H. R. 6407—27
‘‘(i) the accounting practices and principles that should 
be followed by the Postal Service with the objectives 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 prod-
ucts; and 
‘‘(II) subject to subsection (e)(5), preventing the sub-
sidization of such products by market-dominant products; 
and 
‘‘(ii) the substantive and procedural rules that should be 
followed in determining the assumed Federal 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 enactment 
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 Postal Regulatory Commission. 
‘‘(2)(A) Upon receiving the recommendations of the Secretary 
of the Treasury under paragraph (1), the Commission shall give 
interested parties, including the Postal Service, users of the mails, 
and an officer of the Commission 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 Commission considers 
appropriate. 
‘‘(B)(i) After due consideration of the views and other informa-
tion received under subparagraph (A), the Commission shall by 
rule—
‘‘(I) provide for the establishment and application of the 
accounting practices and principles which shall be followed 
by the Postal Service; 
‘‘(II) provide for the establishment and application of the 
substantive and procedural rules described under paragraph 
(1)(A)(ii); and 
‘‘(III) provide for the submission by the Postal Service 
to the Postal Regulatory Commission of annual and other peri-
odic reports setting forth such information 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 Postal 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 Commission 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 Commission shall prescribe) 
to improve the quality, accuracy, or completeness of Postal Service 
information under subparagraph (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
H. R. 6407—28
‘‘(II) such revisions are, in the judgment of the Commission, 
otherwise necessitated by the public interest. 
‘‘(D) A copy of each report described under subparagraph 
(B)(i)(III) shall be submitted by the Postal Service to the Secretary 
of the Treasury and the Inspector General of the United States 
Postal Service. 
‘‘(i)(1) The Postal Service shall submit an annual report to 
the Secretary of the Treasury concerning the operation of the 
Competitive Products Fund. The report shall address such matters 
as risk limitations, reserve balances, allocation or distribution of 
moneys, liquidity requirements, 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 sections for 
chapter 20 of title 39, United States Code, is amended by 
adding after the item relating to section 2010 the following:
‘‘2011. Provisions relating to competitive products.’’.
(b) TECHNICAL AND CONFORMING AMENDMENTS.—
(1) DEFINITION.—Section 2001 of title 39, United States 
Code, is amended by striking ‘‘and’’ at the end of paragraph 
(1), by redesignating paragraph (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.—Section 2002(b) of 
title 39, United States Code, is amended by striking ‘‘Fund,’’ 
and inserting ‘‘Fund and the balance in the Competitive Prod-
ucts 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, 
functions, 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 inserting ‘‘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)’’.
H. R. 6407—29
SEC. 402. ASSUMED FEDERAL INCOME TAX ON COMPETITIVE PROD-
UCTS 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 Internal Revenue Code of 1986 
on the Postal Service’s assumed taxable income from competi-
tive products for the year; and 
‘‘(2) the term ‘assumed taxable income from competitive 
products’, with respect to a year, refers to the amount rep-
resenting what would be the taxable income of a corporation 
under the Internal Revenue Code of 1986 for the year, if—
‘‘(A) the only activities of such corporation were the 
activities of the Postal Service allocable under section 
2011(h) to competitive products; and 
‘‘(B) the only assets held by such corporation were 
the assets of the Postal Service allocable under section 
2011(h) to such activities. 
‘‘(b) COMPUTATION AND TRANSFER REQUIREMENTS.—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 required 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 competition 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 licensing of intellec-
tual property to any third party (such as patents, copyrights, 
trademarks, trade secrets, and proprietary information); or 
‘‘(3) obtain information from a person that provides (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
H. R. 6407—30
obtainable) from an independent source or is otherwise obtained 
(or obtainable). 
‘‘(b) The Postal Regulatory Commission shall prescribe regula-
tions to carry out this section. 
‘‘(c) Any party (including an officer of the Commission rep-
resenting 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 ‘‘Sub-
ject 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 with-
out’’. 
(c) CLERICAL AMENDMENT.—The analysis for chapter 4 of title 
39, United States Code, is amended by inserting 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 doctrine 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 referred 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 section 5 applies to 
unfair or deceptive acts or practices. 
‘‘(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 Federal agency (as the case may be)—
‘‘(A) shall not be immune under any doctrine of sovereign 
immunity from suit in Federal court by any person for any 
violation of Federal law by such agency or any officer or 
employee thereof; and 
‘‘(B) shall be considered to be a person (as defined in 
subsection (a) of the first section of the Clayton Act) for pur-
poses of—
‘‘(i) the antitrust laws (as defined in such subsection); 
and 
‘‘(ii) section 5 of the Federal Trade Commission Act 
to the extent that such section 5 applies to unfair methods 
of competition.
H. R. 6407—31
For purposes of the preceding sentence, any private carriage 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 attorney’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 maximum extent feasible 
as determined by the Postal Service, in compliance with 1 of the 
nationally recognized model building codes and with other 
applicable nationally recognized codes. 
‘‘(2) Each building constructed or altered by the Postal Service 
shall be constructed or altered only after consideration of all require-
ments (other than procedural requirements) of zoning laws, land 
use laws, and applicable environmental laws of a State or subdivi-
sion 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, consult with appro-
priate officials of the State or political 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 exceeding 30 days; and 
‘‘(C) permit inspection by such officials during construction 
or alteration of the building, in accordance 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 construction of the 
building is begun; and 
‘‘(ii) reasonable notice of their intention to conduct 
any inspection before conducting such inspection. 
Nothing in this subsection shall impose an obligation on any 
State or political subdivision to take any action under the 
preceding sentence, nor shall anything in this 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 subsection (including reviewing plans, carrying 
out on-site inspections, issuing building permits, and making 
recommendations). 
‘‘(4) Appropriate officials of a State or a political subdivision 
of a State may make recommendations to the Postal Service con-
cerning 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 
construction or alteration of the building to take into account local 
conditions. The Postal Service shall give due consideration to any 
such recommendations.
H. R. 6407—32
‘‘(5) In addition to consulting with local and State officials 
under paragraph (3), the Postal Service shall establish procedures 
for soliciting, assessing, and incorporating local community input 
on real property and land use decisions. 
‘‘(6) For purposes of this subsection, the term ‘State’ includes 
the District of Columbia, the Commonwealth of Puerto Rico, and 
a territory or possession of the United States. 
‘‘(g)(1) Notwithstanding any other provision of law, legal rep-
resentation may not be furnished by the Department 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 (relating to adminis-
trative subpoenas by the Postal Regulatory Commission). 
‘‘(C) Section 3663 (relating to appellate review). 
The Postal Service may, by contract or otherwise, employ attorneys 
to obtain any legal representation that it is precluded 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 circumstance, 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 Commis-
sion shall be permitted 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 con-
sider appropriate, furnish the Commission such legal representation 
as it may require in connection with any such action, suit, or 
proceeding, except that, with the prior consent of the Attorney 
General, the Commission may employ attorneys by contract or 
otherwise for that purpose. 
‘‘(h) A judgment against the Government of the United States 
arising out of activities of the Postal Service shall be paid by 
the Postal Service out of any funds available to the Postal Service, 
subject to the restriction specified in section 2011(g).’’. 
(b) TECHNICAL AMENDMENT.—Section 409(a) of title 39, United 
States Code, is amended by striking ‘‘Except as provided in section 
3628 of this title,’’ and inserting ‘‘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 international postal services
H. R. 6407—33
and other international delivery services for cultural, social, 
and economic purposes; 
‘‘(2) to promote and encourage unrestricted and undistorted 
competition in the provision of international postal services 
and other international delivery services, except where provi-
sion of such services by private companies may be prohibited 
by law of the United States; 
‘‘(3) to promote and encourage a clear distinction between 
governmental and operational responsibilities with respect to 
the provision of international postal services and other inter-
national delivery 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 formula-
tion, coordination, and oversight of foreign policy related to inter-
national postal services and other international delivery services 
and shall have the power to conclude postal treaties, conventions, 
and amendments related to international postal services and other 
international 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 competi-
tive 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 primary authority for 
the conduct of foreign policy with respect to international postal 
services and international delivery services, including the deter-
mination of United States positions and the conduct of United 
States participation in negotiations with foreign governments and 
international bodies. In exercising this authority, the Secretary—
‘‘(A) shall coordinate with other agencies as appropriate, 
and in particular, shall give full consideration to the authority 
vested by law or Executive order in the Postal Regulatory 
Commission, the Department of Commerce, the Department 
of Transportation, and the Office of the United States Trade 
Representative in this area; 
‘‘(B) shall maintain continuing liaison with other executive 
branch agencies concerned with postal and delivery services; 
‘‘(C) shall maintain continuing liaison with the Committee 
on Homeland Security and Governmental Affairs of the Senate 
and the Committee on Government Reform of the House of 
Representatives; 
‘‘(D) shall maintain appropriate liaison with both represent-
atives of the Postal Service and representatives of users and 
private providers of international postal services and other 
international delivery 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 executive branch agencies in connection
H. R. 6407—34
with international postal services and international delivery 
services. 
‘‘(3) The Secretary of State shall establish an advisory com-
mittee (within the meaning of the Federal Advisory Committee 
Act) to perform such functions as the Secretary considers appro-
priate 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 Secretary of State shall request 
the Postal Regulatory Commission to submit its views on whether 
such rate or classification is consistent with the standards and 
criteria established by the Commission under section 3622. 
‘‘(2) The Secretary shall ensure that each treaty, convention, 
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 foreign 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 Commis-
sion together with a full explanation of the reasons thereof, provided 
that the Secretary may designate which portions of the determina-
tion or explanation shall be kept confidential for reasons of foreign 
policy or national security. 
‘‘(d) Nothing in this section shall be considered to prevent 
the Postal Service from entering into such commercial or operational 
contracts related to providing international 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 contractual in nature and may not 
purport to be international law; and 
‘‘(2) a copy of each such contract between the Postal Service 
and an agency of a foreign government 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 controlled 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 section 3631 that are 
exported or imported by the Postal Service, the Customs Service 
and other appropriate Federal agencies shall apply the customs 
laws of the United States and all other laws relating to the importa-
tion 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 treaties and conventions, the Sec-
retary of State shall, to the maximum extent practicable, 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 companies 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
H. R. 6407—35
States Trade Representative and the Commissioner of Customs 
in carrying out this paragraph. 
‘‘(4) The provisions of this subsection shall take effect 6 months 
after the date of enactment of this subsection or such earlier date 
as the Bureau of Customs and Border Protection of the Department 
of Homeland Security may determine in writing.’’. 
(b) EFFECTIVE DATE.—Notwithstanding any provision of the 
amendment made by subsection (a), the authority of the United 
States Postal Service to establish the rates of postage or other 
charges on mail matter conveyed 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 GOV-
ERNORS. 
(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 Governors shall represent the public interest generally, 
and shall be chosen solely on the basis of their experience 
in the field of public service, law or accounting or on their 
demonstrated ability in managing organizations 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 organiza-
tions or corporations (in either the public or private sector) 
that employ at least 50,000 employees. 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 however, when any such office becomes vacant, the 
appointment 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 begin-
ning 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 paragraph (1) 
for nomination for appointment to the position of Governor, the 
President should consult with the Speaker of the House of Rep-
resentatives, the minority leader of the House of Representatives,
H. R. 6407—36
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
YEARS
OF 
SERVICE.—If a person who is serving as a Governor of 
the United States Postal Service 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 Governor 
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 Service 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 Governor 
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 subpara-
graph shall be construed to affect any action or authority 
of any Governor or the Board of Governors during any 
portion of a 9-year term deemed to be a 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 Gov-
ernor.’’. 
(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
H. R. 6407—37
any of the purposes for which the corresponding authority is avail-
able to the Postal Service under section 2011.’’. 
(b) LIMITATION
ON NET ANNUAL INCREASE
IN OBLIGATIONS 
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 outstanding issued for the purpose of capital improve-
ments and the net increase in the amount of obligations outstanding 
issued for the purpose of defraying operating expenses 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 limitations under 
this subsection, the aggregate amount of obligations 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 sec-
tion 2005(a)(1) of title 39, United States Code, is amended 
by striking ‘‘any such obligations’’ 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 ‘‘obliga-
tions issued by the Postal Service under this section,’’. 
(2) ASSETS, REVENUES, AND RECEIPTS TO WHICH PROVISIONS 
APPLY.—Subsection (b) of section 2005 of title 39, United States 
Code, is amended by striking ‘‘(b)’’ and inserting ‘‘(b)(1)’’, and 
by adding at the end the following: 
‘‘(2) Notwithstanding any other provision of this section—
‘‘(A) the authority to pledge assets of the Postal Service 
under this subsection shall be available only to the extent 
that such assets are not related to the provision of competitive 
products (as determined under section 2011(h) or, for purposes 
of any period before accounting practices and principles under 
section 2011(h) have been established and applied, the best 
information available from the Postal Service, including the 
audited statements required by section 2008(e)); and 
‘‘(B) any authority under this subsection relating to the 
pledging or other use of revenues or receipts 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—
H. R. 6407—38
‘‘(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 services 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 suspension of the 
operation of this section (as then in effect). 
‘‘(c) Any regulations necessary to carry out this section shall 
be promulgated by the Postal Regulatory Commission.’’. 
(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 func-
tions as may be assigned to the Postal Service under any 
provisions of law outside of this title;’’. 
SEC. 505. NONINTERFERENCE WITH COLLECTIVE BARGAINING AGREE-
MENTS. 
(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 modify such agreement 
unless the party desiring such termination 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 Mediation and 
Conciliation Service of the existence of a dispute 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 proce-
dure providing for a binding resolution of a dispute by the expiration 
date of the agreement in effect, or the date of the proposed termi-
nation or modification, the Director of the Federal Mediation and 
Conciliation Service shall within 10 days appoint a mediator of 
nationwide reputation and professional stature, and who is also 
a member 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 modification under subsection 
(a) of this section, or if the parties decide upon arbitration but 
do not agree upon the procedures therefore, an arbitration board
H. R. 6407—39
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 Director. This list shall consist of not 
less then 9 names of arbitrators of nationwide reputation and 
professional nature, who are also members of the National Academy 
of Arbitrators, and whom the Director has determined are available 
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 representative 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 bargaining representa-
tive. 
‘‘(d) In the case of a bargaining unit whose recognized 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 commencement of collective bargaining, a mediator 
shall be appointed 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 differences. 
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 provide conclusive and binding arbitration 
in accordance with the terms of subsection (c) of this section.’’. 
(b) NONINTERFERENCE WITH COLLECTIVE BARGAINING AGREE-
MENTS.—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 handbook or 
manual affecting employee labor relations within the United States 
Postal Service, or any collective bargaining agreement. 
(c) FREE MAILING PRIVILEGES CONTINUE UNCHANGED.—Nothing 
in this Act or any amendment made by this Act shall affect any 
free mailing privileges accorded 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 amended by 
inserting after section 3685 the following: 
‘‘§ 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.—
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‘‘(1) IN GENERAL.—Under any such program, the Postal 
Service may award a bonus or other reward 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 compensa-
tion 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 Service wishes to 
have the authority, under any program described in subsection 
(a), to award bonuses or other rewards in excess of the limita-
tion set forth in the last sentence of section 1003(a)—
‘‘(A) the Postal Service shall make an appropriate 
request to the Board of Governors of the Postal Service 
in such form and manner as the Board requires; and 
‘‘(B) the Board of Governors shall approve any such 
request if the Board certifies, for the annual appraisal 
period involved, that the performance appraisal system 
for affected officers and employees of the Postal Service 
(as designed and applied) makes meaningful distinctions 
based on relative performance. 
‘‘(3) REVOCATION AUTHORITY.—If the Board of Governors 
of the Postal Service finds that a performance appraisal system 
previously approved under paragraph (2)(B) does not (as 
designed and applied) make meaningful distinctions based on 
relative performance, the Board may revoke or suspend the 
authority of the Postal Service to continue a program approved 
under paragraph (2) until such time as appropriate corrective 
measures have, in the judgment of the Board, been taken. 
‘‘(c) EXCEPTIONS
FOR CRITICAL POSITIONS.—Notwithstanding 
any other provision of law, the Board of Governors may allow 
up to 12 officers or employees of the Postal Service in critical 
senior executive or equivalent positions to receive total compensa-
tion in an amount not to exceed 120 percent of 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 such payment 
is received. For each exception made under this subsection, the 
Board shall provide written notification to the Director of the Office 
of Personnel Management and the Congress within 30 days after 
the payment is made setting forth the name of the officer or 
employee involved, the critical nature of his or her duties and 
responsibilities, and the basis for determining that such payment 
is warranted. 
‘‘(d) INFORMATION FOR INCLUSION IN COMPREHENSIVE STATE-
MENT.—Included in its comprehensive statement under section 
2401(e) for any period shall be— 
‘‘(1) the name of each person receiving a bonus or other 
payment during such period which would not have been allow-
able but for the provisions of subsection (b) or (c); 
‘‘(2) the amount of the bonus or other payment; and 
‘‘(3) the amount by which the limitation set forth in the 
last sentence of section 1003(a) was exceeded as a result of 
such bonus or other payment. 
‘‘(e) REGULATIONS.—The Board of Governors may prescribe 
regulations for the administration of this section.’’.