‘‘(b) COMPUTATION AND TRANSFER REQUIREMENTS.— 
The Postal Service shall, for each year beginning with the 
year in which occurs the deadline for the Postal Service’s 
first report to the Postal Regulatory Commission under sec-
tion 3652(a)— 
‘‘(1) compute its assumed Federal income tax on 
competitive products income for such year; and 
‘‘(2) transfer from the Competitive Products 
Fund to the Postal Service Fund the amount of that 
assumed tax. 
‘‘(c) DEADLINE FOR TRANSFERS.—Any transfer re-
quired to be made under this section for a year shall be 
due on or before the January 15th next occurring after the 
close of such year.’’. 
SEC. 303. UNFAIR COMPETITION PROHIBITED. 
(a) SPECIFIC LIMITATIONS.—Chapter 4 of title 39, 
United States Code, is amended by adding after section 404 
the following: 
‘‘§ 404a. Specific Limitations 
‘‘(a) Except as specifically authorized by law, the Post-
al Service may not— 
‘‘(1) establish any rule or regulation (including 
any standard) the effect of which is to preclude com-
petition or establish the terms of competition unless 
the Postal Service demonstrates that the regulation
does not create an unfair competitive advantage for 
itself or any entity funded (in whole or in part) by 
the Postal Service; 
‘‘(2) compel the disclosure, transfer, or licensing 
of intellectual property to any third party (such as 
patents, copyrights, trademarks, trade secrets, and 
proprietary information); or 
‘‘(3) obtain information from a person that pro-
vides (or seeks to provide) any product, and then offer 
any product or service that uses or is based in whole 
or in part on such information, without the consent 
of the person providing that information, unless sub-
stantially the same information is obtained (or ob-
tainable) from an independent source or is otherwise 
obtained (or obtainable). 
‘‘(b) The Postal Regulatory Commission shall prescribe 
regulations to carry out this section. 
‘‘(c) Any party (including an officer of the Commis-
sion representing the interests of the general public) who 
believes that the Postal Service has violated this section may 
bring a complaint in accordance with section 3662.’’. 
(b) CONFORMING AMENDMENTS.— 
(1) GENERAL POWERS.—Section 401 of title 39, 
United States Code, is amended by striking ‘‘The’’
and inserting ‘‘Subject to the provisions of section 
404a, the’’. 
(2) SPECIFIC POWERS.—Section 404(a) of title 
39, United States Code, is amended by striking 
‘‘Without’’ and inserting ‘‘Subject to the provisions of 
section 404a, but otherwise without’’. 
(c) CLERICAL AMENDMENT.—The analysis for chapter 
4 of title 39, United States Code, is amended by inserting 
after the item relating to section 404 the following: 
‘‘404a. Specific limitations.’’. 
SEC. 304. SUITS BY AND AGAINST THE POSTAL SERVICE. 
(a) IN GENERAL.—Section 409 of title 39, United 
States Code, is amended by striking subsections (d) and (e) 
and inserting the following: 
‘‘(d)(1) For purposes of the provisions of law cited in 
paragraphs (2)(A) and (2)(B), respectively, the Postal Serv-
ice— 
‘‘(A) shall be considered to be a ‘person’, as used 
in the provisions of law involved; and 
‘‘(B) shall not be immune under any other doc-
trine of sovereign immunity from suit in Federal 
court by any person for any violation of any of those 
provisions of law by any officer or employee of the 
Postal Service. 
‘‘(2) This subsection applies with respect to—
‘‘(A) the Act of July 5, 1946 (commonly referred 
to as the ‘Trademark Act of 1946’ (15 U.S.C. 1051 
and following)); and 
‘‘(B) the provisions of section 5 of the Federal 
Trade Commission Act to the extent that such section 
5 applies to unfair or deceptive acts or practices. 
‘‘(e)(1) To the extent that the Postal Service, or other 
Federal agency acting on behalf of or in concert with the 
Postal Service, engages in conduct with respect to any com-
petitive product, the Postal Service or other Federal agency 
(as the case may be)— 
‘‘(A) shall not be immune under any doctrine of 
sovereign immunity from suit in Federal court by 
any person for any violation of Federal law by such 
agency or any officer or employee thereof; and 
‘‘(B) shall be considered to be a person (as de-
fined in subsection (a) of the first section of the Clay-
ton Act) for purposes of— 
‘‘(i) the antitrust laws (as defined in such 
subsection); and 
‘‘(ii) section 5 of the Federal Trade Com-
mission Act to the extent that such section 5 ap-
plies to unfair methods of competition. 
‘‘(2) No damages, interest on damages, costs or attor-
ney’s fees may be recovered, and no criminal liability may
be imposed, under the antitrust laws (as so defined) from 
any officer or employee of the Postal Service, or other Fed-
eral agency acting on behalf of or in concert with the Postal 
Service, acting in an official capacity. 
‘‘(3) This subsection shall not apply with respect to 
conduct occurring before the date of the enactment of this 
subsection. 
‘‘(f)(1) Each building constructed or altered by the 
Postal Service shall be constructed or altered, to the max-
imum extent feasible as determined by the Postal Service, 
in compliance with one of the nationally recognized model 
building codes and with other applicable nationally recog-
nized codes. 
‘‘(2) Each building constructed or altered by the Postal 
Service shall be constructed or altered only after consider-
ation of all requirements (other than procedural require-
ments) of zoning laws, land use laws, and applicable envi-
ronmental laws of a State or subdivision of a State which 
would apply to the building if it were not a building con-
structed or altered by an establishment of the Government 
of the United States. 
‘‘(3) For purposes of meeting the requirements of para-
graphs (1) and (2) with respect to a building, the Postal 
Service shall—
‘‘(A) in preparing plans for the building, consult 
with appropriate officials of the State or political 
subdivision, or both, in which the building will be lo-
cated; 
‘‘(B) upon request, submit such plans in a time-
ly manner to such officials for review by such officials 
for a reasonable period of time not exceeding 30 days; 
and 
‘‘(C) permit inspection by such officials during 
construction or alteration of the building, in accord-
ance with the customary schedule of inspections for 
construction or alteration of buildings in the locality, 
if such officials provide to the Postal Service— 
‘‘(i) a copy of such schedule before construc-
tion of the building is begun; and 
‘‘(ii) reasonable notice of their intention to 
conduct any inspection before conducting such 
inspection. 
Nothing in this subsection shall impose an obligation on 
any State or political subdivision to take any action under 
the preceding sentence, nor shall anything in this subsection 
require the Postal Service or any of its contractors to pay 
for any action taken by a State or political subdivision to 
carry out this subsection (including reviewing plans, car-
rying out on-site inspections, issuing building permits, and 
making recommendations). 
‘‘(4) Appropriate officials of a State or a political sub-
division of a State may make recommendations to the Post-
al Service concerning measures necessary to meet the re-
quirements of paragraphs (1) and (2). Such officials may 
also make recommendations to the Postal Service con-
cerning measures which should be taken in the construction 
or alteration of the building to take into account local con-
ditions. The Postal Service shall give due consideration to 
any such recommendations. 
‘‘(5) In addition to consulting with local and State 
officials under paragraph (3), the Postal Service shall estab-
lish procedures for soliciting, assessing, and incorporating 
local community input on real property and land use deci-
sions. 
‘‘(6) For purposes of this subsection, the term ‘State’ 
includes the District of Columbia, the Commonwealth of 
Puerto Rico, and a territory or possession of the United 
States. 
‘‘(g)(1) Notwithstanding any other provision of law, 
legal representation may not be furnished by the Depart-
ment of Justice to the Postal Service in any action, suit, 
or proceeding arising, in whole or in part, under any of 
the following:
‘‘(A) Subsection (d) or (e) of this section. 
‘‘(B) Subsection (f) or (g) of section 504 (relating 
to administrative subpoenas by the Postal Regulatory 
Commission). 
‘‘(C) Section 3663 (relating to appellate review). 
The Postal Service may, by contract or otherwise, employ 
attorneys to obtain any legal representation that it is pre-
cluded from obtaining from the Department of Justice 
under this paragraph. 
‘‘(2) In any circumstance not covered by paragraph 
(1), the Department of Justice shall, under section 411, fur-
nish the Postal Service such legal representation as it may 
require, except that, with the prior consent of the Attorney 
General, the Postal Service may, in any such circumstance, 
employ attorneys by contract or otherwise to conduct litiga-
tion brought by or against the Postal Service or its officers 
or employees in matters affecting the Postal Service. 
‘‘(3)(A) In any action, suit, or proceeding in a court 
of the United States arising in whole or in part under any 
of the provisions of law referred to in subparagraph (B) 
or (C) of paragraph (1), and to which the Commission is 
not otherwise a party, the Commission shall be permitted 
to appear as a party on its own motion and as of right. 
‘‘(B) The Department of Justice shall, under such 
terms and conditions as the Commission and the Attorney
General shall consider appropriate, furnish the Commission 
such legal representation as it may require in connection 
with any such action, suit, or proceeding, except that, with 
the prior consent of the Attorney General, the Commission 
may employ attorneys by contract or otherwise for that pur-
pose. 
‘‘(h) A judgment against the Government of the United 
States arising out of activities of the Postal Service shall 
be paid by the Postal Service out of any funds available 
to the Postal Service, subject to the restriction specified in 
section 2011(g).’’. 
(b) TECHNICAL AMENDMENT.—Section 409(a) of title 
39, United States Code, is amended by striking ‘‘Except as 
provided in section 3628 of this title,’’ and inserting ‘‘Ex-
cept as otherwise provided in this title,’’. 
SEC. 305. INTERNATIONAL POSTAL ARRANGEMENTS. 
(a) IN GENERAL.—Section 407 of title 39, United 
States Code, is amended to read as follows: 
‘‘§ 407. International postal arrangements 
‘‘(a) It is the policy of the United States— 
‘‘(1) to promote and encourage communications 
between peoples by efficient operation of international 
postal services and other international delivery serv-
ices for cultural, social, and economic purposes;
‘‘(2) to promote and encourage unrestricted and 
undistorted competition in the provision of inter-
national postal services and other international deliv-
ery services, except where provision of such services by 
private companies may be prohibited by law of the 
United States; 
‘‘(3) to promote and encourage a clear distinc-
tion between governmental and operational respon-
sibilities with respect to the provision of international 
postal services and other international delivery serv-
ices by the Government of the United States and by 
intergovernmental organizations of which the United 
States is a member; and 
‘‘(4) to participate in multilateral and bilateral 
agreements with other countries to accomplish these 
objectives. 
‘‘(b)(1) The Secretary of State shall be responsible for 
formulation, coordination, and oversight of foreign policy 
related to international postal services and other inter-
national delivery services, and shall have the power to con-
clude treaties, conventions and amendments related to 
international postal services and other international deliv-
ery services, except that the Secretary may not conclude any 
treaty, convention, or other international agreement (in-
cluding those regulating international postal services) if
such treaty, convention, or agreement would, with respect 
to any competitive product, grant an undue or unreason-
able preference to the Postal Service, a private provider of 
international postal or delivery services, or any other per-
son. 
‘‘(2) In carrying out the responsibilities specified in 
paragraph (1), the Secretary of State shall exercise primary 
authority for the conduct of foreign policy with respect to 
international postal services and international delivery 
services, including the determination of United States posi-
tions and the conduct of United States participation in ne-
gotiations with foreign governments and international bod-
ies. In exercising this authority, the Secretary— 
‘‘(A) shall coordinate with other agencies as ap-
propriate, and in particular, shall give full consider-
ation to the authority vested by law or Executive 
order in the Postal Regulatory Commission, the De-
partment of Commerce, the Department of Transpor-
tation, and the Office of the United States Trade Rep-
resentative in this area; 
‘‘(B) shall maintain continuing liaison with 
other executive branch agencies concerned with postal 
and delivery services; 
‘‘(C) shall maintain continuing liaison with the 
Committee on Government Reform of the House of
Representatives and the Committee on Governmental 
Affairs of the Senate; 
‘‘(D) shall maintain appropriate liaison with 
both representatives of the Postal Service and rep-
resentatives of users and private providers of inter-
national postal services and other international deliv-
ery services to keep informed of their interests and 
problems, and to provide such assistance as may be 
needed to ensure that matters of concern are promptly 
considered by the Department of State or (if applica-
ble, and to the extent practicable) other executive 
branch agencies; and 
‘‘(E) shall assist in arranging meetings of such 
public sector advisory groups as may be established to 
advise the Department of State and other executive 
branch agencies in connection with international 
postal services and international delivery services. 
‘‘(3) The Secretary of State shall establish an advisory 
committee (within the meaning of the Federal Advisory 
Committee Act) to perform such functions as the Secretary 
considers appropriate in connection with carrying out sub-
paragraphs (A) through (D) of paragraph (2). 
‘‘(c)(1) Before concluding any treaty, convention, or 
amendment that establishes a rate or classification for a 
product subject to subchapter I of chapter 36, the Secretary
of State shall request the Postal Regulatory Commission to 
submit a decision on whether such rate or classification is 
consistent with the standards and criteria established by the 
Commission under section 3622. 
‘‘(2) The Secretary shall ensure that each treaty, con-
vention, or amendment concluded under subsection (b) is 
consistent with a decision of the Commission adopted under 
paragraph (1), except if, or to the extent, the Secretary de-
termines, by written order, that considerations of foreign 
policy or national security require modification of the Com-
mission’s decision. 
‘‘(d) Nothing in this section shall be considered to pre-
vent the Postal Service from entering into such commercial 
or operational contracts related to providing international 
postal services and other international delivery services as 
it deems appropriate, except that— 
‘‘(1) any such contract made with an agency of 
a foreign government (whether under authority of this 
subsection or otherwise) shall be solely contractual in 
nature and may not purport to be international law; 
and 
‘‘(2) a copy of each such contract between the 
Postal Service and an agency of a foreign government 
shall be transmitted to the Secretary of State and the
Postal Regulatory Commission not later than the ef-
fective date of such contract. 
‘‘(e)(1) With respect to shipments of international mail 
that are competitive products within the meaning of section 
3631 that are exported or imported by the Postal Service, 
the Bureau of Customs and Border Protection of the De-
partment of Homeland Security and other appropriate 
Federal agencies shall apply the customs laws of the United 
States and all other laws relating to the importation or ex-
portation of such shipments in the same manner to both 
shipments by the Postal Service and similar shipments by 
private companies. 
‘‘(2) For purposes of this subsection, the term ‘private 
company’ means a private company substantially owned 
or controlled by persons who are citizens of the United 
States. 
‘‘(3) In exercising the authority pursuant to subsection 
(b) to conclude new treaties, conventions and amendments 
related to international postal services and to renegotiate 
such treaties, conventions and amendments, the Secretary 
of State shall, to the maximum extent practicable, take such 
measures as are within the Secretary’s control to encourage 
the governments of other countries to make available to the 
Postal Service and private companies a range of non-
discriminatory customs procedures that will fully meet the
needs of all types of American shippers. The Secretary of 
State shall consult with the United States Trade Represent-
ative and the Commissioner of Customs, Department of 
Homeland Security in carrying out this paragraph. 
‘‘(4) The provisions of this subsection shall take effect 
6 months after the date of the enactment of this subsection 
or such earlier date as the Bureau of Customs and Border 
Protection of the Department of Homeland Security may 
determine in writing.’’. 
(b) EFFECTIVE DATE.—Notwithstanding any provi-
sion of the amendment made by subsection (a), the author-
ity of the United States Postal Service to establish the rates 
of postage or other charges on mail matter conveyed between 
the United States and other countries shall remain avail-
able to the Postal Service until— 
(1) with respect to market-dominant products, 
the date as of which the regulations promulgated 
under section 3622 of title 39, United States Code (as 
amended by section 201(a)) take effect; and 
(2) with respect to competitive products, the date 
as of which the regulations promulgated under section 
3633 of title 39, United States Code (as amended by 
section 202) take effect.
SEC. 306. REDESIGNATION. 
Chapter 36 of title 39, United States Code (as in effect 
before the amendment made by section 204(a)) is amended 
by striking the heading for subchapter V and inserting the 
following: 
‘‘SUBCHAPTER VI—GENERAL’’. 
TITLE IV—GENERAL PROVISIONS 
SEC. 
401. 
QUALIFICATION 
REQUIREMENTS 
FOR 
GOV-
ERNORS. 
(a) IN GENERAL.—Section 202(a) of title 39, United 
States Code, is amended by striking ‘‘(a)’’ and inserting 
‘‘(a)(1)’’ and by striking the fourth sentence and inserting 
the following: ‘‘The Governors shall represent the public in-
terest generally, and at least 4 of the Governors shall be 
chosen solely on the basis of their demonstrated ability in 
managing organizations or corporations (in either the pub-
lic or private sector) of substantial size; for purposes of this 
sentence, an organization or corporation shall be considered 
to be of substantial size if it employs at least 50,000 employ-
ees. The Governors shall not be representatives of specific 
interests using the Postal Service, and may be removed only 
for cause.’’. 
(b) CONSULTATION REQUIREMENT.—Section 202(a) of 
title 39, United States Code, is amended by adding at the 
end the following:
‘‘(2) In selecting the individuals described in para-
graph (1) for nomination for appointment to the position 
of Governor, the President should consult with the Speaker 
of the House of Representatives, the minority leader of the 
House of Representatives, the majority leader of the Senate, 
and the minority leader of the Senate.’’. 
(c) RESTRICTION.—Section 202(b) of title 39, United 
States Code, is amended by striking ‘‘(b)’’ and inserting 
‘‘(b)(1)’’, and by adding at the end the following: 
‘‘(2)(A) Notwithstanding any other provision of this 
section, in the case of the office of the Governor the term 
of which is the first one scheduled to expire at least 4 
months after the date of the enactment of this paragraph— 
‘‘(i) such office may not, in the case of any per-
son commencing service after that expiration date, be 
filled by any person other than an individual chosen 
from among persons nominated for such office with 
the unanimous concurrence of all labor organizations 
described in section 206(a)(1); and 
‘‘(ii) instead of the term that would otherwise 
apply under the first sentence of paragraph (1), the 
term of any person so appointed to such office shall 
be 3 years. 
‘‘(B) Except as provided in subparagraph (A), an ap-
pointment under this paragraph shall be made in conform-
ance with all provisions of this section that would otherwise 
apply.’’. 
(d) APPLICABILITY.—The amendment made by sub-
section (a) shall not affect the appointment or tenure of any 
person serving as a Governor of the Board of Governors of 
the United States Postal Service pursuant to an appoint-
ment made before the date of the enactment of this Act, or, 
except as provided in the amendment made by subsection 
(c), any nomination made before that date; however, when 
any such office becomes vacant, the appointment of any per-
son to fill that office shall be made in accordance with such 
amendment. The requirement set forth in the fourth sentence 
of section 202(a)(1) of title 39, United States Code (as 
amended by subsection (a)) shall be met beginning not later 
than 9 years after the date of the enactment of this Act. 
SEC. 402. OBLIGATIONS. 
(a) PURPOSES FOR WHICH OBLIGATIONS MAY BE 
ISSUED.—The first sentence of section 2005(a)(1) of title 
39, United States Code, is amended by striking ‘‘title.’’ and 
inserting ‘‘title, other than any of the purposes for which 
the corresponding authority is available to the Postal Serv-
ice under section 2011.’’. 
(b) LIMITATION ON NET ANNUAL INCREASE IN OBLI-
GATIONS ISSUED FOR CERTAIN PURPOSES.—The third sen-
tence of section 2005(a)(1) of title 39, United States Code,
is amended to read as follows: ‘‘In any one fiscal year, the 
net increase in the amount of obligations outstanding issued 
for the purpose of capital improvements and the net in-
crease in the amount of obligations outstanding issued for 
the purpose of defraying operating expenses of the Postal 
Service 
shall 
not 
exceed 
a 
combined 
total 
of 
$3,000,000,000.’’ . 
(c) LIMITATIONS ON OBLIGATIONS OUTSTANDING.— 
(1) IN GENERAL.—Subsection (a) of section 2005 
of title 39, United States Code, is amended by adding 
at the end the following: 
‘‘(3) For purposes of applying the respective limita-
tions under this subsection, the aggregate amount of obliga-
tions issued by the Postal Service which are outstanding 
as of any one time, and the net increase in the amount 
of obligations outstanding issued by the Postal Service for 
the purpose of capital improvements or for the purpose of 
defraying operating expenses of the Postal Service in any 
fiscal year, shall be determined by aggregating the relevant 
obligations issued by the Postal Service under this section 
with the relevant obligations issued by the Postal Service 
under section 2011.’’. 
(2) CONFORMING AMENDMENT.—The second sen-
tence of section 2005(a)(1) of title 39, United States 
Code, is amended by striking ‘‘any such obligations’’
and inserting ‘‘obligations issued by the Postal Serv-
ice which may be’’. 
(d) AMOUNTS WHICH MAY BE PLEDGED, ETC.— 
(1) 
OBLIGATIONS
TO
WHICH
PROVISIONS 
APPLY.—The first sentence of section 2005(b) of title 
39, United States Code, is amended by striking ‘‘such 
obligations,’’ and inserting ‘‘obligations issued by the 
Postal Service under this section,’’. 
(2) ASSETS, 
REVENUES, 
AND
RECEIPTS
TO 
WHICH PROVISIONS APPLY.—Subsection (b) of section 
2005 of title 39, United States Code, is amended by 
striking ‘‘(b)’’ and inserting ‘‘(b)(1)’’, and by adding 
at the end the following: 
‘‘(2) Notwithstanding any other provision of this sec-
tion— 
‘‘(A) the authority to pledge assets of the Postal 
Service under this subsection shall be available only 
to the extent that such assets are not related to the 
provision of competitive products (as determined 
under section 2011(h) or, for purposes of any period 
before accounting practices and principles under sec-
tion 2011(h) have been established and applied, the 
best information available from the Postal Service, 
including the audited statements required by section 
2008(e)); and
‘‘(B) any authority under this subsection relat-
ing to the pledging or other use of revenues or receipts 
of the Postal Service shall be available only to the ex-
tent that they are not revenues or receipts of the Com-
petitive Products Fund.’’. 
SEC. 403. PRIVATE CARRIAGE OF LETTERS. 
(a) IN GENERAL.—Section 601 of title 39, United 
States Code, is amended by striking subsection (b) and in-
serting the following: 
‘‘(b) A letter may also be carried out of the mails 
when— 
‘‘(1) the amount paid for the private carriage of 
the letter is at least the amount equal to 6 times the 
rate then currently charged for the 1st ounce of a sin-
gle-piece first class letter; 
‘‘(2) the letter weighs at least 121⁄2 ounces; or 
‘‘(3) such carriage is within the scope of services 
described by regulations of the Postal Service (includ-
ing, in particular, sections 310.1 and 320.2–320.8 of 
title 39 of the Code of Federal Regulations, as in ef-
fect on July 1, 2004) that purport to permit private 
carriage by suspension of the operation of this section 
(as then in effect).
‘‘(c) Any regulations necessary to carry out this section 
shall be promulgated by the Postal Regulatory Commis-
sion.’’. 
(b) EFFECTIVE DATE.—This section shall take effect 
on the date as of which the regulations promulgated under 
section 3633 of title 39, United States Code (as amended 
by section 202) take effect. 
SEC. 404. RULEMAKING AUTHORITY. 
Paragraph (2) of section 401 of title 39, United States 
Code, is amended to read as follows: 
‘‘(2) to adopt, amend, and repeal such rules and 
regulations, not inconsistent with this title, as may be 
necessary in the execution of its functions under this 
title and such other functions as may be assigned to 
the Postal Service under any provisions of law out-
side of this title;’’. 
SEC. 405. NONINTERFERENCE WITH COLLECTIVE BAR-
GAINING AGREEMENTS, ETC. 
(a) NONINTERFERENCE
WITH
COLLECTIVE
BAR-
GAINING AGREEMENTS.—Except as provided in section 407, 
nothing in this Act or any amendment made by this Act 
shall restrict, expand, or otherwise affect any of the rights, 
privileges, or benefits of either employees of or labor organi-
zations representing employees of the United States Postal 
Service under chapter 12 of title 39, United States Code,
the National Labor Relations Act, any handbook or manual 
affecting employee labor relations within the United States 
Postal Service, or any collective bargaining agreement. 
(b) FREE
MAILING
PRIVILEGES
CONTINUE
UN-
CHANGED.—Nothing in this Act or any amendment made 
by this Act shall affect any free mailing privileges accorded 
under section 3217 or sections 3403 through 3406 of title 
39, United States Code. 
SEC. 406. BONUS AND COMPENSATION AUTHORITY. 
Subchapter VI of chapter 36 of title 39, United States 
Code (as so redesignated by section 306) is amended by add-
ing at the end the following: 
‘‘§ 3686. Bonus authority 
‘‘(a) IN GENERAL.—The Postal Service may establish 
one or more programs to provide bonuses or other rewards 
to officers and employees of the Postal Service in senior ex-
ecutive or equivalent positions to achieve the objectives of 
this chapter. 
‘‘(b) LIMITATION ON TOTAL COMPENSATION.— 
‘‘(1) IN GENERAL.—Under any such program, 
the Postal Service may award a bonus or other re-
ward in excess of the limitation set forth in the last 
sentence of section 1003(a), if such program has been 
approved under paragraph (2). Any such award or 
bonus may not cause the total compensation of such
officer or employee to exceed the total annual com-
pensation payable to the Vice President under section 
104 of title 3 as of the end of the calendar year in 
which the bonus or award is paid. 
‘‘(2) APPROVAL PROCESS.—If the Postal Service 
wishes to have the authority, under any program de-
scribed in subsection (a), to award bonuses or other 
rewards in excess of the limitation set forth in the last 
sentence of section 1003(a)— 
‘‘(A) the Postal Service shall make an ap-
propriate request to the Board of Governors in 
such form and manner as the Board requires; 
and 
‘‘(B) the Board of Governors shall approve 
any such request if it certifies, for the annual 
appraisal period involved, that the performance 
appraisal system for affected officers and em-
ployees of the Postal Service (as designed and 
applied) makes meaningful distinctions based on 
relative performance. 
‘‘(3) REVOCATION AUTHORITY.—If the Board of 
Governors finds that a performance appraisal system 
previously approved under paragraph (2)(B) does not 
(as designed and applied) make meaningful distinc-
tions based on relative performance, the Board may
revoke or suspend the authority of the Postal Service 
to continue a program approved under paragraph (2) 
until such time as appropriate corrective measures 
have, in the judgment of the Board, been taken. 
‘‘(c) EXCEPTIONS
FOR CRITICAL POSITIONS.—Not-
withstanding any other provision of law, the Board of Gov-
ernors may allow up to 12 officers or employees of the Post-
al Service in critical senior executive or equivalent posi-
tions to receive total compensation in an amount not to 
exceed 120 percent of the total annual compensation pay-
able to the Vice President under section 104 of title 3 as 
of the end of the calendar year in which such payment is 
received. For each exception made under this subsection, the 
Board shall provide written notification to the Director of 
the Office of Personnel Management and the Congress with-
in 30 days after the payment is made setting forth the name 
of the officer or employee involved, the critical nature of 
his or her duties and responsibilities, and the basis for de-
termining that such payment is warranted. 
‘‘(d) INFORMATION FOR INCLUSION IN COMPREHEN-
SIVE STATEMENT.—Included in its comprehensive state-
ment under section 2401(e) for any period shall be— 
‘‘(1) the name of each person receiving a bonus 
or other payment during such period which would not
have been allowable but for the provisions of sub-
section (b) or (c); 
‘‘(2) the amount of the bonus or other payment; 
and 
‘‘(3) the amount by which the limitation set 
forth in the last sentence of section 1003(a) was ex-
ceeded as a result of such bonus or other payment. 
‘‘(e) REGULATIONS.—The Board of Governors may 
prescribe regulations for the administration of this sec-
tion.’’. 
SEC. 407. MEDIATION IN COLLECTIVE-BARGAINING DIS-
PUTES. 
(a) IN GENERAL.—Section 1207(b) of title 39, United 
States Code, is amended by striking all that follows ‘‘the 
Director of the Federal Mediation and Conciliation Service 
shall’’ and inserting ‘‘, within 10 days appoint a mediator 
of nationwide reputation and professional stature, and who 
is also a member of the National Academy of Arbitrators. 
The parties shall cooperate with the mediator in an effort 
to reach an agreement and shall meet and negotiate in good 
faith at such times and places that the mediator, in con-
sultation with the parties, shall direct.’’. 
(b) 
PROVISIONS
RELATING
TO
ARBITRATION 
BOARDS.—Section 1207(c) of title 39, United States Code, 
is amended—
(1) in paragraph (1)— 
(A) by striking ‘‘90’’ and inserting ‘‘60’’; 
(B) by striking ‘‘not members of the fact-
finding panel,’’; and 
(C) by striking all that follows ‘‘shall be 
made’’ and inserting ‘‘from a list of names pro-
vided by the Director. This list shall consist of 
not less than 9 names of arbitrators of nation-
wide reputation and professional stature, who 
are also members of the National Academy of Ar-
bitrators, and whom the Director has determined 
are available and willing to serve.’’; and 
(2) in paragraph (3), by striking ‘‘factfinding 
panel’’ and inserting ‘‘mediation’’. 
(c) CONFORMING AMENDMENT.—Section 1207(d) of 
title 39, United States Code, is amended by striking ‘‘fact-
finding panel will be established’’ and inserting ‘‘mediator 
shall be appointed’’. 
TITLE V—ENHANCED 
REGULATORY COMMISSION 
SEC. 501. REORGANIZATION AND MODIFICATION OF CER-
TAIN PROVISIONS RELATING TO THE POSTAL 
REGULATORY COMMISSION. 
(a) TRANSFER
AND
REDESIGNATION.—Title 39, 
United States Code, is amended—
(1) by inserting after chapter 4 the following: 
‘‘CHAPTER 5—POSTAL REGULATORY 
COMMISSION 
‘‘Sec. 
‘‘501. Establishment. 
‘‘502. Commissioners. 
‘‘503. Rules; regulations; procedures. 
‘‘504. Administration. 
‘‘§ 501. Establishment 
‘‘The Postal Regulatory Commission is an independent 
establishment of the executive branch of the Government of 
the United States. 
‘‘§ 502. Commissioners 
‘‘(a) The Postal Regulatory Commission is composed 
of 5 Commissioners, appointed by the President, by and 
with the advice and consent of the Senate. The Commis-
sioners shall be chosen solely on the basis of their technical 
qualifications, professional standing, and demonstrated ex-
pertise in economics, accounting, law, or public adminis-
tration, and may be removed by the President only for 
cause. Each individual appointed to the Commission shall 
have the qualifications and expertise necessary to carry out 
the responsibilities accorded Commissioners under the Post-
al Accountability and Enhancement Act. Not more than 3 
of the Commissioners may be adherents of the same political 
party.
‘‘(b) A Commissioner may continue to serve after the 
expiration of his term until his successor has qualified, ex-
cept that a Commissioner may not so continue to serve for 
more than 1 year after the date upon which his term other-
wise would expire under subsection (e). 
‘‘(c) One of the Commissioners shall be designated as 
Chairman by, and shall serve in the position of Chairman 
at the pleasure of, the President. 
‘‘(d) The Commissioners shall by majority vote des-
ignate a Vice Chairman of the Commission. The Vice Chair-
man shall act as Chairman of the Commission in the ab-
sence of the Chairman. 
‘‘(e) The Commissioners shall serve for terms of 6 
years.’’; 
(2) in subchapter I of chapter 36 (as in effect be-
fore the amendment made by section 201(c)), by strik-
ing the heading for such subchapter I and all that fol-
lows through section 3602; and 
(3) by redesignating sections 3603 and 3604 as 
sections 503 and 504, respectively, and transferring 
such sections to the end of chapter 5 (as inserted by 
paragraph (1)). 
(b) DETERMINATIONS.—Section 503 of title 39, United 
States Code, as so redesignated by subsection (a)(3), is 
amended by adding at the end the following: ‘‘Such rules
shall include procedures which balance, inter alia, the need 
for protecting due process rights and ensuring expeditious 
decision-making.’’. 
(c) APPLICABILITY.—The amendment made by sub-
section (a)(1) shall not affect the appointment or tenure of 
any person serving as a Commissioner on the Postal Regu-
latory Commission (as so redesignated by section 504) pur-
suant to an appointment made before the date of the enact-
ment of this Act or any nomination made before that date, 
but, when any such office becomes vacant, the appointment 
of any person to fill that office shall be made in accordance 
with such amendment. 
(d) CLERICAL AMENDMENT.—The analysis for part I 
of title 39, United States Code, is amended by inserting 
after the item relating to chapter 4 the following: 
‘‘5. Postal Regulatory Commission ..................................................
501’’. 
SEC. 502. AUTHORITY FOR POSTAL REGULATORY COMMIS-
SION TO ISSUE SUBPOENAS. 
Section 504 of title 39, United States Code (as so redes-
ignated by section 501) is amended by adding at the end 
the following: 
‘‘(f)(1) Any Commissioner of the Postal Regulatory 
Commission, any administrative law judge appointed by 
the Commission under section 3105 of title 5, and any em-
ployee of the Commission designated by the Commission
may administer oaths, examine witnesses, take depositions, 
and receive evidence. 
‘‘(2) The Chairman of the Commission, any Commis-
sioner designated by the Chairman, and any administrative 
law judge appointed by the Commission under section 3105 
of title 5 may, with respect to any proceeding conducted 
by the Commission under this title— 
‘‘(A) issue subpoenas requiring the attendance 
and presentation of testimony by, or the production 
of documentary or other evidence in the possession of, 
any covered person; and 
‘‘(B) order the taking of depositions and re-
sponses to written interrogatories by a covered person. 
The written concurrence of a majority of the Commissioners 
then holding office shall, with respect to each subpoena 
under subparagraph (A), be required in advance of its 
issuance. 
‘‘(3) In the case of contumacy or failure to obey a sub-
poena issued under this subsection, upon application by the 
Commission, the district court of the United States for the 
district in which the person to whom the subpoena is ad-
dressed resides or is served may issue an order requiring 
such person to appear at any designated place to testify 
or produce documentary or other evidence. Any failure to
obey the order of the court may be punished by the court 
as a contempt thereof. 
‘‘(4) For purposes of this subsection, the term ‘covered 
person’ means an officer, employee, agent, or contractor of 
the Postal Service. 
‘‘(g)(1) If the Postal Service determines that any docu-
ment or other matter it provides to the Postal Regulatory 
Commission pursuant to a subpoena issued under sub-
section (f), or otherwise at the request of the Commission 
in connection with any proceeding or other purpose under 
this title, contains information which is described in section 
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 rea-
sons therefor). 
‘‘(2) Except as provided in paragraph (3), no officer 
or employee of the Commission may, with respect to any 
information as to which the Commission 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 em-
ployee of the Commission to have access to any such 
information.
‘‘(3)(A) Paragraph (2) shall not prevent the Commis-
sion from publicly disclosing relevant information in fur-
therance of its duties under this title if the Commission has 
adopted regulations under section 553 of title 5 that estab-
lish a procedure for according appropriate confidentiality 
to information identified by the Postal Service under para-
graph (1). In determining the appropriate degree of con-
fidentiality to be accorded information identified by the 
Postal Service under paragraph (1), the Commission shall 
balance the nature and extent of the likely commercial in-
jury to the Postal Service against the public interest, as 
required by section 101(d) of this title for financial trans-
parency of a government establishment. 
‘‘(B) Paragraph (2) shall not prevent information 
from being furnished under any process of discovery estab-
lished under this title in connection with a proceeding 
under this title. The Commission shall, by regulations based 
on rule 26(c) of the Federal Rules of Civil Procedure, estab-
lish procedures for ensuring appropriate confidentiality for 
any information furnished under the preceding sentence.’’. 
SEC. 503. APPROPRIATIONS FOR THE POSTAL REGULATORY 
COMMISSION. 
(a) AUTHORIZATION
OF
APPROPRIATIONS.—Sub-
section (d) of section 504 of title 39, United States Code
(as so redesignated by section 501) is amended to read as 
follows: 
‘‘(d) There are authorized to be appropriated, out of 
the Postal Service Fund, such sums as may be necessary 
for the Postal Regulatory Commission. In requesting an ap-
propriation under this subsection for a fiscal year, the Com-
mission shall prepare and submit to the Congress under sec-
tion 2009 a budget of the Commission’s expenses, including 
expenses for facilities, supplies, compensation, and em-
ployee benefits.’’. 
(b) BUDGET PROGRAM.— 
(1) IN GENERAL.—The next to last sentence of 
section 2009 of title 39, United States Code, is 
amended to read as follows: ‘‘The budget program 
shall also include separate statements of the amounts 
which (1) the Postal Service requests to be appro-
priated under subsections (b) and (c) of section 2401, 
(2) the Office of Inspector General of the United 
States Postal Service requests to be appropriated, out 
of the Postal Service Fund, under section 8L(e) of the 
Inspector General Act of 1978, and (3) the Postal 
Regulatory Commission requests to be appropriated, 
out of the Postal Service Fund, under section 504(d) 
of this title.’’.