I 
114TH CONGRESS 
2D SESSION 
H. R. 5714 
To restore the financial solvency and improve the governance of the United 
States Postal Service in order to ensure the efficient and affordable 
nationwide delivery of mail, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
JULY 11, 2016 
Mr. CHAFFETZ (for himself, Mr. CUMMINGS, Mr. MEADOWS, Mr. CONNOLLY, 
and Mr. LYNCH) introduced the following bill; which was referred to the 
Committee on Oversight and Government Reform, and in addition to the 
Committees on Energy and Commerce, and Ways and Means, for a pe-
riod to be subsequently determined by the Speaker, in each case for con-
sideration of such provisions as fall within the jurisdiction of the com-
mittee concerned 
A BILL 
To restore the financial solvency and improve the governance 
of the United States Postal Service in order to ensure 
the efficient and affordable nationwide delivery of mail, 
and for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 
(a) SHORT TITLE.—This Act may be cited as the 
‘‘Postal Service Reform Act of 2016’’. 
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(b) TABLE OF CONTENTS.—The table of contents of 
this Act is as follows: 
Sec. 1. Short title; table of contents. 
Sec. 2. Definitions. 
TITLE I—POSTAL SERVICE BENEFITS REFORM 
Sec. 101. Postal Service Health Benefits Program. 
Sec. 102. Postal Service retiree health care benefit funding reform. 
Sec. 103. Postal Service pension funding reform. 
Sec. 104. Medicare part B premium transition for newly enrolling Postal Serv-
ice annuitants and family members. 
TITLE II—POSTAL SERVICE OPERATIONS REFORM 
Sec. 201. Governance reform. 
Sec. 202. Transition to more efficient and secure mail delivery. 
Sec. 203. Modernizing postal rates. 
Sec. 204. Nonpostal services. 
Sec. 205. Efficient and flexible universal postal service. 
Sec. 206. Fair stamp-evidencing competition. 
Sec. 207. Market-dominant rates. 
Sec. 208. Completion of initial rate regulation review. 
Sec. 209. Review of Postal Service cost attribution guidelines. 
Sec. 210. Aviation security for parcels. 
Sec. 211. ZIP Codes. 
TITLE III—POSTAL SERVICE PERSONNEL 
Sec. 301. Postal Service Chief Innovation Officer. 
Sec. 302. Inspector General of the Postal Community. 
Sec. 303. Right of appeal to Merit Systems Protection Board. 
TITLE IV—POSTAL CONTRACTING REFORM 
Sec. 401. Contracting provisions. 
Sec. 402. Technical amendment to definition. 
SEC. 2. DEFINITIONS. 
In this Act— 
(1) the term ‘‘Postal Service’’ means the United 
States Postal Service; and 
(2) the term ‘‘postal retail facility’’ means a 
post office, post office branch, post office classified 
station, or other facility which is operated by the 
Postal Service, and the primary function of which is 
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to provide retail postal services, but does not include 
a contractor-operated facility offering postal services. 
TITLE I—POSTAL SERVICE 
BENEFITS REFORM 
SEC. 101. POSTAL SERVICE HEALTH BENEFITS PROGRAM. 
(a) ESTABLISHMENT.— 
(1) IN GENERAL.—Chapter 89 of title 5, United 
States Code, is amended by inserting after section 
8903b the following: 
‘‘SEC. 8903c. POSTAL SERVICE HEALTH BENEFITS PRO-
GRAM. 
‘‘(a) DEFINITIONS.—In this section— 
‘‘(1) the term ‘covered Medicare individual’ 
means an individual who is entitled to benefits under 
part A of title XVIII of the Social Security Act (42 
U.S.C. 1395c et seq.), but excluding an individual 
who is eligible to enroll under such part under sec-
tion 1818 or 1818A of the Social Security Act (42 
U.S.C. 1395i–2, 1395i–2a); 
‘‘(2) the term ‘initial contract year’ means the 
contract year beginning in January of 2018; 
‘‘(3) the term ‘initial participating carrier’ 
means a carrier that enters into a contract with the 
Office to participate in the Postal Service Health 
Benefits Program during the initial contract year; 
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‘‘(B) be available for participation by all 
Postal Service employees and Postal Service an-
nuitants, in accordance with subsection (d); 
‘‘(C) provide for enrollment in a plan as an 
individual, for self plus one, or for self and fam-
ily; and 
‘‘(D) not be available for participation by 
an individual who is not a Postal Service em-
ployee or Postal Service annuitant (except as a 
family member of such an employee or annu-
itant or as provided under paragraph (5)). 
‘‘(2) SEPARATE POSTAL SERVICE RISK POOL.— 
The Office shall ensure that each Program plan in-
cludes rates that reasonably and equitably reflect the 
cost of benefits provided to a risk pool consisting 
solely of Postal Service employees and Postal Service 
annuitants (and covered family members of such em-
ployees and annuitants), taking into specific account 
the reduction in benefits cost for the Program plan 
due to the Medicare enrollment requirements under 
subsection (e) and any savings or subsidies resulting 
from subsection (f)(1). 
‘‘(3) ACTUARIALLY EQUIVALENT COVERAGE.— 
The Office shall ensure that each carrier partici-
pating in the Postal Service Health Benefits Pro-
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gram provides coverage under the Program plans of-
fered by the carrier that is actuarially equivalent, as 
determined by the Office, to the coverage that the 
carrier provides under the health benefits plans of-
fered by the carrier under this chapter that are not 
Program plans. 
‘‘(4) APPLICABILITY OF FEDERAL EMPLOYEES 
HEALTH BENEFITS PROGRAM REQUIREMENTS.—Ex-
cept as otherwise set forth in this section, all provi-
sions of this chapter applicable to health benefits 
plans offered by the carrier under section 8903 or 
8903a shall also apply to plans offered under the 
Program. 
‘‘(5) APPLICATION
OF
CONTINUATION
COV-
ERAGE.—In accordance with rules established by the 
Office, section 8905a shall apply to health benefits 
plans offered under this section in the same manner 
as such section applies to other health benefits plans 
offered under this chapter. 
‘‘(d) ELECTION OF COVERAGE.— 
‘‘(1) IN GENERAL.—Except as provided in para-
graphs (2) and (3), each Postal Service employee 
and Postal Service annuitant who elects to receive 
health benefits coverage under this chapter— 
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‘‘(A) shall be subject to the requirements 
of this section; and 
‘‘(B) may not enroll in any other health 
benefits plan offered under any other section of 
this chapter. 
‘‘(2) ANNUITANTS.— 
‘‘(A) APPLICATION.—A Postal Service an-
nuitant shall not be subject to the requirements 
of this section if the Postal Service annuitant— 
‘‘(i) is enrolled in a health benefits 
plan under this chapter for the contract 
year immediately preceding the initial con-
tract year that is not a health benefits plan 
offered by an initial participating carrier, 
unless— 
‘‘(I) the Postal Service annuitant 
voluntarily enrolls in a Program plan; 
‘‘(II) the health benefits plan in 
which such annuitant is enrolled for 
such contract year ceases to be avail-
able; or 
‘‘(III) the health benefits plan in 
which such annuitant is enrolled for 
such contract year becomes available 
as a Program plan; or 
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‘‘(ii) resides in a geographic area for 
which there is not a Program plan in 
which the Postal Service annuitant may 
enroll. 
‘‘(B) CHANGED ENROLLMENT.—If a Post-
al Service annuitant changes enrollment to a 
health benefits plan under this chapter provided 
by a different carrier than the health benefits 
plan in which such annuitant is enrolled during 
the previous contract year, the Postal Service 
annuitant may only enroll in a Program plan. 
‘‘(3) EMPLOYEES.—A Postal Service employee 
who is enrolled in a health benefits plan under this 
chapter for the contract year immediately preceding 
the initial contract year that is not a health benefits 
plan offered by an initial participating carrier shall 
not be subject to the requirements of this section, 
except that— 
‘‘(A) if the Postal Service employee 
changes enrollment to a different health bene-
fits plan under this chapter during the open 
season for the initial contract year, or after the 
start of the initial contract year, the Postal 
Service employee may only enroll in a Program 
plan; 
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‘‘(B) if the health benefits plan in which 
such employee is enrolled for such contract year 
becomes available as a Program plan, the Post-
al Service employee may only enroll in a Pro-
gram plan; 
‘‘(C) upon becoming a Postal Service an-
nuitant, if the Postal Service employee elects to 
continue coverage under this chapter, the Post-
al Service employee shall enroll in a Program 
plan during the open season that is— 
‘‘(i) being held when the Postal Serv-
ice employee becomes a Postal Service an-
nuitant; or 
‘‘(ii) if the date on which the Postal 
Service employee becomes a Postal Service 
annuitant falls outside of an open season, 
the first open season following that date; 
and 
‘‘(D) subparagraphs (A), (B), and (C) 
shall not apply to an employee who resides in 
a geographic area for which there is not a Pro-
gram plan in which the employee may enroll. 
‘‘(e) REQUIREMENT
OF MEDICARE ENROLLMENT 
FOR ANNUITANTS AND THEIR FAMILY MEMBERS.— 
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‘‘(1) POSTAL SERVICE MEDICARE COVERED AN-
NUITANTS.—A Postal Service Medicare covered an-
nuitant subject to the requirements of this section 
may not obtain coverage under this chapter unless 
the annuitant is enrolled in part B of title XVIII of 
the Social Security Act (42 U.S.C. 1395j et seq.). 
‘‘(2) MEDICARE COVERED FAMILY MEMBERS.— 
If a family member of a Postal Service annuitant 
who is subject to the requirements of this section is 
a covered Medicare individual, the family member 
may not be covered under the Program as a family 
member of the Postal Service annuitant unless the 
family member is enrolled in part B of title XVIII 
of the Social Security Act (42 U.S.C. 1395j et seq.). 
‘‘(3) PROCESS FOR COORDINATED ELECTION OF 
ENROLLMENT UNDER MEDICARE PART B.—The Of-
fice shall establish a process under which— 
‘‘(A) Postal Service annuitants and family 
members who are subject to the requirements of 
paragraph (1) or (2)— 
‘‘(i) are informed, at the time of en-
rollment under this chapter, of such re-
quirement; and 
‘‘(ii) as a consequence of such enroll-
ment are deemed to have elected to be en-
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rolled under Medicare part B (under sec-
tion 1837(m)(1) of the Social Security 
Act) in connection with the enrollment in 
a Program plan under this chapter; and 
‘‘(B) the Office provides the Secretary of 
Health and Human Services and the Commis-
sioner of Social Security in a timely manner 
with such information respecting such annu-
itants and family members and such election as 
may be required to effect their enrollment and 
coverage under Medicare part B and this sec-
tion in a timely manner. 
‘‘(f) MEDICARE COORDINATION.— 
‘‘(1) IN
GENERAL.—The Office shall require 
each Program plan to provide benefits for covered 
Medicare individuals pursuant to the standard co-
ordination of benefits method used under this chap-
ter, rather than the exclusion method or the carve- 
out method. 
‘‘(2) MEDICARE PART D PRESCRIPTION DRUG 
BENEFITS.—The Office shall require each Program 
plan to provide prescription drug benefits for Postal 
Service annuitants and family members who are eli-
gible individuals (as defined in section 1860D– 
1(a)(3)(A) of the Social Security Act (42 U.S.C. 
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1395w–101(a)) in a form and manner that satisfies 
the requirements for a qualified retiree prescription 
drug plan under subsection (a)(2) of section 1860D– 
22 of the Social Security Act (42 U.S.C. 1395w– 
132)), for which plan a waiver or modification of re-
quirements may have been applied pursuant to sub-
section (b) of such section. For purposes of such sec-
tion, a Program plan shall then be deemed to be a 
qualified retiree prescription drug plan and the Fed-
eral Government, through the Office, shall be 
deemed the sponsor of such plan. 
‘‘(g) POSTAL SERVICE CONTRIBUTION.— 
‘‘(1) IN GENERAL.—Subject to subsection (i), 
for purposes of applying section 8906(b) to the 
Postal Service, the weighted average shall be cal-
culated in accordance with paragraphs (2) and (3). 
‘‘(2) WEIGHTED AVERAGE CALCULATION.—Not 
later than October 1 of each year (beginning with 
2017), the Office shall determine the weighted aver-
age of the rates established pursuant to subsection 
(c)(2) for Program plans that will be in effect dur-
ing the following contract year with respect to— 
‘‘(A) enrollments for self only; 
‘‘(B) enrollments for self plus one; and 
‘‘(C) enrollments for self and family. 
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‘‘(3) WEIGHTING
IN
COMPUTING
RATES
FOR 
INITIAL
CONTRACT
YEAR.—In determining such 
weighted average of the rates for the initial contract 
year, the Office shall take into account (for purposes 
of section 8906(a)(2)) the enrollment of Postal Serv-
ice employees and annuitants in the health benefits 
plans offered by the initial participating carriers as 
of March 31, 2017. 
‘‘(h) RESERVES.— 
‘‘(1) SEPARATE RESERVES.— 
‘‘(A) IN GENERAL.—The Office shall en-
sure that each Program plan maintains sepa-
rate reserves (including a separate contingency 
reserve) with respect to the enrollees in the 
Program plan in accordance with section 8909. 
‘‘(B) REFERENCES.—For purposes of the 
Program, each reference to ‘the Government’ in 
section 8909 shall be deemed to be a reference 
to the Postal Service. 
‘‘(C) AMOUNTS TO BE CREDITED.—The re-
serves (including the separate contingency re-
serve) maintained by each Program plan shall 
be credited with a proportionate amount of the 
funds in the reserves for health benefits plans 
offered by the carrier. 
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‘‘(2) DISCONTINUATION OF PROGRAM PLAN.— 
In applying section 8909(e) relating to a Program 
plan that is discontinued, the Office shall credit the 
separate Postal Service contingency reserve main-
tained under paragraph (1) for that plan only to the 
separate Postal Service contingency reserves of the 
Program plans continuing under this chapter. 
‘‘(i) NO EFFECT ON EXISTING LAW.—Nothing in 
this section shall be construed as affecting section 1005(f) 
of title 39 regarding variations, additions, or substitutions 
to the provisions of this chapter. 
‘‘(j) MEDICARE EDUCATION PROGRAM.—Not later 
than 180 days after the date of enactment of this section, 
the Postal Service shall establish a Medicare Education 
Program. Under the Program, the Postal Service shall— 
‘‘(1) notify retirees and employees of the Postal 
Service about the Postal Service Health Benefits 
Program established under subsection (c)(1); 
‘‘(2) provide information regarding the Postal 
Service Health Benefits to such retirees and employ-
ees, including a description of the health care op-
tions available under such Program, the requirement 
that retirees be enrolled in Medicare under sub-
section (e)(1), and the operation of the premium 
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transition fund to be created under section 104 of 
the Postal Service Reform Act of 2016; and 
‘‘(3) respond and provide answers to any in-
quiry from such employees and retirees about the 
Postal Service Health Benefits Program or Medicare 
enrollment.’’. 
(2) TECHNICAL
AND
CONFORMING
AMEND-
MENTS.— 
(A) Section 8903(1) of title 5, United 
States Code, is amended by striking ‘‘two levels 
of benefits’’ and inserting ‘‘2 levels of benefits 
for enrollees under this chapter generally and 2 
levels of benefits for enrollees under the Postal 
Service Health Benefits Program established 
under section 8903c’’. 
(B) The table of sections for chapter 89 of 
title 5, United States Code, is amended by in-
serting after the item relating to section 8903b 
the following: 
‘‘8903c. Postal Service Health Benefits Program.’’. 
(b) COORDINATION WITH MEDICARE.— 
(1) MEDICARE ENROLLMENT AND COVERAGE.— 
Section 1837 of the Social Security Act (42 U.S.C. 
1395p) is amended by adding at the end the fol-
lowing new subsection: 
‘‘(m)(1) In the case of an individual who— 
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‘‘(A) is (i) a Postal Service Medicare covered 
annuitant, or (ii) an individual who is a family mem-
ber of such an annuitant and is a covered Medicare 
individual; 
‘‘(B) enrolls in a Program plan under section 
8903c of title 5, United States Code; and 
‘‘(C) is not enrolled under this part, 
the individual is deemed, in accordance with section 
8903c(e)(3) of such title, to have elected to be enrolled 
under this part. 
‘‘(2) In the case of an individual who is deemed to 
be enrolled under paragraph (1), the coverage period 
under this part shall begin on the date that the individual 
first has coverage under the Program plan pursuant to 
the enrollment described in paragraph (1)(B). 
‘‘(3) The definitions in section 8903c(a) of title 5, 
United States Code, shall apply for purposes of this sub-
section.’’. 
(2) WAIVER OF INCREASE OF PREMIUM.—Sec-
tion 1839(b) of the Social Security Act (42 U.S.C. 
1395r(b)) is amended by inserting after ‘‘section 
1837’’ the following: ‘‘or pursuant to subsection (m) 
of such section’’. 
(3) CONFORMING COORDINATION OF BENEFIT 
RULES.—Section 1862(b) of the Social Security Act 
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(42 U.S.C. 1395y(b)) is amended by adding at the 
end the following: 
‘‘(10) COORDINATION
OF
BENEFITS
WITH 
POSTAL SERVICE HEALTH BENEFITS PLANS.—The 
previous provisions of this subsection are superseded 
to the extent the Secretary determines, in consulta-
tion with the Office of Personnel Management, them 
to be inconsistent with section 8903c(f) of title 5, 
United States Code.’’. 
SEC. 102. POSTAL SERVICE RETIREE HEALTH CARE BEN-
EFIT FUNDING REFORM. 
(a) CONTRIBUTIONS.—Section 8906(g) of title 5, 
United States Code, is amended— 
(1) by striking ‘‘(2)(A) The Government’’ and 
inserting ‘‘(2)(A)(i) The Government’’; and 
(2) in paragraph (2)— 
(A) in subparagraph (A)— 
(i) in clause (i), as added by para-
graph (1), by striking ‘‘shall through Sep-
tember 30, 2016, be paid’’ and all that fol-
lows and inserting the following: ‘‘shall be 
paid as provided in clause (ii).’’; and 
(ii) by adding at the end the fol-
lowing: 
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‘‘(ii) With respect to the Government contributions 
required to be paid under clause (i)— 
‘‘(I) the portion of the contributions that is 
equal to the amount of the net claims costs under 
the enrollment of the individuals described in clause 
(i) shall be paid from the Postal Service Retiree 
Health Benefits Fund up to the amount contained 
in the Fund; and 
‘‘(II) any remaining amount shall be paid by 
the United States Postal Service.’’; and 
(B) by adding at the end the following: 
‘‘(C) For purposes of this paragraph, the amount of 
the net claims costs under the enrollment of an individual 
described in subparagraph (A)(i) shall be the amount, as 
determined by the Office over any particular period of 
time, equal to the difference between— 
‘‘(i) the sum of— 
‘‘(I) the costs incurred by a carrier in pro-
viding health services to, paying for health serv-
ices provided to, or reimbursing expenses for 
health services provided to, the individual and 
any other person covered under the enrollment 
of the individual; and 
‘‘(II) an amount of indirect expenses rea-
sonably allocable to the provision, payment, or 
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reimbursement described in subclause (I), as 
determined by the Office; and 
‘‘(ii) the amount withheld from the annuity of 
the individual or otherwise paid by the individual 
under this section.’’. 
(b) POSTAL SERVICE RETIREE HEALTH BENEFITS 
FUND.—Section 8909a of title 5, United States Code, is 
amended— 
(1) in subsection (d)— 
(A) in paragraph (1), by striking ‘‘required 
under section 8906(g)(2)(A)’’ and inserting the 
following: ‘‘required to be paid from the Postal 
Service Retiree Health Benefits Fund under 
section 8906(g)(2)(A)(ii)(I)’’; 
(B) by striking paragraph (2) and insert-
ing the following: 
‘‘(2)(A) Not later than June 30, 2016, the Office 
shall compute, and by June 30 of each succeeding year, 
the Office shall recompute, a schedule including a series 
of annual installments which provide for the liquidation 
of the amount described under subparagraph (B) (regard-
less of whether the amount is a liability or surplus) by 
September 30, 2055, or within 15 years, whichever is 
later, including interest at the rate used in the computa-
tions under this subsection. 
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‘‘(B) The amount described in this subparagraph is 
the amount, as of the date on which the applicable com-
putation or recomputation under subparagraph (A) is 
made, that is equal to the difference between— 
‘‘(i) 100 percent of the Postal Service actuarial 
liability as of September 30 of the preceding fiscal 
year; and 
‘‘(ii) the value of the assets of the Postal Serv-
ice Retiree Health Benefits Fund as of September 
30 of the preceding fiscal year.’’; 
(C) in paragraph (3)— 
(i) in subparagraph (A)— 
(I) in clause (iii), by adding 
‘‘and’’ at the end; 
(II) in clause (iv), by striking the 
semicolon at the end and inserting a 
period; and 
(III) by striking clauses (v) 
through (x); and 
(ii) in subparagraph (B)— 
(I) in the matter preceding clause 
(i), by striking ‘‘2017’’ and inserting 
‘‘2016’’; 
(II) in clause (i), by striking 
‘‘paragraph (1)’’ and inserting ‘‘para-
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graph (1), except to the extent the 
payment would cause the value of the 
assets in the Fund to exceed the Post-
al Service actuarial liability’’; and 
(III) in clause (ii), by striking 
‘‘paragraph (2)(B).’’ and inserting 
‘‘paragraph (2).’’; 
(D) by amending paragraph (4) to read as 
follows: 
‘‘(4) Computations under this subsection shall be 
based on— 
‘‘(A) economic and actuarial methods and as-
sumptions consistent with the methods and assump-
tions used in determining the Postal surplus or sup-
plemental liability under section 8348(h); and 
‘‘(B) any other methods and assumptions, in-
cluding a health care cost trend rate, that the Direc-
tor of the Office determines to be appropriate.’’; and 
(E) by adding at the end the following: 
‘‘(7) In this subsection, the term ‘Postal Service actu-
arial liability’ means the difference between— 
‘‘(A) the net present value of future payments 
required to be paid from the Postal Service Retiree 
Health 
Benefits 
Fund 
under 
section 
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8906(g)(2)(A)(ii)(I) for current and future United 
States Postal Service annuitants; and 
‘‘(B) the net present value as computed under 
paragraph (1) attributable to the future service of 
United States Postal Service employees. 
‘‘(8) For purposes of computing an amount under 
paragraph (1) or (7)(A), section 8906(g)(2)(A)(ii)(I) shall 
be applied as though ‘up to the amount contained in the 
Fund’ were struck.’’; and 
(2) by adding at the end the following: 
‘‘(e) Subsections (a) through (d) of this section shall 
be subject to section 102 of the Postal Service Reform 
Act of 2016.’’. 
(c) CANCELLATION OF CERTAIN UNPAID OBLIGA-
TIONS OF THE POSTAL SERVICE.—Any obligation of the 
Postal Service under section 8909a(d)(3)(A) of title 5, 
United States Code, as in effect on the day before the date 
of enactment of this Act, that remains unpaid as of such 
date of enactment is canceled. 
(d) TECHNICAL AND CONFORMING AMENDMENT.— 
The heading of section 8909a of title 5, United States 
Code, is amended by striking ‘‘Benefit’’ and inserting 
‘‘Benefits’’. 
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SEC. 103. POSTAL SERVICE PENSION FUNDING REFORM. 
(a) CIVIL SERVICE RETIREMENT SYSTEM.—Section 
8348(h) of title 5, United States Code, is amended— 
(1) in paragraph (2), by striking subparagraphs 
(B) and (C) and inserting the following: 
‘‘(B) The Office shall redetermine the postal surplus 
or supplemental liability as of the close of the fiscal year, 
for each fiscal year beginning after September 30, 2015. 
Subject to subparagraph (C), beginning June 15, 2017, 
if the result is a surplus or a supplemental liability the 
Office shall establish an amortization schedule, including 
a series of annual installments commencing on September 
30 of the subsequent fiscal year, which provides for the 
liquidation of such surplus or liability to the Postal Service 
or the Fund (as the case may be) by September 30, 2043. 
‘‘(C) No later than June 30, 2033, the Office shall 
determine, and thereafter redetermine as necessary, but 
not more frequently than once per year, the appropriate 
date to complete the liquidation of any remaining surplus 
or liability determined under this paragraph. The deter-
mination under this subparagraph shall be set in accord-
ance with generally accepted actuarial practices and prin-
ciples and shall not be longer than a period of 15 years 
from the date on which the determination is made.’’; and 
(2) by adding at the end the following: 
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‘‘(4) For the purpose of carrying out paragraph (1), 
for fiscal year 2013 and each fiscal year thereafter, the 
Office shall use— 
‘‘(A) demographic factors specific to current 
and former employees of the United States Postal 
Service, unless such data cannot be generated; and 
‘‘(B) economic assumptions regarding wage and 
salary growth that reflect the specific past, and like-
ly future, pay for current employees of the United 
States Postal Service.’’. 
(b) FEDERAL EMPLOYEES RETIREMENT SYSTEM LI-
ABILITY ASSUMPTION REFORM.—Section 8423 of title 5, 
United States Code, is amended— 
(1) in subsection (a)— 
(A) in paragraph (1)— 
(i) in subparagraph (A)— 
(I) in clause (i), by striking ‘‘sub-
paragraph (B)),’’ and inserting ‘‘sub-
paragraph (B) or (C)),’’; and 
(II) in clause (ii), by striking 
‘‘and’’ at the end; 
(ii) in subparagraph (B)(ii), by strik-
ing the period at the end and inserting ‘‘; 
and’’; and 
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(iii) by adding at the end the fol-
lowing: 
‘‘(C) the product of— 
‘‘(i) the normal-cost percentage, as deter-
mined for employees (other than employees cov-
ered by subparagraph (B)) of the United States 
Postal Service under paragraph (5), multiplied 
by 
‘‘(ii) the aggregate amount of basic pay 
payable by the United States Postal Service, for 
the period involved, to employees of the United 
States Postal Service.’’; and 
(B) by adding at the end the following: 
‘‘(5)(A) In determining the normal-cost percentage 
for employees of the United States Postal Service for pur-
poses of paragraph (1)(C), the Office shall use— 
‘‘(i) demographic factors specific to such em-
ployees, unless such data cannot be generated; and 
‘‘(ii) economic assumptions regarding wage and 
salary growth that reflect the specific past, and like-
ly future, pay for such employees. 
‘‘(B) The United States Postal Service shall provide 
any data or projections the Office requires in order to de-
termine the normal-cost percentage for employees of the 
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United States Postal Service, consistent with subpara-
graph (A). 
‘‘(C) The Office shall review the determination of the 
normal-cost percentage for employees of the United States 
Postal Service and make such adjustments as the Office 
considers necessary— 
‘‘(i) upon request of the United States Postal 
Service, but not more frequently than once each fis-
cal year; and 
‘‘(ii) at such other times as the Office considers 
appropriate. 
‘‘(6) For the purpose of carrying out subsection 
(b)(1)(B), and consistent with paragraph (5), for fiscal 
year 2013, and each fiscal year thereafter, the Office shall 
use— 
‘‘(A) demographic factors specific to current 
and former employees of the United States Postal 
Service, unless such data cannot be generated; and 
‘‘(B) economic assumptions regarding wage and 
salary growth that reflect the specific past, and like-
ly future, pay for current employees of the United 
States Postal Service.’’; and 
(2) in subsection (b)— 
(A) by redesignating paragraph (5) as 
paragraph (6); and 
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(B) by inserting after paragraph (4) the 
following: 
‘‘(5)(A) In this paragraph, the term ‘postal funding 
surplus’ means the amount by which the amount of the 
supplemental liability computed under paragraph (1)(B) 
is less than zero. 
‘‘(B) If the amount of supplemental liability com-
puted under paragraph (1)(B) as of the close of any fiscal 
year after the date of enactment of the Postal Service Re-
form Act of 2016 is less than zero, the Office shall estab-
lish an amortization schedule, including a series of equal 
annual installments that— 
‘‘(i) provide for the liquidation of the postal 
funding surplus in 30 years, commencing on Sep-
tember 30 of the subsequent fiscal year; and 
‘‘(ii) shall be transferred to the United States 
Postal Service Fund.’’. 
SEC. 104. MEDICARE PART B PREMIUM TRANSITION FOR 
NEWLY ENROLLING POSTAL SERVICE ANNU-
ITANTS AND FAMILY MEMBERS. 
(a) IN GENERAL.—Section 1839 of the Social Secu-
rity Act (42 U.S.C. 1395r) is amended by adding at the 
end the following new subsection: 
‘‘(j) TRANSITION FOR NEWLY ENROLLING POSTAL 
SERVICE ANNUITANTS AND FAMILY MEMBERS.—With re-
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spect to each individual who is enrolled under this part 
pursuant to and during the open enrollment period estab-
lished under section 1837(m) and who is not eligible for 
Medicare 
cost-sharing 
described 
in 
section 
1905(p)(3)(A)(ii) under a State plan under title XIX, the 
premium otherwise established under this part (taking 
into account any adjustments, including those under sub-
sections (b) and (i)) for a month— 
‘‘(1) in the initial contract year (as defined in 
section 8903c(a) of title 5, United States Code), 
shall be reduced by 75 percent; 
‘‘(2) in the succeeding year, shall be reduced by 
50 percent; and 
‘‘(3) in the second succeeding year, shall be re-
duced by 25 percent.’’. 
(b) FUNDING THROUGH POSTAL SERVICE FUND.— 
Section 1844 of the Social Security Act (42 U.S.C. 
1395w) is amended— 
(1) in the last sentence of subsection (a), by 
striking ‘‘under subsection (d)(1) with respect to en-
rollees described in subparagraphs (A) and (B) of 
such subsection’’ and inserting ‘‘under subsections 
(d)(1) and (d)(4) with respect to enrollees described 
in subparagraphs (A) and (B) of such respective 
subsection’’; and 
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(2) in subsection (d), by adding at the end the 
following new paragraph: 
‘‘(4) For each year, there shall be transferred from 
the Postal Service Fund to the Trust Fund an amount, 
as estimated by the Chief Actuary of the Centers for Medi-
care & Medicaid Services, equal to the reduction in aggre-
gate premiums payable under this part for a month in 
such year that is attributable to the application of section 
1839(j) with respect to— 
‘‘(A) enrollees age 65 and over; and 
‘‘(B) enrollees under age 65. 
Such amounts shall be transferred from time to time as 
appropriate but, to the extent practicable, on an annual 
basis and in a manner that places the Trust Fund in the 
same actuarial status as if this paragraph and section 
1839(j) did not apply.’’. 
TITLE II—POSTAL SERVICE 
OPERATIONS REFORM 
SEC. 201. GOVERNANCE REFORM. 
(a) BOARD OF GOVERNORS.— 
(1) IN
GENERAL.—Section 202 of title 39, 
United States Code, is amended to read as follows: 
‘‘§ 202. Board of Governors 
‘‘(a) IN GENERAL.—There is established in the Post-
al Service a Board of Governors composed of 5 Governors, 
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a Postmaster General, and a Deputy Postmaster General, 
all of whom shall be appointed in accordance with this sec-
tion. The Governors shall have the power to— 
‘‘(1) exercise the powers of the Postal Service, 
consistent with section 203(c); 
‘‘(2) appoint, fix the term of service of, and re-
move the Postmaster General; 
‘‘(3) in consultation with the Postmaster Gen-
eral, appoint, fix the term of service of, and remove 
the Deputy Postmaster General; 
‘‘(4) set the strategic direction of postal oper-
ations and approve the pricing and product strategy 
for the Postal Service; 
‘‘(5) set the compensation of the Postmaster 
General and the Deputy Postmaster General in ac-
cordance with private sector best practices, as deter-
mined by the Governors pursuant to section 3686; 
and 
‘‘(6) carry out any other duties specifically pro-
vided for in this title. 
‘‘(b) APPOINTMENT; PAY.— 
‘‘(1) IN GENERAL.—The Governors shall be ap-
pointed by the President, by and with the advice and 
consent of the Senate, not more than 3 of whom 
may be adherents of the same political party. The 
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Governors shall elect a Chair from among their 
members. The Governors shall represent the public 
interest generally, and shall be chosen solely on the 
basis of their experience in the field of public admin-
istration, law, or accounting, or on their dem-
onstrated ability in managing organizations or cor-
porations (in either the public or private sector) of 
substantial size, except that at least 3 of the Gov-
ernors shall be chosen solely on the basis of their 
demonstrated ability in managing organizations or 
corporations (in either the public or private sector) 
that employ at least 10,000 employees. The Gov-
ernors shall not be representatives of specific inter-
ests using the Postal Service, and may be removed 
only for cause. 
‘‘(2) COMPENSATION.—Each Governor shall re-
ceive a salary of $30,000 a year plus $300 a day for 
not more than 42 days of meetings each year and 
shall be reimbursed for travel and reasonable ex-
penses incurred in attending meetings of the Board. 
Nothing in the preceding sentence shall be construed 
to limit the number of days of meetings each year 
to 42 days. 
‘‘(3) CONSULTATION.—In selecting the individ-
uals described in paragraph (1) for nomination for 
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appointment to the position of Governor, the Presi-
dent should consult with the Speaker of the House 
of Representatives, the minority leader of the House 
of Representatives, the majority leader of the Sen-
ate, and the minority leader of the Senate. 
‘‘(c) TERMS OF GOVERNORS.— 
‘‘(1) IN GENERAL.—The terms of the 5 Gov-
ernors shall be 7 years, except that the terms of the 
5 Governors first taking office shall expire as des-
ignated by the President at the time of appointment, 
1 at the end of 1 year, 1 at the end of 2 years, 1 
at the end of 3 years, 1 at the end of 4 years, and 
1 at the end of 5 years, following the appointment 
of the first of them. Any Governor appointed to fill 
a vacancy before the expiration of the term for 
which the Governor’s predecessor was appointed 
shall serve for the remainder of such term. A Gov-
ernor may continue to serve after the expiration of 
the Governor’s term until his successor has quali-
fied, but not to exceed one year. 
‘‘(2) LIMITATION.—No individual may serve 
more than 2 terms as a Governor. 
‘‘(d) STAFF.—The Chair of the Board of Governors 
shall ensure that the Board has appropriate independent 
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staff to carry out the roles and responsibilities of the 
Board.’’. 
(2) APPLICATION.—Any individual serving as a 
Governor on the Board of Governors of the Postal 
Service on the date of enactment of this Act shall 
continue to serve as a Governor until the term appli-
cable to such individual expires (as determined 
under section 202(b) of title 39, United States Code, 
as in effect before the amendments made by this 
section take effect pursuant to subsection (g)). 
(b) POSTMASTER GENERAL.— 
(1) IN
GENERAL.—Section 203 of title 39, 
United States Code, is amended to read as follows: 
‘‘§ 203. Postmaster General 
‘‘(a) IN GENERAL.—The chief executive officer of the 
Postal Service is the Postmaster General, appointed pur-
suant to section 202(a)(1). The alternate chief executive 
officer of the Postal Service is the Deputy Postmaster 
General, appointed pursuant to section 202(a)(2) of this 
title. 
‘‘(b) POWERS.—Consistent with the requirements of 
this title, the exercise of the power of the Postal Service 
shall be vested in the Governors and carried out by the 
Postmaster General in a manner consistent with the stra-
tegic direction and pricing and product strategy approved 
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by the Governors. The Postmaster General shall consult 
with the Governors and the Deputy Postmaster General 
in carrying out such power.’’. 
(2) CONFORMING AMENDMENT.—The item re-
lating to section 203 in the table of sections for 
chapter 2 of title 39, United States Code, is amend-
ed to read as follows: 
‘‘203. Postmaster General.’’. 
(c) PROCEDURES OF THE BOARD.—Section 205 of 
title 39, United States Code, is amended to read as fol-
lows: 
‘‘§ 205. Procedures of the Board of Governors 
‘‘(a) VACANCIES.—Vacancies in the Board shall not 
impair the powers of the Board under this title. 
‘‘(b) VOTE.—The Board shall act upon majority vote 
of those members who are present, subject to such quorum 
requirements as the Board may establish. 
‘‘(c) LIMITATION.—No officer or employee of the 
United States may serve concurrently as a Governor. A 
Governor may hold any other office or employment not 
inconsistent or in conflict with the Governor’s duties, re-
sponsibilities, and powers as an officer of the Government 
of the United States in the Postal Service.’’. 
(d) DELEGATION OF AUTHORITY.—Section 402 of 
title 39, United States Code, is amended to read as fol-
lows: 
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‘‘§ 402. Delegation of authority 
‘‘(a) POSTMASTER GENERAL.—The Postmaster Gen-
eral may delegate his or her authority under such terms, 
conditions, and limitations, including the power of redele-
gation, as he or she determines desirable. The Postmaster 
General may establish such committees of officers and em-
ployees of the Postal Service, and delegate such powers 
to any committee, as the Postmaster General determines 
appropriate to carry out his or her functions and duties. 
Delegations under this section shall be consistent with 
other provisions of this title, shall not relieve the Post-
master General of full responsibility for the carrying out 
the Postmaster General’s duties and functions, and shall 
be revocable by the Postmaster General. 
‘‘(b) BOARD OF GOVERNORS.—The Board may estab-
lish such committees of the Board, and delegate such pow-
ers to any committee, as the Board determines appro-
priate to carry out its functions and duties. Delegations 
to committees shall be consistent with other provisions of 
this title, shall not relieve the Board of full responsibility 
for the carrying out of its duties and functions, and shall 
be revocable by the Board in its exclusive judgment.’’. 
(e) INTERNATIONAL POSTAL ARRANGEMENTS.— 
(1) IN
GENERAL.—Section 407 of title 39, 
United States Code, is amended by adding at the 
end the following: 
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‘‘(f) After submission to the Postal Regulatory Com-
mission by the Department of State of the budget detail-
ing the estimated costs of carrying out the activities under 
this section, and the Commission’s review and approval 
of such submission, the Postal Service shall transfer to 
the Department of State, from any funds available to the 
Postal Service, such sums as may be reasonable, docu-
mented, and auditable for the Department of State to 
carry out such activities.’’. 
(2) APPLICATION.—The amendment made by 
paragraph (1) shall take effect on October 1 of the 
first fiscal year beginning after the date of enact-
ment of this Act. 
(3) CONFORMING
AMENDMENT.—Section 633 
of title VI of the Treasury and General Government 
Appropriations Act, 1999 (Public Law 105–277; 39 
U.S.C. 407 note) is amended by striking subsection 
(d). 
(f) TECHNICAL AND CONFORMING AMENDMENTS.— 
Title 39, United States Code, is amended as follows: 
(1) In section 102(3)— 
(A) by striking ‘‘9 members’’ and inserting 
‘‘5 members’’; and 
(B) by striking ‘‘section 202(a)’’ and in-
serting ‘‘section 202(b)(1)’’. 
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(2) In section 204— 
(A) by striking ‘‘the Board’’ and inserting 
‘‘the Postmaster General’’; and 
(B) by striking ‘‘the Governors and’’. 
(3) In section 207, by striking ‘‘the Board’’ and 
inserting ‘‘the Postal Service’’. 
(4) In section 414(b)(2), by striking ‘‘the Gov-
ernors’’ in each instance it appears and inserting 
‘‘the Postal Service’’. 
(5) In section 416(c)— 
(A) by striking ‘‘the Governors’’ and in-
serting ‘‘the Postal Service’’; and 
(B) by striking ‘‘they’’ and inserting ‘‘the 
Postal Service’’. 
(6) In section 1011, by striking ‘‘the Board’’ 
and inserting ‘‘the Postal Service’’. 
(7) By striking section 2402 and inserting the 
following: 
‘‘§ 2402. Annual report 
‘‘The Postmaster General shall render an annual re-
port concerning the operations of the Postal Service under 
this title to the President and Congress.’’. 
(8) In section 3632— 
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(A) by striking the section heading, and in-
serting ‘‘Establishment of rates and 
classes of competitive products’’; 
(B) by striking subsection (a) and redesig-
nating subsections (b) and (c) as (a) and (b), 
respectively; 
(C) in paragraph (a)(2) (as redesignated 
by subparagraph (B)), by striking ‘‘and the 
record of the Governors’ proceedings in connec-
tion with such decision’’; 
(D) in paragraph (a)(3) (as redesignated 
by subparagraph (B))— 
(i) by striking ‘‘and the record of the 
proceedings in connection with such deci-
sion’’; and 
(ii) by striking ‘‘the Governors con-
sider’’ and inserting ‘‘the Postal Service 
considers’’; and 
(E) by striking ‘‘the Governors’’ in each 
instance it appears and inserting ‘‘the Postal 
Service’’. 
(9) The table of sections for chapter 36 of title 
39, United States Code, is amended by striking the 
item relating to section 3632 and inserting the fol-
lowing: 
‘‘3632. Establishment of rates and classes of competitive products.’’. 
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(g) DELAYED EFFECTIVE DATE.—The amendments 
made by this section shall take effect upon the date that 
is 30 days after the date of enactment of this Act. 
SEC. 202. TRANSITION TO MORE EFFICIENT AND SECURE 
MAIL DELIVERY. 
(a) IN GENERAL.—Subchapter VII of chapter 36 of 
title 39, United States Code, is amended by adding at the 
end the following: 
‘‘§ 3692. Delivery-point modernization 
‘‘(a) DEFINITIONS.—For purposes of this section— 
‘‘(1) the term ‘delivery point’ means a mailbox 
or other receptacle to which mail is delivered; 
‘‘(2) the term ‘primary mode of mail delivery’ 
means the typical method by which the Postal Serv-
ice delivers letter mail to the delivery point of a 
postal patron; 
‘‘(3) the term ‘door delivery’ means a primary 
mode of mail delivery whereby mail is placed into a 
slot or receptacle at or near the postal patron’s door 
or is hand delivered to a postal patron, but does not 
include centralized delivery, curbside delivery, or 
sidewalk delivery; 
‘‘(4) the term ‘centralized delivery’ means a pri-
mary mode of mail delivery whereby mail receptacles 
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of a number of delivery points are grouped or clus-
tered at a single location; 
‘‘(5) the term ‘curbside delivery’ means a pri-
mary mode of mail delivery whereby a mail recep-
tacle is situated at the edge of a sidewalk abutting 
a road or curb, at a road, or at a curb, and can be 
served by a letter carrier from a motorized vehicle; 
and 
‘‘(6) the term ‘sidewalk delivery’ means a pri-
mary mode of mail delivery whereby a mail recep-
tacle is situated at the edge of a sidewalk and can 
be served by a letter carrier from the sidewalk. 
‘‘(b) POLICY.—It shall be the policy of the Postal 
Service— 
‘‘(1) to provide access to secure, convenient 
mail and package delivery receptacles to the greatest 
number of postal patrons feasible; and 
‘‘(2) to use the most cost-effective primary 
mode of mail delivery feasible for postal patrons. 
‘‘(c) PHASEOUT OF DOOR DELIVERY FOR NEW AD-
DRESSES.—For any new delivery point established after 
December 31, 2016, the Postal Service shall provide a pri-
mary mode of mail delivery other than door delivery, with 
a preference for secure, centralized delivery. 
‘‘(d) BUSINESS ADDRESS CONVERSION.— 
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‘‘(1) IDENTIFICATION.—Not later than 1 year 
after the date of the Postal Service Reform Act of 
2016, each Postal Service district office shall iden-
tify the business delivery points within its service 
area that are appropriate candidates for conversion 
from door delivery to centralized delivery, curbside 
delivery, or sidewalk delivery. 
‘‘(2) CONVERSION
REQUIREMENT.—Beginning 
not later than October 1, 2017, the Postal Service 
shall implement a program to convert delivery points 
identified under paragraph (1) to centralized deliv-
ery, curbside delivery, or sidewalk delivery at a rate 
sufficient to ensure that— 
‘‘(A) not less than 20 percent of such de-
livery points are converted by September 30, 
2018; 
‘‘(B) not less than 40 percent of such de-
livery points are converted by September 30, 
2019; 
‘‘(C) not less than 60 percent of such de-
livery points are converted by September 30, 
2020; 
‘‘(D) not less than 80 percent of such de-
livery points are converted by September 30, 
2021; and 
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‘‘(E) all such delivery points are converted 
by September 30, 2022. 
‘‘(3) NOTIFICATION.—In carrying out conver-
sions under paragraph (2), the Postal Service shall 
provide written notice at least 60 days in advance of 
the implementation date of a change in primary 
mode of mail delivery to postal customers served by 
an applicable delivery point. 
‘‘(e) RESIDENTIAL ADDRESS CONVERSION.— 
‘‘(1) IDENTIFICATION.—Not later than 1 year 
after the date of the enactment of the Postal Service 
Reform Act of 2016, each Postal Service district of-
fice shall identify the residential delivery points with-
in its service area that are appropriate candidates 
for conversion from door delivery to centralized de-
livery, curbside delivery, or sidewalk delivery. 
‘‘(2) VOLUNTARY CONVERSION.—Not later than 
October 1, 2017, the Postal Service shall commence 
a program to convert delivery points identified under 
paragraph (1) to centralized delivery, curbside deliv-
ery, or sidewalk delivery. Such program shall operate 
as follows: 
‘‘(A) Not later than 3 months after the 
identification of the delivery points under para-
graph (1), the Postal Service shall divide such 
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delivery points into geographically based ad-
dress units (such as street blocks or other simi-
lar reasonably segregable units) not to exceed 
50 delivery points per unit. 
‘‘(B) Not later than 6 months after such 
identification, the Postal Service shall provide 
written notification to postal patrons served by 
each identified delivery point containing the fol-
lowing: 
‘‘(i) Notice that the delivery point has 
been proposed for conversion to a more ef-
ficient primary mode of mail delivery to 
more economically provide universal postal 
service and improve service. 
‘‘(ii) A description of the new primary 
mode of delivery proposed by the Postal 
Service and a visual example of such mode. 
‘‘(iii) A conversion consent form and 
notice that conversion for residential ad-
dresses is on a voluntary basis. 
‘‘(iv) A description of benefits of con-
version to the postal patron, including ac-
cess to secure mail and package delivery, 
and benefits of conversion to the Postal 
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Service, including a smaller environmental 
impact for delivery. 
‘‘(v) A description of how the conver-
sion process would work, and the monetary 
costs (if any) to the postal patron. 
‘‘(vi) Any other information the Postal 
Service considers necessary. 
‘‘(C) No delivery point may be converted 
under this subsection unless prior written con-
sent is provided to the Postal Service by a post-
al patron served by such delivery point who is 
at least 18 years old. Prior to the conversion of 
a delivery point under this section, any written 
consent so provided may be withdrawn by such 
patron or by any other postal patron served by 
such delivery point who is at least 18 years old 
upon written notification to the Postal Service. 
The Postal Service shall place on the Postal 
Service’s public Web site an option to request 
that a consent form or consent-withdrawal form 
be delivered to any delivery point identified for 
conversion under this subsection. 
‘‘(D) Upon the receipt of written consent 
applicable to at least 40 percent of the delivery 
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points within an address unit described under 
subparagraph (A), the Postal Service shall— 
‘‘(i) not later than 30 days after the 
date that the requisite percentage is 
reached, provide written notice to each de-
livery point within such unit stating that 
the conversion threshold has been reached 
and that— 
‘‘(I) with respect to any delivery 
point for which a consent for conver-
sion was received, that the primary 
mode of mail delivery for such address 
will be converted; and 
‘‘(II) with respect to any delivery 
point for which a consent for conver-
sion was not received, that— 
‘‘(aa) a postal patron served 
by such delivery point may elect, 
by written consent, at any time 
to convert the primary mode of 
mail delivery to the same form of 
delivery as the converted delivery 
points in such unit; and 
‘‘(bb) if such a patron pro-
vides such consent, the primary 
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mode of mail delivery shall be 
converted not later than 30 days 
after the date of such consent or, 
in any case where the conversion 
of delivery points has not yet oc-
curred, upon implementation of 
that conversion; 
‘‘(ii) not later than 90 days after the 
date that the requisite percentage is 
reached, but not less than 30 days fol-
lowing the written notice under clause (i), 
convert the delivery points for which con-
sent was received to the applicable new pri-
mary mode of mail delivery; and 
‘‘(iii) following the conversion of an 
address unit, ensure that the primary 
mode of mail delivery for any new resi-
dents to the address unit is the converted 
primary mode of mail, regardless of the 
primary mode of mail delivery for the pre-
vious occupant. 
‘‘(f) CONSIDERATIONS.—In making a determination 
to convert the primary mode of mail delivery under this 
section, the Postal Service shall consider— 
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‘‘(1) the impact of weather conditions, physical 
barriers, or any other factor that may impact the 
feasibility of providing a primary mode of mail deliv-
ery other than door delivery (such as a factor that 
may significantly reduce the potential cost savings 
associated with providing centralized delivery or 
curbside delivery); 
‘‘(2) whether the address is in a registered his-
toric district (as that term is defined in section 
47(c)(3)(B) of the Internal Revenue Code of 1986), 
is listed on the National Register of Historic Places, 
is designated as a National Historic Landmark, or 
is of historic value; and 
‘‘(3) population density and the concentration 
of poverty. 
‘‘(g) WAIVER FOR PHYSICAL HARDSHIP.— 
‘‘(1) IN GENERAL.—The Postal Service shall es-
tablish and maintain a waiver program under which, 
upon application, door delivery may be continued, or 
provided, for a delivery point identified under sub-
section (d)(1) or (e)(1) at no cost to the applicant 
in any case in which— 
‘‘(A) centralized delivery, curbside delivery, 
or sidewalk delivery would, but for this para-
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graph, otherwise be the primary mode of mail 
delivery; and 
‘‘(B) door delivery is necessary in order to 
avoid causing significant physical hardship or 
physical safety risks to a postal patron. 
‘‘(2) TREATMENT OF WAIVER.—An address re-
ceiving door delivery pursuant to a waiver under this 
subsection— 
‘‘(A) shall be counted, for purposes of the 
reporting requirement under subsection (j), as 
an address that receives the primary mode of 
mail delivery which the address would be sub-
ject to if not for the waiver; and 
‘‘(B) shall, not later than 60 days after 
ceasing to meet the requirements of paragraph 
(1), be converted to the primary mode of mail 
delivery which is otherwise applicable. 
‘‘(h) PROCEDURES.—In carrying out conversions 
under this section, the Postal Service shall establish proce-
dures to— 
‘‘(1) solicit, consider, and respond to input from 
the general public, postal patrons, State and local 
governments, local associations, and property own-
ers; 
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‘‘(2) calculate and make publicly accessible the 
cost or savings of the conversion to the Postal Serv-
ice as well as the average conversion cost or savings 
to each postal patron and any cost or savings to the 
State and local government; and 
‘‘(3) place centralized delivery points in loca-
tions that maximize delivery efficiency, ease of use 
for postal patrons, and respect for private property 
rights. 
‘‘(i) VOUCHER PROGRAM.—The Postal Service shall 
provide for a voucher program under which, upon applica-
tion, the Postal Service may defray all or any portion of 
the costs associated with conversion from door delivery 
under this section which would otherwise be borne by post-
al patrons. 
‘‘(j) ANNUAL REPORT.—Not later than 60 days after 
the end of each of fiscal years 2017 through 2023, the 
Postal Service shall submit to Congress and the Inspector 
General a report on the implementation of this section 
during the most recently completed fiscal year. Each such 
report shall include— 
‘‘(1) the number of residential and business ad-
dresses that— 
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‘‘(A) receive door delivery as of the end of 
the fiscal year preceding the most recently com-
pleted fiscal year; 
‘‘(B) receive door delivery as of the end of 
the most recently completed fiscal year; and 
‘‘(C) during the most recently completed 
fiscal year, were converted from door delivery 
to— 
‘‘(i) centralized delivery; 
‘‘(ii) curbside delivery; and 
‘‘(iii) any other primary mode of mail 
delivery; 
‘‘(2) the estimated cost savings from the con-
versions described in paragraph (1)(C); 
‘‘(3) a description of the progress made by the 
Postal Service toward meeting the requirements of 
the phaseout under subsection (c); and 
‘‘(4) any other information which the Postal 
Service considers appropriate. 
‘‘(k) INSPECTOR GENERAL AUDIT.—The Inspector 
General shall issue an annual audit report on the imple-
mentation of this section not later than 90 days after the 
date on which the Postal Service releases its annual report 
under subsection (j). Such report shall include— 
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‘‘(1) an audit of the data contained in the Post-
al Service’s report under subsection (j); and 
‘‘(2) an evaluation of the Postal Service’s imple-
mentation of the voucher program under subsection 
(i). 
‘‘(l) REVIEW.—Subchapters IV and V shall not apply 
with respect to any action taken by the Postal Service 
under this section.’’. 
(b) CLERICAL AMENDMENT.—The table of sections 
for chapter 36 of title 39, United States Code, is amended 
by adding after the item relating to section 3691 the fol-
lowing: 
‘‘3692. Delivery-point modernization.’’. 
(c) UPDATED DELIVERY COST DATA.— 
(1) STUDY.—Not later than 180 days after the 
date of the enactment of this Act, the Postal Service 
shall begin to collect data on delivery mode costs and 
the potential savings of converting to more cost-effi-
cient primary modes of mail delivery. 
(2) REPORT.—Not later than 2 years after the 
date of enactment of this Act, the Postal Service 
shall submit a report to the Committee on Oversight 
and Government Reform of the House of Represent-
atives and the Committee on Homeland Security and 
Governmental Affairs of the Senate describing the 
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findings of the study conducted under paragraph 
(1). 
(d) INSPECTOR GENERAL REVIEW OF COSTS AND 
BENEFITS OF DELIVERY POINT CONVERSIONS.— 
(1) STUDY.—Not later than 2 years after the 
date on which the Postal Service commences delivery 
point conversions pursuant to subsections (d)(2) and 
(e)(2) of section 3692 of title 39, United States 
Code (as added by subsection (a)), and not later 
than 3 years thereafter, the Inspector General of the 
Postal Community shall conduct a study of the costs 
and benefits of such conversions. 
(2) REPORT.—Not later than 1 year after the 
date on which the Inspector General conducts each 
study required under paragraph (1), the Inspector 
General shall submit to the Committee on Homeland 
Security and Governmental Affairs of the Senate 
and the Committee on Oversight and Government 
Reform of the House of Representatives a report on 
the results of each study. 
(3) CONTENT.—The studies required under 
paragraph (1) shall assess the following: 
(A) The cost savings realized by the Postal 
Service from the conversions under subsections 
(d)(2) and (e)(2) of section 3692 of title 39, 
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United States Code (as added by subsection 
(a)), and the projected cost savings the Postal 
Service is likely to realize from full implementa-
tion of such conversions. 
(B) The expenses incurred by the Postal 
Service to achieve such conversions and the pro-
jected expenses the Postal Service is likely to 
incur from full implementation of such conver-
sions. 
(C) The impact of the conversions on— 
(i) response rates to mailed adver-
tising; 
(ii) advertising revenue earned by the 
Postal Service; 
(iii) small businesses, including small 
home-based businesses; and 
(iv) mail volumes shipped through the 
Postal Service. 
(D) Any other factors the Inspector Gen-
eral considers relevant to provide a complete 
analysis of the costs and benefits associated 
with the conversions described under such sub-
sections. 
(4) NET
COST
BENEFIT
ANALYSIS.—The In-
spector General shall conduct a cost benefit analysis 
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to determine the net cost or benefit to the Postal 
Service of the conversions conducted under such 
subsections and include the analysis in each report 
submitted under paragraph (2). 
SEC. 203. MODERNIZING POSTAL RATES. 
(a) ADEQUACY, EFFICIENCY, AND FAIRNESS
OF 
POSTAL RATES.— 
(1) OBJECTIVES.—Section 3622(b) of title 39, 
United States Code, is amended— 
(A) in paragraph (2), by inserting ‘‘and 
ensure’’ after ‘‘create’’; 
(B) in paragraph (3)— 
(i) by inserting ‘‘and meet’’ after 
‘‘maintain’’; and 
(ii) by inserting ‘‘, with a focus on 
achieving predictable and consistent deliv-
ery’’ before the period at the end; 
(C) in paragraph (5), by inserting ‘‘estab-
lish and’’ before ‘‘maintain’’; 
(D) in paragraph (6), by striking ‘‘proc-
ess’’ and inserting ‘‘and cost allocation proc-
esses’’; and 
(E) in paragraph (9), by inserting ‘‘(and to 
ensure appropriate levels of transparency)’’ be-
fore the period at the end. 
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‘‘SEC. 8M. SPECIAL PROVISIONS CONCERNING THE UNITED 
STATES POSTAL SERVICE AND POSTAL REGU-
LATORY COMMISSION. 
‘‘(a) OFFICE OF INSPECTOR GENERAL OF THE POST-
AL COMMUNITY.—The Inspector General for the United 
States Postal Service and the Postal Regulatory Commis-
sion shall be referred to as the ‘Inspector General of the 
Postal Community’. 
‘‘(b) RESPONSIBILITIES.—In carrying out the duties 
and responsibilities specified in this Act, the Inspector 
General of the Postal Community shall have equal respon-
sibility over the United States Postal Service and the Post-
al Regulatory Commission. 
‘‘(c) APPLICABLE HEAD OF THE ESTABLISHMENT.— 
For purposes of the applicability of this Act to the Inspec-
tor General of the Postal Community— 
‘‘(1) the ‘head of the establishment’ shall mean 
the Postmaster General of the United States for ac-
tivities by the Office related to the United States 
Postal Service; and 
‘‘(2) the ‘head of the establishment’ shall mean 
the Chairman of the Postal Regulatory Commission 
for activities by the Office related to the Postal Reg-
ulatory Commission. 
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