125 
SEC. 709. ASSESSMENT OF CERTAIN RATE DEFICIENCIES. 
(a) IN GENERAL.—Within 12 months after the date 
of the enactment of this Act, the Office of Inspector Gen-
eral of the United States Postal Service shall study and 
submit to the President, the Congress, and the United 
States Postal Service, a report concerning the administra-
tion of section 3626(k) of title 39, United States Code. 
(b) SPECIFIC REQUIREMENTS.—The study and re-
port shall specifically address the adequacy and fairness 
of the process by which assessments under section 3626(k) 
of title 39, United States Code, are determined and ap-
pealable, including— 
(1) whether the Postal Regulatory Commission 
or any other body outside the Postal Service should 
be assigned a role; and 
(2) whether a statute of limitations should be 
established for the commencement of proceedings by 
the Postal Service thereunder. 
SEC. 710. ASSESSMENT OF FUTURE BUSINESS MODEL OF 
THE POSTAL SERVICE. 
(a) GOVERNMENT ACCOUNTABILITY OFFICE MAN-
DATE.—The Comptroller General of the United States 
shall prepare and submit to the President and Congress 
a report that builds upon the work of the 2002 President’s 
Commission on the United States Postal Service by evalu-
ating in-depth various options and strategies for the long- 
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126 
term structural and operational reforms of the United 
States Postal Service. The final report required by this 
section shall be submitted within 5 years of the date of 
enactment of this Act. 
(b) PROTECTION
OF UNIVERSAL SERVICE.—The 
Government Accountability Office may include such rec-
ommendations as it considers appropriate with respect to 
how the Postal Service’s business model can be maintained 
or transformed in an orderly manner that will minimize 
adverse effects on all interested parties and assure contin-
ued availability of affordable, universal postal service 
throughout the United States. The Government Account-
ability Office shall not consider any strategy or other 
course of action that would pose a significant risk to the 
continued availability of affordable, universal postal serv-
ice throughout the United States. 
(c) ELEMENTS OF REPORT.— 
(1) TOPICS TO ADDRESS.—The report shall ad-
dress at least the following: 
(A) Specification of nature and bases of 
one or more sets of reasonable assumptions 
about the development of the postal services 
market, to the extent that such assumptions 
may be necessary or appropriate for each strat-
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127 
egy identified by the Government Accountability 
Office. 
(B) Specification of the nature and bases 
of one or more sets of reasonable assumptions 
about the development of the regulatory frame-
work for postal services, to the extent that such 
assumptions may be necessary or appropriate 
for each strategy identified by the Government 
Accountability Office. 
(C) Qualitative and, to the extent possible, 
quantitative effects that each strategy identified 
by the Government Accountability Office may 
have on universal service generally, the Postal 
Service, mailers, postal employees, private com-
panies that provide delivery services, and the 
general public. 
(D) Financial effects that each strategy 
identified by the Government Accountability Of-
fice may have on the Postal Service, postal em-
ployees, the Treasury of the United States, and 
other affected parties, including the American 
mailing consumer. 
(E) Feasible and appropriate procedural 
steps and timetables for implementing each 
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128 
strategy identified by the Government Account-
ability Office. 
(F) Such additional topics as the Comp-
troller General shall consider necessary and ap-
propriate. 
(2) MATTERS TO CONSIDER.—For each strat-
egy identified, the Government Accountability Office 
shall assess how each business model might— 
(A) address the human-capital challenges 
facing the Postal Service, including how em-
ployee-management relations within the Postal 
Service may be improved; 
(B) optimize the postal infrastructure, in-
cluding the best methods for providing retail 
services that ensure convenience and access to 
customers; 
(C) ensure the safety and security of the 
mail and of postal employees; 
(D) minimize areas of inefficiency or waste 
and improve operations involved in the collec-
tion, processing, or delivery of mail; and 
(E) impact other matters that the Comp-
troller General determines are relevant to evalu-
ating a viable long-term business model for the 
Postal Service. 
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129 
(3) EXPERIENCES OF OTHER COUNTRIES.—In 
preparing the report required by subsection (a), the 
Government Accountability Office shall comprehen-
sively and quantitatively investigate the experiences 
of other industrialized countries that have trans-
formed the national post office. The Government Ac-
countability Office shall undertake such original re-
search as it deems necessary. In each case, the Gov-
ernment Accountability Office shall describe as fully 
as possible the costs and benefits of transformation 
of the national post office on all affected parties and 
shall identify any lessons that foreign experience 
may imply for each strategy identified by the re-
search organization. 
(d) OUTSIDE EXPERTS.—In preparing its study, the 
Government Accountability Office may retain the services 
of additional experts and consultants. 
(e) CONSULTATION.—In preparing its report, the 
Government Accountability Office shall consult fully with 
the Postal Service, the Postal Regulatory Commission, 
other Federal agencies, postal employee unions and man-
agement associations, mailers, private companies that pro-
vide delivery services, and the general public. The Govern-
ment Accountability Office shall include with its final re-
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130 
port a copy of all formal written comments received under 
this subsection. 
(f) AUTHORIZATION
OF APPROPRIATIONS.—There 
are authorized to be appropriated from the Postal Service 
Fund such sums as may be necessary to carry out this 
section. 
SEC. 711. PROVISIONS RELATING TO COOPERATIVE MAIL-
INGS. 
(a) STUDY.— 
(1) IN GENERAL.—The Postal Regulatory Com-
mission shall examine section E670.5.3 of the Do-
mestic Mail Manual to determine whether it contains 
adequate safeguards to protect against— 
(A) abuses of rates for nonprofit mail; and 
(B) deception of consumers. 
(2) REPORT.—The Commission shall report the 
results of its examination to the Postal Service, 
along with any recommendations that the Commis-
sion determines appropriate. 
(b) FAILURE TO ACT.—If the Postal Service fails to 
act on the recommendations of the Commission, the Com-
mission may take such action as it determines necessary 
to prevent abuse of rates or deception of consumers. 
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131 
SEC. 712. DEFINITION. 
For purposes of this title, the term ‘‘Board of Gov-
ernors’’ has the meaning given such term by section 102 
of title 39, United States Code. 
TITLE 
VIII—POSTAL 
SERVICE 
RETIREMENT 
AND 
HEALTH 
BENEFITS FUNDING 
SEC. 801. SHORT TITLE. 
This title may be cited as the ‘‘Postal Civil Service 
Retirement and Health Benefits Funding Amendments of 
2006’’. 
SEC. 802. CIVIL SERVICE RETIREMENT SYSTEM. 
(a) IN GENERAL.—Chapter 83 of title 5, United 
States Code, is amended— 
(1) in section 8334(a)(1)(B), by striking clause 
(ii) and inserting the following: 
‘‘(ii) In the case of an employee of the United States 
Postal Service, no amount shall be contributed under this 
subparagraph.’’; and 
(2) by amending section 8348(h) to read as fol-
lows: 
‘‘(h)(1) In this subsection, the term ‘Postal surplus 
or supplemental liability’ means the estimated difference, 
as determined by the Office, between— 
‘‘(A) the actuarial present value of all future 
benefits payable from the Fund under this sub-
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132 
chapter to current or former employees of the 
United States Postal Service and attributable to ci-
vilian employment with the United States Postal 
Service; and 
‘‘(B) the sum of— 
‘‘(i) the actuarial present value of deduc-
tions to be withheld from the future basic pay 
of employees of the United States Postal Serv-
ice currently subject to this subchapter under 
section 8334; 
‘‘(ii) that portion of the Fund balance, as 
of the date the Postal surplus or supplemental 
liability is determined, attributable to payments 
to the Fund by the United States Postal Serv-
ice and its employees, minus benefit payments 
attributable to civilian employment with the 
United States Postal Service, plus the earnings 
on such amounts while in the Fund; and 
‘‘(iii) any other appropriate amount, as de-
termined by the Office in accordance with gen-
erally accepted actuarial practices and prin-
ciples. 
‘‘(2)(A) Not later than June 15, 2007, the Office 
shall determine the Postal surplus or supplemental liabil-
ity, as of September 30, 2006. If that result is a surplus, 
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133 
the amount of the surplus shall be transferred to the Post-
al Service Retiree Health Benefits Fund established under 
section 8909a by June 30, 2007. 
‘‘(B) The Office shall redetermine the Postal surplus 
or supplemental liability as of the close of the fiscal year, 
for each fiscal year beginning after September 30, 2007, 
through the fiscal year ending September 30, 2038. If the 
result is a surplus, that amount shall remain in the Fund 
until distribution is authorized under subparagraph (C). 
Beginning June 15, 2017, if the result is a supplemental 
liability, the Office shall establish an amortization sched-
ule, including a series of annual installments commencing 
on September 30 of the subsequent fiscal year, which pro-
vides for the liquidation of such liability by September 30, 
2043. 
‘‘(C) As of the close of the fiscal years ending Sep-
tember 30, 2015, 2025, 2035, and 2039, if the result is 
a surplus, that amount shall be transferred to the Postal 
Service Retiree Health Benefits Fund, and any prior am-
ortization schedule for payments shall be terminated. 
‘‘(D) Amortization schedules established under this 
paragraph shall be set in accordance with generally accept-
ed actuarial practices and principles, with interest com-
puted at the rate used in the most recent valuation of the 
Civil Service Retirement System. 
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134 
‘‘(E) The United States Postal Service shall pay the 
amounts so determined to the Office, with payments due 
not later than the date scheduled by the Office. 
‘‘(3) Notwithstanding any other provision of law, in 
computing the amount of any payment under any other 
subsection of this section that is based upon the amount 
of the unfunded liability, such payment shall be computed 
disregarding that portion of the unfunded liability that the 
Office determines will be liquidated by payments under 
this subsection.’’. 
(b) CREDIT ALLOWED FOR MILITARY SERVICE.—In 
the application of section 8348(g)(2) of title 5, United 
States Code, for the fiscal year 2007, the Office of Per-
sonnel Management shall include, in addition to the 
amount otherwise computed under that paragraph, the 
amounts that would have been included for the fiscal years 
2003 through 2006 with respect to credit for military serv-
ice of former employees of the United States Postal Serv-
ice as though the Postal Civil Service Retirement System 
Funding Reform Act of 2003 (Public Law 108–18) had 
not been enacted, and the Secretary of the Treasury shall 
make the required transfer to the Civil Service Retirement 
and Disability Fund based on that amount. 
(c) REVIEW.— 
(1) IN GENERAL.— 
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135 
(A) REQUEST
FOR
REVIEW.—Notwith-
standing any other provision of this section (in-
cluding any amendment made by this section), 
any determination or redetermination made by 
the Office of Personnel Management under this 
section (including any amendment made by this 
section) shall, upon request of the United 
States Postal Service, be subject to a review by 
the Postal Regulatory Commission under this 
subsection. 
(B) REPORT.—Upon receiving a request 
under subparagraph (A), the Commission shall 
promptly procure the services of an actuary, 
who shall hold membership in the American 
Academy of Actuaries and shall be qualified in 
the evaluation of pension obligations, to conduct 
a review in accordance with generally accepted 
actuarial practices and principles and to provide 
a report to the Commission containing the re-
sults of the review. The Commission, upon de-
termining that the report satisfies the require-
ments of this paragraph, shall approve the re-
port, with any comments it may choose to 
make, and submit it with any such comments to 
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136 
the Postal Service, the Office of Personnel 
Management, and Congress. 
(2) RECONSIDERATION.—Upon receiving the re-
port from the Commission under paragraph (1), the 
Office of Personnel Management shall reconsider its 
determination or redetermination in light of such re-
port, and shall make any appropriate adjustments. 
The Office shall submit a report containing the re-
sults of its reconsideration to the Commission, the 
Postal Service, and Congress. 
SEC. 803. HEALTH INSURANCE. 
(a) IN GENERAL.— 
(1) FUNDING.—Chapter 89 of title 5, United 
States Code, is amended— 
(A) in section 8906(g)(2)(A), by striking 
‘‘shall be paid by the United States Postal 
Service.’’ and inserting ‘‘shall through Sep-
tember 30, 2016, be paid by the United States 
Postal Service, and thereafter shall be paid first 
from the Postal Service Retiree Health Benefits 
Fund up to the amount contained in the Fund, 
with any remaining amount paid by the United 
States Postal Service.’’; and 
(B) by inserting after section 8909 the fol-
lowing: 
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137 
‘‘§ 8909a. Postal Service Retiree Health Benefit Fund 
‘‘(a) There is in the Treasury of the United States 
a Postal Service Retiree Health Benefits Fund which is 
administered by the Office of Personnel Management. 
‘‘(b) The Fund is available without fiscal year limita-
tion for payments required under section 8906(g)(2)(A). 
‘‘(c) The Secretary of the Treasury shall immediately 
invest, in interest-bearing securities of the United States 
such currently available portions of the Fund as are not 
immediately required for payments from the Fund. Such 
investments shall be made in the same manner as invest-
ments for the Civil Service Retirement and Disability 
Fund under section 8348. 
‘‘(d)(1) Not later than June 30, 2007, and by June 
30 of each succeeding year, the Office shall compute the 
net present value of the future payments required under 
section 8906(g)(2)(A) and attributable to the service of 
Postal Service employees during the most recently ended 
fiscal year. 
‘‘(2)(A) Not later than June 30, 2007, the Office 
shall compute, and by June 30 of each succeeding year, 
the Office shall recompute the difference between— 
‘‘(i) the net present value of the excess of fu-
ture payments required under section 8906(g)(2)(A) 
for current and future United States Postal Service 
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138 
annuitants as of the end of the fiscal year ending on 
September 30 of that year; and 
‘‘(ii)(I) the value of the assets of the Postal Re-
tiree Health Benefits Fund as of the end of the fis-
cal year ending on September 30 of that year; and 
‘‘(II) the net present value computed under 
paragraph (1). 
‘‘(B) Not later than June 30, 2017, the Office shall 
compute, and by June 30 of each succeeding year shall 
recompute, a schedule including a series of annual install-
ments which provide for the liquidation of any liability or 
surplus by September 30, 2056, or within 15 years, which-
ever is later, of the net present value determined under 
subparagraph (A), including interest at the rate used in 
that computation. 
‘‘(3)(A) The United States Postal Service shall pay 
into such Fund— 
‘‘(i) $5,400,000,000, not later than September 
30, 2007; 
‘‘(ii) $5,400,000,000, not later than September 
30, 2008; 
‘‘(iii) $5,400,000,000, not later than September 
30, 2009; 
‘‘(iv) $5,500,000,000, not later than September 
30, 2010; 
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139 
‘‘(v) $5,500,000,000, not later than September 
30, 2011; 
‘‘(vi) $5,600,000,000, not later than September 
30, 2012; 
‘‘(vii) $5,600,000,000, not later than Sep-
tember 30, 2013; 
‘‘(viii) $5,700,000,000, not later than Sep-
tember 30, 2014; 
‘‘(ix) $5,700,000,000, not later than September 
30, 2015; and 
‘‘(x) $5,800,000,000, not later than September 
30, 2016. 
‘‘(B) Not later than September 30, 2017, and by Sep-
tember 30 of each succeeding year, the United States 
Postal Service shall pay into such Fund the sum of— 
‘‘(i) the net present value computed under para-
graph (1); and 
‘‘(ii) any annual installment computed under 
paragraph (2)(B). 
‘‘(4) Computations under this subsection shall be 
made consistent with the assumptions and methodology 
used by the Office for financial reporting under sub-
chapter II of chapter 35 of title 31. 
‘‘(5)(A)(i) Any computation or other determination of 
the Office under this subsection shall, upon request of the 
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140 
United States Postal Service, be subject to a review by 
the Postal Regulatory Commission under this paragraph. 
‘‘(ii) Upon receiving a request under clause (i), the 
Commission shall promptly procure the services of an ac-
tuary, who shall hold membership in the American Acad-
emy of Actuaries and shall be qualified in the evaluation 
of healthcare insurance obligations, to conduct a review 
in accordance with generally accepted actuarial practices 
and principles and to provide a report to the Commission 
containing the results of the review. The Commission, 
upon determining that the report satisfies the require-
ments of this subparagraph, shall approve the report, with 
any comments it may choose to make, and submit it with 
any such comments to the Postal Service, the Office of 
Personnel Management, and Congress. 
‘‘(B) Upon receiving the report under subparagraph 
(A), the Office of Personnel Management shall reconsider 
its determination or redetermination in light of such re-
port, and shall make any appropriate adjustments. The 
Office shall submit a report containing the results of its 
reconsideration to the Commission, the Postal Service, and 
Congress. 
‘‘(6) After consultation with the United States Postal 
Service, the Office shall promulgate any regulations the 
Office determines necessary under this subsection.’’. 
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141 
(2) TECHNICAL
AND
CONFORMING
AMEND-
MENT.—The table of sections for chapter 89 of title 
5, United States Code, is amended by inserting after 
the item relating to section 8909 the following: 
‘‘8909a. Postal Service Retiree Health Benefits Fund.’’. 
(b) REVIEW.— 
(1) IN GENERAL.— 
(A) REQUEST FOR REVIEW.—Any regula-
tion established under section 8909a(d)(5) of 
title 5, United States Code (as added by sub-
section (a)), shall, upon request of the United 
States Postal Service, be subject to a review by 
the Postal Regulatory Commission under this 
paragraph. 
(B) REPORT.—Upon receiving a request 
under subparagraph (A), the Commission shall 
promptly procure the services of an actuary, 
who shall hold membership in the American 
Academy of Actuaries and shall be qualified in 
the evaluation of healthcare insurance obliga-
tions, to conduct a review in accordance with 
generally accepted actuarial practices and prin-
ciples and to provide a report to the Commis-
sion containing the results of the review. The 
Commission, upon determining that the report 
satisfies the requirements of this paragraph, 
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142 
shall approve the report, with any comments it 
may choose to make, and submit it with any 
such comments to the Postal Service, the Office 
of Personnel Management, and Congress. 
(2) RECONSIDERATION.—Upon receiving the re-
port under paragraph (1), the Office of Personnel 
Management shall reconsider its determination or 
redetermination in light of such report, and shall 
make any appropriate adjustments. The Office shall 
submit a report containing the results of its recon-
sideration to the Commission, the Postal Service, 
and Congress. 
SEC. 804. REPEAL OF DISPOSITION OF SAVINGS PROVISION. 
(a) IN GENERAL.—Section 3 of the Postal Civil Serv-
ice Retirement System Funding Reform Act of 2003 (Pub-
lic Law 108–18) is repealed. 
(b) SAVINGS.—Savings accrued to the Postal Service 
as a result of enactment of Public Law 108–18 and attrib-
utable to fiscal year 2006 shall be transferred to the Post-
al Service Retiree Health Benefits Fund established under 
section 8909a of title 5, United States Code, as added by 
section 803 of this Act. 
SEC. 805. EFFECTIVE DATES. 
(a) IN GENERAL.—Except as provided under sub-
section (b), this title shall take effect on October 1, 2006. 
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