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the general public, an opportunity to present their views 
on those recommendations through submission of written 
data, views, or arguments, with or without opportunity for 
oral presentation, or in such other manner as the Commis-
sion considers appropriate. 
‘‘(B) After due consideration of the views and other 
information received under subparagraph (A), the Com-
mission shall by rule— 
‘‘(i) provide for the establishment and applica-
tion of the accounting practices and principles which 
shall be followed by the Postal Service; 
‘‘(ii) provide for the establishment and applica-
tion of the substantive and procedural rules de-
scribed in paragraph (1)(B); and 
‘‘(iii) provide for the submission by the Postal 
Service to the Postal Regulatory Commission of an-
nual and other periodic reports setting forth such in-
formation as the Commission may require. 
Final rules under this subparagraph shall be issued not 
later than 12 months after the date on which the Sec-
retary of the Treasury makes his submission to the Com-
mission under paragraph (1) (or by such later date as the 
Commission and the Postal Service may agree to). The 
Commission is authorized to promulgate regulations revis-
ing such rules.
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‘‘(C) Reports described in subparagraph (B)(iii) shall 
be submitted at such time and in such form, and shall 
include such information, as the Commission by rule re-
quires. The Commission may, on its own motion or on re-
quest of an interested party, initiate proceedings (to be 
conducted in accordance with such rules as the Commis-
sion shall prescribe) to improve the quality, accuracy, or 
completeness of Postal Service data under such subpara-
graph whenever it shall appear that— 
‘‘(i) the quality of the information furnished in 
those reports has become significantly inaccurate or 
can be significantly improved; or 
‘‘(ii) those revisions are, in the judgment of the 
Commission, otherwise necessitated by the public in-
terest. 
‘‘(D) A copy of each report described in subpara-
graph (B)(iii) shall also be transmitted by the Postal Serv-
ice to the Secretary of the Treasury and the Inspector 
General of the United States Postal Service. 
‘‘(i) The Postal Service shall render an annual report 
to the Secretary of the Treasury concerning the operation 
of the Competitive Products Fund, in which it shall ad-
dress such matters as risk limitations, reserve balances, 
allocation or distribution of moneys, liquidity require-
ments, and measures to safeguard against losses. A copy
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of its then most recent report under this subsection shall 
be included with any other submission that it is required 
to make to the Postal Regulatory Commission under sec-
tion 3652(g).’’. 
(2) CLERICAL AMENDMENT.—The analysis for 
chapter 20 of title 39, United States Code, is 
amended by adding after the item relating to section 
2010 the following: 
‘‘2011. Provisions relating to competitive products.’’. 
(b) TECHNICAL AND CONFORMING AMENDMENTS.— 
(1) DEFINITION.—Section 2001 of title 39, 
United States Code, is amended by striking ‘‘and’’ 
at the end of paragraph (1), by redesignating para-
graph (2) as paragraph (3), and by inserting after 
paragraph (1) the following: 
‘‘(2) ‘Competitive Products Fund’ means the 
Postal Service Competitive Products Fund estab-
lished by section 2011; and’’. 
(2) CAPITAL OF THE POSTAL SERVICE.—Sec-
tion 2002(b) of title 39, United States Code, is 
amended by striking ‘‘Fund,’’ and inserting ‘‘Fund 
and the balance in the Competitive Products 
Fund,’’. 
(3) POSTAL SERVICE FUND.— 
(A) PURPOSES FOR WHICH AVAILABLE.— 
Section 2003(a) of title 39, United States Code,
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is amended by striking ‘‘title.’’ and inserting 
‘‘title (other than any of the purposes, func-
tions, or powers for which the Competitive 
Products Fund is available).’’. 
(B) DEPOSITS.—Section 2003(b) of title 
39, United States Code, is amended by striking 
‘‘There’’ and inserting ‘‘Except as otherwise 
provided in section 2011, there’’. 
(4) RELATIONSHIP BETWEEN THE TREASURY 
AND THE POSTAL SERVICE.—Section 2006 of title 
39, United States Code, is amended— 
(A) in subsection (a), by inserting ‘‘or sec-
tion 2011’’ before ‘‘of this title,’’; 
(B) in subsection (b), by inserting ‘‘under 
section 2005’’ before ‘‘in such amounts’’ in the 
first sentence and before ‘‘in excess of such 
amount.’’ in the second sentence; and 
(C) in subsection (c), by inserting ‘‘or sec-
tion 2011(e)(4)(E)’’ before ‘‘of this title,’’. 
SEC. 302. ASSUMED FEDERAL INCOME TAX ON COMPETI-
TIVE PRODUCTS INCOME. 
Subchapter II of chapter 36 of title 39, United States 
Code, as amended by section 202, is amended by adding 
at the end the following:
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‘‘§ 3634. Assumed Federal income tax on competitive 
products income 
‘‘(a) DEFINITIONS.—For purposes of this section— 
‘‘(1) the term ‘assumed Federal income tax on 
competitive products income’ means the net income 
tax that would be imposed by chapter 1 of the Inter-
nal Revenue Code of 1986 on the Postal Service’s 
assumed taxable income from competitive products 
for the year; and 
‘‘(2) the term ‘assumed taxable income from 
competitive products’, with respect to a year, refers 
to the amount representing what would be the tax-
able income of a corporation under the Internal Rev-
enue Code of 1986 for the year, if— 
‘‘(A) the only activities of such corporation 
were the activities of the Postal Service allo-
cable under section 2011(h) to competitive 
products; and 
‘‘(B) the only assets held by such corpora-
tion were the assets of the Postal Service allo-
cable under section 2011(h) to such activities. 
‘‘(b) COMPUTATION
AND
TRANSFER
REQUIRE-
MENTS.—The Postal Service shall, for each year beginning 
with the year in which occurs the deadline for the Postal 
Service’s first report to the Postal Regulatory Commission 
under section 3652(a)—
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‘‘(1) compute its assumed Federal income tax 
on competitive products income for such year; and 
‘‘(2) transfer from the Competitive Products 
Fund to the Postal Service Fund the amount of that 
assumed tax. 
‘‘(c) DEADLINE FOR TRANSFERS.—Any transfer re-
quired to be made under this section for a year shall be 
due on or before the January 15th next occurring after 
the close of such year.’’. 
SEC. 303. UNFAIR COMPETITION PROHIBITED. 
(a) SPECIFIC LIMITATIONS.—Chapter 4 of title 39, 
United States Code, is amended by adding after section 
404 the following: 
‘‘§ 404a. Specific Limitations 
‘‘(a) Except as specifically authorized by law, the 
Postal Service may not— 
‘‘(1) establish any rule or regulation (including 
any standard) the effect of which is to preclude com-
petition or establish the terms of competition unless 
the Postal Service demonstrates that the regulation 
does not create an unfair competitive advantage for 
itself or any entity funded (in whole or in part) by 
the Postal Service; 
‘‘(2) compel the disclosure, transfer, or licens-
ing of intellectual property to any third party (such
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as patents, copyrights, trademarks, trade secrets, 
and proprietary information); or 
‘‘(3) obtain information from a person that pro-
vides (or seeks to provide) any product, and then 
offer any product or service that uses or is based in 
whole or in part on such information, without the 
consent of the person providing that information, 
unless substantially the same information is obtained 
(or obtainable) from an independent source or is 
otherwise obtained (or obtainable). 
‘‘(b) The Postal Regulatory Commission shall pre-
scribe regulations to carry out this section. 
‘‘(c) Any party (including an officer of the Commis-
sion representing the interests of the general public) who 
believes that the Postal Service has violated this section 
may bring a complaint in accordance with section 3662.’’. 
(b) CONFORMING AMENDMENTS.— 
(1) GENERAL
POWERS.—Section 401 of title 
39, United States Code, is amended by striking 
‘‘The’’ and inserting ‘‘Subject to the provisions of 
section 404a, the’’. 
(2) SPECIFIC POWERS.—Section 404(a) of title 
39, United States Code, is amended by striking 
‘‘Without’’ and inserting ‘‘Subject to the provisions 
of section 404a, but otherwise without’’.
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(c) CLERICAL AMENDMENT.—The analysis for chap-
ter 4 of title 39, United States Code, is amended by insert-
ing after the item relating to section 404 the following: 
‘‘404a. Specific limitations.’’. 
SEC. 304. SUITS BY AND AGAINST THE POSTAL SERVICE. 
(a) IN GENERAL.—Section 409 of title 39, United 
States Code, is amended by striking subsections (d) and 
(e) and inserting the following: 
‘‘(d)(1) For purposes of the provisions of law cited 
in paragraphs (2)(A) and (2)(B), respectively, the Postal 
Service— 
‘‘(A) shall be considered to be a ‘person’, as 
used in the provisions of law involved; and 
‘‘(B) shall not be immune under any other doc-
trine of sovereign immunity from suit in Federal 
court by any person for any violation of any of those 
provisions of law by any officer or employee of the 
Postal Service. 
‘‘(2) This subsection applies with respect to— 
‘‘(A) the Act of July 5, 1946 (commonly re-
ferred to as the ‘Trademark Act of 1946’ (15 U.S.C. 
1051 and following)); and 
‘‘(B) the provisions of section 5 of the Federal 
Trade Commission Act to the extent that such sec-
tion 5 applies to unfair or deceptive acts or prac-
tices.
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‘‘(e)(1) To the extent that the Postal Service, or other 
Federal agency acting on behalf of or in concert with the 
Postal Service, engages in conduct with respect to any 
competitive product, the Postal Service or other Federal 
agency (as the case may be)— 
‘‘(A) shall not be immune under any doctrine of 
sovereign immunity from suit in Federal court by 
any person for any violation of Federal law by such 
agency or any officer or employee thereof; and 
‘‘(B) shall be considered to be a person (as de-
fined in subsection (a) of the first section of the 
Clayton Act) for purposes of— 
‘‘(i) the antitrust laws (as defined in such 
subsection); and 
‘‘(ii) section 5 of the Federal Trade Com-
mission Act to the extent that such section 5 
applies to unfair methods of competition. 
‘‘(2) No damages, interest on damages, costs or at-
torney’s fees may be recovered, and no criminal liability 
may be imposed, under the antitrust laws (as so defined) 
from any officer or employee of the Postal Service, or 
other Federal agency acting on behalf of or in concert with 
the Postal Service, acting in an official capacity.
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‘‘(3) This subsection shall not apply with respect to 
conduct occurring before the date of the enactment of this 
subsection. 
‘‘(f)(1) Each building constructed or altered by the 
Postal Service shall be constructed or altered, to the max-
imum extent feasible as determined by the Postal Service, 
in compliance with one of the nationally recognized model 
building codes and with other applicable nationally recog-
nized codes. 
‘‘(2) Each building constructed or altered by the 
Postal Service shall be constructed or altered only after 
consideration of all requirements (other than procedural 
requirements) of zoning laws, land use laws, and applica-
ble environmental laws of a State or subdivision of a State 
which would apply to the building if it were not a building 
constructed or altered by an establishment of the Govern-
ment of the United States. 
‘‘(3) For purposes of meeting the requirements of 
paragraphs (1) and (2) with respect to a building, the 
Postal Service shall— 
‘‘(A) in preparing plans for the building, con-
sult with appropriate officials of the State or polit-
ical subdivision, or both, in which the building will 
be located;
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‘‘(B) upon request, submit such plans in a 
timely manner to such officials for review by such 
officials for a reasonable period of time not exceed-
ing 30 days; and 
‘‘(C) permit inspection by such officials during 
construction or alteration of the building, in accord-
ance with the customary schedule of inspections for 
construction or alteration of buildings in the locality, 
if such officials provide to the Postal Service— 
‘‘(i) a copy of such schedule before con-
struction of the building is begun; and 
‘‘(ii) reasonable notice of their intention to 
conduct any inspection before conducting such 
inspection. 
Nothing in this subsection shall impose an obligation on 
any State or political subdivision to take any action under 
the preceding sentence, nor shall anything in this sub-
section require the Postal Service or any of its contractors 
to pay for any action taken by a State or political subdivi-
sion to carry out this subsection (including reviewing 
plans, carrying out on-site inspections, issuing building 
permits, and making recommendations). 
‘‘(4) Appropriate officials of a State or a political 
subdivision of a State may make recommendations to the 
Postal Service concerning measures necessary to meet the
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requirements of paragraphs (1) and (2). Such officials 
may also make recommendations to the Postal Service 
concerning measures which should be taken in the con-
struction or alteration of the building to take into account 
local conditions. The Postal Service shall give due consid-
eration to any such recommendations. 
‘‘(5) In addition to consulting with local and State 
officials under paragraph (3), the Postal Service shall es-
tablish procedures for soliciting, assessing, and incor-
porating local community input on real property and land 
use decisions. 
‘‘(6) For purposes of this subsection, the term ‘State’ 
includes the District of Columbia, the Commonwealth of 
Puerto Rico, and a territory or possession of the United 
States. 
‘‘(g)(1) Notwithstanding any other provision of law, 
legal representation may not be furnished by the Depart-
ment of Justice to the Postal Service in any action, suit, 
or proceeding arising, in whole or in part, under any of 
the following: 
‘‘(A) Subsection (d) or (e) of this section. 
‘‘(B) Subsection (f) or (g) of section 504 (relat-
ing to administrative subpoenas by the Postal Regu-
latory Commission).
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‘‘(C) Section 3663 (relating to appellate re-
view). 
The Postal Service may, by contract or otherwise, employ 
attorneys to obtain any legal representation that it is pre-
cluded from obtaining from the Department of Justice 
under this paragraph. 
‘‘(2) In any circumstance not covered by paragraph 
(1), the Department of Justice shall, under section 411, 
furnish the Postal Service such legal representation as it 
may require, except that, with the prior consent of the 
Attorney General, the Postal Service may, in any such cir-
cumstance, employ attorneys by contract or otherwise to 
conduct litigation brought by or against the Postal Service 
or its officers or employees in matters affecting the Postal 
Service. 
‘‘(3)(A) In any action, suit, or proceeding in a court 
of the United States arising in whole or in part under any 
of the provisions of law referred to in subparagraph (B) 
or (C) of paragraph (1), and to which the Commission 
is not otherwise a party, the Commission shall be per-
mitted to appear as a party on its own motion and as 
of right. 
‘‘(B) The Department of Justice shall, under such 
terms and conditions as the Commission and the Attorney 
General shall consider appropriate, furnish the Commis-
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sion such legal representation as it may require in connec-
tion with any such action, suit, or proceeding, except that, 
with the prior consent of the Attorney General, the Com-
mission may employ attorneys by contract or otherwise for 
that purpose. 
‘‘(h) A judgment against the Government of the 
United States arising out of activities of the Postal Service 
shall be paid by the Postal Service out of any funds avail-
able to the Postal Service, subject to the restriction speci-
fied in section 2011(g).’’. 
(b) TECHNICAL AMENDMENT.—Section 409(a) of 
title 39, United States Code, is amended by striking ‘‘Ex-
cept as provided in section 3628 of this title,’’ and insert-
ing ‘‘Except as otherwise provided in this title,’’. 
SEC. 305. INTERNATIONAL POSTAL ARRANGEMENTS. 
(a) IN GENERAL.—Section 407 of title 39, United 
States Code, is amended to read as follows: 
‘‘§ 407. International postal arrangements 
‘‘(a) It is the policy of the United States— 
‘‘(1) to promote and encourage communications 
between peoples by efficient operation of inter-
national postal services and other international deliv-
ery services for cultural, social, and economic pur-
poses;
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‘‘(2) to promote and encourage unrestricted and 
undistorted competition in the provision of inter-
national postal services and other international deliv-
ery services, except where provision of such services 
by private companies may be prohibited by law of 
the United States; 
‘‘(3) to promote and encourage a clear distinc-
tion between governmental and operational respon-
sibilities with respect to the provision of inter-
national postal services and other international deliv-
ery services by the Government of the United States 
and by intergovernmental organizations of which the 
United States is a member; and 
‘‘(4) to participate in multilateral and bilateral 
agreements with other countries to accomplish these 
objectives. 
‘‘(b)(1) The Secretary of State shall be responsible 
for formulation, coordination, and oversight of foreign pol-
icy related to international postal services and other inter-
national delivery services, and shall have the power to con-
clude treaties, conventions and amendments related to 
international postal services and other international deliv-
ery services, except that the Secretary may not conclude 
any treaty, convention, or other international agreement 
(including those regulating international postal services)
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if such treaty, convention, or agreement would, with re-
spect to any competitive product, grant an undue or un-
reasonable preference to the Postal Service, a private pro-
vider of international postal or delivery services, or any 
other person. 
‘‘(2) In carrying out the responsibilities specified in 
paragraph (1), the Secretary of State shall exercise pri-
mary authority for the conduct of foreign policy with re-
spect to international postal services and international de-
livery services, including the determination of United 
States positions and the conduct of United States partici-
pation in negotiations with foreign governments and inter-
national bodies. In exercising this authority, the Sec-
retary— 
‘‘(A) shall coordinate with other agencies as ap-
propriate, and in particular, shall give full consider-
ation to the authority vested by law or Executive 
order in the Postal Regulatory Commission, the De-
partment of Commerce, the Department of Trans-
portation, and the Office of the United States Trade 
Representative in this area; 
‘‘(B) shall maintain continuing liaison with 
other executive branch agencies concerned with post-
al and delivery services;
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‘‘(C) shall maintain continuing liaison with the 
Committee on Government Reform of the House of 
Representatives and the Committee on Govern-
mental Affairs of the Senate; 
‘‘(D) shall maintain appropriate liaison with 
both representatives of the Postal Service and rep-
resentatives of users and private providers of inter-
national postal services and other international deliv-
ery services to keep informed of their interests and 
problems, and to provide such assistance as may be 
needed to ensure that matters of concern are 
promptly considered by the Department of State or 
(if applicable, and to the extent practicable) other 
executive branch agencies; and 
‘‘(E) shall assist in arranging meetings of such 
public sector advisory groups as may be established 
to advise the Department of State and other execu-
tive branch agencies in connection with international 
postal services and international delivery services. 
‘‘(3) The Secretary of State shall establish an advi-
sory committee (within the meaning of the Federal Advi-
sory Committee Act) to perform such functions as the Sec-
retary considers appropriate in connection with carrying 
out subparagraphs (A) through (D) of paragraph (2).
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‘‘(c)(1) Before concluding any treaty, convention, or 
amendment that establishes a rate or classification for a 
product subject to subchapter I of chapter 36, the Sec-
retary of State shall request the Postal Regulatory Com-
mission to submit a decision on whether such rate or clas-
sification is consistent with the standards and criteria es-
tablished by the Commission under section 3622. 
‘‘(2) The Secretary shall ensure that each treaty, con-
vention, or amendment concluded under subsection (b) is 
consistent with a decision of the Commission adopted 
under paragraph (1), except if, or to the extent, the Sec-
retary determines, by written order, that considerations of 
foreign policy or national security require modification of 
the Commission’s decision. 
‘‘(d) Nothing in this section shall be considered to 
prevent the Postal Service from entering into such com-
mercial or operational contracts related to providing inter-
national postal services and other international delivery 
services as it deems appropriate, except that— 
‘‘(1) any such contract made with an agency of 
a foreign government (whether under authority of 
this subsection or otherwise) shall be solely contrac-
tual in nature and may not purport to be inter-
national law; and
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‘‘(2) a copy of each such contract between the 
Postal Service and an agency of a foreign govern-
ment shall be transmitted to the Secretary of State 
and the Postal Regulatory Commission not later 
than the effective date of such contract. 
‘‘(e)(1) With respect to shipments of international 
mail that are competitive products within the meaning of 
section 3631 that are exported or imported by the Postal 
Service, the Bureau of Customs and Border Protection of 
the Department of Homeland Security and other appro-
priate Federal agencies shall apply the customs laws of 
the United States and all other laws relating to the impor-
tation or exportation of such shipments in the same man-
ner to both shipments by the Postal Service and similar 
shipments by private companies. 
‘‘(2) For purposes of this subsection, the term ‘pri-
vate company’ means a private company substantially 
owned or controlled by persons who are citizens of the 
United States. 
‘‘(3) In exercising the authority pursuant to sub-
section (b) to conclude new treaties, conventions and 
amendments related to international postal services and 
to renegotiate such treaties, conventions and amendments, 
the Secretary of State shall, to the maximum extent prac-
ticable, take such measures as are within the Secretary’s
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control to encourage the governments of other countries 
to make available to the Postal Service and private compa-
nies a range of nondiscriminatory customs procedures that 
will fully meet the needs of all types of American shippers. 
The Secretary of State shall consult with the United 
States Trade Representative and the Commissioner of 
Customs, Department of Homeland Security in carrying 
out this paragraph. 
‘‘(4) The provisions of this subsection shall take ef-
fect 6 months after the date of the enactment of this sub-
section or such earlier date as the Bureau of Customs and 
Border Protection of the Department of Homeland Secu-
rity may determine in writing.’’. 
(b) EFFECTIVE DATE.—Notwithstanding any provi-
sion of the amendment made by subsection (a), the au-
thority of the United States Postal Service to establish 
the rates of postage or other charges on mail matter con-
veyed between the United States and other countries shall 
remain available to the Postal Service until— 
(1) with respect to market-dominant products, 
the date as of which the regulations promulgated 
under section 3622 of title 39, United States Code 
(as amended by section 201(a)) take effect; and 
(2) with respect to competitive products, the 
date as of which the regulations promulgated under
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section 3633 of title 39, United States Code (as 
amended by section 202) take effect. 
SEC. 306. REDESIGNATION. 
Chapter 36 of title 39, United States Code (as in ef-
fect before the amendment made by section 204(a)) is 
amended by striking the heading for subchapter V and in-
serting the following: 
‘‘SUBCHAPTER VI—GENERAL’’. 
TITLE IV—GENERAL 
PROVISIONS 
SEC. 
401. 
QUALIFICATION 
REQUIREMENTS 
FOR 
GOV-
ERNORS. 
(a) IN GENERAL.—Section 202(a) of title 39, United 
States Code, is amended by striking ‘‘(a)’’ and inserting 
‘‘(a)(1)’’ and by striking the fourth sentence and inserting 
the following: ‘‘The Governors shall represent the public 
interest generally, and at least 4 of the Governors shall 
be chosen solely on the basis of their demonstrated ability 
in managing organizations or corporations (in either the 
public or private sector) of substantial size; for purposes 
of this sentence, an organization or corporation shall be 
considered to be of substantial size if it employs at least 
50,000 employees. The Governors shall not be representa-
tives of specific interests using the Postal Service, and 
may be removed only for cause.’’.
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(b) CONSULTATION REQUIREMENT.—Section 202(a) 
of title 39, United States Code, is amended by adding at 
the end the following: 
‘‘(2) In selecting the individuals described in para-
graph (1) for nomination for appointment to the position 
of Governor, the President should consult with the Speak-
er of the House of Representatives, the minority leader 
of the House of Representatives, the majority leader of 
the Senate, and the minority leader of the Senate.’’. 
(c) RESTRICTION.—Section 202(b) of title 39, United 
States Code, is amended by striking ‘‘(b)’’ and inserting 
‘‘(b)(1)’’, and by adding at the end the following: 
‘‘(2)(A) Notwithstanding any other provision of this 
section, in the case of the office of the Governor the term 
of which is the first one scheduled to expire at least 4 
months after the date of the enactment of this para-
graph— 
‘‘(i) such office may not, in the case of any per-
son commencing service after that expiration date, 
be filled by any person other than an individual cho-
sen from among persons nominated for such office 
with the unanimous concurrence of all labor organi-
zations described in section 206(a)(1); and 
‘‘(ii) instead of the term that would otherwise 
apply under the first sentence of paragraph (1), the
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term of any person so appointed to such office shall 
be 3 years. 
‘‘(B) Except as provided in subparagraph (A), an ap-
pointment under this paragraph shall be made in conform-
ance with all provisions of this section that would other-
wise apply.’’. 
(d) APPLICABILITY.—The amendment made by sub-
section (a) shall not affect the appointment or tenure of 
any person serving as a Governor of the Board of Gov-
ernors of the United States Postal Service pursuant to an 
appointment made before the date of the enactment of this 
Act, or, except as provided in the amendment made by 
subsection (c), any nomination made before that date; 
however, when any such office becomes vacant, the ap-
pointment of any person to fill that office shall be made 
in accordance with such amendment. The requirement set 
forth in the fourth sentence of section 202(a)(1) of title 
39, United States Code (as amended by subsection (a)) 
shall be met beginning not later than 9 years after the 
date of the enactment of this Act. 
SEC. 402. OBLIGATIONS. 
(a) PURPOSES FOR WHICH OBLIGATIONS MAY BE 
ISSUED.—The first sentence of section 2005(a)(1) of title 
39, United States Code, is amended by striking ‘‘title.’’ 
and inserting ‘‘title, other than any of the purposes for
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which the corresponding authority is available to the Post-
al Service under section 2011.’’. 
(b) LIMITATION ON NET ANNUAL INCREASE IN OB-
LIGATIONS ISSUED FOR CERTAIN PURPOSES.—The third 
sentence of section 2005(a)(1) of title 39, United States 
Code, is amended to read as follows: ‘‘In any one fiscal 
year, the net increase in the amount of obligations out-
standing issued for the purpose of capital improvements 
and the net increase in the amount of obligations out-
standing issued for the purpose of defraying operating ex-
penses of the Postal Service shall not exceed a combined 
total of $3,000,000,000.’’ . 
(c) LIMITATIONS ON OBLIGATIONS OUTSTANDING.— 
(1) IN
GENERAL.—Subsection (a) of section 
2005 of title 39, United States Code, is amended by 
adding at the end the following: 
‘‘(3) For purposes of applying the respective limita-
tions under this subsection, the aggregate amount of obli-
gations issued by the Postal Service which are outstanding 
as of any one time, and the net increase in the amount 
of obligations outstanding issued by the Postal Service for 
the purpose of capital improvements or for the purpose 
of defraying operating expenses of the Postal Service in 
any fiscal year, shall be determined by aggregating the 
relevant obligations issued by the Postal Service under this
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section with the relevant obligations issued by the Postal 
Service under section 2011.’’. 
(2) CONFORMING
AMENDMENT.—The second 
sentence of section 2005(a)(1) of title 39, United 
States Code, is amended by striking ‘‘any such obli-
gations’’ and inserting ‘‘obligations issued by the 
Postal Service which may be’’. 
(d) AMOUNTS WHICH MAY BE PLEDGED, ETC.— 
(1) 
OBLIGATIONS
TO
WHICH
PROVISIONS 
APPLY.—The first sentence of section 2005(b) of 
title 39, United States Code, is amended by striking 
‘‘such obligations,’’ and inserting ‘‘obligations issued 
by the Postal Service under this section,’’. 
(2) ASSETS, REVENUES, AND
RECEIPTS
TO 
WHICH PROVISIONS APPLY.—Subsection (b) of sec-
tion 2005 of title 39, United States Code, is amend-
ed by striking ‘‘(b)’’ and inserting ‘‘(b)(1)’’, and by 
adding at the end the following: 
‘‘(2) Notwithstanding any other provision of this sec-
tion— 
‘‘(A) the authority to pledge assets of the Post-
al Service under this subsection shall be available 
only to the extent that such assets are not related 
to the provision of competitive products (as deter-
mined under section 2011(h) or, for purposes of any
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period before accounting practices and principles 
under section 2011(h) have been established and ap-
plied, the best information available from the Postal 
Service, including the audited statements required 
by section 2008(e)); and 
‘‘(B) any authority under this subsection relat-
ing to the pledging or other use of revenues or re-
ceipts of the Postal Service shall be available only to 
the extent that they are not revenues or receipts of 
the Competitive Products Fund.’’. 
SEC. 403. PRIVATE CARRIAGE OF LETTERS. 
(a) IN GENERAL.—Section 601 of title 39, United 
States Code, is amended by striking subsection (b) and 
inserting the following: 
‘‘(b) A letter may also be carried out of the mails 
when— 
‘‘(1) the amount paid for the private carriage of 
the letter is at least the amount equal to 6 times the 
rate then currently charged for the 1st ounce of a 
single-piece first class letter; 
‘‘(2) the letter weighs at least 121⁄2 ounces; or 
‘‘(3) such carriage is within the scope of serv-
ices described by regulations of the Postal Service 
(including, in particular, sections 310.1 and 320.2– 
320.8 of title 39 of the Code of Federal Regulations,
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as in effect on July 1, 2004) that purport to permit 
private carriage by suspension of the operation of 
this section (as then in effect). 
‘‘(c) Any regulations necessary to carry out this sec-
tion shall be promulgated by the Postal Regulatory Com-
mission.’’. 
(b) EFFECTIVE DATE.—This section shall take effect 
on the date as of which the regulations promulgated under 
section 3633 of title 39, United States Code (as amended 
by section 202) take effect. 
SEC. 404. RULEMAKING AUTHORITY. 
Paragraph (2) of section 401 of title 39, United 
States Code, is amended to read as follows: 
‘‘(2) to adopt, amend, and repeal such rules 
and regulations, not inconsistent with this title, as 
may be necessary in the execution of its functions 
under this title and such other functions as may be 
assigned to the Postal Service under any provisions 
of law outside of this title;’’. 
SEC. 405. NONINTERFERENCE WITH COLLECTIVE BAR-
GAINING AGREEMENTS, ETC. 
(a) NONINTERFERENCE WITH COLLECTIVE BAR-
GAINING AGREEMENTS.—Except as provided in section 
407, nothing in this Act or any amendment made by this 
Act shall restrict, expand, or otherwise affect any of the
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rights, privileges, or benefits of either employees of or 
labor organizations representing employees of the United 
States Postal Service under chapter 12 of title 39, United 
States Code, the National Labor Relations Act, any hand-
book or manual affecting employee labor relations within 
the United States Postal Service, or any collective bar-
gaining agreement. 
(b) FREE MAILING PRIVILEGES CONTINUE UN-
CHANGED.—Nothing in this Act or any amendment made 
by this Act shall affect any free mailing privileges ac-
corded under section 3217 or sections 3403 through 3406 
of title 39, United States Code. 
SEC. 406. BONUS AND COMPENSATION AUTHORITY. 
Subchapter VI of chapter 36 of title 39, United 
States Code (as so redesignated by section 306) is amend-
ed by adding at the end the following: 
‘‘§ 3686. Bonus authority 
‘‘(a) IN GENERAL.—The Postal Service may establish 
one or more programs to provide bonuses or other rewards 
to officers and employees of the Postal Service in senior 
executive or equivalent positions to achieve the objectives 
of this chapter. 
‘‘(b) LIMITATION ON TOTAL COMPENSATION.— 
‘‘(1) IN GENERAL.—Under any such program, 
the Postal Service may award a bonus or other re-
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ward in excess of the limitation set forth in the last 
sentence of section 1003(a), if such program has 
been approved under paragraph (2). Any such award 
or bonus may not cause the total compensation of 
such officer or employee to exceed the total annual 
compensation payable to the Vice President under 
section 104 of title 3 as of the end of the calendar 
year in which the bonus or award is paid. 
‘‘(2) APPROVAL PROCESS.—If the Postal Serv-
ice wishes to have the authority, under any program 
described in subsection (a), to award bonuses or 
other rewards in excess of the limitation set forth in 
the last sentence of section 1003(a)— 
‘‘(A) the Postal Service shall make an ap-
propriate request to the Board of Governors in 
such form and manner as the Board requires; 
and 
‘‘(B) the Board of Governors shall approve 
any such request if it certifies, for the annual 
appraisal period involved, that the performance 
appraisal system for affected officers and em-
ployees of the Postal Service (as designed and 
applied) makes meaningful distinctions based 
on relative performance.
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‘‘(3) REVOCATION AUTHORITY.—If the Board 
of Governors finds that a performance appraisal sys-
tem previously approved under paragraph (2)(B) 
does not (as designed and applied) make meaningful 
distinctions based on relative performance, the 
Board may revoke or suspend the authority of the 
Postal Service to continue a program approved 
under paragraph (2) until such time as appropriate 
corrective measures have, in the judgment of the 
Board, been taken. 
‘‘(c) EXCEPTIONS FOR CRITICAL POSITIONS.—Not-
withstanding any other provision of law, the Board of Gov-
ernors may allow up to 12 officers or employees of the 
Postal Service in critical senior executive or equivalent po-
sitions to receive total compensation in an amount not to 
exceed 120 percent of the total annual compensation pay-
able to the Vice President under section 104 of title 3 as 
of the end of the calendar year in which such payment 
is received. For each exception made under this sub-
section, the Board shall provide written notification to the 
Director of the Office of Personnel Management and the 
Congress within 30 days after the payment is made setting 
forth the name of the officer or employee involved, the 
critical nature of his or her duties and responsibilities, and 
the basis for determining that such payment is warranted.
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‘‘(d) INFORMATION FOR INCLUSION IN COMPREHEN-
SIVE STATEMENT.—Included in its comprehensive state-
ment under section 2401(e) for any period shall be— 
‘‘(1) the name of each person receiving a bonus 
or other payment during such period which would 
not have been allowable but for the provisions of 
subsection (b) or (c); 
‘‘(2) the amount of the bonus or other payment; 
and 
‘‘(3) the amount by which the limitation set 
forth in the last sentence of section 1003(a) was ex-
ceeded as a result of such bonus or other payment. 
‘‘(e) REGULATIONS.—The Board of Governors may 
prescribe regulations for the administration of this sec-
tion.’’. 
SEC. 407. MEDIATION IN COLLECTIVE-BARGAINING DIS-
PUTES. 
(a) IN GENERAL.—Section 1207(b) of title 39, 
United States Code, is amended by striking all that follows 
‘‘the Director of the Federal Mediation and Conciliation 
Service shall’’ and inserting ‘‘, within 10 days appoint a 
mediator of nationwide reputation and professional stat-
ure, and who is also a member of the National Academy 
of Arbitrators. The parties shall cooperate with the medi-
ator in an effort to reach an agreement and shall meet
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and negotiate in good faith at such times and places that 
the mediator, in consultation with the parties, shall di-
rect.’’. 
(b) 
PROVISIONS
RELATING
TO
ARBITRATION 
BOARDS.—Section 1207(c) of title 39, United States 
Code, is amended— 
(1) in paragraph (1)— 
(A) by striking ‘‘90’’ and inserting ‘‘60’’; 
(B) by striking ‘‘not members of the fact-
finding panel,’’; and 
(C) by striking all that follows ‘‘shall be 
made’’ and inserting ‘‘from a list of names pro-
vided by the Director. This list shall consist of 
not less than 9 names of arbitrators of nation-
wide reputation and professional stature, who 
are also members of the National Academy of 
Arbitrators, and whom the Director has deter-
mined are available and willing to serve.’’; and 
(2) in paragraph (3), by striking ‘‘factfinding 
panel’’ and inserting ‘‘mediation’’. 
(c) CONFORMING AMENDMENT.—Section 1207(d) of 
title 39, United States Code, is amended by striking ‘‘fact-
finding panel will be established’’ and inserting ‘‘mediator 
shall be appointed’’.
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TITLE V—ENHANCED 
REGULATORY COMMISSION 
SEC. 501. REORGANIZATION AND MODIFICATION OF CER-
TAIN PROVISIONS RELATING TO THE POSTAL 
REGULATORY COMMISSION. 
(a) TRANSFER
AND
REDESIGNATION.—Title 39, 
United States Code, is amended— 
(1) by inserting after chapter 4 the following: 
‘‘CHAPTER 5—POSTAL REGULATORY 
COMMISSION 
‘‘Sec. 
‘‘501. Establishment. 
‘‘502. Commissioners. 
‘‘503. Rules; regulations; procedures. 
‘‘504. Administration. 
‘‘§ 501. Establishment 
‘‘The Postal Regulatory Commission is an inde-
pendent establishment of the executive branch of the Gov-
ernment of the United States. 
‘‘§ 502. Commissioners 
‘‘(a) The Postal Regulatory Commission is composed 
of 5 Commissioners, appointed by the President, by and 
with the advice and consent of the Senate. The Commis-
sioners shall be chosen solely on the basis of their technical 
qualifications, professional standing, and demonstrated 
expertise in economics, accounting, law, or public adminis-
tration, and may be removed by the President only for
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cause. Each individual appointed to the Commission shall 
have the qualifications and expertise necessary to carry 
out the responsibilities accorded Commissioners under the 
Postal Accountability and Enhancement Act. Not more 
than 3 of the Commissioners may be adherents of the 
same political party. 
‘‘(b) A Commissioner may continue to serve after the 
expiration of his term until his successor has qualified, 
except that a Commissioner may not so continue to serve 
for more than 1 year after the date upon which his term 
otherwise would expire under subsection (e). 
‘‘(c) One of the Commissioners shall be designated 
as Chairman by, and shall serve in the position of Chair-
man at the pleasure of, the President. 
‘‘(d) The Commissioners shall by majority vote des-
ignate a Vice Chairman of the Commission. The Vice 
Chairman shall act as Chairman of the Commission in the 
absence of the Chairman. 
‘‘(e) The Commissioners shall serve for terms of 6 
years.’’; 
(2) in subchapter I of chapter 36 (as in effect 
before the amendment made by section 201(c)), by 
striking the heading for such subchapter I and all 
that follows through section 3602; and
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(3) by redesignating sections 3603 and 3604 as 
sections 503 and 504, respectively, and transferring 
such sections to the end of chapter 5 (as inserted by 
paragraph (1)). 
(b) DETERMINATIONS.—Section 503 of title 39, 
United States Code, as so redesignated by subsection 
(a)(3), is amended by adding at the end the following: 
‘‘Such rules shall include procedures which balance, inter 
alia, the need for protecting due process rights and ensur-
ing expeditious decision-making.’’. 
(c) APPLICABILITY.—The amendment made by sub-
section (a)(1) shall not affect the appointment or tenure 
of any person serving as a Commissioner on the Postal 
Regulatory Commission (as so redesignated by section 
504) pursuant to an appointment made before the date 
of the enactment of this Act or any nomination made be-
fore that date, but, when any such office becomes vacant, 
the appointment of any person to fill that office shall be 
made in accordance with such amendment. 
(d) CLERICAL AMENDMENT.—The analysis for part 
I of title 39, United States Code, is amended by inserting 
after the item relating to chapter 4 the following: 
‘‘5. Postal Regulatory Commission ..............................................
501’’.
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SEC. 502. AUTHORITY FOR POSTAL REGULATORY COMMIS-
SION TO ISSUE SUBPOENAS. 
Section 504 of title 39, United States Code (as so 
redesignated by section 501) is amended by adding at the 
end the following: 
‘‘(f)(1) Any Commissioner of the Postal Regulatory 
Commission, any administrative law judge appointed by 
the Commission under section 3105 of title 5, and any 
employee of the Commission designated by the Commis-
sion may administer oaths, examine witnesses, take depo-
sitions, and receive evidence. 
‘‘(2) The Chairman of the Commission, any Commis-
sioner designated by the Chairman, and any administra-
tive law judge appointed by the Commission under section 
3105 of title 5 may, with respect to any proceeding con-
ducted by the Commission under this title— 
‘‘(A) issue subpoenas requiring the attendance 
and presentation of testimony by, or the production 
of documentary or other evidence in the possession 
of, any covered person; and 
‘‘(B) order the taking of depositions and re-
sponses to written interrogatories by a covered per-
son. 
The written concurrence of a majority of the Commis-
sioners then holding office shall, with respect to each sub-
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poena under subparagraph (A), be required in advance of 
its issuance. 
‘‘(3) In the case of contumacy or failure to obey a 
subpoena issued under this subsection, upon application 
by the Commission, the district court of the United States 
for the district in which the person to whom the subpoena 
is addressed resides or is served may issue an order requir-
ing such person to appear at any designated place to tes-
tify or produce documentary or other evidence. Any failure 
to obey the order of the court may be punished by the 
court as a contempt thereof. 
‘‘(4) For purposes of this subsection, the term ‘cov-
ered person’ means an officer, employee, agent, or con-
tractor of the Postal Service. 
‘‘(g)(1) If the Postal Service determines that any doc-
ument or other matter it provides to the Postal Regulatory 
Commission pursuant to a subpoena issued under sub-
section (f), or otherwise at the request of the Commission 
in connection with any proceeding or other purpose under 
this title, contains information which is described in sec-
tion 410(c) of this title, or exempt from public disclosure 
under section 552(b) of title 5, the Postal Service shall, 
at the time of providing such matter to the Commission, 
notify the Commission, in writing, of its determination 
(and the reasons therefor).
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‘‘(2) Except as provided in paragraph (3), no officer 
or employee of the Commission may, with respect to any 
information as to which the Commission has been notified 
under paragraph (1)— 
‘‘(A) use such information for purposes other 
than the purposes for which it is supplied; or 
‘‘(B) permit anyone who is not an officer or 
employee of the Commission to have access to any 
such information. 
‘‘(3)(A) Paragraph (2) shall not prevent the Commis-
sion from publicly disclosing relevant information in fur-
therance of its duties under this title if the Commission 
has adopted regulations under section 553 of title 5 that 
establish a procedure for according appropriate confiden-
tiality to information identified by the Postal Service 
under paragraph (1). In determining the appropriate de-
gree of confidentiality to be accorded information identi-
fied by the Postal Service under paragraph (1), the Com-
mission shall balance the nature and extent of the likely 
commercial injury to the Postal Service against the public 
interest, as required by section 101(d) of this title for fi-
nancial transparency of a government establishment. 
‘‘(B) Paragraph (2) shall not prevent information 
from being furnished under any process of discovery estab-
lished under this title in connection with a proceeding
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under this title. The Commission shall, by regulations 
based on rule 26(c) of the Federal Rules of Civil Proce-
dure, establish procedures for ensuring appropriate con-
fidentiality for any information furnished under the pre-
ceding sentence.’’. 
SEC. 503. APPROPRIATIONS FOR THE POSTAL REGU-
LATORY COMMISSION. 
(a) AUTHORIZATION
OF
APPROPRIATIONS.—Sub-
section (d) of section 504 of title 39, United States Code 
(as so redesignated by section 501) is amended to read 
as follows: 
‘‘(d) There are authorized to be appropriated, out of 
the Postal Service Fund, such sums as may be necessary 
for the Postal Regulatory Commission. In requesting an 
appropriation under this subsection for a fiscal year, the 
Commission shall prepare and submit to the Congress 
under section 2009 a budget of the Commission’s ex-
penses, including expenses for facilities, supplies, com-
pensation, and employee benefits.’’. 
(b) BUDGET PROGRAM.— 
(1) IN GENERAL.—The next to last sentence of 
section 2009 of title 39, United States Code, is 
amended to read as follows: ‘‘The budget program 
shall also include separate statements of the 
amounts which (1) the Postal Service requests to be
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appropriated under subsections (b) and (c) of section 
2401, (2) the Office of Inspector General of the 
United States Postal Service requests to be appro-
priated, out of the Postal Service Fund, under sec-
tion 8L(e) of the Inspector General Act of 1978, and 
(3) the Postal Regulatory Commission requests to be 
appropriated, out of the Postal Service Fund, under 
section 504(d) of this title.’’. 
(2) 
CONFORMING
AMENDMENT.—Section 
2003(e)(1) of title 39, United States Code, is 
amended by striking the first sentence and inserting 
the following: ‘‘The Fund shall be available for the 
payment of (A) all expenses incurred by the Postal 
Service in carrying out its functions as provided by 
law, subject to the same limitation as set forth in 
the parenthetical matter under subsection (a); (B) 
all expenses of the Postal Regulatory Commission, 
subject to the availability of amounts appropriated 
pursuant to section 504(d); and (C) all expenses of 
the Office of Inspector General, subject to the avail-
ability of amounts appropriated pursuant to section 
8L(e) of the Inspector General Act of 1978.’’. 
(c) EFFECTIVE DATE.—
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(1) IN GENERAL.—The amendments made by 
this section shall apply with respect to fiscal years 
beginning on or after October 1, 2005. 
(2) SAVINGS
PROVISION.—The provisions of 
title 39, United States Code, that are amended by 
this section shall, for purposes of any fiscal year be-
fore the first fiscal year to which the amendments 
made by this section apply, continue to apply in the 
same way as if this section had never been enacted. 
SEC. 504. REDESIGNATION OF THE POSTAL RATE COMMIS-
SION. 
(a) AMENDMENTS TO TITLE 39, UNITED STATES 
CODE.—Title 39, United States Code, is amended in sec-
tions 404, 503–504 (as so redesignated by section 501), 
1001, and 1002 by striking ‘‘Postal Rate Commission’’ 
each place it appears and inserting ‘‘Postal Regulatory 
Commission’’. 
(b) AMENDMENTS
TO TITLE 5, UNITED STATES 
CODE.—Title 5, United States Code, is amended in sec-
tions 104(1), 306(f), 2104(b), 3371(3), 5314 (in the item 
relating to Chairman, Postal Rate Commission), 5315 (in 
the item relating to Members, Postal Rate Commission), 
5514(a)(5)(B), 
7342(a)(1)(A), 
7511(a)(1)(B)(ii), 
8402(c)(1), 8423(b)(1)(B), and 8474(c)(4) by striking
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‘‘Postal Rate Commission’’ and inserting ‘‘Postal Regu-
latory Commission’’. 
(c) AMENDMENT TO THE ETHICS IN GOVERNMENT 
ACT OF 1978.—Section 101(f)(6) of the Ethics in Govern-
ment Act of 1978 (5 U.S.C. App.) is amended by striking 
‘‘Postal Rate Commission’’ and inserting ‘‘Postal Regu-
latory Commission’’. 
(d) AMENDMENT TO THE REHABILITATION ACT OF 
1973.—Section 501(b) of the Rehabilitation Act of 1973 
(29 U.S.C. 791(b)) is amended by striking ‘‘Postal Rate 
Office’’ and inserting ‘‘Postal Regulatory Commission’’. 
(e) AMENDMENT
TO TITLE 44, UNITED STATES 
CODE.—Section 3502(5) of title 44, United States Code, 
is amended by striking ‘‘Postal Rate Commission’’ and in-
serting ‘‘Postal Regulatory Commission’’. 
(f) OTHER REFERENCES.—Whenever a reference is 
made in any provision of law (other than this Act or a 
provision of law amended by this Act), regulation, rule, 
document, or other record of the United States to the 
Postal Rate Commission, such reference shall be consid-
ered a reference to the Postal Regulatory Commission.
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SEC. 505. OFFICER OF THE POSTAL REGULATORY COMMIS-
SION REPRESENTING THE GENERAL PUBLIC. 
(a) IN GENERAL.—Chapter 5 of title 39, United 
States Code (as added by this Act) is amended by adding 
after section 504 the following: 
‘‘§ 505. Officer of the Postal Regulatory Commission 
representing the general public 
‘‘The Postal Regulatory Commission shall designate 
an officer of the Postal Regulatory Commission in all pub-
lic proceedings (such as developing rules, regulations, and 
procedures) who shall represent the interests of the gen-
eral public.’’. 
(b) CLERICAL AMENDMENT.—The analysis for chap-
ter 5 of title 39, United States Code (as amended by sec-
tion 501(a)(1)) is amended by adding after the item relat-
ing to section 504 the following: 
‘‘505. Officer of the Postal Regulatory Commission representing the general 
public.’’. 
TITLE VI—INSPECTORS 
GENERAL 
SEC. 601. INSPECTOR GENERAL OF THE POSTAL REGU-
LATORY COMMISSION. 
(a) IN GENERAL.—Paragraph (2) of section 8G(a) 
of the Inspector General Act of 1978 is amended by insert-
ing ‘‘the Postal Regulatory Commission,’’ after ‘‘the 
United States International Trade Commission,’’.
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(b) ADMINISTRATION.—Section 504 of title 39, 
United States Code (as so redesignated by section 501) 
is amended by adding after subsection (g) (as added by 
section 502) the following: 
‘‘(h)(1) Notwithstanding any other provision of this 
title or of the Inspector General Act of 1978, the authority 
to select, appoint, and employ officers and employees of 
the Office of Inspector General of the Postal Regulatory 
Commission, and to obtain any temporary or intermittent 
services of experts or consultants (or an organization of 
experts or consultants) for such Office, shall reside with 
the Inspector General of the Postal Regulatory Commis-
sion. 
‘‘(2) Except as provided in paragraph (1), any exer-
cise of authority under this subsection shall, to the extent 
practicable, be in conformance with the applicable laws 
and regulations that govern selections, appointments and 
employment, and the obtaining of any such temporary or 
intermittent services, within the Postal Regulatory Com-
mission.’’. 
(c) DEADLINE.—No later than 180 days after the 
date of the enactment of this Act— 
(1) the first Inspector General of the Postal 
Regulatory Commission shall be appointed; and
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(2) the Office of Inspector General of the Post-
al Regulatory Commission shall be established. 
SEC. 602. INSPECTOR GENERAL OF THE UNITED STATES 
POSTAL SERVICE TO BE APPOINTED BY THE 
PRESIDENT. 
(a) DEFINITIONAL AMENDMENTS TO THE INSPEC-
TOR GENERAL ACT OF 1978.—Section 11 of the Inspector 
General Act of 1978 is amended— 
(1) in paragraph (1)— 
(A) by striking ‘‘or’’ before ‘‘the President 
of the Export-Import Bank;’’ and 
(B) by inserting ‘‘or the Governors of the 
United States Postal Service (within the mean-
ing of section 102(3) of title 39, United States 
Code);’’ after ‘‘the President of the Export-Im-
port Bank;’’; and 
(2) in paragraph (2)— 
(A) by striking ‘‘or’’ before ‘‘the Export- 
Import Bank,’’; and 
(B) by inserting ‘‘or the United States 
Postal Service,’’ after ‘‘the Export-Import 
Bank,’’. 
(b) SPECIAL PROVISIONS CONCERNING THE UNITED 
STATES POSTAL SERVICE.—
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(1) IN GENERAL.—The Inspector General Act 
of 1978 is amended by inserting after section 8K the 
following: 
‘‘SPECIAL PROVISIONS CONCERNING THE UNITED STATES 
POSTAL SERVICE 
‘‘SEC. 8L. (a) In carrying out the duties and respon-
sibilities specified in this Act, the Inspector General of the 
United States Postal Service shall have oversight responsi-
bility for all activities of the Postal Inspection Service, in-
cluding any internal investigation performed by the Postal 
Inspection Service. The Chief Postal Inspector shall 
promptly report any significant activities being carried out 
by the Postal Inspection Service to such Inspector Gen-
eral. The Postmaster General shall promptly report to 
such Inspector General all allegations of theft, fraud, or 
misconduct by Postal Service officers or employees, and 
entities or individuals doing business with the Postal Serv-
ice. 
‘‘(b) In the case of any report that the Governors of 
the United States Postal Service (within the meaning of 
section 102(3) of title 39, United States Code) are re-
quired to transmit under the second sentence of section 
5(d), such sentence shall be applied by deeming the term 
‘appropriate committees of Congress’ to mean the Com-
mittee on Government Reform of the House of Represent-
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atives, the Committee on Governmental Affairs of the Sen-
ate, and such other committees or subcommittees of Con-
gress as may be appropriate. 
‘‘(c) Notwithstanding any provision of paragraph (7) 
or (8) of section 6(a), the Inspector General of the United 
States Postal Service may select, appoint, and employ 
such officers and employees as may be necessary for car-
rying out the functions, powers, and duties of the Office 
of Inspector General and to obtain the temporary or inter-
mittent services of experts or consultants or an organiza-
tion of experts or consultants, subject to the applicable 
laws and regulations that govern such selections, appoint-
ments, and employment, and the obtaining of such serv-
ices, within the United States Postal Service. 
‘‘(d) Nothing in this Act shall restrict, eliminate, or 
otherwise adversely affect any of the rights, privileges, or 
benefits of employees of the United States Postal Service, 
or labor organizations representing employees of the 
United States Postal Service, under chapter 12 of title 39, 
United States Code, the National Labor Relations Act, 
any handbook or manual affecting employee labor rela-
tions with the United States Postal Service, or any collec-
tive bargaining agreement. 
‘‘(e) There are authorized to be appropriated, out of 
the Postal Service Fund, such sums as may be necessary
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for the Office of Inspector General of the United States 
Postal Service.’’. 
(2) RELATED PROVISIONS.—For certain related 
provisions, see section 503(b). 
(c) EXERCISE
OF
CERTAIN
POWERS.—Section 
6(e)(3) of the Inspector General Act of 1978 is amended— 
(1) by striking ‘‘and the’’ before ‘‘Tennessee 
Valley Authority’’; and 
(2) by inserting ‘‘, and United States Postal 
Service’’ after ‘‘Tennessee Valley Authority’’. 
(d) PUBLIC CONTRACTS.— 
(1) ADDITIONAL
PROVISIONS
APPLICABLE.— 
Section 410(b)(5) of title 39, United States Code, is 
amended— 
(A) in subparagraph (A), by striking 
‘‘and’’ after the semicolon; and 
(B) by adding after subparagraph (B) the 
following: 
‘‘(C) the Anti-Kickback Act of 1986 (41 
U.S.C. 51 and following), other than sub-
sections (a) and (b) of 7 and section 8 of that 
Act; and 
‘‘(D) section 315 of the Federal Property 
and Administrative Services Act of 1949 (41 
U.S.C. 265) (relating to protecting contractor
100 
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employees from reprisal for disclosure of certain 
information);’’. 
(2) REGULATIONS
ON
ALLOWABLE
COSTS.— 
Section 410 of title 39, United States Code, is 
amended by adding at the end the following: 
‘‘(e) The Postal Service shall develop and issue pur-
chasing regulations that prohibit contract costs not allow-
able under section 5.2.5 of the United States Postal Serv-
ice Procurement Manual (Publication 41), as in effect on 
July 12, 1995.’’. 
(e) REPORTS.—Section 3013 of title 39, United 
States Code, is amended by striking ‘‘Postmaster Gen-
eral’’ each place it appears and inserting ‘‘Chief Postal 
Inspector’’. 
(f) TECHNICAL AND CONFORMING AMENDMENTS.— 
(1) RELATING
TO
THE
INSPECTOR
GENERAL 
ACT OF 1978.—(A) Subsection (a) of section 8G of 
the Inspector General Act of 1978 (as amended by 
section 601(a)) is further amended— 
(i) in paragraph (2), by striking ‘‘the Post-
al Regulatory Commission, and the United 
States Postal Service;’’ and inserting ‘‘and the 
Postal Regulatory Commission;’’ and 
(ii) in paragraph (4), by striking ‘‘except 
that’’ and all that follows through ‘‘Code);’’ and
101 
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inserting ‘‘except that, with respect to the Na-
tional Science Foundation, such term means the 
National Science Board;’’. 
(B)(i) Subsection (f) of section 8G of such Act 
is repealed. 
(ii) Subsection (c) of section 8G of such Act is 
amended by striking ‘‘Except as provided under sub-
section (f) of this section, the’’ and inserting ‘‘The’’. 
(C) Section 8J of such Act is amended by strik-
ing the matter after ‘‘8D,’’ and before ‘‘of this Act’’ 
and inserting ‘‘8E, 8F, 8H, or 8L’’. 
(2) RELATING TO TITLE 39, UNITED STATES 
CODE.—(A) Subsection (e) of section 202 of title 39, 
United States Code, is repealed. 
(B) Paragraph (4) of section 102 of such title 
39 (as amended by section 101) is amended to read 
as follows: 
‘‘(4) ‘Inspector General’ means the Inspector 
General of the United States Postal Service, ap-
pointed under section 3(a) of the Inspector General 
Act of 1978;’’. 
(C) The first sentence of section 1003(a) of 
such title 39 is amended by striking ‘‘chapters 2 and 
12 of this title, section 8G of the Inspector General 
Act of 1978, or other provision of law,’’ and insert-
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ing ‘‘chapter 2 or 12 of this title, subsection (b) or 
(c) of this section, or any other provision of law,’’. 
(D) Section 1003(b) of such title 39 is amended 
by striking ‘‘respective’’ and inserting ‘‘other’’. 
(E) Section 1003(c) of such title 39 is amended 
by striking ‘‘included’’ and inserting ‘‘includes’’. 
(3) RELATING TO THE ENERGY POLICY ACT OF 
1992.—Section 160(a) of the Energy Policy Act of 
1992 (42 U.S.C. 8262f(a)) is amended (in the mat-
ter before paragraph (1)) by striking all that follows 
‘‘(5 U.S.C. App.)’’ and before ‘‘shall—’’. 
(g) EFFECTIVE DATE; TRANSITION PROVISIONS.— 
(1) EFFECTIVE DATE.—Except as provided in 
paragraph (2) or subsection (c), this section and the 
amendments made by this section shall take effect 
on the date of the enactment of this Act. 
(2) TRANSITION PROVISIONS.— 
(A) PRESIDENTIAL
APPOINTMENT
AU-
THORITY
AVAILABLE
IMMEDIATELY.—The au-
thority to appoint an Inspector General of the 
United States Postal Service in accordance with 
the amendments made by this section shall be 
available as of the effective date of this section. 
(B) CONTINUATION IN OFFICE.—Pending 
the appointment of an Inspector General of the
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United States Postal Service in accordance with 
the amendments made by this section, the indi-
vidual serving as the Inspector General of the 
United States Postal Service on the day before 
the effective date of this section may continue 
to serve— 
(i) in accordance with applicable pro-
visions of the Inspector General Act of 
1978 and (except as provided in clause 
(ii)) of title 39, United States Code, as last 
in effect before the effective date of this 
Act; but 
(ii) subject to the provisions of such 
title 39 as amended by subsection (e) of 
this section (deeming any reference to the 
‘‘Inspector General’’ in such provisions, as 
so amended, to refer to the individual con-
tinuing to serve under authority of this 
subparagraph) and subparagraph (C). 
(C) 
AUTHORIZATION
OF
APPROPRIA-
TIONS.— 
(i) IN
GENERAL.—Notwithstanding 
any other provision of this subsection, sec-
tion 8L(e) of the Inspector General Act of 
1978 (as amended by this section) shall be
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effective for purposes of fiscal years begin-
ning on or after October 1, 2005. 
(ii) SAVINGS
PROVISION.—For pur-
poses of the fiscal year ending on Sep-
tember 30, 2005, funding for the Office of 
Inspector General of the United States 
Postal Service shall be made available in 
the same manner as if this Act had never 
been enacted. 
(D) ELIGIBILITY
OF
PRIOR
INSPECTOR 
GENERAL.—Nothing in this Act shall prevent 
any individual who has served as Inspector 
General of the United States Postal Service at 
any time before the date of the enactment of 
this Act from being appointed to that position 
pursuant to the amendments made by this sec-
tion. 
TITLE VII—EVALUATIONS 
SEC. 701. UNIVERSAL POSTAL SERVICE STUDY. 
(a) REPORT BY THE POSTAL SERVICE.—The United 
States Postal Service shall, within 12 months after the 
date of the enactment of this Act, submit to the President, 
the Congress, and the Postal Regulatory Commission, a 
written report on universal postal service in the United
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States (hereinafter in this section referred to as ‘‘universal 
service’’). Such report shall include at least the following: 
(1) A comprehensive review of the history and 
development of universal service, including how the 
scope and standards of universal service have 
evolved over time. 
(2) The scope and standards of universal serv-
ice provided under current law (including sections 
101 and 403 of title 39, United States Code) and 
current rules, regulations, policy statements, and 
practices of the Postal Service. 
(3) A description of any geographic areas, pop-
ulations, 
communities, 
organizations, 
or 
other 
groups or entities not currently covered by universal 
service or that are covered but that are receiving 
services deficient in scope or quality or both. 
(4) The scope and standards of universal serv-
ice likely to be required in the future in order to 
meet the needs and expectations of the American 
public, including all types of mail users, based on 
such assumptions or alternative sets of assumptions 
as the Postal Service considers plausible. 
(5) Such recommendations as the Postal Serv-
ice considers appropriate.
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(b) REPORT BY THE POSTAL REGULATORY COMMIS-
SION.—The Postal Regulatory Commission shall, within 
12 months after receiving the report of the Postal Service 
under subsection (a), submit to the President and the 
Congress a written report evaluating the report of the 
Postal Service. The report of the Commission shall include 
at least the following: 
(1) Such comments and observations relating to 
the matters addressed in the Postal Service’s report 
as the Commission considers appropriate. 
(2) An estimate of the cost attributable to the 
obligation to provide universal service under prior 
and current law, respectively. 
(3) An estimate of the likely cost of fulfilling 
the obligation to provide universal service under— 
(A) the assumptions or respective sets of 
assumptions of the Postal Service described in 
subsection (a)(4); and 
(B) such other assumptions or sets of as-
sumptions as the Commission considers plau-
sible. 
(4) Such additional topics and recommenda-
tions as the Commission considers appropriate.
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(c) CONSULTATION.—In preparing the reports re-
quired by this section, the Postal Service and the Postal 
Regulatory Commission— 
(1) shall consult with each other, other Federal 
agencies, users of the mails, enterprises in the pri-
vate sector engaged in the delivery of mail, and the 
general public; and 
(2) shall address in their respective reports any 
written comments received under this section. 
(d) CLARIFYING PROVISION.—Nothing in this section 
shall be considered to relate to any services that are not 
postal services (within the meaning of section 102 of title 
39, United States Code, as amended by section 101). 
SEC. 702. ASSESSMENTS OF RATEMAKING, CLASSIFICA-
TION, AND OTHER PROVISIONS. 
(a) IN GENERAL.—The Postal Regulatory Commis-
sion shall, at least every 5 years, submit a report to the 
President and the Congress concerning— 
(1) the operation of the amendments made by 
the Postal Accountability and Enhancement Act; 
and 
(2) recommendations for any legislation or 
other measures necessary to improve the effective-
ness or efficiency of the postal laws of the United 
States.
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(b) POSTAL SERVICE VIEWS.—A report under this 
section shall be submitted only after reasonable oppor-
tunity has been afforded to the Postal Service to review 
such report and to submit written comments thereon. Any 
comments timely received from the Postal Service under 
the preceding sentence shall be attached to the report sub-
mitted under subsection (a). 
(c) SPECIFIC INFORMATION REQUIRED.—The Postal 
Regulatory Commission shall include, as part of at least 
its first report under subsection (a), the following: 
(1) COST-COVERAGE REQUIREMENT RELATING 
TO COMPETITIVE PRODUCTS COLLECTIVELY.—With 
respect to section 3633 of title 39, United States 
Code (as amended by this Act)— 
(A) a description of how such section has 
operated; and 
(B) recommendations as to whether or not 
such section should remain in effect and, if so, 
any suggestions as to how it might be improved. 
(2) COMPETITIVE PRODUCTS FUND.—With re-
spect to the Postal Service Competitive Products 
Fund (under section 2011 of title 39, United States 
Code, as amended by section 301), in consultation 
with the Secretary of the Treasury—
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(A) a description of how such Fund has 
operated; 
(B) any suggestions as to how the oper-
ation of such Fund might be improved; and 
(C) a description and assessment of alter-
native accounting or financing mechanisms that 
might be used to achieve the objectives of such 
Fund. 
(3) ASSUMED FEDERAL INCOME TAX ON COM-
PETITIVE PRODUCTS FUND.—With respect to section 
3634 of title 39, United States Code (as amended by 
this Act), in consultation with the Secretary of the 
Treasury— 
(A) a description of how such section has 
operated; and 
(B) recommendations as to whether or not 
such section should remain in effect and, if so, 
any suggestions as to how it might be improved. 
SEC. 703. STUDY ON EQUAL APPLICATION OF LAWS TO 
COMPETITIVE PRODUCTS. 
(a) IN GENERAL.—The Federal Trade Commission 
shall prepare and submit to the President, the Congress, 
and the Postal Regulatory Commission, within 1 year 
after the date of the enactment of this Act, a comprehen-
sive report identifying Federal and State laws that apply
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differently to the United States Postal Service with re-
spect to the competitive category of mail (within the mean-
ing of section 102 of title 39, United States Code, as 
amended by section 101) and private companies providing 
similar products. 
(b) RECOMMENDATIONS; ADJUSTMENTS.—The Fed-
eral Trade Commission shall include such recommenda-
tions as it considers appropriate for bringing such legal 
differences to an end and, in the interim, to account under 
section 3633, for the net economic effects provided by 
those laws. 
(c) CONSULTATION.—In preparing its report, the 
Federal Trade Commission shall consult with the United 
States Postal Service, the Postal Regulatory Commission, 
other Federal agencies, mailers, private companies that 
provide delivery services, and the general public, and shall 
append to such report any written comments received 
under this subsection. 
(d) COMPETITIVE PRODUCT RATE REGULATION.— 
The Postal Regulatory Commission shall take into account 
the recommendations of the Federal Trade Commission, 
and subsequent events that affect the continuing validity 
of the estimate of the net economic effect, in promulgating 
or revising the regulations required by section 3633 of title 
39, United States Code.
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SEC. 704. GREATER DIVERSITY IN POSTAL SERVICE EXECU-
TIVE AND ADMINISTRATIVE SCHEDULE MAN-
AGEMENT POSITIONS. 
(a) STUDY.—The Board of Governors shall study 
and, within 1 year after the date of the enactment of this 
Act, submit to the President and Congress a report con-
cerning the extent to which women and minorities are rep-
resented in supervisory and management positions within 
the United States Postal Service. Any data included in the 
report shall be presented in the aggregate and by pay level. 
(b) PERFORMANCE
EVALUATIONS.—The United 
States Postal Service shall, as soon as practicable, take 
such measures as may be necessary to ensure that, for 
purposes of conducting performance appraisals of super-
visory or managerial employees, appropriate consideration 
shall be given to meeting affirmative action goals, achiev-
ing equal employment opportunity requirements, and im-
plementation of plans designed to achieve greater diversity 
in the workforce. 
SEC. 705. PLAN FOR ASSISTING DISPLACED WORKERS. 
(a) PLAN.—The United States Postal Service shall, 
before the deadline specified in subsection (b), develop and 
be prepared to implement, whenever necessary, a com-
prehensive plan under which reemployment assistance 
shall be afforded to employees displaced as a result of the 
automation or privatization of any of its functions.
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(b) REPORT.—Not later than 1 year after the date 
of the enactment of this Act, the United States Postal 
Service shall submit to the Board of Governors and to 
Congress a written report describing its plan under this 
section. 
SEC. 706. CONTRACTS WITH WOMEN, MINORITIES, AND 
SMALL BUSINESSES. 
The Board of Governors shall study and, within 1 
year after the date of the enactment of this Act, submit 
to the President and the Congress a report concerning the 
number and value of contracts and subcontracts the Post-
al Service has entered into with women, minorities, and 
small businesses. 
SEC. 707. RATES FOR PERIODICALS. 
(a) IN GENERAL.—The United States Postal Service, 
acting jointly with the Postal Regulatory Commission, 
shall study and submit to the President and Congress a 
report concerning— 
(1) the quality, accuracy, and completeness of 
the information used by the Postal Service in deter-
mining the direct and indirect postal costs attrib-
utable to periodicals; and 
(2) any opportunities that might exist for im-
proving efficiencies in the collection, handling, trans-
portation, or delivery of periodicals by the Postal
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Service, including any pricing incentives for mailers 
that might be appropriate. 
(b) RECOMMENDATIONS.—The report shall include 
recommendations for any administrative action or legisla-
tion that might be appropriate. 
SEC. 708. ASSESSMENT OF CERTAIN RATE DEFICIENCIES. 
(a) IN GENERAL.—Within 12 months after the date 
of the enactment of this Act, the Office of Inspector Gen-
eral of the United States Postal Service shall study and 
submit to the President, the Congress, and the United 
States Postal Service, a report concerning the administra-
tion of section 3626(k) of title 39, United States Code. 
(b) SPECIFIC REQUIREMENTS.—The study and re-
port shall specifically address the adequacy and fairness 
of the process by which assessments under section 3626(k) 
of title 39, United States Code, are determined and ap-
pealable, including— 
(1) whether the Postal Regulatory Commission 
or any other body outside the Postal Service should 
be assigned a role; and 
(2) whether a statute of limitations should be 
established for the commencement of proceedings by 
the Postal Service thereunder.
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SEC. 709. NETWORK OPTIMIZATION. 
(a) IN GENERAL.—The Postal Service shall, within 
90 days after the end of each fiscal year, prepare and sub-
mit to the Postal Regulatory Commission, the Congress, 
and the Board of Governors a written report on the postal 
processing, transportation, and distribution networks. 
Such report shall include at least the following: 
(1) An account of actions taken during the pre-
ceding fiscal year to improve the efficiency and effec-
tiveness of the processing, transportation, and dis-
tribution networks, while preserving the timely deliv-
ery of postal services. 
(2) An account of— 
(A) actions taken to identify any excess ca-
pacity within the processing, transportation, 
and distribution networks; and 
(B) actions taken to implement savings 
through realignment or consolidation of facili-
ties. 
(3) Identification of statutory or regulatory ob-
stacles that prevented or will prevent the Postal 
Service from taking action to realign or consolidate 
facilities. 
(4) Such additional topics and recommenda-
tions as the Postal Service considers appropriate.
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(b) TREATMENT
AS PERFORMANCE GOALS.—The 
Postal Service shall establish and report the matters set 
forth in subsection (a) as performance goals in the reports 
required by sections 2803 and 2804. 
(c) ACTIONS TO BE TAKEN.—The Postal Service 
shall take such actions it considers, in its sole discretion, 
necessary and appropriate to provide the Nation with a 
modern and efficient network for the processing, transpor-
tation, and distribution of mail. Nothing in this section 
shall prevent the Postal Service from making such im-
provements in the efficiency and effectiveness of the net-
work as it deems appropriate. 
SEC. 710. ASSESSMENT OF FUTURE BUSINESS MODEL OF 
THE POSTAL SERVICE. 
(a) APPOINTMENT OF RESEARCH ORGANIZATION.— 
Not later than 90 days after the date of the enactment 
of this Act, the Comptroller General of the United States 
shall appoint, in such manner and under such terms as 
he in his sole discretion determines appropriate, an inde-
pendent, impartial, and expert research organization 
(hereinafter in this section referred to as the ‘‘research 
organization’’) to prepare and submit to the President and 
to Congress a comprehensive report that evaluates what 
business model would best promote an efficient, reliable, 
innovative, and viable Postal Service that can meet the
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needs of the Nation and its citizens in the 21st century. 
The final report required by this section shall be submitted 
within 27 months of the date of the enactment of this Act. 
The final report shall identify costs, benefits, and feasible 
options, if any, associated with one or more strategies 
for— 
(1) maintaining the Postal Service in its cur-
rent form as an independent establishment in the ex-
ecutive branch of the Government; and 
(2) transforming the Postal Service into an or-
dinary corporation, owned wholly by the Govern-
ment, wholly by private shareholders, or partly by 
the Government and partly by private shareholders. 
(b) PROTECTION OF UNIVERSAL SERVICE.—The re-
search organization may include such recommendations as 
it considers appropriate with respect to how the Postal 
Service’s business model can be maintained or trans-
formed in an orderly manner that will minimize adverse 
effects on all interested parties and assure continued avail-
ability of affordable, universal postal service throughout 
the United States (based on the reports required by sec-
tion 701). The research organization shall not consider 
any strategy or other course of action that would pose a 
significant risk to the continued availability of affordable, 
universal postal service throughout the United States.
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(c) ELEMENTS OF REPORT.— 
(1) TOPICS TO ADDRESS.—The report shall ad-
dress at least the following: 
(A) Specification of nature and bases of 
one or more sets of reasonable assumptions 
about the development of the postal services 
market, to the extent that such assumptions 
may be necessary or appropriate for each strat-
egy identified by the research organization. 
(B) Specification of the nature and bases 
of one or more sets of reasonable assumptions 
about the development of the regulatory frame-
work for postal services, to the extent that such 
assumptions may be necessary or appropriate 
for each strategy identified by the research or-
ganization. 
(C) Qualitative and, to the extent possible, 
quantitative effects that each strategy identified 
by the research organization may have on uni-
versal service generally, the Postal Service, 
mailers, postal employees, private companies 
that provide delivery services, and the general 
public. 
(D) Financial effects that each strategy 
identified by the research organization may
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have on the Postal Service, postal employees, 
the Treasury of the United States, and other 
affected parties, including the American mailing 
consumer. 
(E) Feasible and appropriate procedural 
steps and timetables for implementing each 
strategy identified by the research organization. 
(F) Such additional topics as the Comp-
troller General or the research organization 
shall consider necessary and appropriate. 
(2) MATTERS TO CONSIDER.—For each strat-
egy identified, the research organization shall assess 
how each business model might— 
(A) address the human-capital challenges 
facing the Postal Service, including how em-
ployee-management relations within the Postal 
Service may be improved; 
(B) optimize the postal infrastructure, in-
cluding the best methods for providing retail 
services that ensure convenience and access to 
customers; 
(C) ensure the safety and security of the 
mail and of postal employees;
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(D) minimize areas of inefficiency or waste 
and improve operations involved in the collec-
tion, processing, or delivery of mail; and 
(E) impact other matters that the Comp-
troller General or the research organization de-
termines are relevant to evaluating a viable 
long-term business model for the Postal Service. 
(3) EXPERIENCES OF OTHER COUNTRIES.—In 
preparing the report required by subsection (a), the 
research organization shall comprehensively and 
quantitatively investigate the experiences of other in-
dustrialized countries that have transformed the na-
tional post office. The research organization shall 
undertake such original research as it deems nec-
essary. In each case, the research organization shall 
describe as fully as possible the costs and benefits of 
transformation of the national post office on all af-
fected parties and shall identify any lessons that for-
eign experience may imply for each strategy identi-
fied by the research organization. 
(d) OUTSIDE EXPERTS.—In preparing its study, the 
research organization may retain the services of additional 
experts and consultants. 
(e) CONSULTATION.—In preparing its report, the re-
search organization shall consult fully with the Postal
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Service, the Postal Regulatory Commission, other Federal 
agencies, postal employee unions and management asso-
ciations, mailers, private companies that provide delivery 
services, and the general public. The research organization 
shall include with its final report a copy of all formal writ-
ten comments received under this subsection. 
(f) AUTHORIZATION
OF APPROPRIATIONS.—There 
are authorized to be appropriated from the Postal Service 
Fund such sums as may be necessary to carry out this 
section. 
SEC. 711. STUDY ON CERTAIN PROPOSED AMENDMENTS. 
The Government Accountability Office shall study 
and, within 12 months after the date of the enactment 
of this Act, submit to the Congress a report on sections 
805 and 807 of H.R. 22 (109th Congress), as introduced. 
Such report shall include the following: 
(1) A description of the efficiencies of the cur-
rent system under section 5402 of title 39, United 
States Code. 
(2) The potential for cost savings to the United 
States Postal Service if the Postal Service, rather 
than the Department of Transportation, were to ad-
minister international mail carriage.
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(3) The potential for harm to domestic air car-
riers and American workers currently employed by 
domestic air carriers. 
(4) The potential loss of revenue to domestic air 
carriers and American workers currently employed 
by domestic air carriers. 
(5) The process by which the United States 
Postal Service would administer any changes in cur-
rent law. 
(6) The process by which the Department of 
Transportation administers current law. 
(7) The potential for change in protection of 
national security by carriage by foreign carriers of 
international mail to and from the United States. 
SEC. 712. DEFINITION. 
For purposes of this title, the term ‘‘Board of Gov-
ernors’’ has the meaning given such term by section 102 
of title 39, United States Code. 
TITLE 
VIII—MISCELLANEOUS; 
TECHNICAL 
AND 
CON-
FORMING AMENDMENTS 
SEC. 801. EMPLOYMENT OF POSTAL POLICE OFFICERS. 
Section 3061 of title 18, United States Code, is 
amended by adding at the end the following:
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‘‘(c)(1) The Postal Service may employ police officers 
for duty in connection with the protection of property 
owned or occupied by the Postal Service or under the 
charge and control of the Postal Service, and persons on 
the property, including duty in areas outside the property 
to the extent necessary to protect the property and persons 
on the property. 
‘‘(2) With respect to such property, such officers shall 
have the power to— 
‘‘(A) enforce Federal laws and regulations for 
the protection of persons and property; 
‘‘(B) carry firearms; and 
‘‘(C) make arrests without a warrant for any 
offense against the United States committed in the 
presence of the officer or for any felony cognizable 
under the laws of the United States if the officer has 
reasonable grounds to believe that the person to be 
arrested has committed or is committing a felony. 
‘‘(3) With respect to such property, such officers may 
have, to such extent as the Postal Service may by regula-
tions prescribe, the power to— 
‘‘(A) serve warrants and subpoenas issued 
under the authority of the United States; and 
‘‘(B) conduct investigations, on and off the 
property in question, of offenses that may have been
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committed against property owned or occupied by 
the Postal Service or persons on the property. 
‘‘(4)(A) As to such property, the Postmaster General 
may prescribe regulations necessary for the protection and 
administration of property owned or occupied by the Post-
al Service and persons on the property. The regulations 
may include reasonable penalties, within the limits pre-
scribed in subparagraph (B), for violations of the regula-
tions. The regulations shall be posted and remain posted 
in a conspicuous place on the property. 
‘‘(B) A person violating a regulation prescribed under 
this subsection shall be fined under this title, imprisoned 
for not more than 30 days, or both.’’. 
SEC. 802. DATE OF POSTMARK TO BE TREATED AS DATE OF 
APPEAL IN CONNECTION WITH THE CLOSING 
OR CONSOLIDATION OF POST OFFICES. 
(a) IN GENERAL.—Section 404(b) of title 39, United 
States Code, is amended by adding at the end the fol-
lowing: 
‘‘(6) For purposes of paragraph (5), any appeal re-
ceived by the Commission shall— 
‘‘(A) if sent to the Commission through the 
mails, be considered to have been received on the 
date of the Postal Service postmark on the envelope 
or other cover in which such appeal is mailed; or
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‘‘(B) if otherwise lawfully delivered to the Com-
mission, be considered to have been received on the 
date determined based on any appropriate docu-
mentation or other indicia (as determined under reg-
ulations of the Commission).’’. 
(b) EFFECTIVE DATE.—This section and the amend-
ments made by this section shall apply with respect to any 
determination to close or consolidate a post office which 
is first made available, in accordance with paragraph (3) 
of section 404(b) of title 39, United States Code, after 
the end of the 3-month period beginning on the date of 
the enactment of this Act. 
SEC. 803. PROVISIONS RELATING TO BENEFITS UNDER 
CHAPTER 81 OF TITLE 5, UNITED STATES 
CODE, FOR OFFICERS AND EMPLOYEES OF 
THE FORMER POST OFFICE DEPARTMENT. 
(a) IN GENERAL.—Section 8 of the Postal Reorga-
nization Act (39 U.S.C. 1001 note) is amended by insert-
ing ‘‘(a)’’ after ‘‘8.’’ and by adding at the end the fol-
lowing: 
‘‘(b) For purposes of chapter 81 of title 5, United 
States Code, the Postal Service shall, with respect to any 
individual receiving benefits under such chapter as an offi-
cer or employee of the former Post Office Department, 
have the same authorities and responsibilities as it has
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with respect to an officer or employee of the Postal Service 
receiving such benefits.’’. 
(b) EFFECTIVE DATE.—This section and the amend-
ments made by this section shall be effective as of the first 
day of the fiscal year in which this Act is enacted. 
SEC. 804. OBSOLETE PROVISIONS. 
(a) REPEAL.— 
(1) IN
GENERAL.—Chapter 52 of title 39, 
United States Code, is repealed. 
(2) CONFORMING AMENDMENTS.—(A) Section 
5005(a) of title 39, United States Code, is amend-
ed— 
(i) by striking paragraph (1), and by re-
designating paragraphs (2) through (4) as 
paragraphs (1) through (3), respectively; and 
(ii) in paragraph (3) (as so designated by 
clause (i)), by striking ‘‘(as defined in section 
5201(6) of this title)’’. 
(B) Section 5005(b) of such title 39 is amended 
by striking ‘‘(a)(4)’’ each place it appears and in-
serting ‘‘(a)(3)’’. 
(C) Section 5005(c) of such title 39 is amended 
by striking ‘‘by carrier or person under subsection 
(a)(1) of this section, by contract under subsection
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(a)(4) of this section, or’’ and inserting ‘‘by contract 
under subsection (a)(3) of this section or’’. 
(b) ELIMINATING RESTRICTION ON LENGTH OF CON-
TRACTS.—(1) Section 5005(b)(1) of title 39, United 
States Code, is amended by striking ‘‘(or where the Postal 
Service determines that special conditions or the use of 
special equipment warrants, not in excess of 6 years)’’ and 
inserting ‘‘(or such longer period of time as may be deter-
mined by the Postal Service to be advisable or appro-
priate)’’. 
(2) Section 5402(d) of such title 39 is amended by 
striking ‘‘for a period of not more than 4 years’’. 
(3) Section 5605 of such title 39 is amended by strik-
ing ‘‘for periods of not in excess of 4 years’’. 
(c) CLERICAL AMENDMENT.—The analysis for part 
V of title 39, United States Code, is amended by repealing 
the item relating to chapter 52. 
SEC. 805. INVESTMENTS. 
Subsection (c) of section 2003 of title 39, United 
States Code, is amended— 
(1) by striking ‘‘(c) If’’ and inserting ‘‘(c)(1) 
Except as provided in paragraph (2), if’’; and 
(2) by adding at the end the following:
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‘‘(2)(A) Nothing in this section shall be considered 
to authorize any investment in any obligations or securi-
ties of a commercial entity. 
‘‘(B) For purposes of this paragraph, the term ‘com-
mercial entity’ means any corporation, company, associa-
tion, partnership, joint stock company, firm, society, or 
other similar entity, as further defined under regulations 
prescribed by the Postal Regulatory Commission.’’. 
SEC. 806. REDUCED RATES. 
Section 3626 of title 39, United States Code, is 
amended— 
(1) in subsection (a), by striking all before 
paragraph (4) and inserting the following: 
‘‘(a)(1) Except as otherwise provided in this section, 
rates of postage for a class of mail or kind of mailer under 
former section 4358, 4452(b), 4452(c), 4554(b), or 
4554(c) of this title shall be established in accordance with 
section 3622. 
‘‘(2) For the purpose of this subsection, the term 
‘regular-rate category’ means any class of mail or kind of 
mailer, other than a class or kind referred to in section 
2401(c). 
‘‘(3) Rates of postage for a class of mail or kind of 
mailer under former section 4358(a) through (c) of this 
title shall be established so that postage on each mailing
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of such mail reflects its preferred status as compared to 
the postage for the most closely corresponding regular-rate 
category mailing.’’; 
(2) in subsection (g), by adding at the end the 
following: 
‘‘(3) For purposes of this section and former section 
4358(a) through (c) of this title, those copies of an issue 
of a publication entered within the county in which it is 
published, but distributed outside such county on postal 
carrier routes originating in the county of publication, 
shall be treated as if they were distributed within the 
county of publication. 
‘‘(4)(A) In the case of an issue of a publication, any 
number of copies of which are mailed at the rates of post-
age for a class of mail or kind of mailer under former 
section 4358(a) through (c) of this title, any copies of such 
issue which are distributed outside the county of publica-
tion (excluding any copies subject to paragraph (3)) shall 
be subject to rates of postage provided for under this para-
graph. 
‘‘(B) The rates of postage applicable to mail under 
this paragraph shall be established in accordance with sec-
tion 3622. 
‘‘(C) This paragraph shall not apply with respect to 
an issue of a publication unless the total paid circulation
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of such issue outside the county of publication (not count-
ing recipients of copies subject to paragraph (3)) is less 
than 5,000.’’; and 
(3) by adding at the end the following: 
‘‘(n) In the administration of this section, matter that 
satisfies the circulation standards for requester publica-
tions shall not be excluded from being mailed at the rates 
for mail under former section 4358 solely because such 
matter is designed primarily for free circulation or for cir-
culation at nominal rates, or fails to meet the require-
ments of former section 4354(a)(5).’’. 
SEC. 807. HAZARDOUS MATTER. 
(a) NONMAILABILITY GENERALLY.—Section 3001 of 
title 39, United States Code, is amended— 
(1) by redesignating subsection (n) as sub-
section (o); and 
(2) by inserting after subsection (m) the fol-
lowing: 
‘‘(n)(1) Except as otherwise authorized by law or reg-
ulations of the Postal Service, hazardous material is non-
mailable. 
‘‘(2) In this subsection, the term ‘hazardous material’ 
means a substance or material designated by the Secretary 
of Transportation under section 5103(a) of title 49.’’.
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(b) MAILABILITY.—Chapter 30 of title 39, United 
States Code, is amended by adding at the end the fol-
lowing: 
‘‘§ 3018. Hazardous material 
‘‘(a) IN GENERAL.—The Postal Service shall pre-
scribe regulations for the safe transportation of hazardous 
material in the mail. 
‘‘(b) PROHIBITIONS.—No person may— 
‘‘(1) mail or cause to be mailed hazardous ma-
terial that has been declared by statute or Postal 
Service regulation to be nonmailable; 
‘‘(2) mail or cause to be mailed hazardous ma-
terial in violation of any statute or Postal Service 
regulation restricting the time, place, or manner in 
which hazardous material may be mailed; or 
‘‘(3) manufacture, distribute, or sell any con-
tainer, packaging kit, or similar device that— 
‘‘(A) is represented, marked, certified, or 
sold by such person for use in the mailing of 
hazardous material; and 
‘‘(B) fails to conform with any statute or 
Postal Service regulation setting forth stand-
ards for a container, packaging kit, or similar 
device used for the mailing of hazardous mate-
rial.
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‘‘(c) CIVIL PENALTY; CLEAN-UP COSTS AND DAM-
AGES.— 
‘‘(1) IN GENERAL.—A person who knowingly 
violates this section or a regulation prescribed under 
this section shall be liable for— 
‘‘(A) a civil penalty of at least $250, but 
not more than $100,000, for each violation; 
‘‘(B) the costs of any clean-up associated 
with each violation; and 
‘‘(C) damages. 
‘‘(2) KNOWING ACTION.—A person acts know-
ingly for purposes of paragraph (1) when— 
‘‘(A) the person has actual knowledge of 
the facts giving rise to the violation; or 
‘‘(B) a reasonable person acting in the cir-
cumstances and exercising reasonable care 
would have had that knowledge. 
‘‘(3) SEPARATE VIOLATIONS.— 
‘‘(A) VIOLATIONS OVER TIME.—A separate 
violation under this subsection occurs for each 
day hazardous material, mailed or caused to be 
mailed in noncompliance with this section, is in 
the mail. 
‘‘(B) SEPARATE ITEMS.—A separate viola-
tion under this subsection occurs for each item
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containing hazardous material that is mailed or 
caused to be mailed in noncompliance with this 
section. 
‘‘(d) HEARINGS.—The Postal Service may determine 
that a person has violated this section or a regulation pre-
scribed under this section only after notice and an oppor-
tunity for a hearing. Proceedings under this section shall 
be conducted in accordance with section 3001(m). 
‘‘(e) PENALTY CONSIDERATIONS.—In determining 
the amount of a civil penalty for a violation of this section, 
the Postal Service shall consider— 
‘‘(1) the nature, circumstances, extent, and 
gravity of the violation; 
‘‘(2) with respect to the person who committed 
the violation, the degree of culpability, any history of 
prior violations, the ability to pay, and any effect on 
the ability to continue in business; 
‘‘(3) the impact on Postal Service operations; 
and 
‘‘(4) any other matters that justice requires. 
‘‘(f) CIVIL ACTIONS TO COLLECT.— 
‘‘(1) IN GENERAL.—In accordance with section 
409(d), a civil action may be commenced in an ap-
propriate district court of the United States to col-
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lect a civil penalty, clean-up costs, and damages as-
sessed under subsection (c). 
‘‘(2) COMPROMISE.—The Postal Service may 
compromise the amount of a civil penalty, clean-up 
costs, and damages assessed under subsection (c) be-
fore commencing a civil action with respect to such 
civil penalty, clean-up costs, and damages under 
paragraph (1). 
‘‘(g) CIVIL JUDICIAL PENALTIES.— 
‘‘(1) IN GENERAL.—At the request of the Post-
al Service, the Attorney General may bring a civil 
action in an appropriate district court of the United 
States to enforce this section or a regulation pre-
scribed under this section. 
‘‘(2) RELIEF.—The court in a civil action under 
paragraph (1) may award appropriate relief, includ-
ing a temporary or permanent injunction, civil pen-
alties as determined in accordance with this section, 
or punitive damages. 
‘‘(3) CONSTRUCTION.—A civil action under this 
subsection shall be in lieu of civil penalties for the 
same violation under subsection (c)(1)(A). 
‘‘(h) DEPOSIT OF AMOUNTS COLLECTED.— 
‘‘(1) POSTAL SERVICE FUND.—Except as pro-
vided under paragraph (2), amounts collected under