‘‘(3) In exercising the authority pursuant to sub-
section (b) to conclude new treaties, conventions and 
amendments related to international postal services and 
to renegotiate such treaties, conventions and amendments, 
the Secretary of State shall, to the maximum extent prac-
ticable, take such measures as are within the Secretary’s 
control to encourage the governments of other countries 
to make available to the Postal Service and private compa-
nies a range of nondiscriminatory customs procedures that 
will fully meet the needs of all types of American shippers. 
The Secretary of State shall consult with the United 
States Trade Representative and the Commissioner of 
Customs, Department of Homeland Security in carrying 
out this paragraph. 
‘‘(4) The provisions of this subsection shall take ef-
fect 6 months after the date of the enactment of this sub-
section or such earlier date as the Bureau of Customs and 
Border Protection of the Department of Homeland Secu-
rity may determine in writing.’’. 
(b) EFFECTIVE DATE.—Notwithstanding any provi-
sion of the amendment made by subsection (a), the au-
thority of the United States Postal Service to establish 
the rates of postage or other charges on mail matter con-
veyed between the United States and other countries shall 
remain available to the Postal Service until—
(1) with respect to market-dominant products, 
the date as of which the regulations promulgated 
under section 3622 of title 39, United States Code 
(as amended by section 201(a)) take effect; and 
(2) with respect to competitive products, the 
date as of which the regulations promulgated under 
section 3633 of title 39, United States Code (as 
amended by section 202) take effect. 
SEC. 306. REDESIGNATION. 
Chapter 36 of title 39, United States Code (as in ef-
fect before the amendment made by section 204(a)) is 
amended by striking the heading for subchapter V and in-
serting the following: 
‘‘SUBCHAPTER VI—GENERAL’’. 
SEC. 307. CLARIFICATION. 
Section 403(c) of title 39, United States Code, is 
amended by adding after ‘‘user.’’ the following: ‘‘The pro-
hibition in this subsection shall not be construed to pre-
vent the establishment of rates that vary with volume if 
such rates will be made available to similarly situated per-
sons and will increase the aggregate contribution to the 
institutional costs of the Postal Service.’’.
TITLE IV—GENERAL 
PROVISIONS 
SEC. 
401. 
QUALIFICATION 
REQUIREMENTS 
FOR 
GOV-
ERNORS. 
(a) IN GENERAL.—Section 202(a) of title 39, United 
States Code, is amended by striking ‘‘(a)’’ and inserting 
‘‘(a)(1)’’ and by striking the fourth sentence and inserting 
the following: ‘‘The Governors shall represent the public 
interest generally, and at least 4 of the Governors shall 
be chosen solely on the basis of their demonstrated ability 
in managing organizations or corporations (in either the 
public or private sector) of substantial size; for purposes 
of this sentence, an organization or corporation shall be 
considered to be of substantial size if it employs at least 
50,000 employees. The Governors shall not be representa-
tives of specific interests using the Postal Service, and 
may be removed only for cause.’’. 
(b) CONSULTATION REQUIREMENT.—Section 202(a) 
of title 39, United States Code, is amended by adding at 
the end the following: 
‘‘(2) In selecting the individuals described in para-
graph (1) for nomination for appointment to the position 
of Governor, the President should consult with the Speak-
er of the House of Representatives, the minority leader
of the House of Representatives, the majority leader of 
the Senate, and the minority leader of the Senate.’’. 
(c) RESTRICTION.—Section 202(b) of title 39, United 
States Code, is amended by striking ‘‘(b)’’ and inserting 
‘‘(b)(1)’’, and by adding at the end the following: 
‘‘(2)(A) Notwithstanding any other provision of this 
section, in the case of the office of the Governor the term 
of which is the first one scheduled to expire at least 4 
months after the date of the enactment of this para-
graph— 
‘‘(i) such office may not, in the case of any per-
son commencing service after that expiration date, 
be filled by any person other than an individual cho-
sen from among persons nominated for such office 
with the unanimous concurrence of all labor organi-
zations described in section 206(a)(1); and 
‘‘(ii) instead of the term that would otherwise 
apply under the first sentence of paragraph (1), the 
term of any person so appointed to such office shall 
be 3 years. 
‘‘(B) Except as provided in subparagraph (A), an ap-
pointment under this paragraph shall be made in conform-
ance with all provisions of this section that would other-
wise apply.’’.
(d) APPLICABILITY.—The amendment made by sub-
section (a) shall not affect the appointment or tenure of 
any person serving as a Governor of the Board of Gov-
ernors of the United States Postal Service pursuant to an 
appointment made before the date of the enactment of this 
Act, or, except as provided in the amendment made by 
subsection (c), any nomination made before that date; 
however, when any such office becomes vacant, the ap-
pointment of any person to fill that office shall be made 
in accordance with such amendment. The requirement set 
forth in the fourth sentence of section 202(a)(1) of title 
39, United States Code (as amended by subsection (a)) 
shall be met beginning not later than 9 years after the 
date of the enactment of this Act. 
SEC. 402. OBLIGATIONS. 
(a) PURPOSES FOR WHICH OBLIGATIONS MAY BE 
ISSUED.—The first sentence of section 2005(a)(1) of title 
39, United States Code, is amended by striking ‘‘title.’’ 
and inserting ‘‘title, other than any of the purposes for 
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, ETC.— 
(1) 
OBLIGATIONS
TO
WHICH
PROVISIONS 
APPLY.—The first sentence of section 2005(b) of 
title 39, United States Code, is amended by striking 
‘‘such obligations,’’ and inserting ‘‘obligations issued 
by the Postal Service under this section,’’. 
(2) ASSETS, REVENUES, AND
RECEIPTS
TO 
WHICH PROVISIONS APPLY.—Subsection (b) of sec-
tion 2005 of title 39, United States Code, is amend-
ed by striking ‘‘(b)’’ and inserting ‘‘(b)(1)’’, and by 
adding at the end the following: 
‘‘(2) Notwithstanding any other provision of this sec-
tion— 
‘‘(A) the authority to pledge assets of the Post-
al Service under this subsection shall be available 
only to the extent that such assets are not related 
to the provision of competitive products (as deter-
mined under section 2011(h) or, for purposes of any 
period before accounting practices and principles 
under section 2011(h) have been established and ap-
plied, the best information available from the Postal 
Service, including the audited statements required 
by section 2008(e)); and
‘‘(B) any authority under this subsection relat-
ing to the pledging or other use of revenues or re-
ceipts of the Postal Service shall be available only to 
the extent that they are not revenues or receipts of 
the Competitive Products Fund.’’. 
SEC. 403. PRIVATE CARRIAGE OF LETTERS. 
(a) IN GENERAL.—Section 601 of title 39, United 
States Code, is amended by striking subsection (b) and 
inserting the following: 
‘‘(b) A letter may also be carried out of the mails 
when— 
‘‘(1) the amount paid for the private carriage of 
the letter is at least the amount equal to 6 times the 
rate then currently charged for the 1st ounce of a 
single-piece first class letter; 
‘‘(2) the letter weighs at least 121⁄2 ounces; or 
‘‘(3) such carriage is within the scope of serv-
ices described by regulations of the Postal Service 
(including, in particular, sections 310.1 and 320.2– 
320.8 of title 39 of the Code of Federal Regulations, 
as in effect on July 1, 2004) that purport to permit 
private carriage by suspension of the operation of 
this section (as then in effect).
‘‘(c) Any regulations necessary to carry out this sec-
tion shall be promulgated by the Postal Regulatory Com-
mission.’’. 
(b) EFFECTIVE DATE.—This section shall take effect 
on the date as of which the regulations promulgated under 
section 3633 of title 39, United States Code (as amended 
by section 202) take effect. 
SEC. 404. RULEMAKING AUTHORITY. 
Paragraph (2) of section 401 of title 39, United 
States Code, is amended to read as follows: 
‘‘(2) to adopt, amend, and repeal such rules 
and regulations, not inconsistent with this title, as 
may be necessary in the execution of its functions 
under this title and such other functions as may be 
assigned to the Postal Service under any provisions 
of law outside of this title;’’. 
SEC. 405. NONINTERFERENCE WITH COLLECTIVE BAR-
GAINING AGREEMENTS, ETC. 
(a) NONINTERFERENCE WITH COLLECTIVE BAR-
GAINING AGREEMENTS.—Except as provided in section 
407, nothing in this Act or any amendment made by this 
Act shall restrict, expand, or otherwise affect any of the 
rights, privileges, or benefits of either employees of or 
labor organizations representing employees of the United 
States Postal Service under chapter 12 of title 39, United
States Code, the National Labor Relations Act, any hand-
book or manual affecting employee labor relations within 
the United States Postal Service, or any collective bar-
gaining agreement. 
(b) FREE MAILING PRIVILEGES CONTINUE UN-
CHANGED.—Nothing in this Act or any amendment made 
by this Act shall affect any free mailing privileges ac-
corded under section 3217 or sections 3403 through 3406 
of title 39, United States Code. 
SEC. 406. BONUS AUTHORITY. 
Subchapter VI of chapter 36 of title 39, United 
States Code (as so redesignated by section 306) is amend-
ed by adding at the end the following: 
‘‘§ 3686. Bonus authority 
‘‘(a) IN GENERAL.—The Postal Service may establish 
one or more programs to provide bonuses or other rewards 
to officers and employees of the Postal Service to achieve 
the objectives of this chapter. 
‘‘(b) WAIVER OF LIMITATION ON 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).
‘‘(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 referred to 
in paragraph (1)— 
‘‘(A) the Postal Service shall make an ap-
propriate request to the Postal Regulatory 
Commission, in such form and manner as the 
Commission requires; and 
‘‘(B) the Postal Regulatory Commission 
shall approve any such request if it finds that 
the program is likely to achieve the objectives of 
this chapter. 
‘‘(3) REVOCATION AUTHORITY.—If the Postal 
Regulatory Commission finds that a program pre-
viously approved under paragraph (2) is not achiev-
ing the objectives of this chapter, the Commission 
may revoke or suspend the authority of the Postal 
Service to continue such program until such time as 
appropriate corrective measures have, in the judg-
ment of the Commission, been taken. 
‘‘(c) REPORTING REQUIREMENT RELATING TO BO-
NUSES OR OTHER REWARDS.—Included in its comprehen-
sive statement under section 2401(e) for any period shall 
be—
‘‘(1) the name of each person receiving a bonus 
or other reward during such period which would not 
have been allowable but for the provisions of sub-
section (b); 
‘‘(2) the amount of the bonus or other reward; 
and 
‘‘(3) the amount by which the limitation re-
ferred to in subsection (b)(1) was exceeded as a re-
sult of such bonus or other reward.’’. 
SEC. 407. MEDIATION IN COLLECTIVE-BARGAINING DIS-
PUTES. 
(a) IN GENERAL.—Section 1207(b) of title 39, 
United States Code, is amended by striking all that follows 
‘‘the Director of the Federal Mediation and Conciliation 
Service shall’’ and inserting ‘‘, within 10 days appoint a 
mediator of nationwide reputation and professional stat-
ure, and who is also a member of the National Academy 
of Arbitrators. The parties shall cooperate with the medi-
ator in an effort to reach an agreement and shall meet 
and negotiate in good faith at such times and places that 
the mediator, in consultation with the parties, shall di-
rect.’’. 
(b) 
PROVISIONS
RELATING
TO
ARBITRATION 
BOARDS.—Section 1207(c) of title 39, United States 
Code, is amended—
(1) in paragraph (1)— 
(A) by striking ‘‘90’’ and inserting ‘‘60’’; 
(B) by striking ‘‘not members of the fact-
finding panel,’’; and 
(C) by striking all that follows ‘‘shall be 
made’’ and inserting ‘‘from a list of names pro-
vided by the Director. This list shall consist of 
not less than 9 names of arbitrators of nation-
wide reputation and professional stature, who 
are also members of the National Academy of 
Arbitrators, and whom the Director has deter-
mined are available and willing to serve.’’; and 
(2) in paragraph (3), by striking ‘‘factfinding 
panel’’ and inserting ‘‘mediation’’. 
(c) CONFORMING AMENDMENT.—Section 1207(d) of 
title 39, United States Code, is amended by striking ‘‘fact-
finding panel will be established’’ and inserting ‘‘mediator 
shall be appointed’’. 
TITLE V—ENHANCED 
REGULATORY COMMISSION 
SEC. 501. REORGANIZATION AND MODIFICATION OF CER-
TAIN PROVISIONS RELATING TO THE POSTAL 
REGULATORY COMMISSION. 
(a) TRANSFER
AND
REDESIGNATION.—Title 39, 
United States Code, is amended—
(1) by inserting after chapter 4 the following: 
‘‘CHAPTER 5—POSTAL REGULATORY 
COMMISSION 
‘‘Sec. 
‘‘501. Establishment. 
‘‘502. Commissioners. 
‘‘503. Rules; regulations; procedures. 
‘‘504. Administration. 
‘‘§ 501. Establishment 
‘‘The Postal Regulatory Commission is an inde-
pendent establishment of the executive branch of the Gov-
ernment of the United States. 
‘‘§ 502. Commissioners 
‘‘(a) The Postal Regulatory Commission is composed 
of 5 Commissioners, appointed by the President, by and 
with the advice and consent of the Senate. The Commis-
sioners shall be chosen solely on the basis of their technical 
qualifications, professional standing, and demonstrated 
expertise in economics, accounting, law, or public adminis-
tration, and may be removed by the President only for 
cause. Each individual appointed to the Commission shall 
have the qualifications and expertise necessary to carry 
out the responsibilities accorded Commissioners under the 
Postal Accountability and Enhancement Act. Not more 
than 3 of the Commissioners may be adherents of the 
same political party.
‘‘(b) A Commissioner may continue to serve after the 
expiration of his term until his successor has qualified, 
except that a Commissioner may not so continue to serve 
for more than 1 year after the date upon which his term 
otherwise would expire under subsection (e). 
‘‘(c) One of the Commissioners shall be designated 
as Chairman by, and shall serve in the position of Chair-
man at the pleasure of, the President. 
‘‘(d) The Commissioners shall by majority vote des-
ignate a Vice Chairman of the Commission. The Vice 
Chairman shall act as Chairman of the Commission in the 
absence of the Chairman. 
‘‘(e) The Commissioners shall serve for terms of 6 
years.’’; 
(2) in subchapter I of chapter 36 (as in effect 
before the amendment made by section 201(c)), by 
striking the heading for such subchapter I and all 
that follows through section 3602; and 
(3) by redesignating sections 3603 and 3604 as 
sections 503 and 504, respectively, and transferring 
such sections to the end of chapter 5 (as inserted by 
paragraph (1)). 
(b) DETERMINATIONS.—Section 503 of title 39, 
United States Code, as so redesignated by subsection 
(a)(3), is amended by adding at the end the following:
‘‘Such rules shall include procedures which balance, inter 
alia, the need for protecting due process rights and ensur-
ing expeditious decision-making.’’. 
(c) APPLICABILITY.—The amendment made by sub-
section (a)(1) shall not affect the appointment or tenure 
of any person serving as a Commissioner on the Postal 
Regulatory Commission (as so redesignated by section 
504) pursuant to an appointment made before the date 
of the enactment of this Act or any nomination made be-
fore that date, but, when any such office becomes vacant, 
the appointment of any person to fill that office shall be 
made in accordance with such amendment. 
(d) CLERICAL AMENDMENT.—The analysis for part 
I of title 39, United States Code, is amended by inserting 
after the item relating to chapter 4 the following: 
‘‘5. Postal Regulatory Commission ..............................................
501’’. 
SEC. 502. AUTHORITY FOR POSTAL REGULATORY COMMIS-
SION TO ISSUE SUBPOENAS. 
Section 504 of title 39, United States Code (as so 
redesignated by section 501) is amended by adding at the 
end the following: 
‘‘(f)(1) Any Commissioner of the Postal Regulatory 
Commission, any administrative law judge appointed by 
the Commission under section 3105 of title 5, and any 
employee of the Commission designated by the Commis-
sion may administer oaths, examine witnesses, take depo-
sitions, and receive evidence. 
‘‘(2) The Chairman of the Commission, any Commis-
sioner designated by the Chairman, and any administra-
tive law judge appointed by the Commission under section 
3105 of title 5 may, with respect to any proceeding con-
ducted by the Commission under this title— 
‘‘(A) issue subpoenas requiring the attendance 
and presentation of testimony by, or the production 
of documentary or other evidence in the possession 
of, any covered person; and 
‘‘(B) order the taking of depositions and re-
sponses to written interrogatories by a covered per-
son. 
The written concurrence of a majority of the Commis-
sioners then holding office shall, with respect to each sub-
poena under subparagraph (A), be required in advance of 
its issuance. 
‘‘(3) In the case of contumacy or failure to obey a 
subpoena issued under this subsection, upon application 
by the Commission, the district court of the United States 
for the district in which the person to whom the subpoena 
is addressed resides or is served may issue an order requir-
ing such person to appear at any designated place to tes-
tify or produce documentary or other evidence. Any failure
to obey the order of the court may be punished by the 
court as a contempt thereof. 
‘‘(4) For purposes of this subsection, the term ‘cov-
ered person’ means an officer, employee, agent, or con-
tractor of the Postal Service. 
‘‘(g)(1) If the Postal Service determines that any doc-
ument or other matter it provides to the Postal Regulatory 
Commission pursuant to a subpoena issued under sub-
section (f), or otherwise at the request of the Commission 
in connection with any proceeding or other purpose under 
this title, contains information which is described in sec-
tion 410(c) of this title, or exempt from public disclosure 
under section 552(b) of title 5, the Postal Service shall, 
at the time of providing such matter to the Commission, 
notify the Commission, in writing, of its determination 
(and the reasons therefor). 
‘‘(2) No officer or employee of the Commission may, 
with respect to any information as to which the Commis-
sion has been notified under paragraph (1)— 
‘‘(A) use such information for purposes other 
than the purposes for which it is supplied; or 
‘‘(B) permit anyone who is not an officer or 
employee of the Commission to have access to any 
such information.
‘‘(3) Paragraph (2) shall not prevent information 
from being furnished under any process of discovery estab-
lished under this title in connection with a proceeding 
under this title. The Commission shall, by regulations 
based on rule 26(c) of the Federal Rules of Civil Proce-
dure, establish procedures for ensuring appropriate con-
fidentiality for any information furnished under the pre-
ceding sentence.’’. 
SEC. 503. APPROPRIATIONS FOR THE POSTAL REGU-
LATORY COMMISSION. 
(a) AUTHORIZATION
OF
APPROPRIATIONS.—Sub-
section (d) of section 504 of title 39, United States Code 
(as so redesignated by section 501) is amended to read 
as follows: 
‘‘(d) There are authorized to be appropriated, out of 
the Postal Service Fund, such sums as may be necessary 
for the Postal Regulatory Commission. In requesting an 
appropriation under this subsection for a fiscal year, the 
Commission shall prepare and submit to the Congress 
under section 2009 a budget of the Commission’s ex-
penses, including expenses for facilities, supplies, com-
pensation, and employee benefits.’’. 
(b) BUDGET PROGRAM.— 
(1) IN GENERAL.—The next to last sentence of 
section 2009 of title 39, United States Code, is
amended to read as follows: ‘‘The budget program 
shall also include separate statements of the amounts 
which (1) the Postal Service requests to be appro-
priated under subsections (b) and (c) of section 2401, 
(2) the Office of Inspector General of the United 
States Postal Service requests to be appropriated, out 
of the Postal Service Fund, under section 8J(e) of 
the Inspector General Act of 1978, and (3) the Postal 
Regulatory Commission requests to be appropriated, 
out of the Postal Service Fund, under section 504(d) 
of this title.’’. 
(2) 
CONFORMING
AMENDMENT.—Section 
2003(e)(1) of title 39, United States Code, is 
amended by striking the first sentence and inserting 
the following: ‘‘The Fund shall be available for the 
payment of (A) all expenses incurred by the Postal 
Service in carrying out its functions as provided by 
law, subject to the same limitation as set forth in 
the parenthetical matter under subsection (a); (B) 
all expenses of the Postal Regulatory Commission, 
subject to the availability of amounts appropriated 
pursuant to section 504(d); and (C) all expenses of 
the Office of Inspector General, subject to the avail-
ability of amounts appropriated pursuant to section 
8J(e) of the Inspector General Act of 1978.’’.
(c) EFFECTIVE DATE.— 
(1) IN GENERAL.—The amendments made by 
this section shall apply with respect to fiscal years 
beginning on or after October 1, 2005. 
(2) SAVINGS
PROVISION.—The provisions of 
title 39, United States Code, that are amended by 
this section shall, for purposes of any fiscal year be-
fore the first fiscal year to which the amendments 
made by this section apply, continue to apply in the 
same way as if this section had never been enacted. 
SEC. 504. REDESIGNATION OF THE POSTAL RATE COMMIS-
SION. 
(a) AMENDMENTS TO TITLE 39, UNITED STATES 
CODE.—Title 39, United States Code, is amended in sec-
tions 404, 503–504 (as so redesignated by section 501), 
1001, and 1002 by striking ‘‘Postal Rate Commission’’ 
each place it appears and inserting ‘‘Postal Regulatory 
Commission’’. 
(b) AMENDMENTS
TO TITLE 5, UNITED STATES 
CODE.—Title 5, United States Code, is amended in sec-
tions 104(1), 306(f), 2104(b), 3371(3), 5314 (in the item 
relating to Chairman, Postal Rate Commission), 5315 (in 
the item relating to Members, Postal Rate Commission), 
5514(a)(5)(B), 
7342(a)(1)(A), 
7511(a)(1)(B)(ii), 
8402(c)(1), 8423(b)(1)(B), and 8474(c)(4) by striking
‘‘Postal Rate Commission’’ and inserting ‘‘Postal Regu-
latory Commission’’. 
(c) AMENDMENT TO THE ETHICS IN GOVERNMENT 
ACT OF 1978.—Section 101(f)(6) of the Ethics in Govern-
ment Act of 1978 (5 U.S.C. App.) is amended by striking 
‘‘Postal Rate Commission’’ and inserting ‘‘Postal Regu-
latory Commission’’. 
(d) AMENDMENT TO THE REHABILITATION ACT OF 
1973.—Section 501(b) of the Rehabilitation Act of 1973 
(29 U.S.C. 791(b)) is amended by striking ‘‘Postal Rate 
Office’’ and inserting ‘‘Postal Regulatory Commission’’. 
(e) AMENDMENT
TO TITLE 44, UNITED STATES 
CODE.—Section 3502(5) of title 44, United States Code, 
is amended by striking ‘‘Postal Rate Commission’’ and in-
serting ‘‘Postal Regulatory Commission’’. 
(f) OTHER REFERENCES.—Whenever a reference is 
made in any provision of law (other than this Act or a 
provision of law amended by this Act), regulation, rule, 
document, or other record of the United States to the 
Postal Rate Commission, such reference shall be consid-
ered a reference to the Postal Regulatory Commission.
SEC. 505. OFFICER OF THE POSTAL REGULATORY COMMIS-
SION REPRESENTING THE GENERAL PUBLIC. 
(a) IN GENERAL.—Chapter 5 of title 39, United 
States Code (as added by this Act) is amended by adding 
after section 504 the following: 
‘‘§ 505. Officer of the Postal Regulatory Commission 
representing the general public 
‘‘The Postal Regulatory Commission shall designate 
an officer of the Postal Regulatory Commission in all pub-
lic proceedings (such as developing rules, regulations, and 
procedures) who shall represent the interests of the gen-
eral public.’’. 
(b) CLERICAL AMENDMENT.—The analysis for chap-
ter 5 of title 39, United States Code (as amended by sec-
tion 501(a)(1)) is amended by adding after the item relat-
ing to section 504 the following: 
‘‘505. Officer of the Postal Regulatory Commission representing the general 
public.’’. 
TITLE VI—INSPECTORS 
GENERAL 
SEC. 601. INSPECTOR GENERAL OF THE POSTAL REGU-
LATORY COMMISSION. 
(a) IN GENERAL.—Paragraph (2) of section 8G(a) 
of the Inspector General Act of 1978 is amended by insert-
ing ‘‘the Postal Regulatory Commission,’’ after ‘‘the 
United States International Trade Commission,’’.
(b) ADMINISTRATION.—Section 504 of title 39, 
United States Code (as so redesignated by section 501) 
is amended by adding after subsection (g) (as added by 
section 502) the following: 
‘‘(h)(1) Notwithstanding any other provision of this 
title or of the Inspector General Act of 1978, the authority 
to select, appoint, and employ officers and employees of 
the Office of Inspector General of the Postal Regulatory 
Commission, and to obtain any temporary or intermittent 
services of experts or consultants (or an organization of 
experts or consultants) for such Office, shall reside with 
the Inspector General of the Postal Regulatory Commis-
sion. 
‘‘(2) Except as provided in paragraph (1), any exer-
cise of authority under this subsection shall, to the extent 
practicable, be in conformance with the applicable laws 
and regulations that govern selections, appointments and 
employment, and the obtaining of any such temporary or 
intermittent services, within the Postal Regulatory Com-
mission.’’. 
(c) DEADLINE.—No later than 180 days after the 
date of the enactment of this Act— 
(1) the first Inspector General of the Postal 
Regulatory Commission shall be appointed; and
(2) the Office of Inspector General of the Post-
al Regulatory Commission shall be established. 
SEC. 602. INSPECTOR GENERAL OF THE UNITED STATES 
POSTAL SERVICE TO BE APPOINTED BY THE 
PRESIDENT. 
(a) DEFINITIONAL AMENDMENTS TO THE INSPEC-
TOR GENERAL ACT OF 1978.—Section 11 of the Inspector 
General Act of 1978 is amended— 
(1) in paragraph (1)— 
(A) by striking ‘‘or’’ before ‘‘the President 
of the Export-Import Bank;’’ and 
(B) by inserting ‘‘or the Governors of the 
United States Postal Service (within the mean-
ing of section 102(3) of title 39, United States 
Code);’’ after ‘‘the President of the Export-Im-
port Bank;’’; and 
(2) in paragraph (2)— 
(A) by striking ‘‘or’’ before ‘‘the Export- 
Import Bank,’’; and 
(B) by inserting ‘‘or the United States 
Postal Service,’’ after ‘‘the Export-Import 
Bank,’’. 
(b) SPECIAL PROVISIONS CONCERNING THE UNITED 
STATES POSTAL SERVICE.—
(1) IN GENERAL.—The Inspector General Act 
of 1978 is amended— 
(A) by redesignating section 8J as section 
8K; and 
(B) by inserting after section 8I the fol-
lowing: 
‘‘SPECIAL PROVISIONS CONCERNING THE UNITED STATES 
POSTAL SERVICE 
‘‘SEC. 8J. (a) In carrying out the duties and respon-
sibilities specified in this Act, the Inspector General of the 
United States Postal Service shall have oversight responsi-
bility for all activities of the Postal Inspection Service, in-
cluding any internal investigation performed by the Postal 
Inspection Service. The Chief Postal Inspector shall 
promptly report any significant activities being carried out 
by the Postal Inspection Service to such Inspector Gen-
eral. The Postmaster General shall promptly report to 
such Inspector General all allegations of theft, fraud, or 
misconduct by Postal Service officers or employees, and 
entities or individuals doing business with the Postal Serv-
ice. 
‘‘(b) In the case of any report that the Governors of 
the United States Postal Service (within the meaning of 
section 102(3) of title 39, United States Code) are re-
quired to transmit under the second sentence of section 
5(d), such sentence shall be applied by deeming the term
‘appropriate committees of Congress’ to mean the Com-
mittee on Government Reform of the House of Represent-
atives, the Committee on Governmental Affairs of the Sen-
ate, and such other committees or subcommittees of Con-
gress as may be appropriate. 
‘‘(c) Notwithstanding any provision of paragraph (7) 
or (8) of section 6(a), the Inspector General of the United 
States Postal Service may select, appoint, and employ 
such officers and employees as may be necessary for car-
rying out the functions, powers, and duties of the Office 
of Inspector General and to obtain the temporary or inter-
mittent services of experts or consultants or an organiza-
tion of experts or consultants, subject to the applicable 
laws and regulations that govern such selections, appoint-
ments, and employment, and the obtaining of such serv-
ices, within the United States Postal Service. 
‘‘(d) Nothing in this Act shall restrict, eliminate, or 
otherwise adversely affect any of the rights, privileges, or 
benefits of employees of the United States Postal Service, 
or labor organizations representing employees of the 
United States Postal Service, under chapter 12 of title 39, 
United States Code, the National Labor Relations Act, 
any handbook or manual affecting employee labor rela-
tions with the United States Postal Service, or any collec-
tive bargaining agreement.
‘‘(e) There are authorized to be appropriated, out of 
the Postal Service Fund, such sums as may be necessary 
for the Office of Inspector General of the United States 
Postal Service.’’. 
(2) RELATED PROVISIONS.—For certain related 
provisions, see section 503(b). 
(c) EXERCISE
OF
CERTAIN
POWERS.—Section 
6(e)(3) of the Inspector General Act of 1978 is amended— 
(1) by striking ‘‘and the’’ before ‘‘Tennessee 
Valley Authority’’; and 
(2) by inserting ‘‘, and United States Postal 
Service’’ after ‘‘Tennessee Valley Authority’’. 
(d) PUBLIC CONTRACTS.— 
(1) ADDITIONAL
PROVISIONS
APPLICABLE.— 
Section 410(b)(5) of title 39, United States Code, is 
amended— 
(A) in subparagraph (A), by striking 
‘‘and’’ after the semicolon; and 
(B) by adding after subparagraph (B) the 
following: 
‘‘(C) the Anti-Kickback Act of 1986 (41 
U.S.C. 51 and following), other than sub-
sections (a) and (b) of 7 and section 8 of that 
Act; and
‘‘(D) section 315 of the Federal Property 
and Administrative Services Act of 1949 (41 
U.S.C. 265) (relating to protecting contractor 
employees from reprisal for disclosure of certain 
information);’’. 
(2) REGULATIONS
ON
ALLOWABLE
COSTS.— 
Section 410 of title 39, United States Code, is 
amended by adding at the end the following: 
‘‘(e) The Postal Service shall develop and issue pur-
chasing regulations that prohibit contract costs not allow-
able under section 5.2.5 of the United States Postal Serv-
ice Procurement Manual (Publication 41), as in effect on 
July 12, 1995.’’. 
(e) AUDITS OF THE POSTAL SERVICE.— 
(1) AUDITS.—Subsection (e) of section 2008 of 
title 39, United States Code, is amended to read as 
follows: 
‘‘(e)(1) At least once each year beginning with the 
fiscal year commencing after the date of the enactment 
of the Postal Accountability and Enhancement Act, the 
financial statements of the Postal Service (including those 
used in determining and establishing postal rates) shall 
be audited by the Inspector General or by an independent 
external auditor selected by the Inspector General.
‘‘(2) Audits under this section shall be conducted in 
accordance with applicable generally accepted government 
auditing standards. 
‘‘(3) Upon completion of the audit required by this 
subsection, the person who audits the statement shall sub-
mit a report on the audit to the Postmaster General.’’. 
(2) RESULTS OF INSPECTOR GENERAL’S AUDIT 
TO
BE
INCLUDED
IN
ANNUAL
REPORT.—Section 
2402 of title 39, United States Code, is amended by 
inserting after the first sentence the following: 
‘‘Each report under this section shall include a copy 
of the report most recently received by the Post-
master General under section 2008(e)(3).’’. 
(3) 
COORDINATION
PROVISIONS.—Section 
2008(d) of title 39, United States Code, is amend-
ed— 
(A) by striking ‘‘(d) Nothing’’ and insert-
ing ‘‘(d)(1) Except as provided in paragraph 
(2), nothing’’; and 
(B) by adding at the end the following: 
‘‘(2) An audit or report under paragraph (1) may not 
be obtained without the prior written approval of the In-
spector General.’’. 
(4) TRANSITION PROVISION.—For purposes of 
any fiscal year preceding the first fiscal year com-
mencing after the date of the enactment of this Act, 
the provisions of title 39, United States Code, shall 
be applied as if the amendments made by this sub-
section had never been enacted. 
(f) REPORTS.—Section 3013 of title 39, United 
States Code, is amended by striking ‘‘Postmaster Gen-
eral’’ each place it appears and inserting ‘‘Chief Postal 
Inspector’’. 
(g) TECHNICAL AND CONFORMING AMENDMENTS.— 
(1) RELATING
TO
THE
INSPECTOR
GENERAL 
ACT OF 1978.—(A) Subsection (a) of section 8G of 
the Inspector General Act of 1978 (as amended by 
section 601(a)) is further amended— 
(i) in paragraph (2), by striking ‘‘the Post-
al Regulatory Commission, and the United 
States Postal Service;’’ and inserting ‘‘and the 
Postal Regulatory Commission;’’ and 
(ii) in paragraph (4), by striking ‘‘except 
that’’ and all that follows through ‘‘Code);’’ and 
inserting ‘‘except that, with respect to the Na-
tional Science Foundation, such term means the 
National Science Board;’’. 
(B)(i) Subsection (f) of section 8G of such Act 
is repealed.
(ii) Subsection (c) of section 8G of such Act is 
amended by striking ‘‘Except as provided under sub-
section (f) of this section, the’’ and inserting ‘‘The’’. 
(C) Section 8K of such Act (as so redesignated 
by subsection (b)(1)(A)) is amended by striking the 
matter after ‘‘8D,’’ and before ‘‘of this Act’’ and in-
serting ‘‘8E, 8F, 8H, or 8J’’. 
(2) RELATING TO TITLE 39, UNITED STATES 
CODE.—(A) Subsection (e) of section 202 of title 39, 
United States Code, is repealed. 
(B) Paragraph (4) of section 102 of such title 
39 (as amended by section 101) is amended to read 
as follows: 
‘‘(4) ‘Inspector General’ means the Inspector 
General of the United States Postal Service, ap-
pointed under section 3(a) of the Inspector General 
Act of 1978;’’. 
(C) The first sentence of section 1003(a) of 
such title 39 is amended by striking ‘‘chapters 2 and 
12 of this title, section 8G of the Inspector General 
Act of 1978, or other provision of law,’’ and insert-
ing ‘‘chapter 2 or 12 of this title, subsection (b) or 
(c) of this section, or any other provision of law,’’. 
(D) Section 1003(b) of such title 39 is amended 
by striking ‘‘respective’’ and inserting ‘‘other’’.
(E) Section 1003(c) of such title 39 is amended 
by striking ‘‘included’’ and inserting ‘‘includes’’. 
(3) RELATING TO THE ENERGY POLICY ACT OF 
1992.—Section 160(a) of the Energy Policy Act of 
1992 (42 U.S.C. 8262f(a)) is amended (in the mat-
ter before paragraph (1)) by striking all that follows 
‘‘(5 U.S.C. App.)’’ and before ‘‘shall—’’. 
(h) EFFECTIVE DATE; TRANSITION PROVISIONS.— 
(1) EFFECTIVE DATE.—Except as provided in 
paragraph (2) or subsection (c), this section and the 
amendments made by this section shall take effect 
on the date of the enactment of this Act. 
(2) TRANSITION PROVISIONS.— 
(A) PRESIDENTIAL
APPOINTMENT
AU-
THORITY
AVAILABLE
IMMEDIATELY.—The au-
thority to appoint an Inspector General of the 
United States Postal Service in accordance with 
the amendments made by this section shall be 
available as of the effective date of this section. 
(B) CONTINUATION IN OFFICE.—Pending 
the appointment of an Inspector General of the 
United States Postal Service in accordance with 
the amendments made by this section, the indi-
vidual serving as the Inspector General of the 
United States Postal Service on the day before
the effective date of this section may continue 
to serve— 
(i) in accordance with applicable pro-
visions of the Inspector General Act of 
1978 and (except as provided in clause 
(ii)) of title 39, United States Code, as last 
in effect before the effective date of this 
Act; but 
(ii) subject to the provisions of such 
title 39 as amended by subsections (e) and 
(f) of this section (deeming any reference 
to the ‘‘Inspector General’’ in such provi-
sions, as so amended, to refer to the indi-
vidual continuing to serve under authority 
of this subparagraph) and subparagraph 
(C). 
(C) 
AUTHORIZATION
OF
APPROPRIA-
TIONS.— 
(i) IN
GENERAL.—Notwithstanding 
any other provision of this subsection, sec-
tion 8J(e) of the Inspector General Act of 
1978 (as amended by this section) shall be 
effective for purposes of fiscal years begin-
ning on or after October 1, 2005.
(ii) SAVINGS
PROVISION.—For pur-
poses of the fiscal year ending on Sep-
tember 30, 2005, funding for the Office of 
Inspector General of the United States 
Postal Service shall be made available in 
the same manner as if this Act had never 
been enacted. 
(D) ELIGIBILITY
OF
PRIOR
INSPECTOR 
GENERAL.—Nothing in this Act shall prevent 
any individual who has served as Inspector 
General of the United States Postal Service at 
any time before the date of the enactment of 
this Act from being appointed to that position 
pursuant to the amendments made by this sec-
tion. 
TITLE VII—EVALUATIONS 
SEC. 701. UNIVERSAL POSTAL SERVICE STUDY. 
(a) REPORT BY THE POSTAL SERVICE.—The United 
States Postal Service shall, within 12 months after the 
date of the enactment of this Act, submit to the President, 
the Congress, and the Postal Regulatory Commission, a 
written report on universal postal service in the United 
States (hereinafter in this section referred to as ‘‘universal 
service’’). Such report shall include at least the following:
100 
(1) A comprehensive review of the history and 
development of universal service, including how the 
scope and standards of universal service have 
evolved over time. 
(2) The scope and standards of universal serv-
ice provided under current law (including sections 
101 and 403 of title 39, United States Code) and 
current rules, regulations, policy statements, and 
practices of the Postal Service. 
(3) A description of any geographic areas, pop-
ulations, 
communities, 
organizations, 
or 
other 
groups or entities not currently covered by universal 
service or that are covered but that are receiving 
services deficient in scope or quality or both. 
(4) The scope and standards of universal serv-
ice likely to be required in the future in order to 
meet the needs and expectations of the American 
public, including all types of mail users, based on 
such assumptions or alternative sets of assumptions 
as the Postal Service considers plausible. 
(5) Such recommendations as the Postal Serv-
ice considers appropriate. 
(b) REPORT BY THE POSTAL REGULATORY COMMIS-
SION.—The Postal Regulatory Commission shall, within 
12 months after receiving the report of the Postal Service
101 
under subsection (a), submit to the President and the 
Congress a written report evaluating the report of the 
Postal Service. The report of the Commission shall include 
at least the following: 
(1) Such comments and observations relating to 
the matters addressed in the Postal Service’s report 
as the Commission considers appropriate. 
(2) An estimate of the cost attributable to the 
obligation to provide universal service under prior 
and current law, respectively. 
(3) An estimate of the likely cost of fulfilling 
the obligation to provide universal service under— 
(A) the assumptions or respective sets of 
assumptions of the Postal Service described in 
subsection (a)(4); and 
(B) such other assumptions or sets of as-
sumptions as the Commission considers plau-
sible. 
(4) Such additional topics and recommenda-
tions as the Commission considers appropriate. 
(c) CONSULTATION.—In preparing the reports re-
quired by this section, the Postal Service and the Postal 
Regulatory Commission— 
(1) shall consult with each other, other Federal 
agencies, users of the mails, enterprises in the pri-
102 
vate sector engaged in the delivery of mail, and the 
general public; and 
(2) shall address in their respective reports any 
written comments received under this section. 
(d) CLARIFYING PROVISION.—Nothing in this section 
shall be considered to relate to any services that are not 
postal services (within the meaning of section 102 of title 
39, United States Code, as amended by section 101). 
SEC. 702. ASSESSMENTS OF RATEMAKING, CLASSIFICA-
TION, AND OTHER PROVISIONS. 
(a) IN GENERAL.—The Postal Regulatory Commis-
sion shall, at least every 5 years, submit a report to the 
President and the Congress concerning— 
(1) the operation of the amendments made by 
the Postal Accountability and Enhancement Act; 
and 
(2) recommendations for any legislation or 
other measures necessary to improve the effective-
ness or efficiency of the postal laws of the United 
States. 
(b) POSTAL SERVICE VIEWS.—A report under this 
section shall be submitted only after reasonable oppor-
tunity has been afforded to the Postal Service to review 
such report and to submit written comments thereon. Any 
comments timely received from the Postal Service under
103 
the preceding sentence shall be attached to the report sub-
mitted under subsection (a). 
(c) SPECIFIC INFORMATION REQUIRED.—The Postal 
Regulatory Commission shall include, as part of at least 
its first report under subsection (a), the following: 
(1) COST-COVERAGE REQUIREMENT RELATING 
TO COMPETITIVE PRODUCTS COLLECTIVELY.—With 
respect to section 3633 of title 39, United States 
Code (as amended by this Act)— 
(A) a description of how such section has 
operated; and 
(B) recommendations as to whether or not 
such section should remain in effect and, if so, 
any suggestions as to how it might be improved. 
(2) COMPETITIVE PRODUCTS FUND.—With re-
spect to the Postal Service Competitive Products 
Fund (under section 2011 of title 39, United States 
Code, as amended by section 301), in consultation 
with the Secretary of the Treasury— 
(A) a description of how such Fund has 
operated; 
(B) any suggestions as to how the oper-
ation of such Fund might be improved; and 
(C) a description and assessment of alter-
native accounting or financing mechanisms that
104 
might be used to achieve the objectives of such 
Fund. 
(3) ASSUMED FEDERAL INCOME TAX ON COM-
PETITIVE PRODUCTS FUND.—With respect to section 
3634 of title 39, United States Code (as amended by 
this Act), in consultation with the Secretary of the 
Treasury— 
(A) a description of how such section has 
operated; and 
(B) recommendations as to whether or not 
such section should remain in effect and, if so, 
any suggestions as to how it might be improved. 
SEC. 703. STUDY ON EQUAL APPLICATION OF LAWS TO 
COMPETITIVE PRODUCTS. 
(a) IN GENERAL.—The Federal Trade Commission 
shall prepare and submit to the President, the Congress, 
and the Postal Regulatory Commission, within 1 year 
after the date of the enactment of this Act, a comprehen-
sive report identifying Federal and State laws that apply 
differently to the United States Postal Service with re-
spect to the competitive category of mail (within the mean-
ing of section 102 of title 39, United States Code, as 
amended by section 101) and private companies providing 
similar products.
105 
(b) RECOMMENDATIONS; ADJUSTMENTS.—The Fed-
eral Trade Commission shall include such recommenda-
tions as it considers appropriate for bringing such legal 
differences to an end and, in the interim, to account under 
section 3633, for the net economic effects provided by 
those laws. 
(c) CONSULTATION.—In preparing its report, the 
Federal Trade Commission shall consult with the United 
States Postal Service, the Postal Regulatory Commission, 
other Federal agencies, mailers, private companies that 
provide delivery services, and the general public, and shall 
append to such report any written comments received 
under this subsection. 
(d) COMPETITIVE PRODUCT RATE REGULATION.— 
The Postal Regulatory Commission shall take into account 
the recommendations of the Federal Trade Commission, 
and subsequent events that affect the continuing validity 
of the estimate of the net economic effect, in promulgating 
or revising the regulations required by section 3633 of title 
39, United States Code. 
SEC. 704. GREATER DIVERSITY IN POSTAL SERVICE EXECU-
TIVE AND ADMINISTRATIVE SCHEDULE MAN-
AGEMENT POSITIONS. 
(a) STUDY.—The Board of Governors shall study 
and, within 1 year after the date of the enactment of this
106 
Act, submit to the President and Congress a report con-
cerning the extent to which women and minorities are rep-
resented in supervisory and management positions within 
the United States Postal Service. Any data included in the 
report shall be presented in the aggregate and by pay level. 
(b) PERFORMANCE
EVALUATIONS.—The United 
States Postal Service shall, as soon as practicable, take 
such measures as may be necessary to ensure that, for 
purposes of conducting performance appraisals of super-
visory or managerial employees, appropriate consideration 
shall be given to meeting affirmative action goals, achiev-
ing equal employment opportunity requirements, and im-
plementation of plans designed to achieve greater diversity 
in the workforce. 
SEC. 705. PLAN FOR ASSISTING DISPLACED WORKERS. 
(a) PLAN.—The United States Postal Service shall, 
before the deadline specified in subsection (b), develop and 
be prepared to implement, whenever necessary, a com-
prehensive plan under which reemployment assistance 
shall be afforded to employees displaced as a result of the 
automation or privatization of any of its functions. 
(b) REPORT.—Not later than 1 year after the date 
of the enactment of this Act, the United States Postal 
Service shall submit to its Board of Governors and Con-
107 
gress a written report describing its plan under this sec-
tion. 
SEC. 706. CONTRACTS WITH WOMEN, MINORITIES, AND 
SMALL BUSINESSES. 
The Board of Governors shall study and, within 1 
year after the date of the enactment of this Act, submit 
to the President and the Congress a report concerning the 
number and value of contracts and subcontracts the Post-
al Service has entered into with women, minorities, and 
small businesses. 
SEC. 707. RATES FOR PERIODICALS. 
(a) IN GENERAL.—The United States Postal Service, 
acting jointly with the Postal Regulatory Commission, 
shall study and submit to the President and Congress a 
report concerning— 
(1) the quality, accuracy, and completeness of 
the information used by the Postal Service in deter-
mining the direct and indirect postal costs attrib-
utable to periodicals; and 
(2) any opportunities that might exist for im-
proving efficiencies in the collection, handling, trans-
portation, or delivery of periodicals by the Postal 
Service, including any pricing incentives for mailers 
that might be appropriate.
108 
(b) RECOMMENDATIONS.—The report shall include 
recommendations for any administrative action or legisla-
tion that might be appropriate. 
SEC. 708. ASSESSMENT OF CERTAIN RATE DEFICIENCIES. 
(a) IN GENERAL.—Within 12 months after the date 
of the enactment of this Act, the Office of Inspector Gen-
eral of the United States Postal Service shall study and 
submit to the President, the Congress, and the United 
States Postal Service, a report concerning the administra-
tion of section 3626(k) of title 39, United States Code. 
(b) SPECIFIC REQUIREMENTS.—The study and re-
port shall specifically address the adequacy and fairness 
of the process by which assessments under section 3626(k) 
of title 39, United States Code, are determined and ap-
pealable, including— 
(1) whether the Postal Regulatory Commission 
or any other body outside the Postal Service should 
be assigned a role; and 
(2) whether a statute of limitations should be 
established for the commencement of proceedings by 
the Postal Service thereunder. 
SEC. 709. POSTAL PROCESSING AND DISTRIBUTION NET-
WORK STUDY. 
The United States Postal Service shall, within 16 
months after the date of the enactment of this Act, submit
109 
to the President, the Congress, and the Board of Gov-
ernors of the United States Postal Service a written report 
on the postal processing and distribution network. Such 
report shall include at least the following: 
(1) Recommendations to improve the efficiency 
and effectiveness of the processing and distribution 
network while preserving the timely delivery of post-
al services. 
(2) Identification of excess capacity (if any) 
within the processing and distribution network and 
opportunities for savings through realignment or 
consolidation of facilities. 
(3) Report of the Postal Service’s plans for 
dealing with the recommendations and findings iden-
tified in paragraphs (1) and (2). 
(4) Statutory or regulatory obstacles preventing 
the Postal Service from taking action to realign or 
consolidate facilities identified in paragraph (2). 
(5) Such additional topics and recommenda-
tions as the Postal Service considers appropriate. 
SEC. 710. DEFINITION. 
For purposes of this title, the term ‘‘Board of Gov-
ernors’’ has the meaning given such term by section 102 
of title 39, United States Code.
110 
TITLE 
VIII—MISCELLANEOUS; 
TECHNICAL 
AND 
CON-
FORMING AMENDMENTS 
SEC. 801. EMPLOYMENT OF POSTAL POLICE OFFICERS. 
Section 3061 of title 18, United States Code, is 
amended by adding at the end the following: 
‘‘(c)(1) The Postal Service may employ police officers 
for duty in connection with the protection of property 
owned or occupied by the Postal Service or under the 
charge and control of the Postal Service, and persons on 
the property, including duty in areas outside the property 
to the extent necessary to protect the property and persons 
on the property. 
‘‘(2) With respect to such property, such officers shall 
have the power to— 
‘‘(A) enforce Federal laws and regulations for 
the protection of persons and property; 
‘‘(B) carry firearms; and 
‘‘(C) make arrests without a warrant for any 
offense against the United States committed in the 
presence of the officer or for any felony cognizable 
under the laws of the United States if the officer has 
reasonable grounds to believe that the person to be 
arrested has committed or is committing a felony.
111 
‘‘(3) With respect to such property, such officers may 
have, to such extent as the Postal Service may by regula-
tions prescribe, the power to— 
‘‘(A) serve warrants and subpoenas issued 
under the authority of the United States; and 
‘‘(B) conduct investigations, on and off the 
property in question, of offenses that may have been 
committed against property owned or occupied by 
the Postal Service or persons on the property. 
‘‘(4)(A) As to such property, the Postmaster General 
may prescribe regulations necessary for the protection and 
administration of property owned or occupied by the Post-
al Service and persons on the property. The regulations 
may include reasonable penalties, within the limits pre-
scribed in subparagraph (B), for violations of the regula-
tions. The regulations shall be posted and remain posted 
in a conspicuous place on the property. 
‘‘(B) A person violating a regulation prescribed under 
this subsection shall be fined under this title, imprisoned 
for not more than 30 days, or both.’’.
112 
SEC. 802. DATE OF POSTMARK TO BE TREATED AS DATE OF 
APPEAL IN CONNECTION WITH THE CLOSING 
OR CONSOLIDATION OF POST OFFICES. 
(a) IN GENERAL.—Section 404(b) of title 39, United 
States Code, is amended by adding at the end the fol-
lowing: 
‘‘(6) For purposes of paragraph (5), any appeal re-
ceived by the Commission shall— 
‘‘(A) if sent to the Commission through the 
mails, be considered to have been received on the 
date of the Postal Service postmark on the envelope 
or other cover in which such appeal is mailed; or 
‘‘(B) if otherwise lawfully delivered to the Com-
mission, be considered to have been received on the 
date determined based on any appropriate docu-
mentation or other indicia (as determined under reg-
ulations of the Commission).’’. 
(b) EFFECTIVE DATE.—This section and the amend-
ments made by this section shall apply with respect to any 
determination to close or consolidate a post office which 
is first made available, in accordance with paragraph (3) 
of section 404(b) of title 39, United States Code, after 
the end of the 3-month period beginning on the date of 
the enactment of this Act.
113 
SEC. 803. PROVISIONS RELATING TO BENEFITS UNDER 
CHAPTER 81 OF TITLE 5, UNITED STATES 
CODE, FOR OFFICERS AND EMPLOYEES OF 
THE FORMER POST OFFICE DEPARTMENT. 
(a) IN GENERAL.—Section 8 of the Postal Reorga-
nization Act (39 U.S.C. 1001 note) is amended by insert-
ing ‘‘(a)’’ after ‘‘8.’’ and by adding at the end the fol-
lowing: 
‘‘(b) For purposes of chapter 81 of title 5, United 
States Code, the Postal Service shall, with respect to any 
individual receiving benefits under such chapter as an offi-
cer or employee of the former Post Office Department, 
have the same authorities and responsibilities as it has 
with respect to an officer or employee of the Postal Service 
receiving such benefits.’’. 
(b) EFFECTIVE DATE.—This section and the amend-
ments made by this section shall be effective as of the first 
day of the fiscal year in which this Act is enacted. 
SEC. 804. OBSOLETE PROVISIONS. 
(a) REPEAL.— 
(1) IN
GENERAL.—Chapter 52 of title 39, 
United States Code, is repealed. 
(2) CONFORMING AMENDMENTS.—(A) Section 
5005(a) of title 39, United States Code, is amend-
ed—
114 
(i) by striking paragraph (1), and by re-
designating paragraphs (2) through (4) as 
paragraphs (1) through (3), respectively; and 
(ii) in paragraph (3) (as so designated by 
clause (i)), by striking ‘‘(as defined in section 
5201(6) of this title)’’. 
(B) Section 5005(b) of such title 39 is amended 
by striking ‘‘(a)(4)’’ each place it appears and in-
serting ‘‘(a)(3)’’. 
(C) Section 5005(c) of such title 39 is amended 
by striking ‘‘by carrier or person under subsection 
(a)(1) of this section, by contract under subsection 
(a)(4) of this section, or’’ and inserting ‘‘by contract 
under subsection (a)(3) of this section or’’. 
(b) ELIMINATING RESTRICTION ON LENGTH OF CON-
TRACTS.—(1) Section 5005(b)(1) of title 39, United 
States Code, is amended by striking ‘‘(or where the Postal 
Service determines that special conditions or the use of 
special equipment warrants, not in excess of 6 years)’’ and 
inserting ‘‘(or such longer period of time as may be deter-
mined by the Postal Service to be advisable or appro-
priate)’’. 
(2) Section 5402(d) of such title 39 is amended by 
striking ‘‘for a period of not more than 4 years’’.
115 
(3) Section 5605 of such title 39 is amended by strik-
ing ‘‘for periods of not in excess of 4 years’’. 
(c) CLERICAL AMENDMENT.—The analysis for part 
V of title 39, United States Code, is amended by repealing 
the item relating to chapter 52. 
SEC. 805. EXPANDED CONTRACTING AUTHORITY. 
(a) AMENDMENT
TO TITLE 39, UNITED STATES 
CODE.— 
(1) CONTRACTS
WITH
AIR
CARRIERS.—Sub-
section (e)(1) of section 5402 of title 39, United 
States Code, is amended to read as follows: 
‘‘(e)(1)(A) The Postal Service may contract with any 
air carrier for the transportation of mail by aircraft in 
interstate air transportation, including the rates therefor, 
either through negotiations or competitive bidding. 
‘‘(B) Notwithstanding subsections (a) through (d), 
the Postal Service may contract with any air carrier or 
foreign air carrier for the transportation of mail by air-
craft in foreign air transportation, including the rates 
therefor, either through negotiations or competitive bid-
ding, except that— 
‘‘(i) any such contract may be awarded only to 
(I) an air carrier holding a certificate required by 
section 41101 of title 49 or an exemption therefrom 
issued by the Secretary of Transportation, (II) a for-
116 
eign air carrier holding a permit required by section 
41301 of title 49 or an exemption therefrom issued 
by the Secretary of Transportation, or (III) a com-
bination of such air carriers or foreign air carriers 
(or both); 
‘‘(ii) mail transported under any such contract 
shall not be subject to any duty-to-carry requirement 
imposed by any provision of subtitle VII of title 49 
or by any certificate, permit, or corresponding ex-
emption authority issued by the Secretary of Trans-
portation under that subtitle; 
‘‘(iii) every contract that the Postal Service 
awards to a foreign air carrier under this subpara-
graph shall be subject to the continuing requirement 
that air carriers shall be afforded the same oppor-
tunity to carry the mail of the country to and from 
which the mail is transported and the flag country 
of the foreign air carrier, if different, as the Postal 
Service has afforded the foreign air carrier; and 
‘‘(iv) the Postmaster General shall consult with 
the Secretary of Defense concerning actions that af-
fect the carriage of military mail transported in for-
eign air transportation. 
‘‘(C) Subparagraph (B) shall not be interpreted as 
suspending or otherwise diminishing the authority of the
117 
Secretary of Transportation under section 41310 of title 
49.’’. 
(2) DEFINITIONS.—Paragraph (2) of section 
5402(a) of title 39, United States Code, is amended 
to read as follows: 
‘‘(2) the terms ‘air carrier’, ‘air transportation’, 
‘foreign air carrier’, ‘foreign air transportation’, 
‘interstate air transportation’, and ‘mail’ shall have 
the meanings given such terms in section 40102 of 
title 49;’’. 
(b) AMENDMENTS TO TITLE 49, UNITED STATES 
CODE.— 
(1) AUTHORITY OF POSTAL SERVICE TO PRO-
VIDE
FOR
INTERSTATE
AIR
TRANSPORTATION
OF 
MAIL.—Section 41901(a) of title 49, United States 
Code, is amended to read as follows: 
‘‘(a) TITLE 39.—The United States Postal Service 
may provide for the transportation of mail by aircraft in 
air transportation under this chapter and under chapter 
54 of title 39.’’. 
(2) SCHEDULES
FOR
CERTAIN
TRANSPOR-
TATION OF MAIL.—Section 41902(b)(1) of title 49, 
United States Code, is amended by inserting before 
the semicolon at the end the following: ‘‘(other than 
foreign air transportation of mail)’’.
118 
(3) PRICES FOR FOREIGN TRANSPORTATION OF 
MAIL.—Section 41907 of title 49, United States 
Code, is amended— 
(A) by striking ‘‘(a) LIMITATIONS.—’’; and 
(B) by striking subsection (b). 
(4) 
CONFORMING
AMENDMENTS.—Sections 
41107, 41901(b)(1), 
41902(a), 
41903(a), 
and 
41903(b) of title 49, United States Code, are 
amended by striking ‘‘in foreign air transportation 
or’’. 
SEC. 806. INVESTMENTS. 
Subsection (c) of section 2003 of title 39, United 
States Code, is amended— 
(1) by striking ‘‘(c) If’’ and inserting ‘‘(c)(1) 
Except as provided in paragraph (2), if’’; and 
(2) by adding at the end the following: 
‘‘(2)(A) Nothing in this section shall be considered 
to authorize any investment in any obligations or securi-
ties of a commercial entity. 
‘‘(B) For purposes of this paragraph, the term ‘com-
mercial entity’ means any corporation, company, associa-
tion, partnership, joint stock company, firm, society, or 
other similar entity, as further defined under regulations 
prescribed by the Postal Regulatory Commission.’’.
119 
SEC. 807. REPEAL OF SECTION 5403. 
(a) IN GENERAL.—Section 5403 of title 39, United 
States Code, is repealed. 
(b) CLERICAL AMENDMENT.—The analysis for chap-
ter 54 of title 39, United States Code, is amended by re-
pealing the item relating to section 5403. 
SEC. 808. REDUCED RATES. 
Section 3626 of title 39, United States Code, is 
amended— 
(1) in subsection (a), by striking all before 
paragraph (4) and inserting the following: 
‘‘(a)(1) Except as otherwise provided in this section, 
rates of postage for a class of mail or kind of mailer under 
former section 4358, 4452(b), 4452(c), 4554(b), or 
4554(c) of this title shall be established in accordance with 
section 3622. 
‘‘(2) For the purpose of this subsection, the term 
‘regular-rate category’ means any class of mail or kind of 
mailer, other than a class or kind referred to in section 
2401(c). 
‘‘(3) Rates of postage for a class of mail or kind of 
mailer under former section 4358(a) through (c) of this 
title shall be established so that postage on each mailing 
of such mail reflects its preferred status as compared to 
the postage for the most closely corresponding regular-rate 
category mailing.’’;
120 
(2) in subsection (g), by adding at the end the 
following: 
‘‘(3) For purposes of this section and former section 
4358(a) through (c) of this title, those copies of an issue 
of a publication entered within the county in which it is 
published, but distributed outside such county on postal 
carrier routes originating in the county of publication, 
shall be treated as if they were distributed within the 
county of publication. 
‘‘(4)(A) In the case of an issue of a publication, any 
number of copies of which are mailed at the rates of post-
age for a class of mail or kind of mailer under former 
section 4358(a) through (c) of this title, any copies of such 
issue which are distributed outside the county of publica-
tion (excluding any copies subject to paragraph (3)) shall 
be subject to rates of postage provided for under this para-
graph. 
‘‘(B) The rates of postage applicable to mail under 
this paragraph shall be established in accordance with sec-
tion 3622. 
‘‘(C) This paragraph shall not apply with respect to 
an issue of a publication unless the total paid circulation 
of such issue outside the county of publication (not count-
ing recipients of copies subject to paragraph (3)) is less 
than 5,000.’’; and