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; 
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(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 
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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 
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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. 
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(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 
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‘‘(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-
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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 
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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; 
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‘‘(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 
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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 
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‘‘(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 
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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. 
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‘‘(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 
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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).’’. 
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(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-
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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: 
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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. 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 
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