTENTS.—Each report under this 

18 paragraph shall include— 

19 (i) an account of actions taken during 

20 the preceding fiscal year to improve the effi21 ciency and effectiveness of its processing, 

22 transportation, and distribution networks 

23 while preserving the timely delivery of post24 al services, including overall estimated costs 

25 and cost savings; 
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1 (ii) an account of actions taken to 

2 identify any excess capacity within its 

3 processing, transportation, and distribution 

4 networks and implement savings through 

5 realignment or consolidation of facilities in6 cluding overall estimated costs and cost sav7 ings; 

8 (iii) an estimate of how postal deci9 sions related to mail changes, security, au10 tomation initiatives, worksharing, informa11 tion technology systems, excess capacity, 

12 consolidating and closing facilities, and 

13 other areas will impact rationalization 

14 plans; 

15 (iv) identification of any statutory or 

16 regulatory obstacles that prevented or will 

17 prevent or hinder the Postal Service from 

18 taking action to realign or consolidate fa19 cilities; and 

20 (v) such additional topics and rec21 ommendations as the Postal Service con22 siders appropriate. 

23 (d) ALTERNATE RETAIL OPTIONS.—The Postal Service 

24 plan shall include plans to expand and market retail access 

25 to postal services, in addition to post offices, including— 
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1 (1) vending machines; 

2 (2) the Internet; 

3 (3) postage meters; 

4 (4) Stamps by Mail; 

5 (5) Postal Service employees on delivery routes; 

6 (6) retail facilities in which overhead costs are 

7 shared with private businesses and other government 

8 agencies; or 

9 (7) any other nonpost office access channel pro10 viding market retail access to postal services. 

11 (e) REEMPLOYMENT ASSISTANCE AND RETIREMENT

12 BENEFITS.—The Postal Service plan shall include— 

13 (1) a plan under which reemployment assistance 

14 shall be afforded to employees displaced as a result of 

15 the automation of any of its functions or the closing 

16 and consolidation of any of its facilities; and 

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

18 Office of Personnel Management, to offer early retire19 ment benefits. 

20 (f) INSPECTOR GENERAL REPORT.— 

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

22 under subsection (a) and each annual report under 

23 subsection (c) to Congress, the Postal Service shall 

24 submit the plan and each annual report to the In-
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1 spector General of the United States Postal Service in 

2 a timely manner to carry out this subsection. 

3 (2) REPORT.—The Inspector General shall pre4 pare a report describing the extent to which the Postal 

5 Service plan and each annual report under subsection 

6 (c)— 

7 (A) are consistent with the continuing obli8 gations of the Postal Service under title 39, 

9 United States Code; 

10 (B) provide for the Postal Service to meet 

11 the service standards established under section 

12 3691 of title 39, United States Code; and 

13 (C) allow progress toward improving overall 

14 efficiency and effectiveness consistent with the 

15 need to maintain universal postal service at af16 fordable rates. 

17 (g) CONTINUED AUTHORITY.—Nothing in this section 

18 shall be construed to prohibit the Postal Service from imple19 menting any change to its processing, transportation, deliv20 ery, and retail networks under any authority granted to 

21 the Postal Service for those purposes. 
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1 TITLE IV—PROVISIONS RELAT2 ING TO FAIR COMPETITION 

3 SEC. 401. POSTAL SERVICE COMPETITIVE PRODUCTS FUND. 

4 (a) PROVISIONS RELATING TO POSTAL SERVICE COM5 PETITIVE PRODUCTS FUND AND RELATED MATTERS.— 

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

7 States Code, is amended by adding at the end the fol8 lowing: 

9 ‘‘§ 2011. Provisions relating to competitive products 

10 ‘‘(a)(1) In this subsection, the term ‘costs attributable’ 

11 has the meaning given such term by section 3631. 

12 ‘‘(2) There is established in the Treasury of the United 

13 States a revolving fund, to be called the Postal Service Com14 petitive Products Fund, which shall be available to the Post15 al Service without fiscal year limitation for the payment 

16 of— 

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

18 and 

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

21 ‘‘(b) There shall be deposited in the Competitive Prod22 ucts Fund, subject to withdrawal by the Postal Service— 

23 ‘‘(1) revenues from competitive products; 

24 ‘‘(2) amounts received from obligations issued by 

25 Postal Service under subsection (e); 
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1 ‘‘(3) interest and dividends earned on invest2 ments of the Competitive Products Fund; and 

3 ‘‘(4) any other receipts of the Postal Service (in4 cluding from the sale of assets), to the extent allocable 

5 to competitive products. 

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

7 of the Competitive Products Fund are in excess of current 

8 needs, the Postal Service may request the investment of such 

9 amounts as the Postal Service determines advisable by the 

10 Secretary of the Treasury in obligations of, or obligations 

11 guaranteed by, the Government of the United States, and, 

12 with the approval of the Secretary, in such other obligations 

13 or securities as the Postal Service determines appropriate. 

14 ‘‘(d) With the approval of the Secretary of the Treas15 ury, the Postal Service may deposit moneys of the Competi16 tive Products Fund in any Federal Reserve bank, any de17 pository for public funds, or in such other places and in 

18 such manner as the Postal Service and the Secretary may 

19 mutually agree. 

20 ‘‘(e)(1)(A) Subject to the limitations specified in sec21 tion 2005(a), the Postal Service is authorized to borrow 

22 money and to issue and sell such obligations as the Postal 

23 Service determines necessary to provide for competitive 

24 products and deposit such amounts in the Competitive 

25 Products Fund. 
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1 ‘‘(B) Subject to paragraph (5), any borrowings by the 

2 Postal Service under subparagraph (A) shall be supported 

3 and serviced by— 

4 ‘‘(i) the revenues and receipts from competitive 

5 products and the assets related to the provision of 

6 competitive products (as determined under subsection 

7 (h)); or 

8 ‘‘(ii) for purposes of any period before account9 ing practices and principles under subsection (h) have 

10 been established and applied, the best information 

11 available from the Postal Service, including the au12 dited statements required by section 2008(e). 

13 ‘‘(2) The Postal Service may enter into binding cov14 enants with the holders of such obligations, and with any 

15 trustee under any agreement entered into in connection 

16 with the issuance of such obligations with respect to— 

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

18 other funds; 

19 ‘‘(B) application and use of revenues and re20 ceipts of the Competitive Products Fund; 

21 ‘‘(C) stipulations concerning the subsequent 

22 issuance of obligations or the execution of leases or 

23 lease purchases relating to properties of the Postal 

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

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

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

5 this subsection— 

6 ‘‘(A) shall be in such forms and denominations; 

7 ‘‘(B) shall be sold at such times and in such 

8 amounts; 

9 ‘‘(C) shall mature at such time or times; 

10 ‘‘(D) shall be sold at such prices; 

11 ‘‘(E) shall bear such rates of interest; 

12 ‘‘(F) may be redeemable before maturity in such 

13 manner, at such times, and at such redemption pre14 miums; 

15 ‘‘(G) may be entitled to such relative priorities 

16 of claim on the assets of the Postal Service with re17 spect to principal and interest payments; and 

18 ‘‘(H) shall be subject to such other terms and 

19 conditions, 

20 as the Postal Service determines. 

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

22 this subsection— 

23 ‘‘(A) shall be negotiable or nonnegotiable and 

24 bearer or registered instruments, as specified therein 

25 and in any indenture or covenant relating thereto; 
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1 ‘‘(B) shall contain a recital that such obligations 

2 are issued under this subsection, and such recital 

3 shall be conclusive evidence of the regularity of the 

4 issuance and sale of such obligations and of their va5 lidity; 

6 ‘‘(C) shall be lawful investments and may be ac7 cepted as security for all fiduciary, trust, and public 

8 funds, the investment or deposit of which shall be 

9 under the authority or control of any officer or agen10 cy of the Government of the United States, and the 

11 Secretary of the Treasury or any other officer or 

12 agency having authority over or control of any such 

13 fiduciary, trust, or public funds, may at any time sell 

14 any of the obligations of the Postal Service acquired 

15 under this section; 

16 ‘‘(D) shall not be exempt either as to principal 

17 or interest from any taxation now or hereafter im18 posed by any State or local taxing authority; and 

19 ‘‘(E) except as provided in section 2006(c), shall 

20 not be obligations of, nor shall payment of the prin21 cipal thereof or interest thereon be guaranteed by, the 

22 Government of the United States, and the obligations 

23 shall so plainly state. 
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1 ‘‘(5)(A) Subject to subparagraph (B), the Postal Serv2 ice shall make payments of principal, or interest, or both 

3 on obligations issued under this subsection from— 

4 ‘‘(i) revenues and receipts from competitive prod5 ucts and assets related to the provision of competitive 

6 products (as determined under subsection (h)); or 

7 ‘‘(ii) for purposes of any period before account8 ing practices and principles under subsection (h) have 

9 been established and applied, the best information 

10 available, including the audited statements required 

11 by section 2008(e). 

12 ‘‘(B) Based on the audited financial statements for the 

13 most recently completed fiscal year, the total assets of the 

14 Competitive Products Fund may not be less than the 

15 amount determined by multiplying— 

16 ‘‘(i) the quotient resulting from the total revenue 

17 of the Competitive Products Fund divided by the total 

18 revenue of the Postal Service; and 

19 ‘‘(ii) the total assets of the Postal Service. 

20 ‘‘(f) The receipts and disbursements of the Competitive 

21 Products Fund shall be accorded the same budgetary treat22 ment as is accorded to receipts and disbursements of the 

23 Postal Service Fund under section 2009a. 

24 ‘‘(g) A judgment (or settlement of a claim) against the 

25 Postal Service or the Government of the United States shall 
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1 be paid out of the Competitive Products Fund to the extent 

2 that the judgment or claim arises out of activities of the 

3 Postal Service in the provision of competitive products. 

4 ‘‘(h)(1)(A) The Secretary of the Treasury, in consulta5 tion with the Postal Service and an independent, certified 

6 public accounting firm and other advisors as the Secretary 

7 considers appropriate, shall develop recommendations re8 garding— 

9 ‘‘(i) the accounting practices and principles that 

10 should be followed by the Postal Service with the ob11 jectives of— 

12 ‘‘(I) identifying and valuing the assets and 

13 liabilities of the Postal Service associated with 

14 providing competitive products, including the 

15 capital and operating costs incurred by the Post16 al Service in providing such competitive prod17 ucts; and 

18 ‘‘(II) subject to subsection (e)(5), preventing 

19 the subsidization of such products by market20 dominant products; and 

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

22 should be followed in determining the assumed Fed23 eral income tax on competitive products income of the 

24 Postal Service for any year (within the meaning of 

25 section 3634). 
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1 ‘‘(B) Not earlier than 6 months after the date of enact2 ment of this section, and not later than 12 months after 

3 such date, the Secretary of the Treasury shall submit the 

4 recommendations under subparagraph (A) to the Postal 

5 Regulatory Commission. 

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

7 Secretary of the Treasury under paragraph (1), the Com8 mission shall give interested parties, including the Postal 

9 Service, users of the mails, and an officer of the Commission 

10 who shall be required to represent the interests of the general 

11 public, an opportunity to present their views on those rec12 ommendations through submission of written data, views, 

13 or arguments with or without opportunity for oral presen14 tation, or in such other manner as the Commission con15 siders appropriate. 

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

17 information received under subparagraph (A), the Commis18 sion shall by rule— 

19 ‘‘(I) provide for the establishment and applica20 tion of the accounting practices and principles which 

21 shall be followed by the Postal Service; 

22 ‘‘(II) provide for the establishment and applica23 tion of the substantive and procedural rules described 

24 under paragraph (1)(A)(ii); and 
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1 ‘‘(III) provide for the submission by the Postal 

2 Service to the Postal Regulatory Commission of an3 nual and other periodic reports setting forth such in4 formation as the Commission may require. 

5 ‘‘(ii) Final rules under this subparagraph shall be 

6 issued not later than 12 months after the date on which 

7 recommendations are submitted under paragraph (1) (or 

8 by such later date on which the Commission and the Postal 

9 Service may agree). The Commission may revise such rules. 

10 ‘‘(C)(i) Reports described under subparagraph 

11 (B)(i)(III) shall be submitted at such time and in such 

12 form, and shall include such information, as the Commis13 sion by rule requires. 

14 ‘‘(ii) The Commission may, on its own motion or on 

15 request of an interested party, initiate proceedings (to be 

16 conducted in accordance with such rules as the Commission 

17 shall prescribe) to improve the quality, accuracy, or com18 pleteness of Postal Service information under subparagraph 

19 (B)(i)(III) whenever it shall appear that— 

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

21 those reports has become significantly inaccurate or 

22 can be significantly improved; or 

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

24 Commission, otherwise necessitated by the public in25 terest. 
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1 ‘‘(D) A copy of each report described under subpara2 graph (B)(i)(III) shall be submitted by the Postal Service 

3 to the Secretary of the Treasury and the Inspector General 

4 of the United States Postal Service. 

5 ‘‘(i)(1) The Postal Service shall submit an annual re6 port to the Secretary of the Treasury concerning the oper7 ation of the Competitive Products Fund. The report shall 

8 address such matters as risk limitations, reserve balances, 

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

11 ‘‘(2) A copy of the most recent report submitted under 

12 paragraph (1) shall be included in the annual report sub13 mitted by the Postal Regulatory Commission under section 

14 3652(g).’’. 

15 (2) CLERICAL AMENDMENT.—The table of sec16 tions for chapter 20 of title 39, United States Code, 

17 is amended by adding after the item relating to sec18 tion 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’’ at 

22 the end of paragraph (1), by redesignating paragraph 

23 (2) as paragraph (3), and by inserting after para24 graph (1) the following: 
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1 ‘‘(2) COMPETITIVE PRODUCTS FUND.—The term 

2 ‘Competitive Products Fund’ means the Postal Service 

3 Competitive Products Fund established by section 

4 2011; and’’. 

5 (2) CAPITAL OF THE POSTAL SERVICE.—Section 

6 2002(b) of title 39, United States Code, is amended 

7 by striking ‘‘Fund,’’ and inserting ‘‘Fund and the 

8 balance in the Competitive Products 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, functions, 

14 or powers for which the Competitive Products 

15 Fund is available).’’. 

16 (B) DEPOSITS.—Section 2003(b) of title 39, 

17 United States Code, is amended by striking 

18 ‘‘There’’ and inserting ‘‘Except as otherwise pro19 vided in section 2011, there’’. 

20 (4) RELATIONSHIP BETWEEN THE TREASURY

21 AND THE POSTAL SERVICE.—Section 2006 of title 39, 

22 United States Code, is amended— 

23 (A) in subsection (a), in the first sentence, 

24 by inserting ‘‘or 2011’’ after ‘‘section 2005’’; 

25 (B) in subsection (b)— 
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•S 662 RS 

1 (i) in the first sentence, by inserting 

2 ‘‘under section 2005’’ before ‘‘in such 

3 amounts’’; and 

4 (ii) in the second sentence, by inserting 

5 ‘‘under section 2005’’ before ‘‘in excess of 

6 such amount.’’; and 

7 (C) in subsection (c), by inserting ‘‘or 

8 2011(e)(4)(E)’’ after ‘‘section 2005(d)(5)’’. 

9 SEC. 402. ASSUMED FEDERAL INCOME TAX ON COMPETI10 TIVE PRODUCTS INCOME. 

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

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

13 at the end the following: 

14 ‘‘§ 3634. Assumed Federal income tax on competitive 

15 products income 

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

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

18 competitive products income’ means the net income 

19 tax that would be imposed by chapter 1 of the Inter20 nal Revenue Code of 1986 on the Postal Service’s as21 sumed taxable income from competitive products for 

22 the year; and 

23 ‘‘(2) the term ‘assumed taxable income from com24 petitive products’, with respect to a year, refers to the 

25 amount representing what would be the taxable in-
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1 come of a corporation under the Internal Revenue 

2 Code of 1986 for the year, if— 

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

4 were the activities of the Postal Service allocable 

5 under section 2011(h) to competitive products; 

6 and 

7 ‘‘(B) the only assets held by such corpora8 tion were the assets of the Postal Service allo9 cable under section 2011(h) to such activities. 

10 ‘‘(b) COMPUTATION AND TRANSFER REQUIREMENTS.— 

11 The Postal Service shall, for each year beginning with the 

12 year in which occurs the deadline for the Postal Service’s 

13 first report to the Postal Regulatory Commission under sec14 tion 3652(a)— 

15 ‘‘(1) compute its assumed Federal income tax on 

16 competitive products income for such year; and 

17 ‘‘(2) transfer from the Competitive Products 

18 Fund to the Postal Service Fund the amount of that 

19 assumed tax. 

20 ‘‘(c) DEADLINE FOR TRANSFERS.—Any transfer re21 quired to be made under this section for a year shall be 

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

23 close of such year.’’. 
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1 SEC. 403. UNFAIR COMPETITION PROHIBITED. 

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

3 United States Code, is amended by adding after section 404 

4 the following: 

5 ‘‘§ 404a. Specific limitations 

6 ‘‘(a) Except as specifically authorized by law, the Post7 al Service may not— 

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

9 any standard) the effect of which is to preclude com10 petition or establish the terms of competition unless 

11 the Postal Service demonstrates that the regulation 

12 does not create an unfair competitive advantage for 

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

14 the Postal Service; 

15 ‘‘(2) compel the disclosure, transfer, or licensing 

16 of intellectual property to any third party (such as 

17 patents, copyrights, trademarks, trade secrets, and 

18 proprietary information); or 

19 ‘‘(3) obtain information from a person that pro20 vides (or seeks to provide) any product, and then offer 

21 any postal service that uses or is based in whole or 

22 in part on such information, without the consent of 

23 the person providing that information, unless sub24 stantially the same information is obtained (or ob25 tainable) from an independent source or is otherwise 

26 obtained (or obtainable). 
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1 ‘‘(b) The Postal Regulatory Commission shall prescribe 

2 regulations to carry out this section. 

3 ‘‘(c) Any party (including an officer of the Commis4 sion representing the interests of the general public) who 

5 believes that the Postal Service has violated this section may 

6 bring a complaint in accordance with section 3662.’’. 

7 (b) CONFORMING AMENDMENTS.— 

8 (1) GENERAL POWERS.—Section 401 of title 39, 

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

10 and inserting ‘‘Subject to the provisions of section 

11 404a, the’’. 

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

13 39, United States Code, is amended by striking 

14 ‘‘Without’’ and inserting ‘‘Subject to the provisions of 

15 section 404a, but otherwise without’’. 

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

17 4 of title 39, United States Code, is amended by inserting 

18 after the item relating to section 404 the following: 

‘‘404a. Specific limitations.’’. 

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

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

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

22 and inserting the following: 

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

24 paragraphs (2)(A) and (2)(B), respectively, the Postal Serv25 ice— 
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•S 662 RS 

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

2 in the provisions of law involved; and 

3 ‘‘(B) shall not be immune under any other doc4 trine of sovereign immunity from suit in Federal 

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

6 provisions of law by any officer or employee of the 

7 Postal Service. 

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

9 ‘‘(A) the Act of July 5, 1946 (commonly referred 

10 to as the ‘Trademark Act of 1946’ (15 U.S.C. 1051 

11 and following)); and 

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

13 Trade Commission Act to the extent that such section 

14 5 applies to unfair or deceptive acts or practices. 

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

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

17 Postal Service, engages in conduct with respect to any prod18 uct which is not reserved to the United States under section 

19 1696 of title 18, the Postal Service or other Federal agency 

20 (as the case may be)— 

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

22 sovereign immunity from suit in Federal court by 

23 any person for any violation of Federal law by such 

24 agency or any officer or employee thereof; and 
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1 ‘‘(B) shall be considered to be a person (as de2 fined in subsection (a) of the first section of the Clay3 ton Act) for purposes of— 

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

5 subsection); and 

6 ‘‘(ii) section 5 of the Federal Trade Com7 mission Act to the extent that such section 5 ap8 plies to unfair methods of competition. 

9 For purposes of the preceding sentence, any private carriage 

10 of mail allowable by virtue of section 601 shall not be con11 sidered a service reserved to the United States under section 

12 1696 of title 18. 

13 ‘‘(2) No damages, interest on damages, costs or attor14 ney’s fees may be recovered, and no criminal liability may 

15 be imposed, under the antitrust laws (as so defined) from 

16 any officer or employee of the Postal Service, or other Fed17 eral agency acting on behalf of or in concert with the Postal 

18 Service, acting in an official capacity. 

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

20 conduct occurring before the date of enactment of this sub21 section. 

22 ‘‘(f) To the extent that the Postal Service engages in 

23 conduct with respect to the provision of competitive prod24 ucts, it shall be considered a person for the purposes of the 

25 Federal bankruptcy laws. 
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1 ‘‘(g)(1) Each building constructed or altered by the 

2 Postal Service shall be constructed or altered, to the max3 imum extent feasible as determined by the Postal Service, 

4 in compliance with 1 of the nationally recognized model 

5 building codes and with other applicable nationally recog6 nized codes. To the extent practicable, model building codes 

7 should meet the voluntary consensus criteria established for 

8 codes and standards as required in the National Technology 

9 Transfer and Advancement Act of 1995 as defined in Office 

10 of Management and Budget Circular A1190. For purposes 

11 of life safety, the Postal Service shall continue to comply 

12 with the most current edition of the Life Safety Code of 

13 the National Fire Protection Association (NFPA 101). 

14 ‘‘(2) Each building constructed or altered by the Postal 

15 Service shall be constructed or altered only after consider16 ation of all requirements (other than procedural require17 ments) of zoning laws, land use laws, and applicable envi18 ronmental laws of a State or subdivision of a State which 

19 would apply to the building if it were not a building con20 structed or altered by an establishment of the Government 

21 of the United States. 

22 ‘‘(3) For purposes of meeting the requirements of para23 graphs (1) and (2) with respect to a building, the Postal 

24 Service shall— 
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1 ‘‘(A) in preparing plans for the building, consult 

2 with appropriate officials of the State or political 

3 subdivision, or both, in which the building will be lo4 cated; 

5 ‘‘(B) upon request, submit such plans in a time6 ly manner to such officials for review by such officials 

7 for a reasonable period of time not exceeding 30 days; 

8 and 

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

10 construction or alteration of the building, in accord11 ance with the customary schedule of inspections for 

12 construction or alteration of buildings in the locality, 

13 if such officials provide to the Postal Service— 

14 ‘‘(i) a copy of such schedule before construc15 tion of the building is begun; and 

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

17 conduct any inspection before conducting such 

18 inspection. 

19 Nothing in this subsection shall impose an obligation 

20 on any State or political subdivision to take any ac21 tion under the preceding sentence, nor shall anything 

22 in this subsection require the Postal Service or any 

23 of its contractors to pay for any action taken by a 

24 State or political subdivision to carry out this sub25 section (including reviewing plans, carrying out on- 
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1 site inspections, issuing building permits, and mak2 ing recommendations). 

3 ‘‘(4) Appropriate officials of a State or a political sub4 division of a State may make recommendations to the Post5 al Service concerning measures necessary to meet the re6 quirements of paragraphs (1) and (2). Such officials may 

7 also make recommendations to the Postal Service con8 cerning measures which should be taken in the construction 

9 or alteration of the building to take into account local con10 ditions. The Postal Service shall give due consideration to 

11 any such recommendations. 

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

13 officials under paragraph (3), the Postal Service shall estab14 lish procedures for soliciting, assessing, and incorporating 

15 local community input on real property and land use deci16 sions. 

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

18 includes the District of Columbia, the Commonwealth of 

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

20 States. 

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

22 legal representation may not be furnished by the Depart23 ment of Justice to the Postal Service in any action, suit, 

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

25 the following: 
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1 ‘‘(A) Subsection (d) or (e) of this section. 

2 ‘‘(B) Subsection (f) or (g) of section 504 (relating 

3 to administrative subpoenas by the Postal Regulatory 

4 Commission). 

5 ‘‘(C) Section 3663 (relating to appellate review). 

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

7 attorneys to obtain any legal representation that it is pre8 cluded from obtaining from the Department of Justice 

9 under this paragraph. 

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

11 (1), the Department of Justice shall, under section 411, fur12 nish the Postal Service such legal representation as it may 

13 require, except that, with the prior consent of the Attorney 

14 General, the Postal Service may, in any such circumstance, 

15 employ attorneys by contract or otherwise to conduct litiga16 tion brought by or against the Postal Service or its officers 

17 or employees in matters affecting the Postal Service. 

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

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

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

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

22 not otherwise a party, the Commission shall be permitted 

23 to appear as a party on its own motion and as of right. 

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

25 terms and conditions as the Commission and the Attorney 
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1 General shall consider appropriate, furnish the Commission 

2 such legal representation as it may require in connection 

3 with any such action, suit, or proceeding, except that, with 

4 the prior consent of the Attorney General, the Commission 

5 may employ attorneys by contract or otherwise for that pur6 pose. 

7 ‘‘(i) A judgment against the Government of the United 

8 States arising out of activities of the Postal Service shall 

9 be paid by the Postal Service out of any funds available 

10 to the Postal Service, subject to the restriction specified in 

11 section 2011(g).’’. 

12 (b) TECHNICAL AMENDMENT.—Section 409(a) of title 

13 39, United States Code, is amended by striking ‘‘Except as 

14 provided in section 3628 of this title,’’ and inserting ‘‘Ex15 cept as otherwise provided in this title,’’. 

16 SEC. 405. INTERNATIONAL POSTAL ARRANGEMENTS. 

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

18 States Code, is amended to read as follows: 

19 ‘‘§ 407. International postal arrangements 

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

21 ‘‘(1) to promote and encourage communications 

22 between peoples by efficient operation of international 

23 postal services and other international delivery serv24 ices for cultural, social, and economic purposes; 
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1 ‘‘(2) to promote and encourage unrestricted and 

2 undistorted competition in the provision of inter3 national postal services and other international deliv4 ery services, except where provision of such services by 

5 private companies may be prohibited by law of the 

6 United States; 

7 ‘‘(3) to promote and encourage a clear distinc8 tion between governmental and operational respon9 sibilities with respect to the provision of international 

10 postal services; and 

11 ‘‘(4) to participate in multilateral and bilateral 

12 agreements with other countries to accomplish these 

13 objectives. 

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

15 formulation, coordination, and oversight of foreign policy 

16 related to international postal services and shall have the 

17 power to conclude postal treaties and conventions, except 

18 that the Secretary may not conclude any postal treaty or 

19 convention if such treaty or convention would, with respect 

20 to any competitive product, grant an undue or unreason21 able preference to the Postal Service, a private provider of 

22 international postal services, or any other person. 

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

24 paragraph (1), the Secretary of State shall exercise primary 

25 authority for the conduct of foreign policy with respect to 
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1 international postal services, including the determination 

2 of United States positions and the conduct of United States 

3 participation in negotiations with foreign governments and 

4 international bodies. In exercising this authority, the Sec5 retary— 

6 ‘‘(A) shall coordinate with other agencies as ap7 propriate, and in particular, should consider the au8 thority vested by law or Executive order in the Postal 

9 Regulatory Commission, the Department of Com10 merce, the Department of Transportation, and the Of11 fice of the United States Trade Representative in this 

12 area; 

13 ‘‘(B) shall maintain continuing liaison with 

14 other executive branch agencies concerned with postal 

15 and delivery services; 

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

17 Committee on Homeland Security and Governmental 

18 Affairs of the Senate and the Committee on Govern19 ment Reform of the House of Representatives; 

20 ‘‘(D) shall maintain appropriate liaison with 

21 both representatives of the Postal Service and rep22 resentatives of users and private providers of inter23 national postal services and other international deliv24 ery services to keep informed of their interests and 

25 problems, and to provide such assistance as may be 
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1 needed to ensure that matters of concern are promptly 

2 considered by the Department of State or (if applica3 ble, and to the extent practicable) other executive 

4 branch agencies; and 

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

6 public sector advisory groups as may be established to 

7 advise the Department of State and other executive 

8 branch agencies in connection with international 

9 postal services and international delivery services. 

10 ‘‘(3) The Secretary of State shall establish an advisory 

11 committee (within the meaning of the Federal Advisory 

12 Committee Act) to perform such functions as the Secretary 

13 considers appropriate in connection with carrying out sub14 paragraphs (A) through (D) of paragraph (2). 

15 ‘‘(c) Before concluding any postal treaty or convention 

16 that establishes a rate or classification for a product subject 

17 to subchapter I of chapter 36, the Secretary of State shall 

18 request the Postal Regulatory Commission to submit its 

19 views on whether such rate or classification is consistent 

20 with the standards and criteria established by the Commis21 sion under section 3622. 

22 ‘‘(d) Nothing in this section shall be considered to pre23 vent the Postal Service from entering into such commercial 

24 or operational contracts related to providing international 

25 postal services as it deems appropriate, except that— 
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1 ‘‘(1) any such contract made with an agency of 

2 a foreign government (whether under authority of this 

3 subsection or otherwise) shall be solely contractual in 

4 nature and may not purport to be binding under 

5 international law; and 

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

7 Postal Service and an agency of a foreign government 

8 shall be transmitted to the Secretary of State and the 

9 Postal Regulatory Commission not later than the ef10 fective date of such contract. 

11 ‘‘(e)(1) With respect to shipments of international mail 

12 that are competitive products within the meaning of section 

13 3631 that are exported or imported by the Postal Service, 

14 the Customs Service and other appropriate Federal agencies 

15 shall apply the customs laws of the United States and all 

16 other laws relating to the importation or exportation of such 

17 shipments in the same manner to both shipments by the 

18 Postal Service and similar shipments by private companies. 

19 ‘‘(2) In exercising the authority under subsection (b) 

20 to conclude new postal treaties and conventions related to 

21 international postal services and to renegotiate such treaties 

22 and conventions, the Secretary of State shall, to the max23 imum extent practicable, take such measures as are within 

24 the Secretary’s control to encourage the governments of 

25 other countries to make available to the Postal Service and 
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1 private companies a range of nondiscriminatory customs 

2 procedures that will fully meet the needs of all types of 

3 American shippers. The Secretary of State shall consult 

4 with the United States Trade Representative and the Com5 missioner of Customs in carrying out this paragraph. 

6 ‘‘(3) The provisions of this subsection shall take effect 

7 6 months after the date of enactment of this subsection or 

8 such earlier date as the Customs Service may determine in 

9 writing.’’. 

10 (b) EFFECTIVE DATE.—Notwithstanding any provi11 sion of the amendment made by subsection (a), the author12 ity of the United States Postal Service to establish the rates 

13 of postage or other charges on mail matter conveyed between 

14 the United States and other countries shall remain avail15 able to the Postal Service until— 

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

17 the date as of which the regulations promulgated 

18 under section 3622 of title 39, United States Code (as 

19 amended by section 201(a)) take effect; and 

20 (2) with respect to competitive products, the date 

21 as of which the regulations promulgated under section 

22 3633 of title 39, United States Code (as amended by 

23 section 202) take effect. 
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1 TITLE V—GENERAL PROVISIONS 

2 SEC. 501. QUALIFICATION AND TERM REQUIREMENTS FOR 

3 GOVERNORS. 

4 (a) QUALIFICATIONS.— 

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

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

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

8 and inserting the following: ‘‘The Governors shall rep9 resent the public interest generally, and shall be cho10 sen solely on the basis of their demonstrated ability 

11 in managing organizations or corporations (in either 

12 the public or private sector) of substantial size. Expe13 rience in the fields of law and accounting shall be 

14 considered in making appointments of Governors. The 

15 Governors shall not be representatives of specific in16 terests using the Postal Service, and may be removed 

17 only for cause.’’. 

18 (2) APPLICABILITY.—The amendment made by 

19 paragraph (1) shall not affect the appointment or ten20 ure of any person serving as a Governor of the United 

21 States Postal Service under an appointment made be22 fore the date of enactment of this Act however, when 

23 any such office becomes vacant, the appointment of 

24 any person to fill that office shall be made in accord25 ance with such amendment. The requirement set forth 
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1 in the fourth sentence of section 202(a)(1) of title 39, 

2 United States Code (as amended by subsection (a)) 

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

4 date of enactment of this Act. 

5 (b) CONSULTATION REQUIREMENT.—Section 202(a) of 

6 title 39, United States Code, is amended by adding at the 

7 end the following: 

8 ‘‘(2) In selecting the individuals described in para9 graph (1) for nomination for appointment to the position 

10 of Governor, the President should consult with the Speaker 

11 of the House of Representatives, the minority leader of the 

12 House of Representatives, the majority leader of the Senate, 

13 and the minority leader of the Senate.’’. 

14 (c) 5-YEAR TERMS.— 

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

16 United States code, is amended in the first sentence 

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

18 (2) APPLICABILITY.— 

19 (A) CONTINUATION BY INCUMBENTS.—The 

20 amendment made by paragraph (1) shall not af21 fect the tenure of any person serving as a Gov22 ernor of the United States Postal Service on the 

23 date of enactment of this Act and such person 

24 may continue to serve the remainder of the ap25 plicable term. 
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1 (B) VACANCY BY INCUMBENT BEFORE 5

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

3 as a Governor of the United States Postal Serv4 ice on the date of enactment of this Act resigns, 

5 is removed, or dies before the expiration of the 9- 

6 year term of that Governor, and that Governor 

7 has served less than 5 years of that term, the re8 sulting vacancy in office shall be treated as a va9 cancy in a 5-year term. 

10 (C) VACANCY BY INCUMBENT AFTER 5

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

12 as a Governor of the United States Postal Serv13 ice on the date of enactment of this Act resigns, 

14 is removed, or dies before the expiration of the 9- 

15 year term of that Governor, and that Governor 

16 has served 5 years or more of that term, that 

17 term shall be deemed to have been a 5-year term 

18 beginning on its commencement date for pur19 poses of determining vacancies in office. Any ap20 pointment to the vacant office shall be for a 5- 

21 year term beginning at the end of the original 9- 

22 year term determined without regard to the 

23 deeming under the preceding sentence. Nothing 

24 in this subparagraph shall be construed to affect 

25 any action or authority of any Governor or the 
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1 Board of Governors during any portion of a 9- 

2 year term deemed to be 5-year term under this 

3 subparagraph. 

4 (d) TERM LIMITATION.— 

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

6 United States Code, is amended— 

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

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

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

10 a Governor.’’. 

11 (2) APPLICABILITY.—The amendments made by 

12 paragraph (1) shall not affect the tenure of any per13 son serving as a Governor of the United States Postal 

14 Service on the date of enactment of this Act with re15 spect to the term which that person is serving on that 

16 date. Such person may continue to serve the remain17 der of the applicable term, after which the amend18 ments made by paragraph (1) shall apply. 

19 SEC. 502. OBLIGATIONS. 

20 (a) PURPOSES FOR WHICH OBLIGATIONS MAY BE

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

22 39, United States Code, is amended by striking ‘‘title.’’ and 

23 inserting ‘‘title, other than any of the purposes for which 

24 the corresponding authority is available to the Postal Serv25 ice under section 2011.’’. 
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1 (b) INCREASE RELATING TO OBLIGATIONS ISSUED FOR

2 CAPITAL IMPROVEMENTS.—Section 2005(a)(1) of title 39, 

3 United States Code, is amended by striking the third sen4 tence. 

5 (c) AMOUNTS WHICH MAY BE PLEDGED.— 

6 (1) OBLIGATIONS TO WHICH PROVISIONS

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

8 39, United States Code, is amended by striking ‘‘such 

9 obligations,’’ and inserting ‘‘obligations issued by the 

10 Postal Service under this section,’’. 

11 (2) ASSETS, REVENUES, AND RECEIPTS TO

12 WHICH PROVISIONS APPLY.—Subsection (b) of section 

13 2005 of title 39, United States Code, is amended by 

14 striking ‘‘(b)’’ and inserting ‘‘(b)(1)’’, and by adding 

15 at the end the following: 

16 ‘‘(2) Notwithstanding any other provision of this sec17 tion— 

18 ‘‘(A) the authority to pledge assets of the Postal 

19 Service under this subsection shall be available only 

20 to the extent that such assets are not related to the 

21 provision of competitive products (as determined 

22 under section 2011(h) or, for purposes of any period 

23 before accounting practices and principles under sec24 tion 2011(h) have been established and applied, the 

25 best information available from the Postal Service, 
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1 including the audited statements required by section 

2 2008(e)); and 

3 ‘‘(B) any authority under this subsection relat4 ing to the pledging or other use of revenues or receipts 

5 of the Postal Service shall be available only to the ex6 tent that they are not revenues or receipts of the Com7 petitive Products Fund.’’. 

8 SEC. 503. PRIVATE CARRIAGE OF LETTERS. 

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

10 States Code, is amended by striking subsection (b) and in11 serting 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 sin17 gle-piece first class letter; 

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

19 ‘‘(3) such carriage is within the scope of services 

20 described by regulations of the United States Postal 

21 Service (as in effect on July 1, 2001) that permit pri22 vate carriage by suspension of the operation of this 

23 section (as then in effect). 
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1 ‘‘(c) Any regulations necessary to carry out this section 

2 shall be promulgated by the Postal Regulatory Commis3 sion.’’. 

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. 504. RULEMAKING AUTHORITY. 

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

10 Code, is amended to read as follows: 

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

12 regulations, not inconsistent with this title, as may be 

13 necessary in the execution of its functions under this 

14 title and such other functions as may be assigned to 

15 the Postal Service under any provisions of law out16 side of this title;’’. 

17 SEC. 505. NONINTERFERENCE WITH COLLECTIVE BAR18 GAINING AGREEMENTS. 

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

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

21 ‘‘§ 1207. Labor disputes 

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

23 effect, no party to such agreement shall terminate or modify 

24 such agreement unless the party desiring such termination 

25 or modification serves written notice upon the other party 
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1 to the agreement of the proposed termination or modifica2 tion not less than 90 days prior to the expiration date there3 of, or not less than 90 days prior to the time it is proposed 

4 to make such termination or modification. The party serv5 ing such notice shall notify the Federal Mediation and Con6 ciliation Service of the existence of a dispute within 45 days 

7 after such notice, if no agreement has been reached by that 

8 time. 

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

10 a procedure providing for a binding resolution of a dispute 

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

12 of the proposed termination or modification, the Director 

13 of the Federal Mediation and Conciliation Service shall 

14 within 10 days appoint a mediator of nationwide reputa15 tion and professional stature, and who is also a member 

16 of the National Academy of Arbitrators. The parties shall 

17 cooperate with the mediator in an effort to reach an agree18 ment and shall meet and negotiate in good faith at such 

19 times and places that the mediator, in consultation with 

20 the parties, shall direct. 

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

22 the expiration or termination of the agreement or the date 

23 on which the agreement became subject to modification 

24 under subsection (a) of this section, or if the parties decide 

25 upon arbitration but do not agree upon the procedures 
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1 therefore, an arbitration board shall be established con2 sisting of 3 members, 1 of whom shall be selected by the 

3 Postal Service, 1 by the bargaining representative of the 

4 employees, and the third by the 2 thus selected. If either 

5 of the parties fails to select a member, or if the members 

6 chosen by the parties fail to agree on the third person with7 in 5 days after their first meeting, the selection shall be 

8 made from a list of names provided by the Director. This 

9 list shall consist of not less then 9 names of arbitrators of 

10 nationwide reputation and professional nature, who are 

11 also members of the National Academy of Arbitrators, and 

12 whom the Director has determined are available and will13 ing to serve. 

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

15 and fair hearing, including an opportunity to present evi16 dence in support of their claims, and an opportunity to 

17 present their case in person, by counsel or by other rep18 resentative as they may elect. Decisions of the arbitration 

19 board shall be conclusive and binding upon the parties. The 

20 arbitration board shall render its decision within 45 days 

21 after its appointment. 

22 ‘‘(3) Costs of the arbitration board and mediation shall 

23 be shared equally by the Postal Service and the bargaining 

24 representative. 
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1 ‘‘(d) In the case of a bargaining unit whose recognized 

2 collective-bargaining representative does not have an agree3 ment with the Postal Service, if the parties fail to reach 

4 the agreement within 90 days after the commencement of 

5 collective bargaining, a mediator shall be appointed in ac6 cordance with the terms in subsection (b) of this section, 

7 unless the parties have previously agreed to another proce8 dure for a binding resolution of their differences. If the par9 ties fail to reach agreement within 180 days after the com10 mencement of collective bargaining, and if they have not 

11 agreed to another procedure for binding resolution, an arbi12 tration board shall be established to provide conclusive and 

13 binding arbitration in accordance with the terms of sub14 section (c) of this section.’’. 

15 (b) NONINTERFERENCE WITH COLLECTIVE BAR16 GAINING AGREEMENTS.—Except as otherwise provided by 

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

18 shall restrict, expand, or otherwise affect any of the rights, 

19 privileges, or benefits of either employees of or labor organi20 zations representing employees of the United States Postal 

21 Service under chapter 12 of title 39, United States Code, 

22 the National Labor Relations Act, any handbook or manual 

23 affecting employee labor relations within the United States 

24 Postal Service, or any collective bargaining agreement. 
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1 (c) FREE MAILING PRIVILEGES CONTINUE UN2 CHANGED.—Nothing in this Act or any amendment made 

3 by this Act shall affect any free mailing privileges accorded 

4 under section 3217 or sections 3403 through 3406 of title 

5 39, United States Code. 

6 SEC. 506. BONUS AUTHORITY. 

7 Chapter 36 of title 39, United States Code, is amended 

8 by inserting after section 3685 the following: 

9 ‘‘§ 3686. Bonus authority 

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

11 1 or more programs to provide bonuses or other rewards 

12 to officers and employees of the Postal Service in senior ex13 ecutive or equivalent positions to achieve the objectives of 

14 this chapter. 

15 ‘‘(b) LIMITATION ON TOTAL COMPENSATION.— 

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

17 the Postal Service may award a bonus or other re18 ward in excess of the limitation set forth in the last 

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

20 approved under paragraph (2). Any such award or 

21 bonus may not cause the total compensation of such 

22 officer or employee to exceed the total annual com23 pensation payable to the Vice President under section 

24 104 of title 3 as of the end of the calendar year in 

25 which the bonus or award is paid. 
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1 ‘‘(2) APPROVAL PROCESS.—If the Postal Service 

2 wishes to have the authority, under any program de3 scribed in subsection (a), to award bonuses or other 

4 rewards in excess of the limitation set forth in the last 

5 sentence of section 1003(a)— 

6 ‘‘(A) the Postal Service shall make an ap7 propriate request to the Board of Governors of 

8 the Postal Service in such form and manner as 

9 the Board requires; and 

10 ‘‘(B) the Board of Governors shall approve 

11 any such request if the Board certifies, for the 

12 annual appraisal period involved, that the per13 formance appraisal system for affected officers 

14 and employees of the Postal Service (as designed 

15 and applied) makes meaningful distinctions 

16 based on relative performance. 

17 ‘‘(3) REVOCATION AUTHORITY.—If the Board of 

18 Governors of the Postal Service finds that a perform19 ance appraisal system previously approved under 

20 paragraph (2)(B) does not (as designed and applied) 

21 make meaningful distinctions based on relative per22 formance, the Board may revoke or suspend the au23 thority of the Postal Service to continue a program 

24 approved under paragraph (2) until such time as ap-
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1 propriate corrective measures have, in the judgment of 

2 the Board, been taken. 

3 ‘‘(c) REPORTING REQUIREMENT RELATING TO BO4 NUSES OR OTHER REWARDS.—Included in its comprehen5 sive statement under section 2401(e) for any period shall 

6 be— 

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

8 or other reward during such period which would not 

9 have been allowable but for the provisions of sub10 section (b); 

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

12 and 

13 ‘‘(3) the amount by which the limitation referred 

14 to in subsection (b)(1) was exceeded as a result of 

15 such bonus or other reward.’’. 

16 TITLE VI—ENHANCED 

17 REGULATORY COMMISSION 

18 SEC. 601. REORGANIZATION AND MODIFICATION OF CER19 TAIN PROVISIONS RELATING TO THE POSTAL 

20 REGULATORY COMMISSION. 

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

22 United States Code, is amended— 

23 (1) by inserting after chapter 4 the following: 
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1 ‘‘CHAPTER 5—POSTAL REGULATORY 

2 COMMISSION 

‘‘Sec. 

‘‘501. Establishment. 

‘‘502. Commissioners. 

‘‘503. Rules; regulations; procedures. 

‘‘504. Administration. 

‘‘505. Officer of the Postal Regulatory Commission representing the general public. 

3 ‘‘§ 501. Establishment 

4 ‘‘The Postal Regulatory Commission is an independent 

5 establishment of the executive branch of the Government of 

6 the United States. 

7 ‘‘§ 502. Commissioners 

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

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

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

12 qualifications, professional standing, and demonstrated ex13 pertise in economics, accounting, law, or public adminis14 tration, and may be removed by the President only for 

15 cause. Each individual appointed to the Commission shall 

16 have the qualifications and expertise necessary to carry out 

17 the enhanced responsibilities accorded Commissioners under 

18 the Postal Accountability and Enhancement Act. Not more 

19 than 3 of the Commissioners may be adherents of the same 

20 political party. 
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1 ‘‘(b) No Commissioner shall be financially interested 

2 in any enterprise in the private sector of the economy en3 gaged in the delivery of mail matter. 

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

5 expiration of his term until his successor has qualified, ex6 cept that a Commissioner may not so continue to serve for 

7 more than 1 year after the date upon which his term other8 wise would expire under subsection (f). 

9 ‘‘(d) One of the Commissioners shall be designated as 

10 Chairman by, and shall serve in the position of Chairman 

11 at the pleasure of, the President. 

12 ‘‘(e) The Commissioners shall by majority vote des13 ignate a Vice Chairman of the Commission. The Vice Chair14 man shall act as Chairman of the Commission in the ab15 sence of the Chairman. 

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

17 years.’’; 

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

19 in effect before the amendment made by section 

20 201(c)), the heading for such subchapter I and all 

21 that follows through section 3602; 

22 (3) by redesignating sections 3603 and 3604 as 

23 sections 503 and 504, respectively, and transferring 

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

25 paragraph (1)); and 
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1 (4) by adding after such section 504 the fol2 lowing: 

3 ‘‘§ 505. Officer of the Postal Regulatory Commission 

4 representing the general public 

5 ‘‘The Postal Regulatory Commission shall designate an 

6 officer of the Postal Regulatory Commission in all public 

7 proceedings who shall represent the interests of the general 

8 public.’’. 

9 (b) APPLICABILITY.—The amendment made by sub10 section (a)(1) shall not affect the appointment or tenure of 

11 any person serving as a Commissioner on the Postal Regu12 latory Commission (as so redesignated by section 604) 

13 under an appointment made before the date of enactment 

14 of this Act or any nomination made before that date, but, 

15 when any such office becomes vacant, the appointment of 

16 any person to fill that office shall be made in accordance 

17 with such amendment. 

18 (c) CLERICAL AMENDMENT.—The analysis for part I 

19 of title 39, United States Code, is amended by inserting 

20 after the item relating to chapter 4 the following: 

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

21 SEC. 602. AUTHORITY FOR POSTAL REGULATORY COMMIS22 SION TO ISSUE SUBPOENAS. 

23 Section 504 of title 39, United States Code (as so redes24 ignated by section 601) is amended by adding at the end 

25 the following: 
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1 ‘‘(f)(1) Any Commissioner of the Postal Regulatory 

2 Commission, any administrative law judge appointed by 

3 the Commission under section 3105 of title 5, and any em4 ployee of the Commission designated by the Commission 

5 may administer oaths, examine witnesses, take depositions, 

6 and receive evidence. 

7 ‘‘(2) The Chairman of the Commission, any Commis8 sioner designated by the Chairman, and any administrative 

9 law judge appointed by the Commission under section 3105 

10 of title 5 may, with respect to any proceeding conducted 

11 by the Commission under this title or to obtain information 

12 to be used to prepare a report under this title— 

13 ‘‘(A) issue subpoenas requiring the attendance 

14 and presentation of testimony by, or the production 

15 of documentary or other evidence in the possession of, 

16 any covered person; and 

17 ‘‘(B) order the taking of depositions and re18 sponses to written interrogatories by a covered person. 

19 The written concurrence of a majority of the Commissioners 

20 then holding office shall, with respect to each subpoena 

21 under subparagraph (A), be required in advance of its 

22 issuance. 

23 ‘‘(3) In the case of contumacy or failure to obey a sub24 poena issued under this subsection, upon application by the 

25 Commission, the district court of the United States for the 
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1 district in which the person to whom the subpoena is ad2 dressed resides or is served may issue an order requiring 

3 such person to appear at any designated place to testify 

4 or produce documentary or other evidence. Any failure to 

5 obey the order of the court may be punished by the court 

6 as a contempt thereof. 

7 ‘‘(4) For purposes of this subsection, the term ‘covered 

8 person’ means an officer, employee, agent, or contractor of 

9 the Postal Service. 

10 ‘‘(g)(1) If the Postal Service determines that any docu11 ment or other matter it provides to the Postal Regulatory 

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

13 or otherwise at the request of the Commission in connection 

14 with any proceeding or other purpose under this title, con15 tains information which is described in section 410(c) of 

16 this title, or exempt from public disclosure under section 

17 552(b) of title 5, the Postal Service shall, at the time of 

18 providing such matter to the Commission, notify the Com19 mission, in writing, of its determination (and the reasons 

20 therefor). 

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

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

23 information as to which the Commission has been notified 

24 under paragraph (1)— 
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1 ‘‘(A) use such information for purposes other 

2 than the purposes for which it is supplied; or 

3 ‘‘(B) permit anyone who is not an officer or em4 ployee of the Commission to have access to any such 

5 information. 

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

7 Commission from publicly disclosing relevant infor8 mation in furtherance of its duties under this title, 

9 provided that the Commission has adopted regula10 tions under section 553 of title 5, that establish a pro11 cedure for according appropriate confidentiality to 

12 information identified by the Postal Service under 

13 paragraph (1). In determining the appropriate degree 

14 of confidentiality to be accorded information identi15 fied by the Postal Service under paragraph (1), the 

16 Commission shall balance the nature and extent of the 

17 likely commercial injury to the Postal Service against 

18 the public interest in maintaining the financial 

19 transparency of a government establishment com20 peting in commercial markets. 

21 ‘‘(B) Paragraph (2) shall not prevent the Com22 mission from requiring production of information in 

23 the course of any discovery procedure established in 

24 connection with a proceeding under this title. The 

25 Commission shall, by regulations based on rule 26(c) 
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1 of the Federal Rules of Civil Procedure, establish pro2 cedures for ensuring appropriate confidentiality for 

3 information furnished to any party.’’. 

4 SEC. 603. AUTHORIZATION OF APPROPRIATIONS FROM THE 

5 POSTAL SERVICE FUND. 

6 (a) POSTAL REGULATORY COMMISSION.—Subsection 

7 (d) of section 504 of title 39, United States Code (as so 

8 redesignated by section 601) is amended to read as follows: 

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

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

11 for the Postal Regulatory Commission. In requesting an ap12 propriation under this subsection for a fiscal year, the Com13 mission shall prepare and submit to the Congress under sec14 tion 2009 a budget of the Commission’s expenses, including 

15 expenses for facilities, supplies, compensation, and em16 ployee benefits.’’. 

17 (b) OFFICE OF INSPECTOR GENERAL OF THE UNITED

18 STATES POSTAL SERVICE.—Section 8G(f) of the Inspector 

19 General Act of 1978 (5 U.S.C. App.) is amended— 

20 (1) by redesignating paragraph (4) as para21 graph (5); 

22 (2) by redesignating the second paragraph (3) 

23 (relating to employees and labor organizations) as 

24 paragraph (4); and 

25 (3) by adding at the end the following: 
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1 ‘‘(6) There are authorized to be appropriated, 

2 out of the Postal Service Fund, such sums as may be 

3 necessary for the Office of Inspector General of the 

4 United States Postal Service.’’. 

5 (c) BUDGET PROGRAM.— 

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

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

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

9 shall also include separate statements of the amounts 

10 which (1) the Postal Service requests to be appro11 priated under subsections (b) and (c) of section 2401, 

12 (2) the Office of Inspector General of the United 

13 States Postal Service requests to be appropriated, out 

14 of the Postal Service Fund, under section 8G(f) of the 

15 Inspector General Act of 1978, and (3) the Postal 

16 Regulatory Commission requests to be appropriated, 

17 out of the Postal Service Fund, under section 504(d) 

18 of this title.’’. 

19 (2) CONFORMING AMENDMENT.—Section 

20 2003(e)(1) of title 39, United States Code, is amended 

21 by striking the first sentence and inserting the fol22 lowing: ‘‘The Fund shall be available for the payment 

23 of (A) all expenses incurred by the Postal Service in 

24 carrying out its functions as provided by law, subject 

25 to the same limitation as set forth in the parenthet-
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1 ical matter under subsection (a); (B) all expenses of 

2 the Postal Regulatory Commission, subject to the 

3 availability of amounts appropriated under section 

4 504(d); and (C) all expenses of the Office of Inspector 

5 General, subject to the availability of amounts appro6 priated under section 8G(f) of the Inspector General 

7 Act of 1978.’’. 

8 (d) EFFECTIVE DATE.— 

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

10 this section shall apply with respect to fiscal years be11 ginning on or after October 1, 2005. 

12 (2) SAVINGS PROVISION.—The provisions of title 

13 39, United States Code, and the Inspector General 

14 Act of 1978 (5 U.S.C. App.) that are amended by this 

15 section shall, for purposes of any fiscal year before the 

16 first fiscal year to which the amendments made by 

17 this section apply, continue to apply in the same way 

18 as if this section had never been enacted. 

19 SEC. 604. REDESIGNATION OF THE POSTAL RATE COMMIS20 SION. 

21 (a) AMENDMENTS TO TITLE 39, UNITED STATES

22 CODE.—Title 39, United States Code, is amended in sec23 tions 404, 503 and 504 (as so redesignated by section 601), 

24 1001 and 1002, by striking ‘‘Postal Rate Commission’’ each 
224 

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1 place it appears and inserting ‘‘Postal Regulatory Commis2 sion’’; 

3 (b) AMENDMENTS TO TITLE 5, UNITED STATES

4 CODE.—Title 5, United States Code, is amended in sections 

5 104(1), 306(f), 2104(b), 3371(3), 5314 (in the item relating 

6 to Chairman, Postal Rate Commission), 5315 (in the item 

7 relating to Members, Postal Rate Commission), 

8 5514(a)(5)(B), 7342(a)(1)(A), 7511(a)(1)(B)(ii), 

9 8402(c)(1), 8423(b)(1)(B), and 8474(c)(4) by striking 

10 ‘‘Postal Rate Commission’’ and inserting ‘‘Postal Regu11 latory Commission’’. 

12 (c) AMENDMENT TO THE ETHICS IN GOVERNMENT ACT

13 OF 1978.—Section 101(f)(6) of the Ethics in Government 

14 Act of 1978 (5 U.S.C. App.) is amended by striking ‘‘Postal 

15 Rate Commission’’ and inserting ‘‘Postal Regulatory Com16 mission’’. 

17 (d) AMENDMENT TO THE REHABILITATION ACT OF

18 1973.—Section 501(b) of the Rehabilitation Act of 1973 (29 

19 U.S.C. 791(b)) is amended by striking ‘‘Postal Rate Office’’ 

20 and inserting ‘‘Postal Regulatory Commission’’. 

21 (e) AMENDMENT TO TITLE 44, UNITED STATES

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

23 amended by striking ‘‘Postal Rate Commission’’ and insert24 ing ‘‘Postal Regulatory Commission’’. 
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1 (f) OTHER REFERENCES.—Whenever a reference is 

2 made in any provision of law (other than this Act or a 

3 provision of law amended by this Act), regulation, rule, doc4 ument, or other record of the United States to the Postal 

5 Rate Commission, such reference shall be considered a ref6 erence to the Postal Regulatory Commission. 

7 SEC. 605. FINANCIAL TRANSPARENCY. 

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

9 States Code, is amended— 

10 (1) by redesignating subsections (d) through (g) 

11 as subsections (e) through (h), respectively; and 

12 (2) by inserting after subsection (c) the fol13 lowing: 

14 ‘‘(d) As an independent establishment of the executive 

15 branch of the Government of the United States, the Postal 

16 Service shall be subject to a high degree of transparency 

17 to ensure fair treatment of customers of the Postal Service’s 

18 market-dominant products and companies competing with 

19 the Postal Service’s competitive products.’’. 

20 (b) FINANCIAL REPORTING REQUIREMENTS AND EN21 FORCEMENT POWERS APPLICABLE TO POSTAL SERVICE.— 

22 Section 503 of title 39, United States Code (as so redesig23 nated by section 601 and 604) is amended by— 

24 (1) inserting ‘‘(a)’’ before ‘‘The Postal Regu25 latory Commission shall promulgate’’; and 
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1 (2) adding at the end the following: 

2 ‘‘(b)(1) Beginning with the first full fiscal year fol3 lowing the date of enactment of the Postal Accountability 

4 and Enhancement Act, the Postal Service shall file with the 

5 Postal Regulatory Commission — 

6 ‘‘(A) within 35 days after the end of each fiscal 

7 quarter, a quarterly report containing the informa8 tion prescribed in Form 10–Q of the Securities and 

9 Exchange Commission under section 13 of the Securi10 ties Exchange Act of 1934 (15 U.S.C. 78m), or any 

11 revised or successor form; 

12 ‘‘(B) within 60 days after the end of each fiscal 

13 year, an annual report containing the information 

14 prescribed in Form 10–K of the Securities and Ex15 change Commission under section 13 of the Securities 

16 Exchange Act of 1934 (15 U.S.C. 78m), or any re17 vised or successor form; and 

18 ‘‘(C) periodic reports within the time frame and 

19 containing the information prescribed in Form 8–K 

20 of the Securities and Exchange Commission under 

21 section 13 of the Securities Exchange Act of 1934 (15 

22 U.S.C. 78m), or any revised or successor form. 

23 ‘‘(2) For purposes of preparing the reports required 

24 under paragraph (1), the Postal Service shall be deemed to 

25 be the registrant described in the Securities and Exchange 
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1 Commission forms, and references contained in such forms 

2 to Securities and Exchange Commission regulations are ap3 plicable. 

4 ‘‘(3) For purposes of preparing the reports required 

5 under paragraph (1), the Postal Service shall comply with 

6 the rules prescribed by the Securities and Exchange Com7 mission implementing section 404 of the Sarbanes-Oxley 

8 Act of 2002 (15 U.S.C. 7262; Public Law 107–204) begin9 ning with fiscal year 2007 and in each fiscal year there10 after. 

11 ‘‘(c)(1) The reports required under subsection (b)(1)(B) 

12 shall include, with respect to the financial obligations of 

13 the Postal Service under chapters 83, 84, and 89 of title 

14 5 for retirees of the Postal Service— 

15 ‘‘(A) the funded status of such obligations of the 

16 Postal Service; 

17 ‘‘(B) components of the net change in the fund 

18 balances and obligations and the nature and cause of 

19 any significant changes; 

20 ‘‘(C) components of net periodic costs; 

21 ‘‘(D) cost methods and assumptions underlying 

22 the relevant actuarial valuations; 

23 ‘‘(E) the effect of a one-percentage point increase 

24 in the assumed health care cost trend rate for each fu25 ture year on the service and interest costs components 
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1 of net periodic cost and the accumulated obligation of 

2 the Postal Service under chapter 89 of title 5 for re3 tirees of the Postal Service; 

4 ‘‘(F) actual contributions to and payments from 

5 the funds for the years presented and the estimated 

6 future contributions and payments for each of the fol7 lowing 5 years; 

8 ‘‘(G) the composition of plan assets reflected in 

9 the fund balances; and 

10 ‘‘(H) the assumed rate of return on fund bal11 ances and the actual rates of return for the years pre12 sented. 

13 ‘‘(2)(A) Beginning with the fiscal year 2007 and in 

14 each fiscal year thereafter, for purposes of the reports re15 quired under subsection (b)(1) (A) and (B), the Postal Serv16 ice shall include segment reporting. 

17 ‘‘(B) The Postal Service shall determine the appro18 priate segment reporting under subparagraph (A), after 

19 consultation with the Postal Regulatory Commission. 

20 ‘‘(d) For purposes of the annual reports required under 

21 subsection (b)(1)(B), the Postal Service shall obtain an 

22 opinion from an independent auditor on whether the infor23 mation listed under subsection (c) is fairly stated in all 

24 material respects, either in relation to the basic financial 

25 statements as a whole or on a stand-alone basis. 
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1 ‘‘(e) The Postal Regulatory Commission shall have ac2 cess to the audit documentation and any other supporting 

3 matter of the Postal Service and its independent auditor 

4 in connection with any information submitted under sub5 section (b)(1)(B). 

6 ‘‘(f) The Postal Regulatory Commission may, on its 

7 own motion or on request of an interested party, initiate 

8 proceedings (to be conducted in accordance with regulations 

9 that the Commission shall prescribe) to improve the quality, 

10 accuracy, or completeness of Postal Service data required 

11 by the Commission under this section whenever it shall ap12 pear that the data— 

13 ‘‘(1) have become significantly inaccurate; 

14 ‘‘(2) can be significantly improved; or 

15 ‘‘(3) are not cost beneficial.’’. 

16 TITLE VII—EVALUATIONS 

17 SEC. 701. ASSESSMENTS OF RATEMAKING, CLASSIFICATION, 

18 AND OTHER PROVISIONS. 

19 (a) IN GENERAL.—The Postal Regulatory Commission 

20 shall, at least every 3 years, submit a report to the President 

21 and Congress concerning— 

22 (1) the operation of the amendments made by 

23 this Act; and 
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1 (2) recommendations for any legislation or other 

2 measures necessary to improve the effectiveness or effi3 ciency of the postal laws of the United States. 

4 (b) POSTAL SERVICE VIEWS.—A report under this sec5 tion shall be submitted only after reasonable opportunity 

6 has been afforded to the Postal Service to review the report 

7 and to submit written comments on the report. Any com8 ments timely received from the Postal Service under the pre9 ceding sentence shall be attached to the report submitted 

10 under subsection (a). 

11 SEC. 702. REPORT ON UNIVERSAL POSTAL SERVICE AND 

12 THE POSTAL MONOPOLY. 

13 (a) REPORT BY THE POSTAL REGULATORY COMMIS14 SION.— 

15 (1) IN GENERAL.—Not later than 24 months 

16 after the date of enactment of this Act, the Postal Reg17 ulatory Commission shall submit a report to the 

18 President and Congress on universal postal service 

19 and the postal monopoly in the United States (in this 

20 section referred to as ‘‘universal service and the postal 

21 monopoly’’), including the monopoly on the delivery 

22 of mail and on access to mailboxes. 

23 (2) CONTENTS.—The report under this subsection 

24 shall include— 
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1 (A) a comprehensive review of the history 

2 and development of universal service and the 

3 postal monopoly, including how the scope and 

4 standards of universal service and the postal mo5 nopoly have evolved over time for the Nation and 

6 its urban and rural areas; 

7 (B) the scope and standards of universal 

8 service and the postal monopoly provided under 

9 current law (including sections 101 and 403 of 

10 title 39, United States Code), and current rules, 

11 regulations, policy statements, and practices of 

12 the Postal Service; 

13 (C) a description of any geographic areas, 

14 populations, communities (including both urban 

15 and rural communities), organizations, or other 

16 groups or entities not currently covered by uni17 versal service or that are covered but that are re18 ceiving services deficient in scope or quality or 

19 both; and 

20 (D) the scope and standards of universal 

21 service and the postal monopoly likely to be re22 quired in the future in order to meet the needs 

23 and expectations of the United States public, in24 cluding all types of mail users, based on discus25 sion of such assumptions, alternative sets of as-
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1 sumptions, and analyses as the Postal Service 

2 considers plausible. 

3 (b) RECOMMENDED CHANGES TO UNIVERSAL SERVICE

4 AND THE MONOPOLY.—The Postal Regulatory Commission 

5 shall include in the report under subsection (a), and in all 

6 reports submitted under section 701 of this Act— 

7 (1) any recommended changes to universal serv8 ice and the postal monopoly as the Commission con9 siders appropriate, including changes that the Com10 mission may implement under current law and 

11 changes that would require changes to current law, 

12 with estimated effects of the recommendations on the 

13 service, financial condition, rates, and security of 

14 mail provided by the Postal Service; 

15 (2) with respect to each recommended change de16 scribed under paragraph (1)— 

17 (A) an estimate of the costs of the Postal 

18 Service attributable to the obligation to provide 

19 universal service under current law; and 

20 (B) an analysis of the likely benefit of the 

21 current postal monopoly to the ability of the 

22 Postal Service to sustain the current scope and 

23 standards of universal service, including esti24 mates of the financial benefit of the postal mo-
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1 nopoly to the extent practicable, under current 

2 law; and 

3 (3) such additional topics and recommendations 

4 as the Commission considers appropriate, with esti5 mated effects of the recommendations on the service, 

6 financial condition, rates, and the security of mail 

7 provided by the Postal Service. 

8 SEC. 703. STUDY ON EQUAL APPLICATION OF LAWS TO COM9 PETITIVE PRODUCTS. 

10 (a) IN GENERAL.—The Federal Trade Commission 

11 shall prepare and submit to the President and Congress, 

12 and to the Postal Regulatory Commission, within 1 year 

13 after the date of enactment of this Act, a comprehensive re14 port identifying Federal and State laws that apply dif15 ferently to the United States Postal Service with respect to 

16 the competitive category of mail (within the meaning of sec17 tion 102 of title 39, United States Code, as amended by 

18 section 101) and similar products provided by private com19 panies. 

20 (b) RECOMMENDATIONS.—The Federal Trade Commis21 sion shall include such recommendations as it considers ap22 propriate for bringing such legal discrimination to an end, 

23 and in the interim, to account under section 3633 of title 

24 39, United States Code (as added by this Act), for the net 

25 economic advantages provided by those laws. 
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1 (c) CONSULTATION.—In preparing its report, the Fed2 eral Trade Commission shall consult with the United States 

3 Postal Service, the Postal Regulatory Commission, other 

4 Federal agencies, mailers, private companies that provide 

5 delivery services, and the general public, and shall append 

6 to such report any written comments received under this 

7 subsection. 

8 (d) COMPETITIVE PRODUCT REGULATION.—The Postal 

9 Regulatory Commission shall take into account the rec10 ommendations of the Federal Trade Commission in promul11 gating or revising the regulations required under section 

12 3633 of title 39, United States Code. 

13 SEC. 704. REPORT ON POSTAL WORKPLACE SAFETY AND 

14 WORKPLACE-RELATED INJURIES. 

15 (a) REPORT BY THE INSPECTOR GENERAL.— 

16 (1) IN GENERAL.—Not later than 6 months after 

17 the enactment of this Act, the Inspector General of the 

18 United States Postal Service shall submit a report to 

19 Congress and the Postal Service that— 

20 (A) details and assesses any progress the 

21 Postal Service has made in improving workplace 

22 safety and reducing workplace-related injuries 

23 nationwide; and 
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1 (B) identifies opportunities for improve2 ment that remain with respect to such improve3 ments and reductions. 

4 (2) CONTENTS.—The report under this subsection 

5 shall also— 

6 (A) discuss any injury reduction goals es7 tablished by the Postal Service; 

8 (B) describe the actions that the Postal 

9 Service has taken to improve workplace safety 

10 and reduce workplace-related injuries, and assess 

11 how successful the Postal Service has been in 

12 meeting its injury reduction goal; and 

13 (C) identify areas where the Postal Service 

14 has failed to meet its injury reduction goals, ex15 plain the reasons why these goals were not met, 

16 and identify opportunities for making further 

17 progress in meeting these goals. 

18 (b) REPORT BY THE POSTAL SERVICE.— 

19 (1) REPORT TO CONGRESS.—Not later than 6 

20 months after receiving the report under subsection (a), 

21 the Postal Service shall submit a report to Congress 

22 detailing how it plans to improve workplace safety 

23 and reduce workplace-related injuries nationwide, in24 cluding goals and metrics. 
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1 (2) PROBLEM AREAS.—The report under this 

2 subsection shall also include plans, developed in con3 sultation with the Inspector General and employee 

4 representatives, including representatives of each post5 al labor union and management association, for ad6 dressing the problem areas identified by the Inspector 

7 General in the report under subsection (a)(2)(C). 

8 SEC. 705. STUDY ON RECYCLED PAPER. 

9 (a) IN GENERAL.—Within 12 months after the date 

10 of enactment of this Act, the Government Accountability Of11 fice shall study and submit to the Congress, the Board of 

12 Governors of the Postal Service, and to the Postal Regu13 latory Commission a report concerning— 

14 (1) the economic and environmental efficacy of 

15 establishing rate incentives for mailers linked to the 

16 use of recycled paper; 

17 (2) a description of the accomplishments of the 

18 Postal Service in each of the preceding 5 years involv19 ing recycling activities, including the amount of an20 nual revenue generated and savings achieved by the 

21 Postal Service as a result of its use of recycled paper 

22 and other recycled products and its efforts to recycle 

23 undeliverable and discarded mail and other mate24 rials; and 
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1 (3) additional opportunities that may be avail2 able for the United States Postal Service to engage in 

3 recycling initiatives and the projected costs and reve4 nues of undertaking such opportunities. 

5 (b) RECOMMENDATIONS.—The report shall include rec6 ommendations for any administrative or legislative actions 

7 that may be appropriate. 

8 TITLE VIII—POSTAL SERVICE RE9 TIREMENT AND HEALTH BEN10 EFITS FUNDING 

11 SEC. 801. SHORT TITLE. 

12 This title may be cited as the ‘‘Postal Civil Service 

13 Retirement and Health Benefits Funding Amendments of 

14 2004’’. 

15 SEC. 802. CIVIL SERVICE RETIREMENT SYSTEM. 

16 (a) IN GENERAL.—Chapter 83 of title 5, United States 

17 Code, is amended— 

18 (1) in section 8334(a)(1)(B), by striking clause 

19 (ii) and inserting the following: 

20 ‘‘(ii) In the case of an employee of the United States 

21 Postal Service, no amount shall be contributed under this 

22 subparagraph.’’; and 

23 (2) by amending section 8348(h) to read as fol24 lows: 
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1 ‘‘(h)(1) In this subsection, the term ‘Postal surplus or 

2 supplemental liability’ means the estimated difference, as 

3 determined by the Office, between— 

4 ‘‘(A) the actuarial present value of all future 

5 benefits payable from the Fund under this subchapter 

6 to current or former employees of the United States 

7 Postal Service and attributable to civilian employ8 ment with the United States Postal Service; and 

9 ‘‘(B) the sum of— 

10 ‘‘(i) the actuarial present value of deduc11 tions to be withheld from the future basic pay of 

12 employees of the United States Postal Service 

13 currently subject to this subchapter under section 

14 8334; 

15 ‘‘(ii) that portion of the Fund balance, as of 

16 the date the Postal surplus or supplemental li17 ability is determined, attributable to payments 

18 to the Fund by the United States Postal Service 

19 and its employees, minus benefit payments at20 tributable to civilian employment with the 

21 United States Postal Service, plus the earnings 

22 on such amounts while in the Fund; and 

23 ‘‘(iii) any other appropriate amount, as de24 termined by the Office in accordance with gen-
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1 erally accepted actuarial practices and prin2 ciples. 

3 ‘‘(2)(A) Not later than June 15, 2006, the Office shall 

4 determine the Postal surplus or supplemental liability, as 

5 of September 30, 2005. If that result is a surplus, the 

6 amount of the surplus shall be transferred to the Postal 

7 Service Retiree Health Benefits Fund established under sec8 tion 8909a by June 30, 2006. If the result is a supplemental 

9 liability, the Office shall establish an amortization schedule, 

10 including a series of annual installments commencing Sep11 tember 30, 2006, which provides for the liquidation of such 

12 liability by September 30, 2043. 

13 ‘‘(B) The Office shall redetermine the Postal surplus 

14 or supplemental liability as of the close of the fiscal year, 

15 for each fiscal year beginning after September 30, 2006, 

16 through the fiscal year ending September 30, 2038. If the 

17 result is a surplus, that amount shall remain in the Fund 

18 until distribution is authorized under subparagraph (C), 

19 and any prior amortization schedule for payments shall be 

20 terminated. If the result is a supplemental liability, the Of21 fice shall establish a new amortization schedule, including 

22 a series of annual installments commencing on September 

23 30 of the subsequent fiscal year, which provides for the liq24 uidation of such liability by September 30, 2043. 
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1 ‘‘(C) As of the close of the fiscal years ending Sep2 tember 30, 2015, 2025, 2035, and 2039, if the result is a 

3 surplus, that amount shall be transferred to the Postal Serv4 ice Retiree Health Benefits Fund, and any prior amortiza5 tion schedule for payments shall be terminated. 

6 ‘‘(D) Amortization schedules established under this 

7 paragraph shall be set in accordance with generally accept8 ed actuarial practices and principles, with interest com9 puted at the rate used in the most recent valuation of the 

10 Civil Service Retirement System. 

11 ‘‘(E) The United States Postal Service shall pay the 

12 amounts so determined to the Office, with payments due 

13 not later than the date scheduled by the Office. 

14 ‘‘(3) Notwithstanding any other provision of law, in 

15 computing the amount of any payment under any other 

16 subsection of this section that is based upon the amount 

17 of the unfunded liability, such payment shall be computed 

18 disregarding that portion of the unfunded liability that the 

19 Office determines will be liquidated by payments under this 

20 subsection.’’. 

21 (b) CREDIT ALLOWED FOR MILITARY SERVICE.—In 

22 the application of section 8348(g)(2) of title 5, United 

23 States Code, for the fiscal year 2006, the Office of Personnel 

24 Management shall include, in addition to the amount other25 wise computed under that paragraph, the amounts that 
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1 would have been included for the fiscal years 2003 through 

2 2005 with respect to credit for military service of former 

3 employees of the United States Postal Service as though the 

4 Postal Civil Service Retirement System Funding Reform 

5 Act of 2003 (Public Law 108–18) had not been enacted, 

6 and the Secretary of the Treasury shall make the required 

7 transfer to the Civil Service Retirement and Disability 

8 Fund based on that amount. 

9 (c) REVIEW.— 

10 (1) IN GENERAL.— 

11 (A) REQUEST FOR REVIEW.—Notwith12 standing any other provision of this section (in13 cluding any amendment made by this section), 

14 any determination or redetermination made by 

15 the Office of Personnel Management under this 

16 section (including any amendment made by this 

17 section) shall, upon request of the United States 

18 Postal Service, be subject to a review by the Post19 al Regulatory Commission under this subsection. 

20 (B) REPORT.—Upon receiving a request 

21 under subparagraph (A), the Commission shall 

22 promptly procure the services of an actuary, who 

23 shall hold membership in the American Academy 

24 of Actuaries and shall be qualified in the evalua25 tion of pension obligations, to conduct a review 
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1 in accordance with generally accepted actuarial 

2 practices and principles and to provide a report 

3 to the Commission containing the results of the 

4 review. The Commission, upon determining that 

5 the report satisfies the requirements of this para6 graph, shall approve the report, with any com7 ments it may choose to make, and submit it with 

8 any such comments to the Postal Service, the Of9 fice of Personnel Management, and Congress. 

10 (2) RECONSIDERATION.—Upon receiving the re11 port from the Commission under paragraph (1), the 

12 Office of Personnel Management shall reconsider its 

13 determination or redetermination in light of such re14 port, and shall make any appropriate adjustments. 

15 The Office shall submit a report containing the results 

16 of its reconsideration to the Commission, the Postal 

17 Service, and Congress. 

18 SEC. 803. HEALTH INSURANCE. 

19 (a) IN GENERAL.— 

20 (1) FUNDING.—Chapter 89 of title 5, United 

21 States Code, is amended— 

22 (A) in section 8906(g)(2)(A), by striking 

23 ‘‘shall be paid by the United States Postal Serv24 ice.’’ and inserting ‘‘shall be paid first from the 

25 Postal Service Retiree Health Benefits Fund up 
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1 to the amount contained in the Fund, with any 

2 remaining amount paid by the United States 

3 Postal Service.’’; and 

4 (B) by inserting after section 8909 the fol5 lowing: 

6 ‘‘§ 8909a. Postal Service Retiree Health Benefit Fund 

7 ‘‘(a) There is in the Treasury of the United States a 

8 Postal Service Retiree Health Benefits Fund which is ad9 ministered by the Office of Personnel Management. 

10 ‘‘(b) The Fund is available without fiscal year limita11 tion for payments required under section 8906(g)(2)(A). 

12 ‘‘(c) The Secretary of the Treasury shall immediately 

13 invest, in interest-bearing securities of the United States 

14 such currently available portions of the Fund as are not 

15 immediately required for payments from the Fund. Such 

16 investments shall be made in the same manner as invest17 ments for the Civil Service Retirement and Disability Fund 

18 under section 8348. 

19 ‘‘(d)(1) Not later than June 30, 2006, and by June 

20 30 of each succeeding year, the Office shall compute the net 

21 present value of the future payments required under section 

22 8906(g)(2)(A) and attributable to the service of Postal Serv23 ice employees during the most recently ended fiscal year. 
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1 ‘‘(2)(A) Not later than June 30, 2006, the Office shall 

2 compute, and by June 30 of each succeeding year, the Office 

3 shall recompute the difference between— 

4 ‘‘(i) the net present value of the excess of future 

5 payments required under section 8906(g)(2)(A) for 

6 current and future United States Postal Service an7 nuitants as of the end of the fiscal year ending on 

8 September 30 of that year; and 

9 ‘‘(ii)(I) the value of the assets of the Postal Re10 tiree Health Benefits Fund as of the end of the fiscal 

11 year ending on September 30 of that year; and 

12 ‘‘(II) the net present value computed under para13 graph (1). 

14 ‘‘(B) Not later than June 30, 2006, the Office shall 

15 compute, and by June 30 of each succeeding year shall re16 compute, an amortization schedule including a series of an17 nual installments which provide for the liquidation by Sep18 tember 30, 2045, or within 15 years, whichever is later, of 

19 the net present value determined under subparagraph (A), 

20 including interest at the rate used in that computation. 

21 ‘‘(3) Not later than September 30, 2006, and by Sep22 tember 30 of each succeeding year, the United States Postal 

23 Service shall pay into such Fund— 

24 ‘‘(A) the net present value computed under para25 graph (1); and 
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1 ‘‘(B) the annual installment computed under 

2 paragraph (2)(B). 

3 ‘‘(4) Computations under this subsection shall be made 

4 consistent with the assumptions and methodology used by 

5 the Office for financial reporting under subchapter II of 

6 chapter 35 of title 31. 

7 ‘‘(5)(A)(i) Any computation or other determination of 

8 the Office under this subsection shall, upon request of the 

9 United States Postal Service, be subject to a review by the 

10 Postal Regulatory Commission under this paragraph. 

11 ‘‘(ii) Upon receiving a request under clause (i), the 

12 Commission shall promptly procure the services of an actu13 ary, who shall hold membership in the American Academy 

14 of Actuaries and shall be qualified in the evaluation of 

15 healthcare insurance obligations, to conduct a review in ac16 cordance with generally accepted actuarial practices and 

17 principles and to provide a report to the Commission con18 taining the results of the review. The Commission, upon de19 termining that the report satisfies the requirements of this 

20 subparagraph, shall approve the report, with any comments 

21 it may choose to make, and submit it with any such com22 ments to the Postal Service, the Office of Personnel Manage23 ment, and Congress. 

24 ‘‘(B) Upon receiving the report under subparagraph 

25 (A), the Office of Personnel Management shall reconsider 
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1 its determination or redetermination in light of such report, 

2 and shall make any appropriate adjustments. The Office 

3 shall submit a report containing the results of its reconsid4 eration to the Commission, the Postal Service, and Con5 gress. 

6 ‘‘(6) After consultation with the United States Postal 

7 Service, the Office shall promulgate any regulations the Of8 fice determines necessary under this subsection.’’. 

9 (2) TECHNICAL AND CONFORMING AMEND10 MENT.—The table of sections for chapter 89 of title 5, 

11 United States Code, is amended by inserting after the 

12 item relating to section 8909 the following: 

‘‘8909a. Postal Service Retiree Health Benefits Fund.’’. 

13 (b) REVIEW.— 

14 (1) IN GENERAL.— 

15 (A) REQUEST FOR REVIEW.—Any regula16 tion established under section 8909a(d)(5) of title 

17 5, United States Code (as added by subsection 

18 (a)), shall, upon request of the United States 

19 Postal Service, be subject to a review by the Post20 al Regulatory Commission under this para21 graph. 

22 (B) REPORT.—Upon receiving a request 

23 under subparagraph (A), the Commission shall 

24 promptly procure the services of an actuary, who 

25 shall hold membership in the American Academy 
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1 of Actuaries and shall be qualified in the evalua2 tion of healthcare insurance obligations, to con3 duct a review in accordance with generally ac4 cepted actuarial practices and principles and to 

5 provide a report to the Commission containing 

6 the results of the review. The Commission, upon 

7 determining that the report satisfies the require8 ments of this paragraph, shall approve the re9 port, with any comments it may choose to make, 

10 and submit it with any such comments to the 

11 Postal Service, the Office of Personnel Manage12 ment, and Congress. 

13 (2) RECONSIDERATION.—Upon receiving the re14 port under paragraph (1), the Office of Personnel 

15 Management shall reconsider its determination or re16 determination in light of such report, and shall make 

17 any appropriate adjustments. The Office shall submit 

18 a report containing the results of its reconsideration 

19 to the Commission, the Postal Service, and Congress. 

20 (c) TRANSITIONAL ADJUSTMENT FOR FISCAL YEAR

21 2006.—For fiscal year 2006, the amounts paid by the Post22 al Service in Government contributions under section 

23 8906(g)(2)(A) of title 5, United States Code, for fiscal year 

24 2006 contributions shall be deducted from the initial pay25 ment otherwise due from the Postal Service to the Postal 
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1 Service Retiree Health Benefits Fund under section 

2 8909a(d)(3) of such title as added by this section. 

3 SEC. 804. REPEAL OF DISPOSITION OF SAVINGS PROVISION. 

4 Section 3 of the Postal Civil Service Retirement Sys5 tem Funding Reform Act of 2003 (Public Law 108–18) is 

6 repealed. 

7 SEC. 805. EFFECTIVE DATES. 

8 (a) IN GENERAL.—Except as provided under sub9 section (b), this title shall take effect on October 1, 2005. 

10 (b) TERMINATION OF EMPLOYER CONTRIBUTION.—The 

11 amendment made by paragraph (1) of section 802(a) shall 

12 take effect on the first day of the first pay period beginning 

13 on or after October 1, 2005. 

14 TITLE IX—COMPENSATION FOR 

15 WORK INJURIES 

16 SEC. 901. TEMPORARY DISABILITY; CONTINUATION OF PAY. 

17 (a) TIME OF ACCRUAL OF RIGHT.—Section 8117 of 

18 title 5, United States Code, is amended— 

19 (1) by striking ‘‘An employee’’ and inserting 

20 ‘‘(a) An employee other than a Postal Service em21 ployee’’; and 

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

23 ‘‘(b) A Postal Service employee is not entitled to com24 pensation or continuation of pay for the first 3 days of tem25 porary disability, except as provided under paragraph (3) 
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1 of subsection (a). A Postal Service employee may use an2 nual leave, sick leave, or leave without pay during that 3- 

3 day period, except that if the disability exceeds 14 days or 

4 is followed by permanent disability, the employee may have 

5 their sick leave or annual leave reinstated or receive pay 

6 for the time spent on leave without pay under this section.’’. 

7 (b) TECHNICAL AND CONFORMING AMENDMENT.—Sec8 tion 8118(b)(1) of title 5, United States Code, is amended 

9 to read as follows: 

10 ‘‘(1) without a break in time, except as provided 

11 under section 8117(b), unless controverted under regu12 lations of the Secretary’’. 

13 SEC. 902. DISABILITY RETIREMENT FOR POSTAL EMPLOY14 EES. 

15 (a) TOTAL DISABILITY.—Section 8105 of title 5, 

16 United States Code, is amended— 

17 (1) in subsection (a), by adding at the end the 

18 following: ‘‘This section applies to a Postal Service 

19 employee, except as provided under subsection (c).’’; 

20 and 

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

22 ‘‘(c)(1) In this subsection, the term ‘retirement age’ has 

23 the meaning given under section 216(l)(1) of the Social Se24 curity Act (42 U.S.C. 416(l)(1)). 
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1 ‘‘(2) Notwithstanding any other provision of law, for 

2 any injury occurring on or after the date of enactment of 

3 the Postal Accountability and Enhancement Act, and for 

4 any new claim for a period of disability commencing on 

5 or after that date, the compensation entitlement for total 

6 disability is converted to 50 percent of the monthly pay of 

7 the employee on the later of— 

8 ‘‘(A) the date on which the injured employee 

9 reaches retirement age; or 

10 ‘‘(B) 1 year after the employee begins receiving 

11 compensation.’’. 

12 (b) PARTIAL DISABILITY.—Section 8106 of title 5, 

13 United States Code, is amended— 

14 (1) in subsection (a), by adding at the end the 

15 following: ‘‘This section applies to a Postal Service 

16 employee, except as provided under subsection (d).’’; 

17 and 

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

19 ‘‘(d)(1) In this subsection, the term ‘retirement age’ has 

20 the meaning given under section 216(l)(1) of the Social Se21 curity Act (42 U.S.C. 416(l)(1)). 

22 ‘‘(2) Notwithstanding any other provision of law, 

23 for any injury occurring on or after the date of enact24 ment of this subsection, and for any new claim for a 

25 period of disability commencing on or after that date, 
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1 the compensation entitlement for partial disability is 

2 converted to 50 percent of the difference between the 

3 monthly pay of an employee and the monthly wage 

4 earning capacity of the employee after the beginning 

5 of partial disability on the later of— 

6 ‘‘(A) the date on which the injured employee 

7 reaches retirement age; or 

8 ‘‘(B) 1 year after the employee begins re9 ceiving compensation.’’. 

10 TITLE X—MISCELLANEOUS 

11 SEC. 1001. EMPLOYMENT OF POSTAL POLICE OFFICERS. 

12 Section 404 of title 39, United States Code (as amend13 ed by this Act), is further amended by adding at the end 

14 the following: 

15 ‘‘(d) The Postal Service may employ guards for all 

16 buildings and areas owned or occupied by the Postal Service 

17 or under the charge and control of the Postal Service, and 

18 may give such guards, with respect to such property, any 

19 of the powers of special policemen provided under section 

20 1315 of title 40. The Postmaster General, or the designee 

21 of the Postmaster General, may take any action that the 

22 Secretary of Homeland Security may take under section 

23 1315 of title 40, with respect to that property. 

24 SEC. 1002. OBSOLETE PROVISIONS. 

25 (a) REPEAL.— 
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1 (1) IN GENERAL.—Chapter 52 of title 39, United 

2 States Code, is repealed. 

3 (2) CONFORMING AMENDMENTS.—(A) Section 

4 5005(a) of title 39, United States Code, is amended— 

5 (i) by striking paragraph (1), and by redes6 ignating paragraphs (2) through (4) as para7 graphs (1) through (3), respectively; and 

8 (ii) in paragraph (3) (as so designated by 

9 clause (i)), by striking ‘‘(as defined in section 

10 5201(6) of this title)’’. 

11 (B) Section 5005(b) of such title 39 is amended 

12 by striking ‘‘(a)(4)’’ each place it appears and insert13 ing ‘‘(a)(3)’’. 

14 (C) Section 5005(c) of such title 39 is amended 

15 by striking ‘‘by carrier or person under subsection 

16 (a)(1) of this section, by contract under subsection 

17 (a)(4) of this section, or’’ and inserting ‘‘by contract 

18 under subsection (a)(3) of this section or’’. 

19 (b) ELIMINATING RESTRICTION ON LENGTH OF CON20 TRACTS.—(1) Section 5005(b)(1) of title 39, United States 

21 Code, is amended by striking ‘‘(or where the Postal Service 

22 determines that special conditions or the use of special 

23 equipment warrants, not in excess of 6 years)’’ and insert24 ing ‘‘(or such longer period of time as may be determined 

25 by the Postal Service to be advisable or appropriate)’’. 
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1 (2) Section 5402(d) of such title 39 is amended by 

2 striking ‘‘for a period of not more than 4 years’’. 

3 (3) Section 5605 of such title 39 is amended by strik4 ing ‘‘for periods of not in excess of 4 years’’. 

5 (c) TECHNICAL AND CONFORMING AMENDMENT.—The 

6 table of chapters for part V of title 39, United States Code, 

7 is amended by repealing the item relating to chapter 52. 

8 SEC. 1003. REDUCED RATES. 

9 Section 3626 of title 39, United States Code, is amend10 ed— 

11 (1) in subsection (a), by striking all before para12 graph (4) and inserting the following: 

13 ‘‘(a)(1) Except as otherwise provided in this section, 

14 rates of postage for a class of mail or kind of mailer under 

15 former section 4358, 4452(b), 4452(c), 4554(b), or 4554(c) 

16 of this title shall be established in accordance with section 

17 3622. 

18 ‘‘(2) For the purpose of this subsection, the term ‘reg19 ular-rate category’ means any class of mail or kind of mail20 er, other than a class or kind referred to in section 2401(c). 

21 ‘‘(3) Rates of postage for a class of mail or kind of 

22 mailer under former section 4358(a) through (c) of this title 

23 shall be established so that postage on each mailing of such 

24 mail reflects its preferred status as compared to the postage 
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1 for the most closely corresponding regular-rate category 

2 mailing.’’; 

3 (2) in subsection (g), by adding at the end the 

4 following: 

5 ‘‘(3) For purposes of this section and former section 

6 4358(a) through (c) of this title, those copies of an issue 

7 of a publication entered within the county in which it is 

8 published, but distributed outside such county on postal 

9 carrier routes originating in the county of publication, shall 

10 be treated as if they were distributed within the county of 

11 publication. 

12 ‘‘(4)(A) In the case of an issue of a publication, any 

13 number of copies of which are mailed at the rates of postage 

14 for a class of mail or kind of mailer under former section 

15 4358(a) through (c) of this title, any copies of such issue 

16 which are distributed outside the county of publication (ex17 cluding any copies subject to paragraph (3)) shall be subject 

18 to rates of postage provided for under this paragraph. 

19 ‘‘(B) The rates of postage applicable to mail under this 

20 paragraph shall be established in accordance with section 

21 3622. 

22 ‘‘(C) This paragraph shall not apply with respect to 

23 an issue of a publication unless the total paid circulation 

24 of such issue outside the county of publication (not counting 
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1 recipients of copies subject to paragraph (3)) is less than 

2 5,000.’’; and 

3 (3) by adding at the end the following: 

4 ‘‘(n) In the administration of this section, matter that 

5 satisfies the circulation standards for requester publications 

6 shall not be excluded from being mailed at the rates for mail 

7 under former section 4358 solely because such matter is de8 signed primarily for free circulation or for circulation at 

9 nominal rates, or fails to meet the requirements of former 

10 section 4354(a)(5).’’. 

11 SEC. 1004. SENSE OF CONGRESS REGARDING POSTAL SERV12 ICE PURCHASING REFORM. 

13 It is the sense of Congress that the Postal Service 

14 should— 

15 (1) ensure the fair and consistent treatment of 

16 suppliers and contractors in its current purchasing 

17 policies and any revision or replacement of such poli18 cies, such as through the use of competitive contract 

19 award procedures, effective dispute resolution mecha20 nisms, and socioeconomic programs; and 

21 (2) implement commercial best practices in Post22 al Service purchasing policies to achieve greater effi23 ciency and cost savings as recommended in July 2003 

24 by the President’s Commission on the United States 

25 Postal Service, in a manner that is compatible with 
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1 the fair and consistent treatment of suppliers and 

2 contractors, as befitting an establishment in the 

3 United States Government. 

Calendar No. 164 

109TH CONGRESS 

1ST SESSION S. 662 

A BILL 

To reform the postal laws of the United States 

JULY 14, 2005 

Reported with an amendment