I
105TH CONGRESS
1ST SESSION
H. R. 22
To reform the postal laws of the United States.
IN THE HOUSE OF REPRESENTATIVES
JANUARY 7, 1997
Mr. MCHUGH introduced the following bill; which was referred to the
Committee on Government Reform and Oversight
A BILL
To reform the postal laws of the United States.
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 Reform Act of 1997’’.
(b) TABLE OF CONTENTS.—The table of contents for
this Act is as follows:
Sec. 1. Short title; table of contents.
TITLE I—ORGANIZATION
Sec. 101. Redesignations relating to the Governors and the Board of
Governors.
Sec. 102. Redesignations relating to the Postmaster General and the Deputy
Postmaster General.
Sec. 103. Clarification relating to execution of amendments.
TITLE II—GENERAL AUTHORITY
Sec. 201. Employment of postal police officers.
Sec. 202. Date of postmark to be treated as date of appeal in connection with
the closing or consolidation of post offices.
TITLE III—PRESIDENTIAL POSTAL EMPLOYEE-MANAGEMENT
COMMISSION
Sec. 301. Presidential Postal Employee-Management Commission.
TITLE IV—FINANCE
Sec. 401. End of Treasury control of Postal Service banking.
Sec. 402. Postal Service investments.
Sec. 403. Exclusion from Federal Financing Bank.
Sec. 404. Elimination of Treasury preemption of borrowing by the Postal
Service.
Sec. 405. Elimination of Postal Service ‘‘put’’ on Treasury.
TITLE V—BUDGET AND APPROPRIATIONS PROCESS
Sec. 501. Repeal of provision relating to transitional appropriations.
Sec. 502. Provisions relating to benefits under chapter 81 of title 5, United
States Code, for officers and employees of the former Post
Office Department.
Sec. 503. Repeal of authorizations of appropriations for public service costs,
revenue forgone, and certain compensatory appropriations.
Sec. 504. Congressional oversight preserved.
TITLE VI—MISCELLANEOUS PROVISIONS RELATING TO POSTAL
RATES, CLASSES, AND SERVICES
Sec. 601. Change-of-address order involving a commercial mail receiving
agency.
Sec. 602. Rates for mail under former section 4358.
Sec. 603. Powers of the Postal Rate Commission.
Sec. 604. Volume discounts.
TITLE VII—PROVISIONS RELATING TO THE TRANSPORTATION,
CARRIAGE, OR DELIVERY OF MAIL
Sec. 701. Obsolete provisions.
Sec. 702. Expanded contracting authority.
Sec. 703. Private carriage of letters.
Sec. 704. Mailbox demonstration project.
TITLE VIII—DIRECT APPEAL OF DECISIONS OF THE MERIT
SYSTEMS PROTECTION BOARD
Sec. 801. Direct appeal of decisions of the Merit Systems Protection Board.
TITLE IX—LAW ENFORCEMENT
Subtitle A—Amendments to Title 39, United States Code
Sec. 901. Make Federal assault statutes applicable to postal contract
employees.
Sec. 902. Sexually oriented advertising.
Sec. 903. Allow Postal Service to retain asset forfeiture recoveries.
Sec. 904. Hazardous matter.
Subtitle B—Other Provisions
Sec. 911. Stalking Federal officers and employees.
Sec. 912. Nonmailability of controlled substances.
Sec. 913. Enhanced penalties.
Sec. 914. Postal burglary provisions.
Sec. 915. Mail, money, or other property of the United States.
TITLE X—NEW SYSTEM RELATING TO POSTAL RATES, CLASSES,
AND SERVICES
Sec. 1001. Establishment.
Sec. 1002. Termination of ratemaking authority under chapter 36 and related
matters.
TITLE I—ORGANIZATION
SEC. 101. REDESIGNATIONS RELATING TO THE GOVERNORS
AND THE BOARD OF GOVERNORS.
(a) REFERENCES IN TITLE 39.—Title 39, United
States Code, is amended—
(1) by striking ‘‘Board of Governors’’ each
place it appears and inserting ‘‘Board of Directors’’;
(2) by striking ‘‘Governors’’ each place it ap-
pears (except wherever it appears in ‘‘Board of Gov-
ernors’’) and inserting ‘‘Directors’’; and
(3) by striking ‘‘Governor’’ each place it ap-
pears and inserting ‘‘Director’’.
(b) REFERENCES OUTSIDE TITLE 39.—Any ref-
erence in any provision of law outside title 39, United
States Code, enacted before the date of the enactment of
this Act—
(1) to the Board of Governors, within the
meaning of section 102(2) of title 39, United States
Code, as in effect before the date of the enactment
of this Act, shall be treated as referring to the
Board of Directors, within the meaning of such sec-
tion 102(2), as amended by subsection (a); or
(2) to any of the Governors, within the meaning
of section 102(3) of title 39, United States Code, as
in effect before the date of the enactment of this
Act, shall be treated as referring to the correspond-
ing Director or Directors, within the meaning of
such section 102(3), as amended by subsection (a).
SEC. 102. REDESIGNATIONS RELATING TO THE POST-
MASTER GENERAL AND THE DEPUTY POST-
MASTER GENERAL.
(a) IN GENERAL.—(1) Section 202(c) of title 39,
United States Code, is amended by striking ‘‘Postmaster
General’’ and inserting ‘‘Chief Executive Officer of the
United States Postal Service’’.
(2) Section 202(d) of such title 39 is amended by
striking ‘‘Deputy Postmaster General’’ and inserting
‘‘Deputy Chief Executive Officer of the United States
Postal Service’’.
(3) Section 102 of such title 39 is amended by strik-
ing ‘‘and’’ at the end of paragraph (2), by striking the
period at the end of paragraph (3) and inserting a semi-
colon, and by adding after paragraph (3) the following:
‘‘(4) ‘Chief Executive Officer’, unless the con-
text otherwise requires, means the Chief Executive
Officer of the United States Postal Service ap-
pointed under section 202(c); and
‘‘(5) ‘Deputy Chief Executive Officer’, unless
the context otherwise requires, means the Deputy
Chief Executive Officer of the United States Postal
Service appointed under section 202(d).’’.
(b) OTHER REFERENCES IN TITLE 39.—Title 39,
United States Code, is further amended—
(1) by striking ‘‘Postmaster General’’ each
place it appears (except wherever it appears in
‘‘Deputy Postmaster General’’) and inserting ‘‘Chief
Executive Officer’’; and
(2) by striking ‘‘Deputy Postmaster General’’
each place it appears and inserting ‘‘Deputy Chief
Executive Officer’’.
(c) REFERENCES OUTSIDE TITLE 39.—Any ref-
erence in any provision of law outside title 39, United
States Code, enacted before the date of the enactment of
this Act—
(1) to the Postmaster General shall be treated
as referring to the Chief Executive Officer of the
United States Postal Service; and
(2) to the Deputy Postmaster General shall be
treated as referring to the Deputy Chief Executive
Officer of the United States Postal Service.
SEC. 103. CLARIFICATION RELATING TO EXECUTION OF
AMENDMENTS.
Any amendment made in this title to a term ‘‘each
place it appears’’ (or other words to the same effect) shall
be considered to include such term when it appears in a
table of contents or a section heading.
TITLE II—GENERAL AUTHORITY
SEC. 201. EMPLOYMENT OF POSTAL POLICE OFFICERS.
Section 404 of title 39, United States Code, is
amended by adding at the end the following:
‘‘(c)(1) The Postal Service may employ guards for all
buildings and areas owned or occupied by the Postal Serv-
ice or under the charge and control of the Postal Service,
and such guards shall have, with respect to such property,
the powers of special policemen provided by the first sec-
tion of the Act cited in paragraph (2), and, as to such
property, the Chief Executive Officer (or his designee)
may take any action that the Administrator of General
Services (or his designee) may take under section 2 or 3
of such Act, attaching thereto penalties under the author-
ity and within the limits provided in section 4 of such Act.
‘‘(2) The Act cited in this paragraph is the Act of
June 1, 1948 (62 Stat. 281), commonly known as the Pro-
tection of Public Property Act.’’.
SEC. 202. DATE OF POSTMARK TO BE TREATED AS DATE OF
APPEAL IN CONNECTION WITH THE CLOSING
OR CONSOLIDATION OF POST OFFICES.
(a) IN GENERAL.—Section 404(b) of title 39, United
States Code, is amended by adding at the end the follow-
ing:
‘‘(6) For purposes of paragraph (5), any appeal re-
ceived by the Commission shall—
‘‘(A) if sent to the Commission through the
mails, be considered to have been received on the
date of the Postal Service postmark on the envelope
or other cover in which such appeal is mailed; or
‘‘(B) if lawfully delivered to the Commission by
an enterprise in the private sector of the economy
engaged in the delivery of mail, be considered to
have been received on the date determined based on
any appropriate documentation or other indicia (as
determined under regulations of the Commission).’’.
(b) EFFECTIVE DATE.—This section and the amend-
ments made by this section shall apply with respect to any
determination to close or consolidate a post office which
is first made available, in accordance with paragraph (3)
of section 404(b) of title 39, United States Code, after
the end of the 3-month period beginning on the date of
the enactment of this Act.
TITLE III—PRESIDENTIAL POST-
AL EMPLOYEE-MANAGEMENT
COMMISSION
SEC. 301. PRESIDENTIAL POSTAL EMPLOYEE-MANAGE-
MENT COMMISSION.
(a) IN GENERAL.—Section 206 of title 39, United
States Code, is amended to read as follows:
‘‘§ 206. Presidential Postal Employee-Management
Commission
‘‘(a) There shall be established a Presidential Postal
Employee-Management Commission (hereinafter in this
section referred to as the ‘Commission’).
‘‘(b)(1) The Commission shall study and make rec-
ommendations, in accordance with this section, on how
employee-management relations within the Postal Service
might be improved.
‘‘(2) The Commission shall submit its recommenda-
tions—
‘‘(A) to the President and the Congress, to the
extent that they involve any legislation; and
‘‘(B) to the Postal Service, to the extent that
no legislation would be involved.
‘‘(3) All recommendations shall be submitted in the
form of a written report, with the first set of reports due
within 18 months after the Commission is first con-
stituted, and the second and third sets of reports in 12-
month intervals thereafter.
‘‘(4) The Commission shall terminate after submit-
ting its third set of reports.
‘‘(c)(1) The Commission shall be composed of 7 mem-
bers, all of whom shall be appointed by the President. Of
the members—
‘‘(A) 2 shall be appointed from among persons
who will represent the views of nonpostal labor orga-
nizations familiar with issues common to postal em-
ployees;
‘‘(B) 2 shall be appointed from among persons
who will represent the views of the management of
private corporations similar in size to the Postal
Service;
‘‘(C) 2 shall be appointed from among persons
well known in the fields of employee-management re-
lations, labor mediation, and collective bargaining;
and
‘‘(D) 1 shall be appointed from among persons
well known in the fields described in subparagraph
(C), who are also generally viewed as not being pre-
disposed to the interests of employees or manage-
ment.
‘‘(2) All members shall be appointed for the life of
the Commission.
‘‘(3) Not more than 4 members may be of the same
political party.
‘‘(4) Members shall serve without compensation, but
shall be reimbursed for necessary travel and reasonable
expenses incurred in attending meetings of the Commis-
sion.
‘‘(5) The member appointed under paragraph (1)(D)
shall serve as chairman of the Commission.
‘‘(d)(1) The Commission shall have a Director who
shall be appointed by the Commission and paid at a rate
not to exceed the rate of basic pay payable for level IV
of the Executive Schedule under section 5315 of title 5.
‘‘(2) Upon request of the Commission, the Federal
Mediation and Conciliation Service may detail, on a reim-
bursable basis, any of the personnel of that agency to the
Commission to assist it in carrying out its duties under
this Act.
‘‘(3) The Commission may not appoint or retain any
staff, except as provided in paragraph (1) or (2).’’.
(b) CLERICAL AMENDMENT.—The table of sections
at the beginning of chapter 2 of title 39, United States
Code, is amended by striking the item relating to section
206 and inserting the following:
‘‘206. Presidential Postal Employee-Management Commission.’’.
TITLE IV—FINANCE
SEC. 401. END OF TREASURY CONTROL OF POSTAL SERV-
ICE BANKING.
(a) IN GENERAL.—Subsection (d) of section 2003 of
title 39, United States Code, is amended to read as fol-
lows:
‘‘(d)(1) The Postal Service, in its sole discretion—
‘‘(A) may provide that amounts which would
otherwise be deposited in the revolving fund referred
to in subsection (a) shall instead, to the extent con-
sidered appropriate by the Postal Service, be directly
deposited in a Federal Reserve bank or a depository
for public funds selected by the Postal Service; and
‘‘(B) may provide for transfers of amounts
under this subsection between or among—
‘‘(i) Federal Reserve banks;
‘‘(ii) depositories for public funds; and
‘‘(iii) the revolving fund referred to in sub-
section (a).
‘‘(2) The Postal Service, after consultation with the
Secretary of the Treasury, shall prepare and may from
time to time revise a master plan for the exercise of any
authority under this subsection. Such plan shall address—
‘‘(A) the criteria that shall be applied by the
Postal Service in deciding when and how any such
authority shall be exercised;
‘‘(B) matters such as risk limitations, reserve
balances, allocation or distribution of monies, liquid-
ity requirements, and measures to safeguard against
losses;
‘‘(C) the types of notification or consultation re-
quirements the Postal Service shall follow in connec-
tion with any exercise or proposed exercise of au-
thority under this subsection; and
‘‘(D) procedures under which the Postal Service
shall, at least annually, render a full accounting as
to how any authority under this subsection has been
exercised during the period involved.
‘‘(3)(A) Authority under this subsection may not be
exercised except in accordance with applicable provisions
of the master plan under paragraph (2).
‘‘(B) The Postal Service shall submit its master plan
(and any revision thereof) to the President, the Secretary
of the Treasury, and each House of Congress at least 30
days before the date of its proposed implementation.’’.
(b) SAVINGS PROVISION.—Until the authority under
section 2003(d) of title 39, United States Code, as amend-
ed by subsection (a), becomes available, the provisions of
such section 2003(d), as last in effect before being so
amended, shall be treated as if still in effect.
(c) STATUS
OF MONIES UNCHANGED.—(1) Any
amounts invested under section 2003(c) of title 39, United
States Code, as amended by this title, shall be considered
to be part of the Postal Service Fund, to the same extent
as if they had been invested under section 2003(c) of such
title 39, as last in effect before the date of the enactment
of this Act.
(2) Any amounts deposited or transferred under sec-
tion 2003(d) of title 39, United States Code, as amended
by this title, shall be considered to be part of the Postal
Service Fund, to the same extent as if they had been
transferred under section 2003(d) of such title 39, as last
in effect before the date of the enactment of this Act.
SEC. 402. POSTAL SERVICE INVESTMENTS.
Section 2003(c) of title 39, United States Code, is
amended by striking all after ‘‘it may’’ and inserting the
following: ‘‘invest such amounts as it considers appro-
priate in obligations of, or obligations guaranteed by, the
Government of the United States.’’.
SEC. 403. EXCLUSION FROM FEDERAL FINANCING BANK.
Section 2005(d) of title 39, United States Code, is
amended—
(1) in paragraph (4) by striking ‘‘and’’ after
the semicolon;
(2) in paragraph (5) by striking the period and
inserting ‘‘; and’’; and
(3) by adding at the end the following:
‘‘(6) notwithstanding the provisions of the Fed-
eral Financing Bank Act of 1973 or any other provi-
sion of law (except as may be specifically provided
by reference to this paragraph in any Act enacted
after this paragraph takes effect), not be eligible for
purchase by, or commitment to purchase by, or sale
or issuance to, the Federal Financing Bank.’’.
SEC. 404. ELIMINATION OF TREASURY PREEMPTION OF
BORROWING BY THE POSTAL SERVICE.
Section 2006(a) of title 39, United States Code, is
amended by striking all after the first sentence.
SEC. 405. ELIMINATION OF POSTAL SERVICE ‘‘PUT’’ ON
TREASURY.
Section 2006(b) of title 39, United States Code, is
amended to read as follows:
‘‘(b) The Secretary of the Treasury may purchase ob-
ligations of the Postal Service in such amounts as the Sec-
retary of the Treasury and the Postal Service, in their dis-
cretion, may agree.’’.
TITLE V—BUDGET AND
APPROPRIATIONS PROCESS
SEC. 501. REPEAL OF PROVISION RELATING TO TRANSI-
TIONAL APPROPRIATIONS.
(a) REPEAL.—(1) Section 2004 of title 39, United
States Code, is repealed.
(2) The item relating to section 2004 in the table of
sections at the beginning of chapter 20 of such title 39
is repealed.
(3) Section 2003(e)(2) of such title 39 is amended
by striking ‘‘sections 2401 and 2004’’ each place it ap-
pears and inserting ‘‘section 2401’’.
(b) CLARIFICATION THAT LIABILITIES FORMERLY
PAID PURSUANT TO SECTION 2004 REMAIN LIABILITIES
PAYABLE BY THE POSTAL SERVICE.—Section 2003 of
title 39, United States Code, is amended by adding at the
end the following:
‘‘(h) Liabilities of the former Post Office Department
to the Employees’ Compensation Fund (appropriations for
which were authorized by former section 2004, as in effect
before the effective date of this subsection) shall be liabil-
ities of the Postal Service payable out of the Fund.’’.
(c) EFFECTIVE DATE.—This section and the amend-
ments made by this section shall take effect on October
1, 1998.
SEC. 502. PROVISIONS RELATING TO BENEFITS UNDER
CHAPTER 81 OF TITLE 5, UNITED STATES
CODE, FOR OFFICERS AND EMPLOYEES OF
THE FORMER POST OFFICE DEPARTMENT.
(a) IN GENERAL.—Section 8 of the Postal Reorga-
nization Act (39 U.S.C. 1001 note) is amended by insert-
ing ‘‘(a)’’ after ‘‘8.’’ and by adding at the end the follow-
ing:
‘‘(b) For purposes of chapter 81 of title 5, United
States Code, the Postal Service shall, with respect to any
individual receiving benefits under such chapter as an offi-
cer or employee of the former Post Office Department,
have the same authorities and responsibilities as it has
with respect to an officer or employee of the Postal Service
receiving such benefits.’’.
(b) EFFECTIVE DATE.—This section and the amend-
ments made by this section shall take effect on October
1, 1998.
SEC. 503. REPEAL OF AUTHORIZATIONS OF APPROPRIA-
TIONS FOR PUBLIC SERVICE COSTS, REVE-
NUE 
FORGONE, 
AND 
CERTAIN 
COMPEN-
SATORY APPROPRIATIONS.
(a) IN GENERAL.—Section 2401 of title 39, United
States Code, is amended by striking subsections (b), (c),
(d), (f), and (g), and by redesignating subsection (e) as
subsection (b).
(b) CONFORMING AMENDMENTS.—(1) Section 2003
of title 39, United States Code, is amended—
(A) in subsection (e) by striking paragraph (2)
and by redesignating subsection (e)(1) as subsection
(e); and
(B) by striking subsection (f) and by redesig-
nating subsection (g) as subsection (f).
(2) Section 2009 of such title 39 is amended by strik-
ing the last two sentences.
(3) Sections 2803(a) and 2804(a) of such title 39 are
amended by striking ‘‘2401(g)’’ and inserting ‘‘2401(b)’’.
(4) Section 3626(a)(2)(B) of such title 39 is amended
by striking ‘‘paragraph (3)(A) or section 2401(c);’’ and
inserting ‘‘paragraph (3)(A), section 3217, or sections
3403–3406;’’.
(5)(A) Section 3627 of such title 39 is repealed.
(B) The item relating to section 3627 in the table
of sections at the beginning of chapter 36 of such title
39 is repealed.
(C) Section 3684 of such title 39 is amended by strik-
ing ‘‘Except as provided in section 3627 of this title, no’’
and inserting ‘‘No’’.
(c) EFFECTIVE DATE.—This section and the amend-
ments made by this section shall take effect on October
1, 1998.
SEC. 504. CONGRESSIONAL OVERSIGHT PRESERVED.
Subsection (b) of section 2401 of title 39, United
States Code, as so redesignated by section 503(a), is
amended—
(1) by striking ‘‘Committee on Post Office and
Civil Service’’ each place it appears and inserting
‘‘Committee on Government Reform and Oversight’’;
(2) by striking ‘‘and the Committees on Appro-
priations of the Senate and the House of Represent-
atives’’;
(3) in the matter before paragraph (1)—
(A) by striking ‘‘2009 of this title,’’ and
inserting ‘‘2009 for a fiscal year,’’; and
(B) by striking ‘‘for the fiscal year for
which funds are requested to be appropriated,’’
and inserting ‘‘for such fiscal year,’’;
(4) in paragraph (3) by striking ‘‘during the
fiscal year for which funds are requested to be ap-
propriated,’’ and inserting ‘‘during the fiscal year re-
ferred to in the matter before paragraph (1),’’;
(5) by striking ‘‘Not later than March 15 of
each year,’’ and inserting ‘‘Each year,’’; and
(6) by striking ‘‘any such committee considers
necessary to determine the amount of funds to be
appropriated for the operation of the Postal Serv-
ice,’’ and inserting ‘‘either such committee considers
necessary,’’.
TITLE 
VI—MISCELLANEOUS
PROVISIONS 
RELATING 
TO
POSTAL 
RATES, 
CLASSES,
AND SERVICES
SEC. 601. CHANGE-OF-ADDRESS ORDER INVOLVING A COM-
MERCIAL MAIL RECEIVING AGENCY.
(a) IN GENERAL.—Subchapter V of chapter 36 of
title 39, United States Code, is amended by adding at the
end the following:
‘‘§ 3686. Change-of-address order involving a commer-
cial mail receiving agency
‘‘(a) For the purpose of this section, the term ‘com-
mercial mail receiving agency’ or ‘CMRA’ means a private
business that acts as the mail receiving agent for specific
clients.
‘‘(b) Upon termination of an agency relationship be-
tween an addressee and a commercial mail receiving agen-
cy—
‘‘(1) the addressee or, if authorized to do so,
the CMRA may file a change-of-address order with
the Postal Service with respect to such addressee;
‘‘(2) a change-of-address order so filed shall, to
the extent practicable, be given full force and effect;
and
‘‘(3) any mail for the addressee that is delivered
to the CMRA after the filing of an appropriate order
under this subsection shall be subject to subsection
(c).
‘‘(c) Mail described in subsection (b)(3) shall, if
marked for forwarding and remailed by the CMRA, be for-
warded by the Postal Service in the same manner as, and
subject to the same terms and conditions (including limita-
tions on the period of time for which a change-of-address
order shall be given effect) as apply to, mail forwarded
directly by the Postal Service to the addressee.’’.
(b) CLERICAL AMENDMENT.—The table of sections
at the beginning of chapter 36 of title 39, United States
Code, is amended by adding after the item relating to sec-
tion 3685 the following:
‘‘3686. Change-of-address order involving a commercial mail receiving agency.’’.
SEC. 602. RATES FOR MAIL UNDER FORMER SECTION 4358.
Section 3626 of title 39, United States Code, is
amended by adding at the end the following:
‘‘(n) In the administration of this section, matter
shall not be excluded from being mailed at the rates for
mail under former section 4358 solely because such matter
does not meet the requirements of former section
4354(a)(5).’’.
SEC. 603. POWERS OF THE POSTAL RATE COMMISSION.
Section 3604 of title 39, United States Code, is
amended by adding at the end the following:
‘‘(f)(1) Any Commissioner of the Commission, any
administrative law judge appointed by the Commission
under section 3105 of title 5, and any employee of the
Commission designated by the Commission may admin-
ister oaths, examine witnesses, take depositions, and re-
ceive evidence.
‘‘(2) The Chairman of the Commission, any Commis-
sioner designated by the Chairman, and any administra-
tive law judge appointed by the Commission under section
3105 of title 5 may, with respect to any proceeding under
section 3624 or 3661 or chapter 37—
‘‘(A) issue subpenas requiring the attendance
and presentation of testimony of any individual, and
the production of documentary or other evidence,
from any place in the United States, any territory
or possession of the United States, the Common-
wealth of Puerto Rico, or the District of Columbia;
and
‘‘(B) order the taking of depositions and re-
sponses to written interrogatories.
The written concurrence of a majority of the Commis-
sioners then holding office shall, with respect to each sub-
pena under subparagraph (A), be required in advance of
its issuance.
‘‘(3) In the case of contumacy or failure to obey a
subpena issued under this subsection, upon application by
the Commission, the district court of the United States
for the district in which the person to whom the subpena
is addressed resides or is served may issue an order requir-
ing such person to appear at any designated place to tes-
tify or produce documentary or other evidence. Any failure
to obey the order of the court may be punished by the
court as a contempt thereof.
‘‘(g)(1) If the Postal Service determines that any doc-
ument or other matter it provides to the Commission pur-
suant to a subpena issued under subsection (f), or other-
wise at the request of the Commission in connection with
any proceeding or other purpose under this chapter or
chapter 37, contains information which is described in sec-
tion 410(c) of this title, or exempt from public disclosure
under section 552(b) of title 5, the Postal Service shall,
at the time of providing such matter to the Commission,
notify the Commission, in writing, of its determination
(and the reasons therefor).
‘‘(2) No officer or employee of the Commission may,
with respect to any information as to which the Commis-
sion has been notified under paragraph (1)—
‘‘(A) use such information for purposes other
than the purposes for which it is supplied; or
‘‘(B) permit anyone who is not an officer or
employee of the Commission to have access to any
such information.
‘‘(3) Paragraph (2) shall not prevent information
from being furnished under any process of discovery estab-
lished under this title in connection with a proceeding
under this chapter or chapter 37 which is conducted in
accordance with sections 556 and 557 of title 5. The Com-
mission shall, by regulations based on rule 26(c) of the
Federal Rules of Civil Procedure, establish appropriate ad-
ministrative and other safeguards to ensure the security
and confidentiality of any information furnished under the
preceding sentence.’’.
SEC. 604. VOLUME DISCOUNTS.
(a) IN GENERAL.—Subsection (c) of section 403 of
title 39, United States Code, is amended by striking ‘‘(c)’’
and inserting ‘‘(c)(1)’’ and by adding at the end the fol-
lowing:
‘‘(2) Nothing in this title shall be considered to pre-
clude the Postal Service from offering any discount in a
rate or fee, on the basis of volume, so long as—
‘‘(A) all persons are, with respect to the class
of mail or postal service involved, eligible for the
same volume discount; and
‘‘(B) the discounted rate—
‘‘(i) if a product in the noncompetitive cat-
egory of mail is involved, does not exceed the
maximum rate then allowable for such product
under subchapter II of chapter 37; or
‘‘(ii) if a product in the competitive cat-
egory of mail is involved, satisfies the require-
ment under section 3742(b) that each such
product bear the direct and indirect postal costs
attributable to such product plus a reasonable
contribution to all other costs of the Postal
Service.’’.
(b) DEMONSTRATION PROJECT.—
(1) IN GENERAL.—
(A) PURPOSE.—As soon as practicable
after the date of the enactment of this Act, the
United States Postal Service shall conduct a
demonstration project, the purpose of which
shall be to determine the feasibility and desir-
ability of affording volume discounts to mailers
on a negotiated basis.
(B) 
LIMITATION.—The 
demonstration
project shall be limited to products in the com-
petitive category of mail (within the meaning of
section 3741(2) of title 39, United States Code,
as amended by section 1001).
(C) DISCOUNTS.—Under the demonstra-
tion project, any discounts shall be on such
terms and conditions as may be mutually
agreed to by the Postal Service and the mailer,
subject to section 403(c)(2)(B)(ii) of title 39,
United States Code (as amended by subsection
(a)).
(2) 
OTHER
REQUIREMENTS.—Subsections
(c)(1)(A), (d)(1) (excluding subparagraphs (A)(i),
(B)(ii), and (C)(ii) thereof), and (e) of section 704
shall apply with respect to the demonstration project
under this subsection.
(c) EFFECTIVE DATE.—This section and the amend-
ments made by this section shall take effect on the date
on which section 1002 (relating to termination of rate-
making authority under chapter 36 and related matters)
takes effect.
TITLE VII—PROVISIONS RELAT-
ING 
TO 
TRANSPORTATION,
CARRIAGE, OR DELIVERY OF
MAIL
SEC. 701. OBSOLETE PROVISIONS.
(a) REPEAL.—Chapter 52 of title 39, United States
Code, is repealed.
(b) 
CONFORMING
AMENDMENTS.—(1) 
Section
5005(a) of title 39, United States Code, is amended—
(A) by repealing paragraph (1); and
(B) in paragraph (4) by striking ‘‘(as defined in
section 5201(6) of this title)’’.
(2) Section 10721(b)(1) of title 49, United States
Code, is amended by striking ‘‘chapters 50 and 52’’ and
inserting ‘‘chapter 50’’.
(c) ELIMINATING RESTRICTION ON LENGTH OF CON-
TRACTS.—(1) Section 5005(b)(1) of title 39, United
States Code, is amended by striking ‘‘shall be for periods
not in excess of 4 years (or where the Postal Service deter-
mines that special conditions or the use of special equip-
ment warrants, not in excess of 6 years) and’’.
(2) Section 5402(c) of such title 39 is amended by
striking ‘‘for a period of not more than 4 years’’.
(3) Section 5605 of such title 39 is amended by strik-
ing ‘‘for periods of not in excess of 4 years’’.
SEC. 702. EXPANDED CONTRACTING AUTHORITY.
Subsection (d) of section 5402 of title 39, United
States Code, is amended to read as follows:
‘‘(d) Notwithstanding the provisions of subsections
(a) through (c), the Postal Service may contract for the
transportation of mail by aircraft, except as provided in
subsections (f) and (g).’’.
SEC. 703. PRIVATE CARRIAGE OF LETTERS.
Section 601(a) of title 39, United States Code, is
amended by inserting ‘‘when the amount paid for private
carriage of the letter is at least $2, or’’ before ‘‘when’’.
SEC. 704. MAILBOX DEMONSTRATION PROJECT.
(a) PURPOSE.—The purpose of this section is to de-
termine the feasibility and desirability of allowing non-
postage bearing matter to be deposited in private
letterboxes.
(b) PROJECT.—As soon as practicable after the date
of the enactment of this Act, the United States Postal
Service shall—
(1) develop a plan for the conducting of a dem-
onstration project under this section; and
(2) within 18 months after the date of the en-
actment of this Act, commence implementation of
such plan.
(c) SPECIFICATIONS.—
(1) IN GENERAL.—The demonstration project—
(A) shall be conducted over a 3-year pe-
riod;
(B) shall include such areas as the Postal
Service considers appropriate, except that such
project shall include at least 1 urban area, 1
rural area, and 1 suburban area, each of which
shall involve a sufficient level of participation so
as to ensure meaningful results; and
(C) shall include provisions under which
any person may elect not to participate, or to
cease to participate, in the project.
(2) TEMPORARY SUSPENSION OF SECTION 1725
OF
TITLE
18.—Section 1725 of title 18, United
States Code, shall not apply with respect to conduct
occurring—
(A) within an area included in the dem-
onstration project; and
(B) while the demonstration project is on-
going.
(d) PROCEDURES.—
(1) IN GENERAL.—The Postal Service shall—
(A) develop a plan for the demonstration
project which identifies—
(i) the specific areas to be included in
the project;
(ii) the commencement and termi-
nation dates of the project;
(iii) the legal authority for the project;
and
(iv) specific details as to what the
project will entail;
(B) at least 90 days before commencing
implementation of the project—
(i) publish the proposed plan in the
Federal Register, including notice as to the
time and manner in which interested per-
sons may submit written comments; and
(ii) provide notification of the pro-
posed plan to persons served within the
areas to be included in the project, includ-
ing the relevant information as to the time,
form, and manner in which any such per-
son shall have the opportunity to present
their views, in writing or by oral presen-
tation, as they may elect; and
(C) after considering the comments and
views and any other information received under
subparagraph (B), prepare the final version of
the plan for such project and, not later than 30
days before commencing implementation of the
project—
(i) publish the final plan in the Fed-
eral Register; and
(ii) provide notification of the final
plan to persons served within the areas to
be included in the project.
(2) FACTORS TO BE TAKEN INTO ACCOUNT IN
SELECTING AREAS FOR INCLUSION.—In identifying
areas for inclusion in the demonstration project, the
Postal Service shall take into account—
(A) what types of data are needed in order
to permit a meaningful evaluation under sub-
section (e); and
(B) such other factors as the Postal Serv-
ice considers appropriate.
(3) WRITTEN
DETERMINATIONS.—Any deter-
mination of the Postal Service to commence imple-
mentation of the demonstration project shall be in
writing and shall include the findings of the Postal
Service with respect to the factors required to be
taken into account under paragraph (2). Such deter-
mination and findings shall be made available to the
persons served by the Postal Service within each
area included in the project.
(e) EVALUATION.—Not later than 1 year after the
demonstration project ends, the Comptroller General of
the United States shall submit to each House of Congress
a written evaluation of such project, including rec-
ommendations as to whether or not the authority tested
by the project should be broadened in scope and made per-
manent and, if so, with what modifications (if any).
TITLE VIII—DIRECT APPEAL OF
DECISIONS OF THE MERIT
SYSTEMS 
PROTECTION
BOARD
SEC. 801. DIRECT APPEAL OF DECISIONS OF THE MERIT
SYSTEMS PROTECTION BOARD.
Section 7703 of title 5, United States Code, is
amended by adding at the end the following:
‘‘(e)(1) The Chief Executive Officer may, with respect
to any employee of the Postal Service or applicant for em-
ployment with the Postal Service, and subject to the provi-
sions of sections 409(b)–(e) and 411 of title 39, obtain
review of any final order or decision of the Board by filing
a petition for judicial review in the United States Court
of Appeals for the Federal Circuit if the Chief Executive
Officer determines, in his or her discretion, that the Board
erred in interpreting a civil service law, rule, or regulation
affecting personnel management and that the Board’s de-
cision will have a substantial impact on a civil service law,
rule, regulation, or policy directive, as applied with respect
to the Postal Service. If the Chief Executive Officer did
not intervene in a matter before the Board, the Chief Ex-
ecutive Officer may not petition for review of a Board deci-
sion under this section unless the Chief Executive Officer
first petitions the Board for a reconsideration of its deci-
sion, and such petition is denied. In addition to the named
respondent, the Board and all other parties to the proceed-
ings before the Board shall have the right to appear in
the proceeding before the Court of Appeals. The granting
of the petition for judicial review shall be at the discretion
of the Court of Appeals.
‘‘(2) For purposes of applying the provisions of sec-
tion 7701(e) in the case of a decision that relates to an
employee of the Postal Service or applicant for employ-
ment with the Postal Service, such provisions shall be ap-
plied by substituting ‘Director or Chief Executive Officer
of the United States Postal Service’ for ‘Director’.
‘‘(3) For purposes of this subsection—
‘‘(A) the term ‘Chief Executive Officer’ means
the Chief Executive Officer of the United States
Postal Service; and
‘‘(B) the term ‘Postal Service’ means the
United States Postal Service.’’.
TITLE IX—LAW ENFORCEMENT
Subtitle A—Amendments to Title
39, United States Code
SEC. 901. MAKE FEDERAL ASSAULT STATUTES APPLICABLE
TO POSTAL CONTRACT EMPLOYEES.
Section 1008 of title 39, United States Code, is
amended—
(1) in subsection (a) by inserting ‘‘or entrusted
with mail under contract with the Postal Service’’
after ‘‘mail’’; and
(2) in subsection (b) by inserting ‘‘an employee
of the Postal Service for the purposes of sections
111 and 1114 of title 18, and’’ after ‘‘deemed’’.
SEC. 902. SEXUALLY ORIENTED ADVERTISING.
(a) CIVIL PENALTY.—Section 3011 of title 39, Unit-
ed States Code, is amended—
(1) by redesignating subsections (b) through (e)
as subsections (c) through (f), respectively; and
(2) by inserting after subsection (a) the follow-
ing:
‘‘(b)(1) Upon a finding by the court that a sexually
oriented advertisement has been mailed in violation of sec-
tion 3010(b), the court may assess, on whoever made the
mailing or caused it to be made, a civil penalty of not
(1) IN
GENERAL.—Section 3008 of title 39,
United States Code, and the item relating to such
section in the table of sections at the beginning of
chapter 30 of such title, are repealed.
(2) CONFORMING
AMENDMENTS.—(A) Sub-
section (f) of section 3011 of such title 39 (as so re-
designated by subsection (a)) is amended by striking
‘‘section 3006, 3007, or 3008’’ and inserting ‘‘sec-
tion 3006 or 3007’’.
(B) Section 1737 of title 18, United States
Code, is amended—
(i) in subsection (a) by striking ‘‘3008 or’’;
and
(ii) in subsection (b) by striking ‘‘3008(a)
or’’.
(c) EFFECTIVE DATE.—This section and the amend-
ments made by this section shall take effect 90 days after
the date of the enactment of this Act. The amendments
made by this section shall be treated as if they had never
been enacted for purposes of any mailing made or caused
to be made before this section takes effect.
SEC. 903. ALLOW POSTAL SERVICE TO RETAIN ASSET FOR-
FEITURE RECOVERIES.
Paragraph (7) of section 2003(b) of title 39, United
States Code, is amended to read as follows:
‘‘(7) amounts (including proceeds from the sale
of forfeited items) from any civil forfeiture con-
ducted by the Postal Service and from any forfeiture
resulting from an investigation in which the Postal
Service has primary responsibility, except that noth-
ing in this paragraph shall preclude the Postal Serv-
ice, on such terms as it may determine, from sharing
such amounts with any Federal, State, or local law
enforcement agency which participated in any of the
acts which led to the seizure or forfeiture of the
property; and’’.
SEC. 904. HAZARDOUS MATTER.
(a) CIVIL PENALTY.—Chapter 30 of title 39, United
States Code, is amended by adding at the end the follow-
ing:
‘‘§ 3016. Civil penalty for prohibited mailing and defi-
cient packaging of hazardous matter
‘‘(a) For the purposes of this section—
‘‘(1) the term ‘parcel’ includes any kind of
package, envelope, container, or other piece of mail;
‘‘(2) the term ‘manner’ includes the preparation
and packaging of a piece of mail;
‘‘(3) a person shall be considered to have acted
knowingly if—
‘‘(A) such person had actual knowledge of
the facts giving rise to the violation; or
‘‘(B) a reasonable person acting in the
same circumstances and exercising due care
would have had such knowledge; and
‘‘(4) the term ‘hazardous matter’ has the mean-
ing given such term by section 1716 of title 18.
‘‘(b) Any person—
‘‘(1) who knowingly mails or causes to be
mailed any parcel, the contents of which constitute
or include any hazardous matter which has been de-
clared by statute or Postal Service regulation to be
nonmailable under any circumstances;
‘‘(2) who knowingly mails or causes to be
mailed a parcel in violation of any statute or Postal
Service regulation restricting the time, place, or
manner in which hazardous matter may be mailed;
or
‘‘(3) who knowingly manufactures, distributes,
or sells any container, packaging kit, or similar de-
vice that—
‘‘(A) is represented, marked, certified, or
sold by such person for use in the mailing of
any hazardous matter; and
‘‘(B) fails to conform with any statute or
Postal Service regulation setting forth stand-
ards for containers, packaging kits, or similar
devices used for the mailing of hazardous mat-
ter;
shall be liable to the Postal Service for a civil penalty in
an amount not to exceed $25,000 per violation.
‘‘(c) The Postal Service may enforce this section by
commencing a civil action in accordance with section
409(d). The action may be brought in the district court
of the United States for the district in which the defend-
ant resides or any district in which the defendant conducts
business or in which a violation of this section was discov-
ered.
‘‘(d) In determining the amount of any civil penalty
to be assessed under this section, the district court—
‘‘(1) shall treat as a separate violation—
‘‘(A) each parcel mailed or caused to be
mailed as described in paragraph (1) or (2) of
subsection (b); and
‘‘(B) each container, packaging kit, or
similar device manufactured, distributed, or
sold as described in subsection (b)(3); and
‘‘(2) shall take into account—
‘‘(A) the nature, circumstances, extent,
and gravity of each violation committed; and
‘‘(B) with respect to the person found to
have committed such violation, the degree of
culpability, any history of prior offenses, ability
to pay, effect on ability to continue to do busi-
ness, and such other matters as justice may re-
quire.
‘‘(e) All penalties collected under authority of this
section shall be paid into the Postal Service Fund estab-
lished by section 2003.’’.
(b) CLERICAL AMENDMENT.—The table of sections
at the beginning of chapter 30 of title 39, United States
Code, is amended by adding at the end the following:
‘‘3016. Civil penalty for prohibited mailing and deficient packaging of hazardous
matter.’’.
Subtitle B—Other Provisions
SEC. 911. STALKING FEDERAL OFFICERS AND EMPLOYEES.
(a) IN GENERAL.—Chapter 41 of title 18, United
States Code, is amended by adding at the end the follow-
ing:
‘‘§ 881. Stalking Federal and postal officers and em-
ployees
‘‘(a) Whoever—
‘‘(1) repeatedly engages in a pattern of conduct
(including maintaining a visual or physical proximity
or verbal or written threat) directed at another per-
son who is or was an officer or employee—
‘‘(A) in the executive, legislative, or judicial
branch of the Federal Government; or
‘‘(B) in the United States Postal Service;
while such other person is engaged in official duties
or on account of such duties;
‘‘(2) knows that such conduct is likely to place
that other person in reasonable fear of sexual bat-
tery, bodily injury, or death; and
‘‘(3) thereby induces such fear in that other
person;
shall be punished as provided in subsection (b) of this sec-
tion.
‘‘(b)(1) The punishment for an offense under sub-
section (a) of this section is the greatest of the following:
‘‘(A) In the case of a first conviction under
such subsection, a fine under this title or imprison-
ment for not more than 3 years, or both.
‘‘(B) In the case of a second or subsequent con-
viction under such subsection, a fine under this title
or imprisonment for not more than 15 years, or
both.
‘‘(C) If, during the commission of the offense,
the offender uses a deadly or dangerous weapon, a
fine under this title or imprisonment for not more
than 10 years, or both.
‘‘(D) If the offense violates a protective order,
a fine under this title or imprisonment for not more
than 5 years, or both.
‘‘(2) If a sentence of probation is imposed for an of-
fense under subsection (a) of this section, the court shall
require the defendant to undergo appropriate psychiatric,
psychological, or social counselling.
‘‘(c) As used in this section, the term ‘protective
order’ means any court order that requires an individual—
‘‘(1) to refrain from behavior prohibited by sub-
section (a) of this section; or
‘‘(2) to refrain from contact with the person
who subsequently is a victim of the offense under
such subsection that is committed by that individual.
‘‘(d)(1) Whoever is or is about to be aggrieved by a
violation of subsection (a) of this section may, in a civil
action, obtain from the person engaging or about to en-
gage in that violation, appropriate relief, including puni-
tive damages in the case of a completed violation and rea-
sonable attorney’s fees.
‘‘(2) If—
‘‘(A) the court issues an injunction against the
person engaging or about to engage in a violation of
subsection (a) of this section;
‘‘(B) such person is an officer or employee in
the executive branch of the Federal Government or
in the United States Postal Service; and
‘‘(C) there is a nexus between the enjoined con-
duct and such person’s office or employment;
the court may order that the person be suspended or sum-
marily discharged from such office or employment.’’.
(b) CLERICAL AMENDMENT.—The table of sections
at the beginning of chapter 41 of title 18, United States
Code, is amended by adding at the end the following:
‘‘881. Stalking Federal and postal officers and employees.’’.
SEC. 912. NONMAILABILITY OF CONTROLLED SUBSTANCES.
Section 1716 of title 18, United States Code, is
amended by adding at the end the following:
‘‘Whoever knowingly deposits for mailing or delivery,
or knowingly causes to be delivered by mail, according to
the direction thereon, or at any place at which it is di-
rected to be delivered by the person to whom it is ad-
dressed, unless in accordance with the rules and regula-
tions authorized to be prescribed by the Postal Service,
any controlled substance, as that term is defined for the
purposes of the Controlled Substances Act, shall, if the
distribution of a like amount of such substance is a felony
under such Act, be fined under this title or imprisoned
not more than 5 years, or both.’’.
SEC. 913. ENHANCED PENALTIES.
Pursuant to its authority under section 994 of title
28, United States Code, the United States Sentencing
Commission shall amend its sentencing guidelines to—
(1) appropriately enhance penalties in cases in
which a defendant is convicted of stealing or de-
stroying a quantity of undelivered United States
mail, in violation of sections 1702, 1703, 1708,
1709, 2114, or 2115 of title 18, United States Code;
and
(2) establish that the intended loss in a theft of
an access device as defined in section 1029(e)(1) of
title 18, United States Code, shall be based on the
credit line of the access device or the actual unau-
thorized charges, whichever amount is greater.
SEC. 914. POSTAL BURGLARY PROVISIONS.
(a) LARCENY INVOLVING POST OFFICE BOXES AND
POSTAL STAMP VENDING MACHINES.—Section 2115 of
title 18, United States Code, is amended—
(1) by striking ‘‘or’’ before ‘‘any building’’;
(2) by inserting ‘‘or any post office box or post-
al products vending machine,’’ after ‘‘used in whole
or in part as a post office,’’;
(3) by inserting ‘‘or in such box or machine,’’
after ‘‘so used’’; and
(4) by striking ‘‘not more than $1,000’’ and in-
serting ‘‘under this title’’.
(b) RECEIPT, POSSESSION, CONCEALMENT, OR DIS-
POSITION OF PROPERTY.—Section 2115 of title 18, Unit-
ed States Code, is amended—
(1) by inserting ‘‘(a)’’ before ‘‘Whoever’’; and
(2) by adding at the end the following:
‘‘(b) Whoever receives, possesses, conceals, or dis-
poses of any mail matter, money, or other property of the
United States, that has been obtained in violation of this
section, knowing the same to have been unlawfully ob-
tained, shall be fined under this title or imprisoned not
more than 5 years, or both.’’.
SEC. 915. MAIL, MONEY, OR OTHER PROPERTY OF THE
UNITED STATES.
(a) ENHANCED
PENALTY
FOR
ROBBERY.—Sub-
section (a) of section 2114 of title 18, United States Code,
is amended to read as follows:
‘‘(a) ASSAULT.—Whoever assaults any person having
lawful charge, control, or custody of any mail matter or
of any money or other property of the United States, with
intent to rob, steal, or purloin such mail matter, money,
or other property of the United States, or robs or attempts
to rob any such person of mail matter, or of any money,
or other property of the United States, shall, for the first
offense, be imprisoned not more than 10 years or fined
under this title, or both. If, in effecting or attempting to
effect such robbery the defendant wounds the person hav-
ing custody of such mail, money, or other property of the
United States, or puts that person’s life in jeopardy by
the use of a dangerous weapon, or the offense is a subse-
quent offense under this subsection, the defendant shall
be imprisoned not more than 25 years or fined under this
title, or both. If the death of any person results from the
offense under this subsection, the defendant shall be pun-
ished by death or life imprisonment.’’.
(b) ATTEMPT OFFENSES.—
(1) The second paragraph of section 501 of title
18, United States Code, is amended by striking
‘‘uses or sells,’’ and inserting ‘‘uses or sells or at-
tempts to use or sell,’’.
(2) Section 1711 of title 18, United States
Code, is amended by inserting ‘‘attempts to loan,
use, pledge, hypothecate, or convert to this own
use,’’ after ‘‘converts to his own use,’’.
TITLE X—NEW SYSTEM RELAT-
ING 
TO 
POSTAL 
RATES,
CLASSES, AND SERVICES
SEC. 1001. ESTABLISHMENT.
(a) IN GENERAL.—Title 39, United States Code, is
amended by adding after chapter 36 the following:
‘‘CHAPTER 37—NEW SYSTEM FOR ESTABLISHING
POSTAL RATES, CLASSES, AND SERVICES
‘‘SUBCHAPTER I—BASELINE RATES AND FEES
‘‘Sec.
‘‘3701. Establishment of baseline rates and fees.
‘‘SUBCHAPTER II—RATES AND FEES FOR PRODUCTS IN THE
NONCOMPETITIVE CATEGORY OF MAIL
‘‘3721. Definitions.
‘‘3722. Maximum rates.
‘‘3723. Adjustment factor.
‘‘3724. Action of the Directors.
‘‘SUBCHAPTER III—RATES AND FEES FOR PRODUCTS IN THE
COMPETITIVE CATEGORY OF MAIL
‘‘3741. Definitions.
‘‘3742. Action of the Directors.
‘‘3743. Transfers of products from the noncompetitive category of mail.
‘‘3744. Application of antitrust laws.
‘‘SUBCHAPTER IV—MARKET TESTS OF EXPERIMENTAL
PRODUCTS
‘‘3761. Market tests.
‘‘SUBCHAPTER V—REPORTING REQUIREMENTS AND RELATED
PROVISIONS
‘‘3781. Definition.
‘‘3782. Reporting requirements.
‘‘3783. Use of profits.
‘‘SUBCHAPTER I—BASELINE RATES AND FEES
‘‘§ 3701. Establishment of baseline rates and fees
‘‘(a) REQUIREMENT THAT A RATEMAKING REQUEST
BE MADE.—
‘‘(1) IN GENERAL.—Except as provided in para-
graph (2), the Postal Service shall, within 18
months after the effective date of this chapter, re-
quest the Postal Rate Commission to submit a rec-
ommended decision on appropriate changes in rates
of postage and in fees for postal services, in accord-
ance with section 3622(a).
‘‘(2) EXCEPTION.—A request under this sub-
section may not be made if, on the effective date of
this chapter—
‘‘(A) a new schedule of rates and fees
takes effect under subchapter II of chapter 36
pursuant to a previous request under section
3622(a); or
‘‘(B) a recommended decision or further
recommended decision pursuant to a previous
request under section 3622(a), or judicial re-
view of any such decision or recommended deci-
sion, is pending.
‘‘(b) BASELINE RATES
AND FEES ESTABLISHED
PURSUANT TO THIS SECTION.—
‘‘(1) IN GENERAL.—For purposes of this title,
the baseline rates and fees established pursuant to
this section shall be—
‘‘(A) the rates and fees taking effect pur-
suant to a request made under subsection
(a)(1), subject to subparagraph (C)(i) or para-
graph (2)(A) (as applicable);
‘‘(B) the rates and fees—
‘‘(i) that, by virtue of subsection
(a)(2)(A), preclude the making of a re-
quest under subsection (a)(1); or
‘‘(ii) that take effect upon completion
of all proceedings referred to in subsection
(a)(2)(B), subject to subparagraph (C)(ii)
or paragraph (2)(B) (as applicable); or
‘‘(C)(i) if a request under subsection (a)(1)
is made, but proceedings pursuant to such re-
quest have not been completed by the end of
the 18-month period beginning on the date on
which such request is made, the rates and fees
in effect at the end of such period (including
any temporary rate or fee then in effect under
subchapter III of chapter 36); or
‘‘(ii) if a request under subsection (a)(1) is
precluded by virtue of the provisions of sub-
section (a)(2)(B), but the proceedings referred
to in such provisions have not been completed
by the end of the 18-month period referred to
in subsection (a)(1), the rates and fees in effect
at the end of such period (including any tem-
porary rate or fee then in effect under sub-
chapter III of chapter 36).
‘‘(2) APPLICABLE STATUTORY DEADLINE NOT
CHANGEABLE
BY
ADMINISTRATIVE
OR
OTHER
AC-
TION.—Rates and fees established under chapter 36
pursuant to—
‘‘(A) a request made under subsection
(a)(1) shall take effect as of the date deter-
mined in accordance with section 3625(f) or
otherwise applicable provisions of such chapter,
except that in no event may the date so deter-
mined be later than the last day of the 18-
month 
period 
referred 
to 
in 
paragraph
(1)(C)(i); or
‘‘(B) a previous request, as referred to in
subsection (a)(2)(B), shall take effect as of the
date determined in accordance with section
3625(f) or otherwise applicable provisions of
such chapter, except that in no event may the
date so determined be later than the last day of
the 18-month period referred to in subsection
(a)(1).
‘‘(c) PRIORITY OF RATEMAKING FACTORS IF PURSU-
ANT TO A REQUEST UNDER THIS SECTION.—If a request
under subsection (a)(1) is made, then, for purposes of all
proceedings under chapter 36 relating to such request,
subsection (b) of section 3622 shall be considered to be
amended to read as follows:
‘‘ ‘(b) Upon receiving a request, the Commission shall
make a recommended decision on the request for changes
in rates or fees in each class of mail or type of service
in accordance with the policies of this title and the follow-
ing factors, set forth in descending order of priority:
‘‘ ‘(1) The requirement that each class of mail
or type of mail service bear the direct and indirect
postal costs attributable to such class or type plus
that portion of all other costs of the Postal Service
reasonably assignable to such class or type.
‘‘ ‘(2) The value of the mail service to senders,
as reflected by the volume response of classes of
mail and types of service to changes in postal rates
and fees, and, as appropriate, the price and quality
of alternative means of sending mail.
‘‘ ‘(3) The quality of mail service actually pro-
vided each class or type of mail service, including
the collection, mode of transportation, priority of de-
livery, and timeliness of delivery (as measured by
reference to standards established by the Postal
Service).
‘‘ ‘(4) The available alternative means of send-
ing and receiving letters and other mail matter at
reasonable costs.
‘‘ ‘(5) The degree of preparation of mail for de-
livery into the postal system performed by the mailer
and its effect upon reducing costs to the Postal
Service.
‘‘ ‘(6) The effect of rate increases upon users of
the mail and the general public.
‘‘ ‘(7) Simplicity of structure for the entire
schedule and simple, identifiable relationships be-
tween the rates or fees charged the various classes
of mail for postal services.
‘‘ ‘(8) The educational, cultural, scientific, and
informational value to the recipient of mail matter.
‘‘ ‘(9) The establishment and maintenance of a
fair and equitable schedule.
‘‘ ‘(10) Such other factors as the Commission
deems appropriate.’.
‘‘SUBCHAPTER II—RATES AND FEES FOR PROD-
UCTS IN THE NONCOMPETITIVE CATEGORY
OF MAIL
‘‘§ 3721. Definitions
‘‘For purposes of this subchapter—
‘‘(1) YEAR.—The term ‘year’ means a calendar
year.
‘‘(2) GDPPI.—The term ‘GDPPI’ means the
Gross Domestic Product Chain-Type Price Index
(published quarterly by the Bureau of Economic
Analysis of the Department of Commerce).
‘‘(3) PRODUCT.—The term ‘product’ means a
class of mail or type of postal service, including—
‘‘(A) a subclass or other similar subordi-
nate unit thereof; and
‘‘(B) any further subordinate unit thereof
(below the first level of subordinate units re-
ferred to in subparagraph (A)).
‘‘(4) PRODUCTS IN THE NONCOMPETITIVE CAT-
EGORY OF MAIL.—The term ‘products in the non-
competitive category of mail’ means the respective
products in the first, second, third, and fourth bas-
kets of products (within the meaning of section
3723(a)).
‘‘(5) RATE.—The term ‘rate’, used with respect
to a product, means—
‘‘(A) for a class of mail, the rate for such
class of mail; and
‘‘(B) for a type of postal service, the fee
for such service.
‘‘(6) NONCOMPETITIVE
PRODUCT.—The term
‘noncompetitive product’ means a product in the
noncompetitive category of mail.
‘‘§ 3722. Maximum rates
‘‘(a) IN GENERAL.—Except as otherwise provided in
this subchapter, the rate for a noncompetitive product
may not, in any year, exceed the maximum rate allowable
for such product in such year under this section.
‘‘(b) COMPUTATION
OF MAXIMUM RATE ALLOW-
ABLE.—
‘‘(1) IN GENERAL.—The maximum rate allow-
able for a noncompetitive product in any year shall
be computed by multiplying—
‘‘(A) the change in the GDPPI for such
year, adjusted by the adjustment factor for
such year, times
‘‘(B) the maximum rate allowable for such
product in the preceding year (determined dis-
regarding paragraph (4), any exercise of au-
thority under section 3724(d), and any alter-
native limitation under section 1002(e) of the
Postal Reform Act of 1997).
‘‘(2) DEFINITIONS.—For purposes of this sub-
section—
‘‘(A) CHANGE IN THE GDPPI.—The change
in the GDPPI for any year shall be equal to the
percentage (if any) by which—
‘‘(i) the GDPPI for the preceding
year, exceeds
‘‘(ii) the GDPPI for the second pre-
ceding year.
‘‘(B) 
GDPPI 
FOR
ANY
YEAR.—The
GDPPI for any year is the average of the
GDPPI for the 4 consecutive calendar quarters
ending on September 30th of such year.
‘‘(C) ADJUSTMENT FACTOR.—The adjust-
ment factor for any year shall be determined in
accordance with section 3723.
‘‘(3) SPECIAL
RULE
FOR
FIRST
COMPUTA-
TION.—For purposes of the first computation of a
maximum rate allowable under this section for any
product, the rate applied under paragraph (1)(B)
shall be the baseline rate established for such prod-
uct under section 3701.
‘‘(4) ROUNDING.—Any maximum rate com-
puted under this section shall be rounded to the
nearest cent (rounding 1⁄2 of a cent to the next high-
er cent).
‘‘§ 3723. Adjustment factor
‘‘(a) DEFINITIONS.—For purposes of this section—
‘‘(1) RATEMAKING CYCLE.—
‘‘(A) IN GENERAL.—The term ‘ratemaking
cycle’ means—
‘‘(i) the 5-year period beginning on
the first day of the second year beginning
after the effective date of the baseline
rates and fees established pursuant to sec-
tion 3701; and
‘‘(ii) each 5-year period beginning on
the day after the last day of the imme-
diately preceding 5-year period under this
paragraph.
‘‘(B) EARLIER INITIAL DATE.—The Postal
Rate Commission may, by written determina-
tion, advance the date applicable under sub-
paragraph (A)(i) to the date which occurs 1
year earlier, but only if that earlier date does
not precede the date on which all requirements
of this section have been completed with respect
to the ratemaking cycle involved.
‘‘(2) BASKET OF PRODUCTS TO WHICH THIS
SECTION APPLIES.—The term ‘basket of products to
which this section applies’ means the first, second,
third, and fourth baskets of products.
‘‘(3) FIRST BASKET OF PRODUCTS.—The term
‘first basket of products’ means—
‘‘(A) single-piece first-class letters (both
domestic and international);
‘‘(B) single-piece first-class cards (both do-
mestic and international); and
‘‘(C) single-piece first-class parcels (both
domestic and international).
‘‘(4) SECOND
BASKET
OF
PRODUCTS.—The
term ‘second basket of products’ means all first-class
mail not in the first basket of products.
‘‘(5) THIRD BASKET OF PRODUCTS.—The term
‘third basket of products’ means periodicals.
‘‘(6) FOURTH
BASKET
OF
PRODUCTS.—The
term ‘fourth basket of products’ means standard
mail (except for parcel post).
‘‘(7) RULE OF CONSTRUCTION.—
‘‘(A) IN GENERAL.—Mail matter referred
to in paragraphs (3) through (6) shall, for pur-
poses of such paragraphs, be considered to have
the meaning given them under the mail classi-
fication schedule (within the meaning of section
3623) as of the effective date of this chapter.
‘‘(B) UPDATES.—The Board of Directors
shall, whenever any relevant change occurs
(pursuant to a reclassification under chapter
36, a transfer of a product from the non-
competitive category of mail under section
3743, or the conversion of an experimental
product under subchapter IV to a permanent
one), prescribe new lists of products within the
baskets under paragraphs (3) through (6), re-
spectively. The revised lists shall indicate how
and when any previous lists are superseded.
‘‘(b) PROCEDURES RELATING TO DETERMINING AD-
JUSTMENT FACTORS.—
‘‘(1) COMMENCEMENT.—
‘‘(A) IN GENERAL.—Except as provided in
subparagraph (B), the Postal Rate Commission
shall, beginning in December of the second year
before the start of each ratemaking cycle, pro-
vide the opportunity for a hearing on the record
under sections 556 and 557 of title 5 to the
Postal Service, users of the mails, and an offi-
cer of the Commission who shall be required to
represent the interests of the general public,
with respect to the adjustment factors to be es-
tablished for the upcoming ratemaking cycle.
‘‘(B) EXCEPTION.—For purposes of the
first hearing under this subsection, proceedings
shall be commenced during the second month
beginning on or after the effective date of the
baseline rates and fees established pursuant to
section 3701.
‘‘(2) RULES
OF
PROCEEDINGS.—In order to
conduct its proceedings with utmost expedition con-
sistent with procedural fairness to the parties, the
Commission may (without limitation) adopt rules
which provide for—
‘‘(A) the advance submission of written di-
rect testimony;
‘‘(B) the conduct of prehearing conferences
to define issues, and for other purposes to in-
sure orderly and expeditious proceedings;
‘‘(C) discovery both from the Postal Serv-
ice and the parties to the proceedings;
‘‘(D) limitation of testimony; and
‘‘(E) the conduct of the entire proceedings
off the record with the consent of the parties.
‘‘(3) PRINTING AND NOTICE REQUIREMENTS.—
‘‘(A) IN GENERAL.—The Commission’s de-
cision and the record of the Commission’s hear-
ings shall be made generally available at the
time the decision is issued and shall be printed
and made available for sale by the Public Print-
er within 10 days following the day the decision
is issued.
‘‘(B) TIMING.—All actions required of the
Commission under this section, including those
under subparagraph (A), shall be completed as
expeditiously as possible, but in no event later
than the end of the year before the commence-
ment of the ratemaking cycle to which the deci-
sion relates.
‘‘(c) FACTORS.—Adjustment factors shall be estab-
lished in accordance with the policies of this title and the
following:
‘‘(1) The value of the product to senders, as re-
flected by the volume response of classes of mail and
types of service to changes in postal rates and fees,
and, as appropriate, the price and quality of alter-
native means of sending mail.
‘‘(2) Cost to the Postal Service of providing the
product.
‘‘(3) Productivity of the Postal Service in pro-
viding postal services.
‘‘(4) The level of postal revenues attributable to
the product.
‘‘(5) The actual level of service (described in
terms of speed of delivery and reliability) provided
with respect to the product.
‘‘(6) Such other considerations as the Postal
Service and the Commission mutually agree to be
appropriate.
‘‘(d) SEPARATE ADJUSTMENT FACTOR REQUIRED
FOR EACH BASKET OF PRODUCTS.—A separate adjust-
ment factor shall be established for each basket of prod-
ucts to which this section applies, and, except as provided
in section 3724(d), the adjustment factor applicable to any
basket shall be uniformly applied to all products within
such basket.
‘‘(e) HOW EACH ADJUSTMENT FACTOR IS TO BE
EXPRESSED AND APPLIED.—
‘‘(1) EXPRESSION.—Each adjustment factor es-
tablished under this section shall be expressed as a
percentage.
‘‘(2) APPLICATION.—For purposes of section
3722(b)(1)(A), to adjust a change in the GDPPI by
an adjustment factor, the adjustment factor shall be
added to or subtracted from such change in the
GDPPI, as the case may be.
‘‘(f) EXIGENT CIRCUMSTANCES.—
‘‘(1) IN GENERAL.—Upon a majority vote of
the Directors then holding office, the Postal Service
may request the Postal Rate Commission to render
a decision on changing the adjustment factors to be
applied during the then current ratemaking cycle
(after having previously been established under this
section for such cycle).
‘‘(2) CONDITIONS.—A request made under
paragraph (1) may be considered only upon written
certification by the Directors that—
‘‘(A) the Postal Service faces severe finan-
cial exigencies; and
‘‘(B) the change is warranted to restore
the Postal Service to fiscal soundness.
‘‘(3) EFFECT; DURATION.—A change granted
under this subsection—
‘‘(A) shall supersede the adjustment fac-
tors which would otherwise apply under this
section; and
‘‘(B) shall remain effective for the remain-
der of the ratemaking cycle involved, subject to
paragraph (5).
‘‘(4) EXPEDITED CONSIDERATION.—A request
made under paragraph (1) shall be acted on in the
same manner as if initiated under subsection (b)(1),
except that a decision on such request shall be ren-
dered not later than 6 months after the date on
which such request is made.
‘‘(5) FREQUENCY.—Nothing in this section
shall be considered to limit the number of times that
authority under this subsection may be invoked or
exercised during any particular ratemaking cycle.
‘‘(6) FINALITY.—A decision of the Postal Rate
Commission under this subsection shall be final and
shall not be subject to administrative or judicial re-
view.
‘‘(g) APPELLATE REVIEW.—Except as provided in
subsection (f)(6), a decision of the Postal Rate Commis-
sion under this section may be appealed to any court of
appeals of the United States, within 15 days after its pub-
lication by the Public Printer, by an aggrieved party who
appeared in the proceedings under subsection (b). The
court shall review the decision, in accordance with section
706 of title 5, and chapter 158 and section 2112 of title
28, except as otherwise provided in this subsection, on the
basis of the record before the Commission. The court may
affirm the decision or order that the entire matter be re-
turned for further consideration, but the court may not
modify the decision. The court may not suspend the effec-
tiveness of the adjustment factors, or otherwise prevent
them from taking effect until final disposition of the suit
by the court. No court shall have jurisdiction to review
a decision made by the Commission under this section ex-
cept as provided in this subsection.
‘‘§ 3724. Action of the Directors
‘‘(a) IN GENERAL.—The Directors, with the written
concurrence of a majority of all of the Directors then hold-
ing office, shall establish rates for products in the non-
competitive category of mail in accordance with the re-
quirements of this subchapter and the policies of this title.
‘‘(b) PROCEDURES.—
‘‘(1) IN
GENERAL.—Rates under this section
shall be established in writing, complete with a
statement of explanation and justification.
‘‘(2) PUBLICATION.—The Directors shall cause
each such decision and statement to be published in
the Federal Register at least 45 days before the rate
or rates to which they pertain take effect.
‘‘(c) LIMITATIONS ON AUTHORITY.—
‘‘(1) IN GENERAL.—Except as provided in para-
graph (2)—
‘‘(A) FREQUENCY.—Ratemaking authority
under this section may not be exercised more
than once for purposes of any year.
‘‘(B) UNIFORM
EFFECTIVE
DATE.—All
changes in rates pursuant to this section shall
take effect beginning on the same date.
‘‘(2) EXCEPTION
FOR
CHANGE
DUE
TO
EXI-
GENT CIRCUMSTANCES.—
‘‘(A) IN GENERAL.—If the maximum rate
allowable for a product in a year changes pur-
suant to a request granted under section
3723(f), then, in the event that ratemaking au-
thority under this section was previously exer-
cised with respect to such product for such
year, such rate may be modified, not more than
once more in such year, based on the change in
the maximum rate allowable.
‘‘(B) UNIFORM
EFFECTIVE
DATE.—All
changes in rates pursuant to this paragraph
shall, to the extent based on the same change
in the maximum rate allowable, take effect be-
ginning on the same date.
‘‘(d) EXCEPTION TO REQUIREMENT RELATING TO
UNIFORM APPLICABILITY OF EACH MAXIMUM.—
‘‘(1) DEFINITIONS.—For purposes of this sub-
section—
‘‘(A) SUBORDINATE UNIT.—The term ‘sub-
ordinate unit’, with respect to a product, means
a subclass or other similar subordinate unit of
such product, as described in subparagraph (A)
of section 3721(3).
‘‘(B) FURTHER SUBORDINATE UNIT.—The
term ‘further subordinate unit’, with respect to
a subordinate unit, means a further subordinate
unit thereof, as described in subparagraph (B)
of section 3721(3).
‘‘(2) APPLICABILITY.—This subsection applies
with respect to the second, third, and fourth baskets
of products.
‘‘(3) RULE.—
‘‘(A) IN
GENERAL.—Notwithstanding the
uniformity requirement in section 3723(d), for
purposes of establishing rates for further subor-
dinate units of any particular subordinate unit
of a product, rates may be established at such
levels as the Directors consider appropriate,
subject to subparagraph (B).
‘‘(B) REQUIREMENT.—The rates so estab-
lished may not exceed the maximum rates es-
tablished for such further subordinate units in
accordance with subparagraph (C).
‘‘(C) ALTERNATIVE MAXIMUM RATES.—Al-
ternative maximum rates may be established
under this subparagraph by using adjustment
factors (other than those that would otherwise
apply absent this subsection) fixed at levels
which the Directors consider appropriate, so
long as the resulting average maximum rate,
for the further subordinate units comprising
such subordinate unit (determined separately
for each successive level, if there are 2 or more
levels of further subordinate units), remains
equal to the maximum rate that would other-
wise apply with respect to those further subor-
dinate units.
‘‘(e) FINALITY
OF DECISIONS.—Decisions of the
Postal Service under this section shall be final and shall
not be subject to administrative or judicial review.
‘‘SUBCHAPTER 
III—RATES 
AND 
FEES 
FOR
PRODUCTS IN THE COMPETITIVE CAT-
EGORY OF MAIL
‘‘§ 3741. Definitions
‘‘For purposes of this subchapter—
‘‘(1) YEAR, PRODUCT, RATE, ETC.—The terms
‘year’, ‘product’, ‘rate’, and ‘product in the non-
competitive category of mail’ each has the meaning
given such term by section 3721, unless the context
otherwise requires.
‘‘(2) PRODUCTS
IN
THE
COMPETITIVE
CAT-
EGORY OF MAIL.—The term ‘products in the com-
petitive category of mail’ means—
‘‘(A) priority mail;
‘‘(B) expedited mail;
‘‘(C) mailgrams;
‘‘(D) international mail;
‘‘(E) parcel post;
‘‘(F) special services; and
‘‘(G) any product transferred to the com-
petitive category of mail under section 3743;
except that such term does not include any product
then currently in the noncompetitive category of
mail.
‘‘(3) RULE OF CONSTRUCTION.—
‘‘(A) IN GENERAL.—Mail matter referred
to in paragraph (2) shall, for purposes of such
paragraph, be considered to have the meaning
given them under the mail classification sched-
ule (within the meaning of section 3623) as of
the effective date of this chapter.
‘‘(B) UPDATES.—The Board of Directors
shall, whenever any relevant change occurs
(pursuant to a reclassification under chapter
36, a transfer of a product from the non-
competitive category of mail under section
3743, or the conversion of an experimental
product under subchapter IV to a permanent
one), prescribe a new list of products under
subparagraphs (A) through (G) of paragraph
(2). The revised list shall indicate how and
when any previous list is superseded.
‘‘§ 3742. Action of the Directors
‘‘(a) IN GENERAL.—The Directors, with the written
concurrence of a majority of all of the Directors then hold-
ing office, shall establish rates for products in the competi-
tive category of mail.
‘‘(b) REQUIREMENTS.—Rates under this section shall
be established in accordance with the policies of this title
and the requirement that each product in the competitive
category of mail bear the direct and indirect postal costs
attributable to such product plus a reasonable contribution
to all other costs of the Postal Service.
‘‘(c) PROCEDURES.—Subsections (b), (c)(1), and (e)
of section 3724 shall apply with respect to rates and deci-
sions under this section.
‘‘§ 3743. Transfers of products from the noncompeti-
tive category of mail
‘‘(a) IN GENERAL.—The Postal Service or users of
the mails may from time to time request the Postal Rate
Commission to submit, or the Commission may submit to
the Directors on its own initiative, a recommended deci-
sion on transferring one or more products in the non-
competitive category of mail to the competitive category
of mail.
‘‘(b) CRITERIA.—A recommended decision under this
section shall be made in accordance with the policies of
this title and taking into consideration the availability and
nature of enterprises in the private sector engaged in the
delivery of the product involved.
‘‘(c) PROCEDURES.—If the Commission receives a re-
quest under subsection (a) or decides to act on its own
initiative, the Commission shall, after proceedings in con-
formity with section 3624, issue a recommended decision
which shall be acted upon in accordance with the provi-
sions of section 3625 and subject to review in accordance
with the provisions of section 3628.
‘‘§ 3744. Application of antitrust laws
‘‘(a) APPLICABILITY OF THE ANTITRUST LAWS.—
The antitrust laws shall apply with respect to the Postal
Service to the extent that the Postal Service engages in
conduct with respect to—
‘‘(1) any product in the competitive category of
mail; and
‘‘(2) any product offered pursuant to a market
test under subchapter IV.
‘‘(b) DEFINITION.—For purposes of subsection (a),
the term ‘antitrust laws’ has the meaning given such term
in subsection (a) of the first section of the Clayton Act
(15 U.S.C. 12(a)), but includes section 5 of the Federal
Trade Commission Act (15 U.S.C. 45) to the extent that
such section 5 applies to unfair methods of competition.
‘‘(c) EFFECTIVE DATE.—This section shall not apply
with respect to conduct occurring before the effective date
of this chapter.
‘‘SUBCHAPTER IV—MARKET TESTS OF
EXPERIMENTAL PRODUCTS
‘‘§ 3761. Market tests
‘‘(a) IN GENERAL.—The Postal Service may conduct
market tests of experimental products. Subject to the pro-
visions of this section, the conducting of any such market
test by the Postal Service shall not be limited by any lack
of specific authority under this title to take the action con-
templated, or by any provision of this title or any rule
or regulation prescribed under this title which is inconsist-
ent with the action.
‘‘(b) PROCEDURAL REQUIREMENTS.—Before con-
ducting a market test, the Postal Service shall—
‘‘(1) develop a plan for such test which identi-
fies—
‘‘(A) the purposes of the test (and how
they comport with the provisions of section
101);
‘‘(B) the duration;
‘‘(C) the anticipated costs for each year;
‘‘(D) the anticipated revenues for each
year;
‘‘(E) a specific description of any aspect of
the test for which there is a lack of specific au-
thority; and
‘‘(F) a specific citation to any provision of
law, rule, or regulation which, if not waived
under this section, would prohibit the conduct-
ing of the test, or any part of the test as pro-
posed;
‘‘(2) at least 60 days in advance of the date any
test proposed under this section is to take effect—
‘‘(A) publish the plan in the Federal Reg-
ister;
‘‘(B) submit such plan to each House of
Congress; and
‘‘(C) provide notification of the proposed
test to officers and employees likely to be af-
fected by the test.
‘‘(c) RESTRICTIONS.—No market test under this sec-
tion may provide for a waiver of—
‘‘(1) any provision of section 410(b)–(d) (or any
law applicable to the Postal Service by virtue of any
such provision);
‘‘(2) section 412 or any other provision of law
(not otherwise covered by paragraph (1)) providing
for the nondisclosure of names or addresses or any
other information or matter by the Postal Service;
‘‘(3) the limitation on compensation under the
last sentence of section 1003(a);
‘‘(4) any provision of chapter 10 (relating to
employment within the Postal Service);
‘‘(5) any provision of chapter 12 or of any col-
lective-bargaining agreement under such chapter;
‘‘(6) any provision of section 3623(d) (relating
to maintaining one or more classes of mail for the
transmission of letters sealed against inspection);
‘‘(7) any provision of law—
‘‘(A) providing for equal employment op-
portunity through affirmative action; or
‘‘(B) providing any right or remedy avail-
able to any officer or employee or applicant for
employment in the Postal Service; or
‘‘(8) any rule or regulation prescribed under
any provision of law referred to in any of the preced-
ing paragraphs of this subsection.
‘‘(d) LIMITATIONS.—
‘‘(1) DURATION.—Each market test under this
section shall terminate not later than 3 years after
such project takes effect, except that the project
may continue beyond the date on which it would oth-
erwise terminate, if proceedings under subsection (g)
are then pending with respect to the product in-
volved.
‘‘(2) DOLLAR
LIMITATION.—A market test
under this section may not be conducted if the an-
ticipated revenues attributable to such test would,
for any calendar year, exceed $100,000,000.
‘‘(e) EMPLOYEES WITHIN BARGAINING UNITS.—Em-
ployees within a unit with respect to which a labor organi-
zation is accorded exclusive recognition under chapter 12
shall not be included within any market test under this
section—
‘‘(1) if the test would violate a collective-bar-
gaining agreement under such chapter between the
Postal Service and the labor organization, unless
there is another written agreement with respect to
the test between the Postal Service and the organi-
zation permitting the inclusion; or
‘‘(2) if the test is not covered by such a collec-
tive-bargaining agreement, until there has been con-
sultation or negotiation, as appropriate, by the Post-
al Service with the labor organization.
‘‘(f) OTHER EMPLOYEES.—Employees within any
unit with respect to which a labor organization has not
been accorded exclusive recognition under chapter 12 shall
not be included within any market test under this section
unless there has been consultation by the Postal Service
regarding the test with the employees in the unit.
‘‘(g) CONVERSION TO PERMANENCE.—A request to
make an experimental product (as referred to in sub-
section (a)) permanent—
‘‘(1) shall be made in accordance with the same
requirements as set forth in section 3743(b);
‘‘(2) shall be subject to the same procedures
(including review) as set forth in section 3743(c),
except as provided in subsection (h); and
‘‘(3) may not be considered unless it is made by
the Postal Service.
‘‘(h) TIME LIMITATION ON COMMISSION DELIBERA-
TIONS.—For purposes of applying section 3624 (pursuant
to subsection (g)(2)) with respect to a request to make
an experimental product permanent—
‘‘(1) section 3624(c) (as deemed to have re-
mained in effect under paragraph (2)) shall be ap-
plied with respect to such request in the same man-
ner as would have applied in the case of a request
made under section 3622 (as last in effect before
being repealed by section 1002); and
‘‘(2) section 3624 (as last in effect before being
repealed by section 1002) shall be deemed to have
remained in effect, except that subsection (c) of such
section (as then in effect) shall be applied by sub-
stituting—
‘‘(A) ‘6 months’ for ‘10 months’ in para-
graph (1) thereof; and
‘‘(B) ‘6-month period’ for ‘10-month pe-
riod’ in paragraph (2) thereof.
‘‘SUBCHAPTER V—REPORTING REQUIREMENTS
AND RELATED PROVISIONS
‘‘§ 3781. Definition
‘‘For purposes of this subchapter, the term ‘product’
has the meaning given such term by section 3721(3).
‘‘§ 3782. Reporting requirements
‘‘(a) IN GENERAL.—No later than 3 months after the
last day of each fiscal year, the Postal Service shall submit
sufficient information to the Postal Rate Commission to
demonstrate that the then current rates for products are
in compliance with all applicable requirements of this title.
‘‘(b) AUDITS.—
‘‘(1) IN GENERAL.—Before submitting any in-
formation under subsection (a), the Postal Service
shall have such information audited by an independ-
ent professional accounting organization (from out-
side of government), and such audit shall be submit-
ted along with the information to which it relates.
‘‘(2) ACCESS TO PAPERS AND SUPPORTING MA-
TERIALS.—
‘‘(A) IN GENERAL.—The Commission shall
have access to the working papers and support-
ing materials of an auditor in connection with
any audit conducted by such auditor under this
subsection.
‘‘(B) CONFIDENTIALITY.—Any information
described in paragraph (3) to which the Com-
mission gains access under subparagraph (A)
shall be subject to section 3604(g)(2) in the
same way as if the Commission had received
notification with respect to such information
under section 3604(g)(1).
‘‘(3) IDENTIFICATION OF PROTECTED INFORMA-
TION.—
‘‘(A) IN
GENERAL.—The Postal Service
shall, in accordance with regulations which it
shall prescribe, ensure that—
‘‘(i) any protected information shall,
before being furnished to an auditor under
this section, be appropriately identified (in-
cluding, to the extent practicable, by being
appropriately stamped, labelled, tagged, or
otherwise physically marked); and
‘‘(ii) appropriate measures are taken
(such as the inclusion of appropriate terms
in any contract or other agreement with
the auditor) to safeguard the security and
confidentiality of protected information.
‘‘(B) 
PROTECTED
INFORMATION
DE-
FINED.—For purposes of this paragraph, the
term ‘protected information’ means any infor-
mation which, in the judgment of the Postal
Service, is information of a type which is de-
scribed in section 410(c) of this title, or exempt
from public disclosure under section 552(b) of
title 5.
‘‘(c) ADDITIONAL
REQUIREMENTS.—The Postal
Service shall submit to the Commission, at the time of
making its submissions under subsections (a) and (b)—
‘‘(1) a copy of the then most recent comprehen-
sive statement under section 2401(b);
‘‘(2) a copy of the then most recent perform-
ance plan and program performance reports required
under sections 2803 and 2804, respectively; and
‘‘(3) for the most recently completed fiscal year,
with respect to each product in the competitive cat-
egory of mail, each product in the noncompetitive
category of mail, and each product under subchapter
IV—
‘‘(A) market information, including mail
volumes;
‘‘(B) postal financial information, includ-
ing costs to the Postal Service and revenues;
‘‘(C) measures of the speed and reliability
of postal service, including—
‘‘(i) the service standard applicable to
each product;
‘‘(ii) the actual level of service (de-
scribed in terms of speed of delivery and
reliability) provided; and
‘‘(iii) the degree of customer satisfac-
tion with the service provided; and
‘‘(D) any other information that the Com-
mission and the Postal Service mutually agree
upon.
‘‘(d) REGULATIONS.—The Commission shall pre-
scribe regulations specifying the form and detail of the in-
formation required under this section, consistent with oth-
erwise applicable provisions of this title. Such regulations
shall give due consideration to avoiding unnecessary or un-
warranted administrative effort and expense on the part
of the Postal Service.
‘‘§ 3783. Use of profits
‘‘(a) DEFINITION OF PROFITS.—For purposes of this
section, the term ‘profits’, with respect to any fiscal year,
means the amount by which total income of the Postal
Service attributable to such year, exceeds total costs of
the Postal Service attributable to such year, as determined
by the Directors, in writing, in accordance with generally
accepted accounting principles.
‘‘(b) DETERMINATION
OF NONCOMPLIANCE.—Not
later than 90 days after receiving all the submissions re-
quired under section 3782 with respect to a fiscal year,
the Postal Rate Commission shall make a written deter-
mination as to—
‘‘(1) whether any rates or fees were placed in
effect during such fiscal year which were not in com-
pliance with applicable provisions of this title;
‘‘(2) whether any performance goals, estab-
lished under section 2803 or 2804 for such fiscal
year, were not met; and
‘‘(3) whether any service standards for such fis-
cal year were not met, based on the information
under section 3782(c)(3)(C).
‘‘(c) IF NO NONCOMPLIANCE IS FOUND.—If the
Commission does not make a timely determination of non-
compliance under subsection (b), or if a timely determina-
tion is made under subsection (b) to the effect that no
instances of noncompliance occurred, up to 100 percent
of the profits (if any) from the preceding fiscal year may
be used by the Postal Service for the purposes described
in subsection (e).
‘‘(d) IF ANY NONCOMPLIANCE IS FOUND.—If the
Commission makes a timely determination of noncompli-
ance under subsection (b)—
‘‘(1) the Commission may order, based on the
seriousness of the noncompliance, that a specific
percentage of the previous fiscal year’s profits (if
any), not to exceed 50 percent, be set aside for the
purposes described in subsection (f); and
‘‘(2) up to 100 percent of the remainder of the
previous fiscal year’s profits (if any) may be used by
the Postal Service for the purposes described in sub-
section (e).
‘‘(e) BONUSES.—
‘‘(1) IN GENERAL.—The Postal Service shall es-
tablish a program under which cash bonuses may be
paid to officers and employees of the Postal Service
out of any profits which are available for that pur-
pose.
‘‘(2) REQUIREMENTS.—Under the program—
‘‘(A) bonuses may be paid to officers and
employees of the Postal Service under criteria
which shall be fair and equitable;
‘‘(B) the sole source of funding shall be
any profits from any fiscal year, subject to the
application of subsection (d)(1) with respect to
such fiscal year; and
‘‘(C) subject to subsection (h), bonuses
shall not be precluded by the limitation on com-
pensation under the last sentence of section
1003(a).
‘‘(3) DISCRETIONARY NATURE OF PROGRAM.—
Nothing in this section shall be considered to create
any entitlement to receive bonuses or to require that
any portion of the profits from any fiscal year be
used for bonuses in excess of whatever amount the
Postal Service considers appropriate (if any).
‘‘(4) CONSIDERATIONS RELATING TO THE POR-
TION
OF
PROFITS
TO
BE
AVAILABLE
FOR
BO-
NUSES.—In any decision relating to what portion of
the available profits from any fiscal year shall be
available or used for purposes of the payment of bo-
nuses under this subsection, there shall be taken
into consideration—
‘‘(A) the duty on the part of the Postal
Service to provide efficient and economical post-
al services in accordance with the requirements
of section 101, section 403, and this chapter;
and
‘‘(B) what portion of those profits (if any)
should be used—
‘‘(i) to retire debts or other obliga-
tions of the Postal Service;
‘‘(ii) to limit future increases in postal
rates or fees for products in the non-
competitive category of mail; or
‘‘(iii) to carry out any other purpose.
‘‘(f) DEDICATION
OF FUNDS TOWARD REDUCING
RATES AND FEES.—
‘‘(1) IN GENERAL.—Any amounts ordered to be
set aside under subsection (d)(1) may not be used
for any purpose other than to defray increases in fu-
ture rates and fees for products in the noncompeti-
tive category of mail or to reduce the rates and fees
already in effect for such products.
‘‘(2) COMPLIANCE.—Whenever an order under
subsection (d)(1) is issued, the Postal Service shall
include in its next comprehensive statement under
section 2401(b) (and each subsequent statement
thereunder until the order has been fully complied
with)—
‘‘(A) a statement of the measures which
have been or will be implemented in order to
comply with the order;
‘‘(B) the amount of savings actually passed
on to mailers during the reporting period, as
compared to the estimated savings for such pe-
riod; and
‘‘(C) what measures, if any, have been or
will be implemented in order to reconcile any
difference identified under subparagraph (B).
‘‘(3) NONREDUNDANT INFORMATION.—Nothing
in paragraph (2) shall be considered to require that
the same information be reported if included in a
previous report under this subsection.
‘‘(g) PROCEDURES.—The provisions of sections 556
and 557 of title 5 shall not apply to any review carried
out by the Commission under this section.
‘‘(h) REPORTING REQUIREMENT.—Included in its
comprehensive statement under section 2401(b) for any
period shall be—
‘‘(1) the name of each person receiving a bonus
during such period which would not have been allow-
able but for the provisions of subsection (e)(2)(C);
‘‘(2) the amount of the bonus; and
‘‘(3) the amount by which the limitation re-
ferred to in subsection (e)(2)(C) was exceeded.’’.
(b) REPRESENTATION IN AN ANTITRUST ACTION.—
Section 409(d) of title 39, United States Code, is amended
by striking ‘‘(d) The’’ and inserting ‘‘(d)(1) Except in any
instance in which the Postal Service elects to employ attor-
neys under paragraph (2), the’’ and by adding at the end
the following:
‘‘(2)(A) As used in this paragraph, the term ‘anti-
trust laws’ has the meaning given to it by section 3744(b).
‘‘(B) The Postal Service may, in connection with any
litigation brought against the Postal Service under any of
the antitrust laws, employ attorneys by contract or other-
wise to conduct litigation on its behalf without regard to
any provision of paragraph (1).’’.
(c) TECHNICAL AND CONFORMING AMENDMENTS.—
(1) Section 410(c)(4) of title 39, United States
Code, is amended by inserting ‘‘or 37’’ after ‘‘36’’.
(2) Section 409(a) of title 39, United States
Code, is amended by striking ‘‘section 3628’’ and in-
serting ‘‘section 3628 (or any provision of this title
incorporating such section by reference) or section
3723(g)’’.
SEC. 1002. TERMINATION OF RATEMAKING AUTHORITY
UNDER CHAPTER 36 AND RELATED MATTERS.
(a) AUTHORITY TO FIX RATES AND CLASSES.—Sec-
tion 3621 of title 39, United States Code, is amended—
(1) in the first sentence by striking ‘‘this chap-
ter’’ and inserting ‘‘this chapter and chapter 37’’;
(2) by repealing the last 2 sentences.
(b) RATES AND FEES.—
(1) IN
GENERAL.—Section 3622 of title 39,
United States Code, is repealed.
(2) CLERICAL AMENDMENT.—The item relating
to section 3622 in the table of sections at the begin-
ning of chapter 36 of such title 39 is repealed.
(c) RECOMMENDED DECISIONS OF COMMISSION.—
Section 3624 of title 39, United States Code, is amend-
ed—
(1) in subsection (a) by striking ‘‘section 3622
or 3623’’ and inserting ‘‘section 3623’’;
(2) by repealing subsection (c); and
(3) in subsection (d)—
(A) by striking ‘‘rate, fee, or’’; and
(B) by striking ‘‘section 3622 or 3623, as
the case may be.’’ and inserting ‘‘section
3623.’’.
(d) ACTION OF THE GOVERNORS.—Section 3625 of
title 39, United States Code, is amended—
(1) in the third sentence of subsection (d)—
(A) by striking ‘‘(1)’’; and
(B) by striking ‘‘chapter, and (2)’’ and all
that follows through the period and inserting
‘‘chapter and chapter 37, respectively.’’; and
(2) by amending subsection (f) to read as fol-
lows:
‘‘(f) Except as otherwise provided in this title, the
Board shall determine—
‘‘(1) the date on which any changes in the mail
classification schedule (whether made under this
chapter or chapter 37) shall become effective; and
‘‘(2) the date on which new rates and fees
under chapter 37 shall become effective.’’.
(e) REDUCED-RATE CATEGORIES OF MAIL.—
(1) CONTINUED APPLICABILITY OF RELEVANT
PROVISIONS OF CHAPTER 36 FOR THE LIMITED PUR-
POSE OF COMPUTING ALTERNATIVE RATE LIMITA-
TIONS FOR NONCOMPETITIVE PRODUCTS.—Notwith-
standing any other provision of this Act (or any
amendment made by this Act), the rate of postage
established under subchapter II of chapter 37 of
title 39, United States Code, as amended by this
Act, for a class of mail or kind of mailer referred
to in section 3626(a)(1) of such title may not, at
any time, exceed the lesser of—
(A) the maximum rate then otherwise al-
lowable under chapter 37 (determined as if this
subsection had not been enacted) for such class
of mail or kind of mailer; or
(B) the rate determined under paragraph
(2) for such class of mail or kind of mailer.
(2) DETERMINATION OF RATES WHICH WOULD
THEN OTHERWISE APPLY UNDER CHAPTER 36.—
(A) IN GENERAL.—For purposes of para-
graph (1)(B), the United States Postal Service
shall determine, and subsequently revise when-
ever necessary in order to keep determinations
under this paragraph current, the rate of post-
age which would then otherwise apply with re-
spect to each class of mail or kind of mailer re-
ferred to in section 3626(a)(1) of such title 39.
(B) METHODOLOGY.—Subparagraph (A)
shall be carried out—
(i) by applying the provisions of para-
graphs (2) through (5) of section 3626(a)
and of section 3642 of such title 39; and
(ii) by using the then most recent in-
formation available to the Postal Service
relating to costs attributable and institu-
tional costs (within the meaning of the
provisions referred to in clause (i)).
(3) LIMITATION UNDER THIS SUBSECTION TO
BE USED INSTEAD OF (AND TO BE TREATED AS)
THE LIMITATION UNDER SECTION 3722.—The maxi-
mum rate determined for a product under this sub-
section shall, for all purposes (except paragraph
(1)(A)), be used instead of (and shall be treated as)
the maximum rate allowable for such product under
section 3722 of such title 39.
(4) STATEMENT OF LIMITED PURPOSE.—Sec-
tion 3626(a) of such title 39 is amended by adding
at the end the following:
‘‘(6) Neither this subsection nor section 3642 shall
have any force or effect, except for purposes of section
1002(e) of the Postal Reform Act of 1997. Nothing in the
preceding sentence shall be considered to affect any base-
line rate established pursuant to section 3701.’’.
(5) REGULATIONS.—The United States Postal
Service shall prescribe such regulations as may be
necessary to carry out the provisions of sections
3626 (including subsections (b) through (n) thereof)
and 3642 of such title 39 (as amended by this Act)
in a manner consistent with chapter 37 of such title
39 (as amended by this Act) and with the purposes
of this Act.
(f) OTHER TEMPORARY RATES.—
(1) IN
GENERAL.—Section 3641 of title 39,
United States Code, is amended—
(A) by repealing subsections (a) through
(d); and
(B) in subsection (f) by striking ‘‘in rates
of postage, and fees for postal services, or’’.
(2) CLERICAL AMENDMENTS.—
(A)(i) The heading for section 3641 of
such title 39 is amended to read as follows:
‘‘§ 3641. Temporary changes in classes’’.
(ii) The item relating to section 3641 in
the table of sections at the beginning of chapter
36 of such title 39 is amended to read as fol-
lows:
‘‘3641. Temporary changes in classes.’’.
(B)(i) The heading for subchapter III of
chapter 36 of such title 39 is amended to read
as follows:
‘‘SUBCHAPTER II—TEMPORARY CLASSES’’.
(ii) The analysis for chapter 36 of such
title 39 is amended by striking the item relating
to subchapter II and inserting the following:
‘‘SUBCHAPTER II—TEMPORARY CLASSES’’.
(g) RATE AND SERVICE COMPLAINTS.—Section 3662
of title 39, United States Code, is amended to read as
follows:
‘‘§ 3662. Rate and service complaints
‘‘(a) Interested parties who believe the Postal Service
is charging rates which do not conform to the policies set
out in this title or who believe that they are not receiving
postal service in accordance with the policies of this title
may lodge a complaint with the Postal Rate Commission
in such form and in such manner as it may prescribe. The
Commission may in its discretion hold hearings on such
complaint.
‘‘(b)(1) If the Commission, in a classification matter
covered by subchapter II, determines the complaint to be
justified, it shall, after proceedings in conformity with sec-
tion 3624, issue a recommended decision which shall be
acted upon in accordance with the provisions of section
3625 and subject to review in accordance with the provi-
sions of section 3628.
‘‘(2) If a violation of a limitation under section 3722
or 3724(d) (relating to the maximum rate allowable for
products in the noncompetitive category of mail) or section
3742(b) (relating to requirements applicable with respect
to rates established for products in the competitive cat-
egory of mail) is involved, it may issue an appropriate
order under section 3783.
‘‘(3) If a matter other than a matter covered by para-
graph (1) or (2) is involved, and the Commission after
a hearing finds the complaint to be justified, it shall
render a public report thereon to the Postal Service which
shall take such action as it deems appropriate.’’.
(h) LIMITATIONS.—Section 3684 of title 39, United
States Code, is amended by striking ‘‘or 34’’ and inserting
‘‘34, or 37’’.
(i) MAIL CLASSIFICATION.—Section 3623 of title 39,
United States Code, is amended—
(1) by repealing subsection (a);
(2) in subsection (b) by striking ‘‘Following the
establishment of the mail classification schedule re-
quested under subsection (a) of this section, the’’
and inserting ‘‘The’’;
(3) in subsection (c) (in the matter before para-
graph (1)) by striking ‘‘this title’’ and inserting
‘‘this title, subsection (e),’’; and
(4) by adding at the end the following:
‘‘(e)(1) Any change under this subchapter in the mail
classification system shall be in accordance with the re-
quirements of paragraph (2).
‘‘(3) For purposes of this subsection—
‘‘(A) the term ‘product’ has the meaning given
such term by section 3721(3);
‘‘(B) the term ‘noncompetitive category of mail’
refers to the category of mail under subchapter II of
chapter 37;
‘‘(C) the term ‘competitive category of mail’ re-
fers to the category of mail under subchapter III of
chapter 37;
‘‘(D) the term ‘basket’ refers to a basket under
paragraph (3), (4), (5), or (6) of section 3723(a);
‘‘(E) the term ‘ratemaking cycle’ has the mean-
ing given such term by section 3723(a)(1); and
‘‘(F) the term ‘new product’ means a product
which, as of the effective date of this subsection, is
not available to the public through the Postal Serv-
ice.’’.
(j) EFFECTIVE DATE.—This section and the amend-
ments made by this section shall become effective on the
effective date of the baseline rates and fees established
pursuant to section 3701 of title 39, United States Code,
as amended by section 1001.
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