extent and in the same manner as in the case of any 
matter described in section 504(g)(1). Nothing in 
paragraph (1) shall be considered to permit or re-
quire the publication of any information as to which 
confidential treatment is accorded under the pre-
ceding sentence (subject to the same exception as set 
forth in section 504(g)(3)). 
‘‘(d) DURATION.—
‘‘(1) IN GENERAL.—A market test of a product 
under this section may be conducted over a period 
of not to exceed 24 months. 
‘‘(2) EXTENSION AUTHORITY.—If necessary in 
order to determine the feasibility or desirability of a 
product being tested under this section, the Postal 
Regulatory Commission may, upon written applica-
tion of the Postal Service (filed not later than 60 
days before the date as of which the testing of such 
product would otherwise be scheduled to terminate 
under paragraph (1)), extend the testing of such 
product for not to exceed an additional 12 months. 
‘‘(e) DOLLAR-AMOUNT LIMITATION.—
‘‘(1) IN
GENERAL.—A product may only be 
tested under this section if the total revenues that 
are anticipated, or in fact received, by the Postal 
Service 
from 
such 
product 
do 
not 
exceed
$10,000,000 in any year, subject to paragraph (2) 
and subsection (g). In carrying out the preceding 
sentence, the Postal Regulatory Commission may 
limit the amount of revenues the Postal Service may 
obtain from any particular geographic market as 
necessary to prevent market disruption (as defined 
under subsection (b)(2)). 
‘‘(2) EXEMPTION
AUTHORITY.—The Postal 
Regulatory Commission may, upon written applica-
tion of the Postal Service, exempt the market test 
from the limit in paragraph (1) if the total revenues 
that are anticipated, or in fact received, by the Post-
al Service from such product do not exceed 
$50,000,000 in any year, subject to subsection (g). 
In reviewing an application under this paragraph, 
the Postal Regulatory Commission shall approve 
such application if it determines that—
‘‘(A) the product is likely to benefit the 
public and meet an expected demand; 
‘‘(B) the product is likely to contribute to 
the financial stability of the Postal Service; and 
‘‘(C) the product is not likely to result in 
unfair or otherwise inappropriate competition. 
‘‘(f) CANCELLATION.—If the Postal Regulatory Com-
mission at any time determines that a market test under
this section fails, with respect to any particular product, 
to meet 1 or more of the requirements of this section, it 
may order the cancellation of the test involved or take 
such other action as it considers appropriate. A determina-
tion under this subsection shall be made in accordance 
with such procedures as the Commission shall by regula-
tion prescribe. 
‘‘(g) ADJUSTMENT FOR INFLATION.—For purposes 
of each year following the year in which occurs the dead-
line for the Postal Service’s first report to the Postal Reg-
ulatory Commission under section 3652(a), each dollar 
amount contained in this section shall be adjusted by the 
change in the Consumer Price Index for such year (as de-
termined under regulations of the Commission). 
‘‘(h) DEFINITION
OF
A SMALL BUSINESS CON-
CERN.—The criteria used in defining small business con-
cerns or otherwise categorizing business concerns as small 
business concerns shall, for purposes of this section, be 
established by the Postal Regulatory Commission in con-
formance with the requirements of section 3 of the Small 
Business Act. 
‘‘(i) EFFECTIVE DATE.—Market tests under this 
subchapter may be conducted in any year beginning with 
the first year in which occurs the deadline for the Postal
Service’s first report to the Postal Regulatory Commission 
under section 3652(a). 
‘‘§ 3642. New products and transfers of products be-
tween the market-dominant and competi-
tive categories of mail 
‘‘(a) IN GENERAL.—Upon request of the Postal Serv-
ice or users of the mails, or upon its own initiative, the 
Postal Regulatory Commission may change the list of 
market-dominant products under section 3621 and the list 
of competitive products under section 3631 by adding new 
products to the lists, removing products from the lists, or 
transferring products between the lists. 
‘‘(b) CRITERIA.—All determinations by the Postal 
Regulatory Commission under subsection (a) shall be 
made in accordance with the following criteria: 
‘‘(1) The market-dominant category of products 
shall consist of each product in the sale of which the 
Postal Service exercises sufficient market power that 
it can effectively set the price of such product sub-
stantially above costs, raise prices significantly, de-
crease quality, or decrease output, without risk of 
losing a significant level of business to other firms 
offering similar products. The competitive category 
of products shall consist of all other products.
‘‘(2) EXCLUSION OF PRODUCTS COVERED BY 
POSTAL MONOPOLY.—A product covered by the post-
al monopoly shall not be subject to transfer under 
this section from the market-dominant category of 
mail. For purposes of the preceding sentence, the 
term ‘product covered by the postal monopoly’ 
means any product the conveyance or transmission 
of which is reserved to the United States under sec-
tion 1696 of title 18, subject to the same exception 
as set forth in the last sentence of section 409(e)(1). 
‘‘(3) ADDITIONAL CONSIDERATIONS.—In mak-
ing any decision under this section, due regard shall 
be given to—
‘‘(A) the availability and nature of enter-
prises in the private sector engaged in the deliv-
ery of the product involved; 
‘‘(B) the views of those who use the prod-
uct involved on the appropriateness of the pro-
posed action; and 
‘‘(C) the likely impact of the proposed ac-
tion on small business concerns (within the 
meaning of section 3641(h)). 
‘‘(c) TRANSFERS OF SUBCLASSES AND OTHER SUB-
ORDINATE UNITS ALLOWABLE.—Nothing in this title 
shall be considered to prevent transfers under this section
from being made by reason of the fact that they would 
involve only some (but not all) of the subclasses or other 
subordinate units of the class of mail or type of postal 
service involved (without regard to satisfaction of min-
imum quantity requirements standing alone). 
‘‘(d) NOTIFICATION
AND PUBLICATION REQUIRE-
MENTS.—
‘‘(1) NOTIFICATION REQUIREMENT.—The Post-
al Service shall, whenever it requests to add a prod-
uct or transfer a product to a different category, file 
with the Postal Regulatory Commission and publish 
in the Federal Register a notice setting out the basis 
for its determination that the product satisfies the 
criteria under subsection (b) and, in the case of a 
request to add a product or transfer a product to 
the competitive category of mail, that the product 
meets the regulations promulgated by the Postal 
Regulatory Commission under section 3633. The 
provisions of section 504(g) shall be available with 
respect to any information required to be filed. 
‘‘(2) PUBLICATION REQUIREMENT.—The Postal 
Regulatory Commission shall, whenever it changes 
the list of products in the market-dominant or com-
petitive category of mail, prescribe new lists of prod-
ucts. The revised lists shall indicate how and when
any previous lists (including the lists under sections 
3621 and 3631) are superseded, and shall be pub-
lished in the Federal Register. 
‘‘(e) PROHIBITION.—Except as provided in section 
3641, no product that involves the physical delivery of let-
ters, printed matter, or packages may be offered by the 
Postal Service unless it has been assigned to the market-
dominant or competitive category of mail (as appropriate) 
either—
‘‘(1) under this subchapter; or 
‘‘(2) by or under any other provision of law.’’. 
SEC. 204. REPORTING REQUIREMENTS AND RELATED PRO-
VISIONS. 
(a) REDESIGNATION.—Chapter 36 of title 39, United 
States Code (as in effect before the amendment made by 
subsection (b)) is amended— 
(1) by striking the heading for subchapter IV 
and inserting the following: 
‘‘SUBCHAPTER V—POSTAL SERVICES, 
COMPLAINTS, AND JUDICIAL REVIEW’’; and 
(2) by striking the heading for subchapter V 
and inserting the following:
‘‘SUBCHAPTER VI—GENERAL’’. 
(b) REPORTS AND COMPLIANCE.—Chapter 36 of title 
39, United States Code, is amended by inserting after sub-
chapter III the following: 
‘‘SUBCHAPTER IV—REPORTING 
REQUIREMENTS AND RELATED PROVISIONS 
‘‘§ 3651. Annual reports by the Commission 
‘‘(a) IN GENERAL.—The Postal Regulatory Commis-
sion shall submit an annual report to the President and 
the Congress concerning the operations of the Commission 
under this title, including the extent to which regulations 
are achieving the objectives under sections 3622 and 3633, 
respectively. 
‘‘(b) ADDITIONAL INFORMATION.—
‘‘(1) IN GENERAL.—In addition to the informa-
tion required under subsection (a), each report 
under this section shall also include, with respect to 
the period covered by such report, an estimate of the 
costs incurred by the Postal Service in providing—
‘‘(A) postal services to areas of the Nation 
where, in the judgment of the Postal Regu-
latory Commission, the Postal Service either 
would not provide services at all or would not 
provide such services in accordance with the re-
quirements of this title if the Postal Service
were not required to provide prompt, reliable, 
and efficient services to patrons in all areas and 
all communities, including as required under 
the first sentence of section 101(b); 
‘‘(B) free or reduced rates for postal serv-
ices as required by this title; and 
‘‘(C) other public services or activities 
which, in the judgment of the Postal Regulatory 
Commission, would not otherwise have been 
provided by the Postal Service but for the re-
quirements of law. 
‘‘(2) BASIS FOR ESTIMATES.—The Commission 
shall detail the basis for its estimates and the statu-
tory requirements giving rise to the costs identified 
in each report under this section. 
‘‘(c) INFORMATION FROM POSTAL SERVICE.—The 
Postal Service shall provide the Postal Regulatory Com-
mission with such information as may, in the judgment 
of the Commission, be necessary in order for the Commis-
sion to prepare its reports under this section. 
‘‘§ 3652. Annual reports to the Commission 
‘‘(a) COSTS, REVENUES, RATES, AND SERVICE.—Ex-
cept as provided in subsection (c), the Postal Service shall, 
no later than 90 days after the end of each year, prepare 
and submit to the Postal Regulatory Commission a report
(together with such nonpublic annex to the report as the 
Commission may require under subsection (e))—
‘‘(1) which shall analyze costs, revenues, rates, 
and quality of service, using such methodologies as 
the Commission shall by regulation prescribe, and in 
sufficient detail to demonstrate that all products 
during such year complied with all applicable re-
quirements of this title; and 
‘‘(2) which shall, for each market-dominant 
product provided in such year, provide—
‘‘(A) product information, including mail 
volumes; and 
‘‘(B) measures of the quality of service af-
forded by the Postal Service in connection with 
such product, including—
‘‘(i) the level of service (described in 
terms of speed of delivery and reliability) 
provided; and 
‘‘(ii) the degree of customer satisfac-
tion with the service provided. 
The Inspector General shall regularly audit the data 
collection systems and procedures utilized in col-
lecting information and preparing such report (in-
cluding any annex thereto and the information re-
quired under subsection (b)). The results of any
such audit shall be submitted to the Postal Service 
and the Postal Regulatory Commission. 
‘‘(b) INFORMATION RELATING TO WORKSHARE DIS-
COUNTS.—The Postal Service shall include, in each report 
under subsection (a), the following information with re-
spect to each market-dominant product for which a 
workshare discount was in effect during the period covered 
by such report: 
‘‘(1) The per-item cost avoided by the Postal 
Service by virtue of such discount. 
‘‘(2) The percentage of such per-item cost 
avoided that the per-item workshare discount rep-
resents. 
‘‘(3) The per-item contribution made to institu-
tional costs. 
‘‘(c) MARKET TESTS.—In carrying out subsections 
(a) and (b) with respect to experimental products offered 
through market tests under section 3641 in a year, the 
Postal Service shall—
‘‘(1) report data on the costs, revenues, and 
quality of service by market test, which may be re-
ported in summary form; and 
‘‘(2) report such data as the Postal Regulatory 
Commission requires.
‘‘(d) SUPPORTING MATTER.—The Postal Regulatory 
Commission shall have access, in accordance with such 
regulations as the Commission shall prescribe, to the 
working papers and any other supporting matter of the 
Postal Service and the Inspector General in connection 
with any information submitted under this section. 
‘‘(e) CONTENT AND FORM OF REPORTS.—
‘‘(1) IN
GENERAL.—The Postal Regulatory 
Commission shall, by regulation, prescribe the con-
tent and form of the public reports (and any non-
public annex and supporting matter relating to the 
report) to be provided by the Postal Service under 
this section. In carrying out this subsection, the 
Commission shall give due consideration to—
‘‘(A) providing the public with timely, ade-
quate information to assess the lawfulness of 
rates charged; 
‘‘(B) avoiding unnecessary or unwarranted 
administrative effort and expense on the part of 
the Postal Service; and 
‘‘(C) protecting the confidentiality of com-
mercially sensitive information. 
‘‘(2) REVISED REQUIREMENTS.—The Commis-
sion may, on its own motion or on request of an in-
terested party, initiate proceedings (to be conducted
in accordance with regulations that the Commission 
shall prescribe) to improve the quality, accuracy, or 
completeness of Postal Service data required by the 
Commission under this subsection whenever it shall 
appear that—
‘‘(A) the attribution of costs or revenues to 
products has become significantly inaccurate or 
can be significantly improved; 
‘‘(B) the quality of service data has be-
come significantly inaccurate or can be signifi-
cantly improved; or 
‘‘(C) such revisions are, in the judgment of 
the Commission, otherwise necessitated by the 
public interest. 
‘‘(f) CONFIDENTIAL INFORMATION.—
‘‘(1) IN GENERAL.—If the Postal Service deter-
mines that any document or portion of a document, 
or other matter, which it provides to the Postal Reg-
ulatory Commission in a nonpublic annex under this 
section or under subsection (d) contains information 
which is described in section 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 of its determination, in writing, and de-
scribe with particularity the documents (or portions 
of documents) or other matter for which confiden-
tiality is sought and the reasons therefor. 
‘‘(2) TREATMENT.—Any information or other 
matter described in paragraph (1) to which the 
Commission gains access under this section shall be 
subject to paragraphs (2) and (3) of section 504(g) 
in the same way as if the Commission had received 
notification with respect to such matter under sec-
tion 504(g)(1). 
‘‘(g) OTHER REPORTS.—The Postal Service shall 
submit to the Postal Regulatory Commission, together 
with any other submission that the Postal Service is re-
quired to make under this section in a year, copies of its 
then most recent—
‘‘(1) comprehensive statement under section 
2401(e); 
‘‘(2) performance plan under section 2803; and 
‘‘(3) program performance reports under sec-
tion 2804. 
‘‘§ 3653. Annual determination of compliance 
‘‘(a) OPPORTUNITY FOR PUBLIC COMMENT.—After 
receiving the reports required under section 3652 for any 
year, the Postal Regulatory Commission shall promptly 
provide an opportunity for comment on such reports by
users of the mails, affected parties, and an officer of the 
Commission who shall be required to represent the inter-
ests of the general public. 
‘‘(b) DETERMINATION
OF COMPLIANCE
OR NON-
COMPLIANCE.—Not later than 90 days after receiving the 
submissions required under section 3652 with respect to 
a year, the Postal Regulatory Commission shall make a 
written determination as to—
‘‘(1) whether any rates or fees in effect during 
such year (for products individually or collectively) 
were not in compliance with applicable provisions of 
this chapter (or regulations promulgated there-
under); or 
‘‘(2) whether any service standards in effect 
during such year were not met. 
If, with respect to a year, no instance of noncompliance 
is found under this subsection to have occurred in such 
year, the written determination shall be to that effect. 
‘‘(c) NONCOMPLIANCE WITH REGARD TO RATES OR 
SERVICES.—If, for a year, a timely written determination 
of noncompliance is made under subsection (b), the Postal 
Regulatory Commission shall take appropriate action in 
accordance with subsections (c) and (e) of section 3662 
(as if a complaint averring such noncompliance had been 
duly filed and found under such section to be justified).
‘‘(d) REVIEW OF PERFORMANCE GOALS.—The Postal 
Regulatory Commission shall also evaluate annually 
whether the Postal Service has met the goals established 
under sections 2803 and 2804, and may provide rec-
ommendations to the Postal Service related to the protec-
tion or promotion of public policy objectives set out in this 
title. 
‘‘(e) REBUTTABLE PRESUMPTION.—A timely written 
determination described in the last sentence of subsection 
(b) shall, for purposes of any proceeding under section 
3662, create a rebuttable presumption of compliance by 
the Postal Service (with regard to the matters described 
under paragraphs (1) and (2) of subsection (b)) during 
the year to which such determination relates. 
‘‘§ 3654. Additional financial reporting 
‘‘(a) ADDITIONAL FINANCIAL REPORTING.—
‘‘(1) IN
GENERAL.—The Postal Service shall 
file with the Postal Regulatory Commission begin-
ning with the first full fiscal year following the effec-
tive date of this section—
‘‘(A) within 40 days after the end of each 
fiscal quarter, a quarterly report containing the 
information required by the Securities and Ex-
change Commission to be included in quarterly 
reports under sections 13 and 15(d) of the Se-
curities Exchange Act of 1934 (15 U.S.C. 78m, 
78o(d)) on Form 10–Q, as such Form (or any 
successor form) may be revised from time to 
time; 
‘‘(B) within 60 days after the end of each 
fiscal year, an annual report containing the in-
formation required by the Securities and Ex-
change Commission to be included in annual re-
ports under such sections on Form 10–K, as 
such Form (or any successor form) may be re-
vised from time to time; and 
‘‘(C) periodic reports within the time frame 
and containing the information prescribed in 
Form 8–K of the Securities and Exchange 
Commission, as such Form (or any successor 
form) may be revised from time to time. 
‘‘(2) REGISTRANT DEFINED.—For purposes of 
defining the reports required by paragraph (1), the 
Postal Service shall be deemed to be the ‘registrant’ 
described in the Securities and Exchange Commis-
sion Forms, and references contained in such Forms 
to Securities and Exchange Commission regulations 
are incorporated herein by reference, as amended. 
‘‘(3) INTERNAL CONTROL REPORT.—For pur-
poses of defining the reports required by paragraph
(1)(B), the Postal Service shall comply with the 
rules prescribed by the Securities and Exchange 
Commission implementing section 404 of the Sar-
banes-Oxley Act of 2002 (15 U.S.C. 7262), begin-
ning with the annual report for fiscal year 2010. 
‘‘(b) FINANCIAL REPORTING.—
‘‘(1) The reports required by subsection 
(a)(1)(B) shall include, with respect to the Postal 
Service’s pension and post-retirement health obliga-
tions—
‘‘(A) the funded status of the Postal Serv-
ice’s pension and postretirement health obliga-
tions; 
‘‘(B) components of the net change in the 
fund balances and obligations and the nature 
and cause of any significant changes; 
‘‘(C) components of net periodic costs; 
‘‘(D) cost methods and assumptions under-
lying the relevant actuarial valuations; 
‘‘(E) the effect of a one-percentage point 
increase in the assumed health care cost trend 
rate for each future year on the service and in-
terest costs components of net periodic post-
retirement health cost and the accumulated ob-
ligation;
‘‘(F) actual contributions to and payments 
from the funds for the years presented and the 
estimated future contributions and payments 
for each of the following 5 years; 
‘‘(G) the composition of plan assets re-
flected in the fund balances; and 
‘‘(H) the assumed rate of return on fund 
balances and the actual rates of return for the 
years presented. 
‘‘(2) The Office of Personnel Management shall 
provide the data listed under paragraph (1) to the 
Postal Service not later than 30 days after the end 
of each fiscal year. 
‘‘(3)(A) Beginning with reports for the fiscal 
year 2010, for purposes of the reports required 
under subparagraphs (A) and (B) of subsection 
(a)(1), the Postal Service shall include segment re-
porting. 
‘‘(B) The Postal Service shall determine the ap-
propriate segment reporting under subparagraph (A) 
after consultation with the Postal Regulatory Com-
mission. 
‘‘(c) TREATMENT.—For purposes of the reports re-
quired by subsection (a)(1)(B), the Postal Service shall 
obtain an opinion from an independent auditor on whether
the information listed in subsection (b) is fairly stated in 
all material respects, either in relation to the basic finan-
cial statements as a whole or on a stand-alone basis. 
‘‘(d) SUPPORTING MATTER.—The Postal Regulatory 
Commission shall have access to the audit documentation 
and any other supporting matter of the Postal Service and 
its independent auditor in connection with any information 
submitted under this section. 
‘‘(e) REVISED REQUIREMENTS.—The Postal Regu-
latory Commission may, on its own motion or on request 
of an interested party, initiate proceedings (to be con-
ducted in accordance with regulations that the Commis-
sion shall prescribe) to improve the quality, accuracy, or 
completeness of Postal Service data required under this 
section whenever it shall appear that—
‘‘(1) the data have become significantly inac-
curate or can be significantly improved; or 
‘‘(2) those revisions are, in the judgment of the 
Commission, otherwise necessitated by the public in-
terest. 
‘‘(f) CONFIDENTIAL INFORMATION.— 
‘‘(1) IN GENERAL.—If the Postal Service deter-
mines that any document or portion of a document, 
or other matter, which it provides to the Postal Reg-
ulatory Commission in a nonpublic annex under this
section or pursuant to subsection (d) contains infor-
mation which is described in section 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 of its determination, in writ-
ing, and describe with particularity the documents 
(or portions of documents) or other matter for which 
confidentiality is sought and the reasons therefor. 
‘‘(2) TREATMENT.—Any information or other 
matter described in paragraph (1) to which the 
Commission gains access under this section shall be 
subject to paragraphs (2) and (3) of section 504(g) 
in the same way as if the Commission had received 
notification with respect to such matter under sec-
tion 504(g)(1).’’. 
SEC. 205. COMPLAINTS; APPELLATE REVIEW AND EN-
FORCEMENT. 
Chapter 36 of title 39, United States Code, is amend-
ed by striking sections 3662 and 3663 and inserting the 
following: 
‘‘§ 3662. Rate and service complaints 
‘‘(a) IN GENERAL.—Any interested person (including 
an officer of the Postal Regulatory Commission rep-
resenting the interests of the general public) who believes
the Postal Service is not operating in conformance with 
the requirements of the provisions of sections 101(d), 
401(2), 403(c), 404a, or 601, or this chapter (or regula-
tions promulgated under any of those provisions) may 
lodge a complaint with the Postal Regulatory Commission 
in such form and manner as the Commission may pre-
scribe. 
‘‘(b) PROMPT RESPONSE REQUIRED.—
‘‘(1) IN
GENERAL.—The Postal Regulatory 
Commission shall, within 90 days after receiving a 
complaint under subsection (a)—
‘‘(A) either—
‘‘(i) upon a finding that such com-
plaint raises material issues of fact or law, 
begin proceedings on such complaint; or 
‘‘(ii) issue an order dismissing the 
complaint; and 
‘‘(B) with respect to any action taken 
under subparagraph (A) (i) or (ii), issue a writ-
ten statement setting forth the bases of its de-
termination. 
‘‘(2) TREATMENT OF COMPLAINTS NOT TIMELY 
ACTED ON.—For purposes of section 3663, any com-
plaint under subsection (a) on which the Commis-
sion fails to act in the time and manner required by
paragraph (1) shall be treated in the same way as 
if it had been dismissed pursuant to an order issued 
by the Commission on the last day allowable for the 
issuance of such order under paragraph (1). 
‘‘(c) ACTION REQUIRED IF COMPLAINT FOUND TO 
BE JUSTIFIED.—If the Postal Regulatory Commission 
finds the complaint to be justified, it shall order that the 
Postal Service take such action as the Commission con-
siders appropriate in order to achieve compliance with the 
applicable requirements and to remedy the effects of any 
noncompliance (such as ordering unlawful rates to be ad-
justed to lawful levels, ordering the cancellation of market 
tests, ordering the Postal Service to discontinue providing 
loss-making products, or requiring the Postal Service to 
make up for revenue shortfalls in competitive products). 
‘‘(d) AUTHORITY TO ORDER FINES IN CASES OF DE-
LIBERATE NONCOMPLIANCE.—In addition, in cases of de-
liberate noncompliance by the Postal Service with the re-
quirements of this title, the Postal Regulatory Commission 
may order, based on the nature, circumstances, extent, 
and seriousness of the noncompliance, a fine (in the 
amount specified by the Commission in its order) for each 
incidence of noncompliance. Fines resulting from the pro-
vision of competitive products shall be paid from the Com-
petitive Products Fund established in section 2011. All re-
ceipts from fines imposed under this subsection shall be 
deposited in the general fund of the Treasury of the 
United States. 
‘‘§ 3663. Appellate review 
‘‘A person, including the Postal Service, adversely af-
fected or aggrieved by a final order or decision of the Post-
al Regulatory Commission may, within 30 days after such 
order or decision becomes final, institute proceedings for 
review thereof by filing a petition in the United States 
Court of Appeals for the District of Columbia. The court 
shall review the order or decision in accordance with sec-
tion 706 of title 5, and chapter 158 and section 2112 of 
title 28, on the basis of the record before the Commission. 
‘‘§ 3664. Enforcement of orders 
‘‘The several district courts have jurisdiction specifi-
cally to enforce, and to enjoin and restrain the Postal 
Service from violating, any order issued by the Postal Reg-
ulatory Commission.’’. 
SEC. 206. CLERICAL AMENDMENT. 
Chapter 36 of title 39, United States Code, is amend-
ed by striking the heading and analysis for such chapter 
and inserting the following:
‘‘CHAPTER 36—POSTAL RATES, CLASSES, AND SERVICES 
‘‘SUBCHAPTER I—PROVISIONS RELATING TO MARKET-DOMINANT 
PRODUCTS 
‘‘Sec. 
‘‘3621. Applicability; definitions. 
‘‘3622. Modern rate regulation.
‘‘[3623. Repealed.] 
‘‘[3624. Repealed.] 
‘‘[3625. Repealed.] 
‘‘3626. Reduced Rates. 
‘‘3627. Adjusting free rates. 
‘‘[3628. Repealed.] 
‘‘3629. Reduced rates for voter registration purposes. 
‘‘SUBCHAPTER II—PROVISIONS RELATING TO COMPETITIVE 
PRODUCTS 
‘‘3631. Applicability; definitions and updates. 
‘‘3632. Action of the Governors. 
‘‘3633. Provisions applicable to rates for competitive products. 
‘‘3634. Assumed Federal income tax on competitive products. 
‘‘SUBCHAPTER III—PROVISIONS RELATING TO EXPERIMENTAL 
AND NEW PRODUCTS 
‘‘3641. Market tests of experimental products. 
‘‘3642. New products and transfers of products between the market-dominant 
and competitive categories of mail. 
‘‘SUBCHAPTER IV—REPORTING REQUIREMENTS AND RELATED 
PROVISIONS 
‘‘3651. Annual reports by the Commission. 
‘‘3652. Annual reports to the Commission. 
‘‘3653. Annual determination of compliance. 
‘‘3654. Additional financial reporting. 
‘‘SUBCHAPTER V—POSTAL SERVICES, COMPLAINTS, AND 
JUDICIAL REVIEW 
‘‘3661. Postal Services. 
‘‘3662. Rate and service complaints. 
‘‘3663. Appellate review. 
‘‘3664. Enforcement of orders. 
‘‘SUBCHAPTER VI—GENERAL 
‘‘3681. Reimbursement. 
‘‘3682. Size and weight limits. 
‘‘3683. Uniform rates for books; films, other materials. 
‘‘3684. Limitations. 
‘‘3685. Filing of information relating to periodical publications. 
‘‘3686. Bonus authority. 
‘‘SUBCHAPTER VII—MODERN SERVICE STANDARDS 
‘‘3691. Establishment of modern service standards.’’.
TITLE III—MODERN SERVICE 
STANDARDS 
SEC. 301. ESTABLISHMENT OF MODERN SERVICE STAND-
ARDS. 
Chapter 36 of title 39, United States Code, as 
amended by this Act, is further amended by adding at the 
end the following: 
‘‘SUBCHAPTER VII—MODERN SERVICE 
STANDARDS 
‘‘§ 3691. Establishment of modern service standards 
‘‘(a) AUTHORITY GENERALLY.—Not later than 12 
months after the date of enactment of this section, the 
Postal Service shall, in consultation with the Postal Regu-
latory Commission, by regulation establish (and may from 
time to time thereafter by regulation revise) a set of serv-
ice standards for market-dominant products. 
‘‘(b) OBJECTIVES.—
‘‘(1) IN GENERAL.—Such standards shall be de-
signed to achieve the following objectives: 
‘‘(A) To enhance the value of postal serv-
ices to both senders and recipients. 
‘‘(B) To preserve regular and effective ac-
cess to postal services in all communities, in-
cluding those in rural areas or where post of-
fices are not self-sustaining.
‘‘(C) To reasonably assure Postal Service 
customers delivery reliability, speed and fre-
quency consistent with reasonable rates and 
best business practices. 
‘‘(D) To provide a system of objective ex-
ternal performance measurements for each mar-
ket-dominant product as a basis for measure-
ment of Postal Service performance. 
‘‘(2) 
IMPLEMENTATION
OF
PERFORMANCE 
MEASUREMENTS.—With 
respect 
to 
paragraph 
(1)(D), with the approval of the Postal Regulatory 
Commission an internal measurement system may be 
implemented instead of an external measurement 
system. 
‘‘(c) FACTORS.—In establishing or revising such 
standards, the Postal Service shall take into account—
‘‘(1) the actual level of service that Postal Serv-
ice customers receive under any service guidelines 
previously established by the Postal Service or serv-
ice standards established under this section; 
‘‘(2) the degree of customer satisfaction with 
Postal Service performance in the acceptance, proc-
essing and delivery of mail; 
‘‘(3) the needs of Postal Service customers, in-
cluding those with physical impairments;
‘‘(4) mail volume and revenues projected for fu-
ture years; 
‘‘(5) the projected growth in the number of ad-
dresses the Postal Service will be required to serve 
in future years; 
‘‘(6) the current and projected future cost of 
serving Postal Service customers; 
‘‘(7) the effect of changes in technology, demo-
graphics, and population distribution on the efficient 
and reliable operation of the postal delivery system; 
and 
‘‘(8) the policies of this title and such other fac-
tors as the Postal Service determines appropriate. 
‘‘(d) REVIEW.—The regulations promulgated pursu-
ant to this section (and any revisions thereto), and any 
violations thereof, shall be subject to review upon com-
plaint under sections 3662 and 3663.’’. 
SEC. 302. POSTAL SERVICE PLAN. 
(a) IN GENERAL.—Within 6 months after the estab-
lishment of the service standards under section 3691 of 
title 39, United States Code, as added by this Act, the 
Postal Service shall, in consultation with the Postal Regu-
latory Commission, develop and submit to Congress a plan 
for meeting those standards. 
(b) CONTENTS.—The plan under this section shall—
(1) establish performance goals; 
(2) describe any changes to the Postal Service’s 
processing, transportation, delivery, and retail net-
works necessary to allow the Postal Service to meet 
the performance goals; 
(3) describe any changes to planning and per-
formance management documents previously sub-
mitted to Congress to reflect new performance goals; 
and 
(4) describe the long-term vision of the Postal 
Service for rationalizing its infrastructure and work-
force, and how the Postal Service intends to imple-
ment that vision. 
(c) POSTAL FACILITIES.—
(1) FINDINGS.—Congress finds that—
(A) the Postal Service has more than 400 
logistics facilities, separate from its post office 
network; 
(B) as noted by the President’s Commis-
sion on the United States Postal Service, the 
Postal Service has more facilities than it needs 
and the streamlining of this distribution net-
work can pave the way for the potential consoli-
dation of sorting facilities and the elimination 
of excess costs;
(C) the Postal Service has always revised 
its distribution network to meet changing condi-
tions and is best suited to address its oper-
ational needs; and 
(D) Congress strongly encourages the 
Postal Service to—
(i) expeditiously move forward in its 
streamlining efforts; and 
(ii) keep unions, management associa-
tions, and local elected officials informed 
as an essential part of this effort and abide 
by any procedural requirements contained 
in the national bargaining agreements. 
(2) IN
GENERAL.—The Postal Service plan 
shall include a description of—
(A) the long-term vision of the Postal 
Service for rationalizing its infrastructure and 
workforce; and 
(B) how the Postal Service intends to im-
plement that vision. 
(3) CONTENT OF FACILITIES PLAN.—The plan 
under this subsection shall include—
(A) a strategy for how the Postal Service 
intends to rationalize the postal facilities net-
work and remove excess processing capacity and
space from the network, including estimated 
timeframes, criteria, and processes to be used 
for making changes to the facilities network, 
and the process for engaging policy makers and 
the public in related decisions; 
(B) a discussion of what impact any facil-
ity changes may have on the postal workforce 
and whether the Postal Service has sufficient 
flexibility to make needed workforce changes; 
(C) an identification of anticipated costs, 
cost savings, and other benefits associated with 
the infrastructure rationalization alternatives 
discussed in the plan; and 
(D) procedures that the Postal Service will 
use to—
(i) provide adequate public notice to 
communities potentially affected by a pro-
posed rationalization decision; 
(ii) make available information re-
garding any service changes in the affected 
communities, any other effects on cus-
tomers, any effects on postal employees, 
and any cost savings;
(iii) afford affected persons ample op-
portunity to provide input on the proposed 
decision; and 
(iv) take such comments into account 
in making a final decision. 
(4) ANNUAL REPORTS.—
(A) IN GENERAL.—Not later than 90 days 
after the end of each fiscal year, the Postal 
Service shall prepare and submit a report to 
Congress on how postal decisions have impacted 
or will impact rationalization plans. 
(B) CONTENTS.—Each report under this 
paragraph shall include—
(i) an account of actions taken during 
the preceding fiscal year to improve the ef-
ficiency and effectiveness of its processing, 
transportation, and distribution networks 
while preserving the timely delivery of 
postal services, including overall estimated 
costs and cost savings; 
(ii) an account of actions taken to 
identify any excess capacity within its 
processing, transportation, and distribution 
networks and implement savings through 
realignment or consolidation of facilities
including overall estimated costs and cost 
savings; 
(iii) an estimate of how postal deci-
sions related to mail changes, security, au-
tomation initiatives, worksharing, informa-
tion technology systems, excess capacity, 
consolidating and closing facilities, and 
other areas will impact rationalization 
plans; 
(iv) identification of any statutory or 
regulatory obstacles that prevented or will 
prevent or hinder the Postal Service from 
taking action to realign or consolidate fa-
cilities; and 
(v) such additional topics and rec-
ommendations as the Postal Service con-
siders appropriate. 
(5) EXISTING EFFORTS.—Effective on the date 
of enactment of this Act, the Postal Service may not 
close or consolidate any processing or logistics facili-
ties without using procedures for public notice and 
input consistent with those described under para-
graph (3)(D). 
(d) ALTERNATE RETAIL OPTIONS.—The Postal Serv-
ice plan shall include plans to expand and market retail
access to postal services, in addition to post offices, includ-
ing—
(1) vending machines; 
(2) the Internet; 
(3) postage meters; 
(4) Stamps by Mail; 
(5) Postal Service employees on delivery routes; 
(6) retail facilities in which overhead costs are 
shared with private businesses and other government 
agencies; 
(7) postal kiosks; or 
(8) any other nonpost office access channel pro-
viding market retail access to postal services. 
(e) REEMPLOYMENT ASSISTANCE AND RETIREMENT 
BENEFITS.—The Postal Service plan shall include—
(1) a comprehensive plan under which reem-
ployment assistance shall be afforded to employees 
displaced as a result of automation of any of its 
functions, the closing and consolidation of any of its 
facilities, or such other reasons as the Postal Service 
may determine; and 
(2) a plan, developed in consultation with the 
Office of Personnel Management, to offer early re-
tirement benefits.
(f) CONTINUED AUTHORITY.—Nothing in this section 
shall be construed to prohibit the Postal Service from im-
plementing any change to its processing, transportation, 
delivery, and retail networks under any authority granted 
to the Postal Service for those purposes. 
TITLE IV—PROVISIONS RELAT-
ING TO FAIR COMPETITION 
SEC. 
401. 
POSTAL 
SERVICE 
COMPETITIVE 
PRODUCTS 
FUND. 
(a) PROVISIONS RELATING
TO POSTAL SERVICE 
COMPETITIVE PRODUCTS FUND
AND RELATED MAT-
TERS.—
(1) IN
GENERAL.—Chapter 20 of title 39, 
United States Code, is amended by adding at the 
end the following: 
‘‘§ 2011. Provisions relating to competitive products 
‘‘(a)(1) In this subsection, the term ‘costs attrib-
utable’ has the meaning given such term by section 3631. 
‘‘(2) There is established in the Treasury of the 
United States a revolving fund, to be called the Postal 
Service Competitive Products Fund, which shall be avail-
able to the Postal Service without fiscal year limitation 
for the payment of—
‘‘(A) costs attributable to competitive products; 
and
‘‘(B) all other costs incurred by the Postal 
Service, to the extent allocable to competitive prod-
ucts. 
‘‘(b) There shall be deposited in the Competitive 
Products Fund, subject to withdrawal by the Postal Serv-
ice—
‘‘(1) revenues from competitive products; 
‘‘(2) amounts received from obligations issued 
by Postal Service under subsection (e); 
‘‘(3) interest and dividends earned on invest-
ments of the Competitive Products Fund; and 
‘‘(4) any other receipts of the Postal Service 
(including from the sale of assets), to the extent al-
locable to competitive products. 
‘‘(c) If the Postal Service determines that the moneys 
of the Competitive Products Fund are in excess of current 
needs, the Postal Service may request the investment of 
such amounts as the Postal Service determines advisable 
by the Secretary of the Treasury in obligations of, or obli-
gations guaranteed by, the Government of the United 
States, and, with the approval of the Secretary, in such 
other obligations or securities as the Postal Service deter-
mines appropriate. 
‘‘(d) With the approval of the Secretary of the Treas-
ury, the Postal Service may deposit moneys of the Com-
petitive Products Fund in any Federal Reserve bank, any 
depository for public funds, or in such other places and 
in such manner as the Postal Service and the Secretary 
may mutually agree. 
‘‘(e)(1)(A) Subject to the limitations specified in sec-
tion 2005(a), the Postal Service is authorized to borrow 
money and to issue and sell such obligations as the Postal 
Service determines necessary to provide for competitive 
products and deposit such amounts in the Competitive 
Products Fund. 
‘‘(B) Subject to paragraph (5), any borrowings by the 
Postal Service under subparagraph (A) shall be supported 
and serviced by—
‘‘(i) the revenues and receipts from competitive 
products and the assets related to the provision of 
competitive products (as determined under sub-
section (h)); or 
‘‘(ii) for purposes of any period before account-
ing practices and principles under subsection (h) 
have been established and applied, the best informa-
tion available from the Postal Service, including the 
audited statements required by section 2008(e). 
‘‘(2) The Postal Service may enter into binding cov-
enants with the holders of such obligations, and with any
trustee under any agreement entered into in connection 
with the issuance of such obligations with respect to—
‘‘(A) the establishment of reserve, sinking, and 
other funds; 
‘‘(B) application and use of revenues and re-
ceipts of the Competitive Products Fund; 
‘‘(C) stipulations concerning the subsequent 
issuance of obligations or the execution of leases or 
lease purchases relating to properties of the Postal 
Service; and 
‘‘(D) such other matters as the Postal Service, 
considers necessary or desirable to enhance the mar-
ketability of such obligations. 
‘‘(3) Obligations issued by the Postal Service under 
this subsection—
‘‘(A) shall be in such forms and denominations; 
‘‘(B) shall be sold at such times and in such 
amounts; 
‘‘(C) shall mature at such time or times; 
‘‘(D) shall be sold at such prices; 
‘‘(E) shall bear such rates of interest; 
‘‘(F) may be redeemable before maturity in 
such manner, at such times, and at such redemption 
premiums;
‘‘(G) may be entitled to such relative priorities 
of claim on the assets of the Postal Service with re-
spect to principal and interest payments; and 
‘‘(H) shall be subject to such other terms and 
conditions, 
as the Postal Service determines. 
‘‘(4) Obligations issued by the Postal Service under 
this subsection—
‘‘(A) shall be negotiable or nonnegotiable and 
bearer or registered instruments, as specified therein 
and in any indenture or covenant relating thereto; 
‘‘(B) shall contain a recital that such obliga-
tions are issued under this section, and such recital 
shall be conclusive evidence of the regularity of the 
issuance and sale of such obligations and of their va-
lidity; 
‘‘(C) shall be lawful investments and may be ac-
cepted as security for all fiduciary, trust, and public 
funds, the investment or deposit of which shall be 
under the authority or control of any officer or agen-
cy of the Government of the United States, and the 
Secretary of the Treasury or any other officer or 
agency having authority over or control of any such 
fiduciary, trust, or public funds, may at any time
sell any of the obligations of the Postal Service ac-
quired under this section; 
‘‘(D) shall not be exempt either as to principal 
or interest from any taxation now or hereafter im-
posed by any State or local taxing authority; and 
‘‘(E) except as provided in section 2006(c), 
shall not be obligations of, nor shall payment of the 
principal thereof or interest thereon be guaranteed 
by, the Government of the United States, and the 
obligations shall so plainly state. 
‘‘(5) The Postal Service shall make payments of prin-
cipal, or interest, or both on obligations issued under this 
section out of revenues and receipts from competitive 
products and assets related to the provision of competitive 
products (as determined under subsection (h)), or for pur-
poses of any period before accounting practices and prin-
ciples under subsection (h) have been established and ap-
plied, the best information available, including the audited 
statements required by section 2008(e). For purposes of 
this subsection, the total assets of the Competitive Prod-
ucts Fund shall be the greater of—
‘‘(A) the assets related to the provision of com-
petitive products as calculated under subsection (h); 
or
‘‘(B) the percentage of total Postal Service rev-
enues and receipts from competitive products times 
the total assets of the Postal Service. 
‘‘(f) The receipts and disbursements of the Competi-
tive Products Fund shall be accorded the same budgetary 
treatment as is accorded to receipts and disbursements of 
the Postal Service Fund under section 2009a. 
‘‘(g) A judgment (or settlement of a claim) against 
the Postal Service or the Government of the United States 
shall be paid out of the Competitive Products Fund to the 
extent that the judgment or claim arises out of activities 
of the Postal Service in the provision of competitive prod-
ucts. 
‘‘(h)(1)(A) The Secretary of the Treasury, in con-
sultation with the Postal Service and an independent, cer-
tified public accounting firm and other advisors as the 
Secretary considers appropriate, shall develop rec-
ommendations regarding—
‘‘(i) the accounting practices and principles that 
should be followed by the Postal Service with the ob-
jectives of—
‘‘(I) identifying and valuing the assets and 
liabilities of the Postal Service associated with 
providing competitive products, including the 
capital and operating costs incurred by the
Postal Service in providing such competitive 
products; and 
‘‘(II) subject to subsection (e)(5), pre-
venting the subsidization of such products by 
market-dominant products; and 
‘‘(ii) the substantive and procedural rules that 
should be followed in determining the assumed Fed-
eral income tax on competitive products income of 
the Postal Service for any year (within the meaning 
of section 3634). 
‘‘(B) Not earlier than 6 months after the date of en-
actment of this section, and not later than 12 months 
after such date, the Secretary of the Treasury shall submit 
the recommendations under subparagraph (A) to the Post-
al Regulatory Commission. 
‘‘(2)(A) Upon receiving the recommendations of the 
Secretary of the Treasury under paragraph (1), the Com-
mission shall give interested parties, including the Postal 
Service, users of the mails, and an officer of the Commis-
sion who shall be required to represent the interests of 
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)(i) 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 under paragraph (1)(A)(ii); 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. 
‘‘(ii) Final rules under this subparagraph shall be 
issued not later than 12 months after the date on which 
recommendations are submitted under paragraph (1) (or 
by such later date on which the Commission and the Post-
al Service may agree). The Commission is authorized to 
promulgate regulations revising such rules. 
‘‘(C)(i) Reports described under subparagraph 
(B)(i)(III) shall be submitted at such time and in such 
form, and shall include such information, as the Commis-
sion by rule requires. 
‘‘(ii) The Commission may, on its own motion or on 
request 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 information under subpara-
graph (B)(i)(III) 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) such revisions are, in the judgment of the 
Commission, otherwise necessitated by the public in-
terest. 
‘‘(D) A copy of each report described under subpara-
graph (B)(i)(III) shall be submitted by the Postal Service 
to the Secretary of the Treasury and the Inspector Gen-
eral of the United States Postal Service. 
‘‘(i)(1) The Postal Service shall submit an annual re-
port to the Secretary of the Treasury concerning the oper-
ation of the Competitive Products Fund. The report shall 
address such matters as risk limitations, reserve balances, 
allocation or distribution of moneys, liquidity require-
ments, and measures to safeguard against losses. 
‘‘(2) A copy of the most recent report submitted 
under paragraph (1) shall be included in the annual report 
submitted by the Postal Regulatory Commission under 
section 3652(g).’’.
(2) CLERICAL AMENDMENT.—The table of sec-
tions for chapter 20 of title 39, United States Code, 
is amended by adding after the item relating to sec-
tion 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.—The 
term ‘Competitive Products Fund’ means the Postal 
Service Competitive Products Fund established 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, 
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), in the first sentence, 
by inserting ‘‘or 2011’’ after ‘‘section 2005’’; 
(B) in subsection (b)—
(i) in the first sentence, by inserting 
‘‘under section 2005’’ before ‘‘in such 
amounts’’; and 
(ii) in the second sentence, by insert-
ing ‘‘under section 2005’’ before ‘‘in excess 
of such amount.’’; and 
(C) in subsection (c), by inserting ‘‘or 
2011(e)(4)(E)’’ after ‘‘section 2005(d)(5)’’. 
SEC. 402. 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:
‘‘§ 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)—
‘‘(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. 403. 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
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 postal 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’’.
(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. 404. 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.
‘‘(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 
product which is not reserved to the United States under 
section 1696 of title 18, the Postal Service or other Fed-
eral 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. 
For purposes of the preceding sentence, any private car-
riage of mail allowable by virtue of section 601 shall not 
be considered a service reserved to the United States 
under section 1696 of title 18. 
‘‘(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. 
‘‘(3) This subsection shall not apply with respect to 
conduct occurring before the date of 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 1 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; 
‘‘(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 ac-
tion under the preceding sentence, nor shall any-
thing in this subsection require the Postal Service or 
any of its contractors to pay for any action taken by 
a State or political subdivision to carry out this sub-
section (including reviewing plans, carrying out on-
site inspections, issuing building permits, and mak-
ing 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 
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. 
‘‘(h)(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). 
‘‘(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-
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. 
‘‘(i) 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. 405. 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; 
‘‘(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 postal treaties, conventions, and amendments re-
lated to international postal services and other inter-
national delivery services, except that the Secretary may
not conclude any treaty, convention, or other international 
agreement (including those regulating international postal 
services) if such treaty, convention, or agreement would, 
with respect to any competitive product, grant an undue 
or unreasonable preference to the Postal Service, a private 
provider 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; 
‘‘(C) shall maintain continuing liaison with the 
Committee on Homeland Security and Governmental 
Affairs of the Senate and the Committee on Govern-
ment Reform of the House of Representatives; 
‘‘(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). 
‘‘(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 its views on whether such rate or classi-
fication is consistent with the standards and criteria estab-
lished 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 the views submitted by the Commission 
pursuant to paragraph (1), except if, or to the extent, the 
Secretary determines, in writing, that it is not in the for-
eign policy or national security interest of the United 
States to ensure consistency with the Commission’s views. 
Such written determination shall be provided to the Com-
mission together with a full explanation of the reasons 
thereof, provided that the Secretary may designate which 
portions of the determination or explanation shall be kept 
confidential for reasons of foreign policy or national secu-
rity. 
‘‘(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 
‘‘(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) In this subsection, the term ‘private company’ 
means a private company substantially owned or con-
trolled by persons who are citizens of the United States. 
‘‘(2) With respect to shipments of international mail 
that are competitive products within the meaning of sec-
tion 3631 that are exported or imported by the Postal 
Service, the Customs Service and other appropriate Fed-
eral agencies shall apply the customs laws of the United 
States and all other laws relating to the importation or 
exportation of such shipments in the same manner to both 
shipments by the Postal Service and similar shipments by 
private companies.
‘‘(3) In exercising the authority under subsection (b) 
to conclude new postal treaties and conventions related to 
international postal services and to renegotiate such trea-
ties and conventions, the Secretary of State shall, to the 
maximum extent practicable, take such measures as are 
within the Secretary’s control to encourage the govern-
ments of other countries to make available to the Postal 
Service and private companies a range of nondiscrim-
inatory 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 in carrying out this 
paragraph. 
‘‘(4) The provisions of this subsection shall take ef-
fect 6 months after the date of 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 
section 3633 of title 39, United States Code (as 
amended by section 202) take effect. 
TITLE V—GENERAL PROVISIONS 
SEC. 501. QUALIFICATION AND TERM REQUIREMENTS FOR 
GOVERNORS. 
(a) QUALIFICATIONS.—
(1) 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 Gov-
ernors shall represent the public interest generally, 
and shall be chosen solely on the basis of their expe-
rience in the field of public service, law or account-
ing or on their demonstrated ability in managing or-
ganizations or corporations (in either the public or 
private sector) of substantial size; except that at 
least 4 of the Governors shall be chosen solely on the 
basis of their demonstrated ability in managing or-
ganizations or corporations (in either the public or
private sector) that employ at least 50,000 employ-
ees. The Governors shall not be representatives of 
specific interests using the Postal Service, and may 
be removed only for cause.’’. 
(2) APPLICABILITY.—The amendment made by 
paragraph (1) shall not affect the appointment or 
tenure of any person serving as a Governor of the 
United States Postal Service under an appointment 
made before the date of enactment of this Act how-
ever, 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 re-
quirement set forth in the fourth sentence of section 
202(a)(1) of title 39, United States Code (as amend-
ed by subsection (a)) shall be met beginning not 
later than 9 years after the date of enactment of 
this Act. 
(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) 7-YEAR TERMS.—
(1) IN GENERAL.—Section 202(b) of title 39, 
United States code, is amended in the first sentence 
by striking ‘‘9 years’’ and inserting ‘‘7 years’’. 
(2) APPLICABILITY.—
(A) CONTINUATION
BY
INCUMBENTS.—
The amendment made by paragraph (1) shall 
not affect the tenure of any person serving as 
a Governor of the United States Postal Service 
on the date of enactment of this Act and such 
person may continue to serve the remainder of 
the applicable term. 
(B) VACANCY BY INCUMBENT BEFORE 7 
YEARS OF SERVICE.—If a person who is serving 
as a Governor of the United States Postal Serv-
ice on the date of enactment of this Act resigns, 
is removed, or dies before the expiration of the 
9-year term of that Governor, and that Gov-
ernor has served less than 7 years of that term, 
the resulting vacancy in office shall be treated 
as a vacancy in a 7-year term. 
(C) VACANCY
BY
INCUMBENT
AFTER
YEARS OF SERVICE.—If a person who is serving
as a Governor of the United States Postal Serv-
ice on the date of enactment of this Act resigns, 
is removed, or dies before the expiration of the 
9-year term of that Governor, and that Gov-
ernor has served 7 years or more of that term, 
that term shall be deemed to have been a 7-year 
term beginning on its commencement date for 
purposes of determining vacancies in office. Any 
appointment to the vacant office shall be for a 
7-year term beginning at the end of the original 
9-year term determined without regard to the 
deeming under the preceding sentence. Nothing 
in this subparagraph shall be construed to af-
fect any action or authority of any Governor or 
the Board of Governors during any portion of 
a 9-year term deemed to be 7-year term under 
this subparagraph. 
(d) TERM LIMITATION.—
(1) IN GENERAL.—Section 202(b) of title 39, 
United States Code, is amended—
(A) by inserting ‘‘(1)’’ after ‘‘(b)’’; and 
(B) by adding at the end the following: 
‘‘(2) No person may serve more than 2 terms 
as a Governor.’’.
(2) APPLICABILITY.—The amendments made 
by paragraph (1) shall not affect the tenure of any 
person serving as a Governor of the United States 
Postal Service on the date of enactment of this Act 
with respect to the term which that person is serving 
on that date. Such person may continue to serve the 
remainder of the applicable term, after which the 
amendments made by paragraph (1) shall apply. 
SEC. 502. 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 
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 
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.—
(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 
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. 503. 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 United States 
Postal Service (including, in particular, sections 
310.1 and 320.2–320.8 of title 39 of the Code of 
Federal Regulations, as in effect on July 1, 2005) 
that purport to permit private carriage by suspen-
sion of the operation of this section (as then in ef-
fect). 
‘‘(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. 504. 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. 505. NONINTERFERENCE WITH COLLECTIVE BAR-
GAINING AGREEMENTS. 
(a) LABOR DISPUTES.—Section 1207 of title 39, 
United States Code, is amended to read as follows: 
‘‘§ 1207. Labor disputes 
‘‘(a) If there is a collective-bargaining agreement in 
effect, no party to such agreement shall terminate or mod-
ify such agreement unless the party desiring such termi-
nation or modification serves written notice upon the other 
party to the agreement of the proposed termination or 
modification not less than 90 days prior to the expiration 
date thereof, or not less than 90 days prior to the time 
it is proposed to make such termination or modification. 
The party serving such notice shall notify the Federal Me-
diation and Conciliation Service of the existence of a dis-
pute within 45 days after such notice, if no agreement has 
been reached by that time.
‘‘(b) If the parties fail to reach agreement or to adopt 
a procedure providing for a binding resolution of a dispute 
by the expiration date of the agreement in effect, or the 
date of the proposed termination or modification, the Di-
rector of the Federal Mediation and Conciliation Service 
shall within 10 days appoint a mediator of nationwide rep-
utation and professional stature, and who is also a mem-
ber of the National Academy of Arbitrators. The parties 
shall cooperate with the mediator in an effort to reach an 
agreement and shall meet and negotiate in good faith at 
such times and places that the mediator, in consultation 
with the parties, shall direct. 
‘‘(c)(1) If no agreement is reached within 60 days 
after the expiration or termination of the agreement or 
the date on which the agreement became subject to modi-
fication under subsection (a) of this section, or if the par-
ties decide upon arbitration but do not agree upon the pro-
cedures therefore, an arbitration board shall be established 
consisting of 3 members, 1 of whom shall be selected by 
the Postal Service, 1 by the bargaining representative of 
the employees, and the third by the 2 thus selected. If 
either of the parties fails to select a member, or if the 
members chosen by the parties fail to agree on the third 
person within 5 days after their first meeting, the selection 
shall be made from a list of names provided by the Direc-
tor. This list shall consist of not less then 9 names of arbi-
trators of nationwide reputation and professional nature, 
who are also members of the National Academy of Arbi-
trators, and whom the Director has determined are avail-
able and willing to serve. 
‘‘(2) The arbitration board shall give the parties a 
full and fair hearing, including an opportunity to present 
evidence in support of their claims, and an opportunity 
to present their case in person, by counsel or by other rep-
resentative as they may elect. Decisions of the arbitration 
board shall be conclusive and binding upon the parties. 
The arbitration board shall render its decision within 45 
days after its appointment. 
‘‘(3) Costs of the arbitration board and mediation 
shall be shared equally by the Postal Service and the bar-
gaining representative. 
‘‘(d) In the case of a bargaining unit whose recog-
nized collective-bargaining representative does not have an 
agreement with the Postal Service, if the parties fail to 
reach the agreement within 90 days after the commence-
ment of collective bargaining, a mediator shall be ap-
pointed in accordance with the terms in subsection (b) of 
this section, unless the parties have previously agreed to 
another procedure for a binding resolution of their dif-
ferences. If the parties fail to reach agreement within 180
days after the commencement of collective bargaining, and 
if they have not agreed to another procedure for binding 
resolution, an arbitration board shall be established to pro-
vide conclusive and binding arbitration in accordance with 
the terms of subsection (c) of this section.’’. 
(b) NONINTERFERENCE WITH COLLECTIVE BAR-
GAINING AGREEMENTS.—Except as otherwise provided by 
the amendment made by subsection (a), nothing in this 
Act shall restrict, expand, or otherwise affect any of the 
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. 
(c) 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. 506. BONUS AUTHORITY. 
Chapter 36 of title 39, United States Code, is amend-
ed by inserting after section 3685 the following:
100
‘‘§ 3686. Bonus authority 
‘‘(a) IN GENERAL.—The Postal Service may establish 
1 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-
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 of 
the Postal Service in such form and manner as 
the Board requires; and