I 114th CONGRESS 2d Session H. R. 5714 IN THE HOUSE OF REPRESENTATIVES July 11, 2016 Mr. Chaffetz (for himself, Mr. Cummings , Mr. Meadows , Mr. Connolly , and Mr. Lynch ) introduced the following bill; which was referred to the Committee on Oversight and Government Reform , and in addition to the Committees on Energy and Commerce , and Ways and Means , for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned A BILL To restore the financial solvency and improve the governance of the United States Postal Service in order to ensure the efficient and affordable nationwide delivery of mail, and for other purposes.

1. Short title; table of contents (a) Short title This Act may be cited as the Postal Service Reform Act of 2016 . (b) Table of contents The table of contents of this Act is as follows: Sec. 1. Short title; table of contents. Sec. 2. Definitions. Title I—Postal Service Benefits Reform Sec. 101. Postal Service Health Benefits Program. Sec. 102. Postal Service retiree health care benefit funding reform. Sec. 103. Postal Service pension funding reform. Sec. 104. Medicare part B premium transition for newly enrolling Postal Service annuitants and family members. Title II—Postal Service Operations Reform Sec. 201. Governance reform. Sec. 202. Transition to more efficient and secure mail delivery. Sec. 203. Modernizing postal rates. Sec. 204. Nonpostal services. Sec. 205. Efficient and flexible universal postal service. Sec. 206. Fair stamp-evidencing competition. Sec. 207. Market-dominant rates. Sec. 208. Completion of initial rate regulation review. Sec. 209. Review of Postal Service cost attribution guidelines. Sec. 210. Aviation security for parcels. Sec. 211. ZIP Codes. Title III—Postal Service Personnel Sec. 301. Postal Service Chief Innovation Officer. Sec. 302. Inspector General of the Postal Community. Sec. 303. Right of appeal to Merit Systems Protection Board. Title IV—Postal Contracting Reform Sec. 401. Contracting provisions. Sec. 402. Technical amendment to definition. 2. Definitions In this Act— (1) the term Postal Service means the United States Postal Service; and (2) the term postal retail facility means a post office, post office branch, post office classified station, or other facility which is operated by the Postal Service, and the primary function of which is to provide retail postal services, but does not include a contractor-operated facility offering postal services. I Postal Service Benefits Reform 101. Postal Service Health Benefits Program (a) Establishment (1) In general Chapter 89 of title 5, United States Code, is amended by inserting after section 8903b the following: 8903c. Postal Service Health Benefits Program (a) Definitions In this section— (1) the term covered Medicare individual means an individual who is entitled to benefits under part A of title XVIII of the Social Security Act ( 42 U.S.C. 1395c et seq. ), but excluding an individual who is eligible to enroll under such part under section 1818 or 1818A of the Social Security Act ( 42 U.S.C. 1395i–2 , 1395i–2a); (2) the term initial contract year means the contract year beginning in January of 2018; (3) the term initial participating carrier means a carrier that enters into a contract with the Office to participate in the Postal Service Health Benefits Program during the initial contract year; (4) the term Office means the Office of Personnel Management; (5) the term Postal Service means the United States Postal Service; (6) the term Postal Service annuitant means an annuitant enrolled in a health benefits plan under this chapter whose Government contribution is paid pursuant to the requirements of section 8906(g)(2); (7) the term Postal Service employee means an employee of the Postal Service enrolled in a health benefits plan under this chapter; (8) the term Postal Service Medicare covered annuitant means an individual who— (A) is a Postal Service annuitant; and (B) is a covered Medicare individual; (9) the term Program means the Postal Service Health Benefits Program established under subsection (c) within the Federal Employees Health Benefit Program; and (10) the term Program plan means a health benefits plan offered under the Program. (b) Application The requirements under this section shall— (1) apply to the initial contract year and each contract year thereafter; and (2) supersede any other provision of this chapter inconsistent with such requirements, as determined by the Office. (c) Establishment of the Postal Service Health Benefits Program (1) In general The Office shall establish the Postal Service Health Benefits Program under which the Office contracts with carriers to offer health benefits plans as described under this section. Except as otherwise provided under this section, any such contract shall be consistent with the requirements of this chapter for contracts under section 8902 with carriers to offer health benefits plans other than under this section. The Program shall— (A) to the greatest extent practicable, include plans offered by— (i) each carrier for which the total enrollment in the plans provided under this chapter includes, in the contract year beginning in January 2017, 1,500 or more enrollees who are Postal Service employees or Postal Service annuitants; and (ii) any other carrier determined appropriate by the Office; (B) be available for participation by all Postal Service employees and Postal Service annuitants, in accordance with subsection (d); (C) provide for enrollment in a plan as an individual, for self plus one, or for self and family; and (D) not be available for participation by an individual who is not a Postal Service employee or Postal Service annuitant (except as a family member of such an employee or annuitant or as provided under paragraph (5)). (2) Separate Postal Service risk pool The Office shall ensure that each Program plan includes rates that reasonably and equitably reflect the cost of benefits provided to a risk pool consisting solely of Postal Service employees and Postal Service annuitants (and covered family members of such employees and annuitants), taking into specific account the reduction in benefits cost for the Program plan due to the Medicare enrollment requirements under subsection (e) and any savings or subsidies resulting from subsection (f)(1). (3) Actuarially equivalent coverage The Office shall ensure that each carrier participating in the Postal Service Health Benefits Program provides coverage under the Program plans offered by the carrier that is actuarially equivalent, as determined by the Office, to the coverage that the carrier provides under the health benefits plans offered by the carrier under this chapter that are not Program plans. (4) Applicability of Federal Employees Health Benefits Program requirements Except as otherwise set forth in this section, all provisions of this chapter applicable to health benefits plans offered by the carrier under section 8903 or 8903a shall also apply to plans offered under the Program. (5) Application of continuation coverage In accordance with rules established by the Office, section 8905a shall apply to health benefits plans offered under this section in the same manner as such section applies to other health benefits plans offered under this chapter. (d) Election of coverage (1) In general Except as provided in paragraphs (2) and (3), each Postal Service employee and Postal Service annuitant who elects to receive health benefits coverage under this chapter— (A) shall be subject to the requirements of this section; and (B) may not enroll in any other health benefits plan offered under any other section of this chapter. (2) Annuitants (A) Application A Postal Service annuitant shall not be subject to the requirements of this section if the Postal Service annuitant— (i) is enrolled in a health benefits plan under this chapter for the contract year immediately preceding the initial contract year that is not a health benefits plan offered by an initial participating carrier, unless— (I) the Postal Service annuitant voluntarily enrolls in a Program plan; (II) the health benefits plan in which such annuitant is enrolled for such contract year ceases to be available; or (III) the health benefits plan in which such annuitant is enrolled for such contract year becomes available as a Program plan; or (ii) resides in a geographic area for which there is not a Program plan in which the Postal Service annuitant may enroll. (B) Changed enrollment If a Postal Service annuitant changes enrollment to a health benefits plan under this chapter provided by a different carrier than the health benefits plan in which such annuitant is enrolled during the previous contract year, the Postal Service annuitant may only enroll in a Program plan. (3) Employees A Postal Service employee who is enrolled in a health benefits plan under this chapter for the contract year immediately preceding the initial contract year that is not a health benefits plan offered by an initial participating carrier shall not be subject to the requirements of this section, except that— (A) if the Postal Service employee changes enrollment to a different health benefits plan under this chapter during the open season for the initial contract year, or after the start of the initial contract year, the Postal Service employee may only enroll in a Program plan; (B) if the health benefits plan in which such employee is enrolled for such contract year becomes available as a Program plan, the Postal Service employee may only enroll in a Program plan; (C) upon becoming a Postal Service annuitant, if the Postal Service employee elects to continue coverage under this chapter, the Postal Service employee shall enroll in a Program plan during the open season that is— (i) being held when the Postal Service employee becomes a Postal Service annuitant; or (ii) if the date on which the Postal Service employee becomes a Postal Service annuitant falls outside of an open season, the first open season following that date; and (D) subparagraphs (A), (B), and (C) shall not apply to an employee who resides in a geographic area for which there is not a Program plan in which the employee may enroll. (e) Requirement of Medicare enrollment for annuitants and their family members (1) Postal service medicare covered annuitants A Postal Service Medicare covered annuitant subject to the requirements of this section may not obtain coverage under this chapter unless the annuitant is enrolled in part B of title XVIII of the Social Security Act ( 42 U.S.C. 1395j et seq. ). (2) Medicare covered family members If a family member of a Postal Service annuitant who is subject to the requirements of this section is a covered Medicare individual, the family member may not be covered under the Program as a family member of the Postal Service annuitant unless the family member is enrolled in part B of title XVIII of the Social Security Act ( 42 U.S.C. 1395j et seq. ). (3) Process for coordinated election of enrollment under Medicare part B The Office shall establish a process under which— (A) Postal Service annuitants and family members who are subject to the requirements of paragraph (1) or (2)— (i) are informed, at the time of enrollment under this chapter, of such requirement; and (ii) as a consequence of such enrollment are deemed to have elected to be enrolled under Medicare part B (under section 1837(m)(1) of the Social Security Act) in connection with the enrollment in a Program plan under this chapter; and (B) the Office provides the Secretary of Health and Human Services and the Commissioner of Social Security in a timely manner with such information respecting such annuitants and family members and such election as may be required to effect their enrollment and coverage under Medicare part B and this section in a timely manner. (f) Medicare coordination (1) In general The Office shall require each Program plan to provide benefits for covered Medicare individuals pursuant to the standard coordination of benefits method used under this chapter, rather than the exclusion method or the carve-out method. (2) Medicare part D prescription drug benefits The Office shall require each Program plan to provide prescription drug benefits for Postal Service annuitants and family members who are eligible individuals (as defined in section 1860D–1(a)(3)(A) of the Social Security Act ( 42 U.S.C. 1395w–101(a) ) in a form and manner that satisfies the requirements for a qualified retiree prescription drug plan under subsection (a)(2) of section 1860D–22 of the Social Security Act ( 42 U.S.C. 1395w–132 )), for which plan a waiver or modification of requirements may have been applied pursuant to subsection (b) of such section. For purposes of such section, a Program plan shall then be deemed to be a qualified retiree prescription drug plan and the Federal Government, through the Office, shall be deemed the sponsor of such plan. (g) Postal Service contribution (1) In general Subject to subsection (i), for purposes of applying section 8906(b) to the Postal Service, the weighted average shall be calculated in accordance with paragraphs (2) and (3). (2) Weighted average calculation Not later than October 1 of each year (beginning with 2017), the Office shall determine the weighted average of the rates established pursuant to subsection (c)(2) for Program plans that will be in effect during the following contract year with respect to— (A) enrollments for self only; (B) enrollments for self plus one; and (C) enrollments for self and family. (3) Weighting in computing rates for initial contract year In determining such weighted average of the rates for the initial contract year, the Office shall take into account (for purposes of section 8906(a)(2)) the enrollment of Postal Service employees and annuitants in the health benefits plans offered by the initial participating carriers as of March 31, 2017. (h) Reserves (1) Separate reserves (A) In general The Office shall ensure that each Program plan maintains separate reserves (including a separate contingency reserve) with respect to the enrollees in the Program plan in accordance with section 8909. (B) References For purposes of the Program, each reference to the Government in section 8909 shall be deemed to be a reference to the Postal Service. (C) Amounts to be credited The reserves (including the separate contingency reserve) maintained by each Program plan shall be credited with a proportionate amount of the funds in the reserves for health benefits plans offered by the carrier. (2) Discontinuation of Program plan In applying section 8909(e) relating to a Program plan that is discontinued, the Office shall credit the separate Postal Service contingency reserve maintained under paragraph (1) for that plan only to the separate Postal Service contingency reserves of the Program plans continuing under this chapter. (i) No effect on existing law Nothing in this section shall be construed as affecting section 1005(f) of title 39 regarding variations, additions, or substitutions to the provisions of this chapter. (j) Medicare Education Program Not later than 180 days after the date of enactment of this section, the Postal Service shall establish a Medicare Education Program. Under the Program, the Postal Service shall— (1) notify retirees and employees of the Postal Service about the Postal Service Health Benefits Program established under subsection (c)(1); (2) provide information regarding the Postal Service Health Benefits to such retirees and employees, including a description of the health care options available under such Program, the requirement that retirees be enrolled in Medicare under subsection (e)(1), and the operation of the premium transition fund to be created under section 104 of the Postal Service Reform Act of 2016 ; and (3) respond and provide answers to any inquiry from such employees and retirees about the Postal Service Health Benefits Program or Medicare enrollment. . (2) Technical and conforming amendments (A) Section 8903(1) of title 5, United States Code, is amended by striking two levels of benefits and inserting 2 levels of benefits for enrollees under this chapter generally and 2 levels of benefits for enrollees under the Postal Service Health Benefits Program established under section 8903c . (B) The table of sections for chapter 89 of title 5, United States Code, is amended by inserting after the item relating to section 8903b the following: 8903c. Postal Service Health Benefits Program. . (b) Coordination with Medicare (1) Medicare enrollment and coverage Section 1837 of the Social Security Act ( 42 U.S.C. 1395p ) is amended by adding at the end the following new subsection: (m) (1) In the case of an individual who— (A) is (i) a Postal Service Medicare covered annuitant, or (ii) an individual who is a family member of such an annuitant and is a covered Medicare individual; (B) enrolls in a Program plan under section 8903c of title 5, United States Code; and (C) is not enrolled under this part, the individual is deemed, in accordance with section 8903c(e)(3) of such title, to have elected to be enrolled under this part. (2) In the case of an individual who is deemed to be enrolled under paragraph (1), the coverage period under this part shall begin on the date that the individual first has coverage under the Program plan pursuant to the enrollment described in paragraph (1)(B). (3) The definitions in section 8903c(a) of title 5, United States Code, shall apply for purposes of this subsection. . (2) Waiver of increase of premium Section 1839(b) of the Social Security Act ( 42 U.S.C. 1395r(b) ) is amended by inserting after section 1837 the following: or pursuant to subsection (m) of such section . (3) Conforming coordination of benefit rules Section 1862(b) of the Social Security Act ( 42 U.S.C. 1395y(b) ) is amended by adding at the end the following: (10) Coordination of benefits with postal service health benefits plans The previous provisions of this subsection are superseded to the extent the Secretary determines, in consultation with the Office of Personnel Management, them to be inconsistent with section 8903c(f) of title 5, United States Code. . 102. Postal Service retiree health care benefit funding reform (a) Contributions Section 8906(g) of title 5, United States Code, is amended— (1) by striking (2)(A) The Government and inserting (2)(A)(i) The Government ; and (2) in paragraph (2)— (A) in subparagraph (A)— (i) in clause (i), as added by paragraph (1), by striking shall through September 30, 2016, be paid and all that follows and inserting the following: shall be paid as provided in clause (ii). ; and (ii) by adding at the end the following: (ii) With respect to the Government contributions required to be paid under clause (i)— (I) the portion of the contributions that is equal to the amount of the net claims costs under the enrollment of the individuals described in clause (i) shall be paid from the Postal Service Retiree Health Benefits Fund up to the amount contained in the Fund; and (II) any remaining amount shall be paid by the United States Postal Service. ; and (B) by adding at the end the following: (C) For purposes of this paragraph, the amount of the net claims costs under the enrollment of an individual described in subparagraph (A)(i) shall be the amount, as determined by the Office over any particular period of time, equal to the difference between— (i) the sum of— (I) the costs incurred by a carrier in providing health services to, paying for health services provided to, or reimbursing expenses for health services provided to, the individual and any other person covered under the enrollment of the individual; and (II) an amount of indirect expenses reasonably allocable to the provision, payment, or reimbursement described in subclause (I), as determined by the Office; and (ii) the amount withheld from the annuity of the individual or otherwise paid by the individual under this section. . (b) Postal Service Retiree Health Benefits Fund Section 8909a of title 5, United States Code, is amended— (1) in subsection (d)— (A) in paragraph (1), by striking required under section 8906(g)(2)(A) and inserting the following: required to be paid from the Postal Service Retiree Health Benefits Fund under section 8906(g)(2)(A)(ii)(I) ; (B) by striking paragraph (2) and inserting the following: (2) (A) Not later than June 30, 2016, the Office shall compute, and by June 30 of each succeeding year, the Office shall recompute, a schedule including a series of annual installments which provide for the liquidation of the amount described under subparagraph (B) (regardless of whether the amount is a liability or surplus) by September 30, 2055, or within 15 years, whichever is later, including interest at the rate used in the computations under this subsection. (B) The amount described in this subparagraph is the amount, as of the date on which the applicable computation or recomputation under subparagraph (A) is made, that is equal to the difference between— (i) 100 percent of the Postal Service actuarial liability as of September 30 of the preceding fiscal year; and (ii) the value of the assets of the Postal Service Retiree Health Benefits Fund as of September 30 of the preceding fiscal year. ; (C) in paragraph (3)— (i) in subparagraph (A)— (I) in clause (iii), by adding and at the end; (II) in clause (iv), by striking the semicolon at the end and inserting a period; and (III) by striking clauses (v) through (x); and (ii) in subparagraph (B)— (I) in the matter preceding clause (i), by striking 2017 and inserting 2016 ; (II) in clause (i), by striking paragraph (1) and inserting paragraph (1), except to the extent the payment would cause the value of the assets in the Fund to exceed the Postal Service actuarial liability ; and (III) in clause (ii), by striking paragraph (2)(B). and inserting paragraph (2). ; (D) by amending paragraph (4) to read as follows: (4) Computations under this subsection shall be based on— (A) economic and actuarial methods and assumptions consistent with the methods and assumptions used in determining the Postal surplus or supplemental liability under section 8348(h); and (B) any other methods and assumptions, including a health care cost trend rate, that the Director of the Office determines to be appropriate. ; and (E) by adding at the end the following: (7) In this subsection, the term Postal Service actuarial liability means the difference between— (A) the net present value of future payments required to be paid from the Postal Service Retiree Health Benefits Fund under section 8906(g)(2)(A)(ii)(I) for current and future United States Postal Service annuitants; and (B) the net present value as computed under paragraph (1) attributable to the future service of United States Postal Service employees. (8) For purposes of computing an amount under paragraph (1) or (7)(A), section 8906(g)(2)(A)(ii)(I) shall be applied as though up to the amount contained in the Fund were struck. ; and (2) by adding at the end the following: (e) Subsections (a) through (d) of this section shall be subject to section 102 of the Postal Service Reform Act of 2016. . (c) Cancellation of certain unpaid obligations of the Postal Service Any obligation of the Postal Service under section 8909a(d)(3)(A) of title 5, United States Code, as in effect on the day before the date of enactment of this Act, that remains unpaid as of such date of enactment is canceled. (d) Technical and conforming amendment The heading of section 8909a of title 5, United States Code, is amended by striking Benefit and inserting Benefits . 103. Postal Service pension funding reform (a) Civil Service Retirement System Section 8348(h) of title 5, United States Code, is amended— (1) in paragraph (2), by striking subparagraphs (B) and (C) and inserting the following: (B) The Office shall redetermine the postal surplus or supplemental liability as of the close of the fiscal year, for each fiscal year beginning after September 30, 2015. Subject to subparagraph (C), beginning June 15, 2017, if the result is a surplus or a supplemental liability the Office shall establish an amortization schedule, including a series of annual installments commencing on September 30 of the subsequent fiscal year, which provides for the liquidation of such surplus or liability to the Postal Service or the Fund (as the case may be) by September 30, 2043. (C) No later than June 30, 2033, the Office shall determine, and thereafter redetermine as necessary, but not more frequently than once per year, the appropriate date to complete the liquidation of any remaining surplus or liability determined under this paragraph. The determination under this subparagraph shall be set in accordance with generally accepted actuarial practices and principles and shall not be longer than a period of 15 years from the date on which the determination is made. ; and (2) by adding at the end the following: (4) For the purpose of carrying out paragraph (1), for fiscal year 2013 and each fiscal year thereafter, the Office shall use— (A) demographic factors specific to current and former employees of the United States Postal Service, unless such data cannot be generated; and (B) economic assumptions regarding wage and salary growth that reflect the specific past, and likely future, pay for current employees of the United States Postal Service. . (b) Federal Employees Retirement System liability assumption reform Section 8423 of title 5, United States Code, is amended— (1) in subsection (a)— (A) in paragraph (1)— (i) in subparagraph (A)— (I) in clause (i), by striking subparagraph (B)), and inserting subparagraph (B) or (C)), ; and (II) in clause (ii), by striking and at the end; (ii) in subparagraph (B)(ii), by striking the period at the end and inserting ; and ; and (iii) by adding at the end the following: (C) the product of— (i) the normal-cost percentage, as determined for employees (other than employees covered by subparagraph (B)) of the United States Postal Service under paragraph (5), multiplied by (ii) the aggregate amount of basic pay payable by the United States Postal Service, for the period involved, to employees of the United States Postal Service. ; and (B) by adding at the end the following: (5) (A) In determining the normal-cost percentage for employees of the United States Postal Service for purposes of paragraph (1)(C), the Office shall use— (i) demographic factors specific to such employees, unless such data cannot be generated; and (ii) economic assumptions regarding wage and salary growth that reflect the specific past, and likely future, pay for such employees. (B) The United States Postal Service shall provide any data or projections the Office requires in order to determine the normal-cost percentage for employees of the United States Postal Service, consistent with subparagraph (A). (C) The Office shall review the determination of the normal-cost percentage for employees of the United States Postal Service and make such adjustments as the Office considers necessary— (i) upon request of the United States Postal Service, but not more frequently than once each fiscal year; and (ii) at such other times as the Office considers appropriate. (6) For the purpose of carrying out subsection (b)(1)(B), and consistent with paragraph (5), for fiscal year 2013, and each fiscal year thereafter, the Office shall use— (A) demographic factors specific to current and former employees of the United States Postal Service, unless such data cannot be generated; and (B) economic assumptions regarding wage and salary growth that reflect the specific past, and likely future, pay for current employees of the United States Postal Service. ; and (2) in subsection (b)— (A) by redesignating paragraph (5) as paragraph (6); and (B) by inserting after paragraph (4) the following: (5) (A) In this paragraph, the term postal funding surplus means the amount by which the amount of the supplemental liability computed under paragraph (1)(B) is less than zero. (B) If the amount of supplemental liability computed under paragraph (1)(B) as of the close of any fiscal year after the date of enactment of the Postal Service Reform Act of 2016 is less than zero, the Office shall establish an amortization schedule, including a series of equal annual installments that— (i) provide for the liquidation of the postal funding surplus in 30 years, commencing on September 30 of the subsequent fiscal year; and (ii) shall be transferred to the United States Postal Service Fund. . 104. Medicare part B premium transition for newly enrolling Postal Service annuitants and family members (a) In general Section 1839 of the Social Security Act ( 42 U.S.C. 1395r ) is amended by adding at the end the following new subsection: (j) Transition for newly enrolling postal service annuitants and family members With respect to each individual who is enrolled under this part pursuant to and during the open enrollment period established under section 1837(m) and who is not eligible for Medicare cost-sharing described in section 1905(p)(3)(A)(ii) under a State plan under title XIX, the premium otherwise established under this part (taking into account any adjustments, including those under subsections (b) and (i)) for a month— (1) in the initial contract year (as defined in section 8903c(a) of title 5, United States Code), shall be reduced by 75 percent; (2) in the succeeding year, shall be reduced by 50 percent; and (3) in the second succeeding year, shall be reduced by 25 percent. . (b) Funding through Postal Service Fund Section 1844 of the Social Security Act ( 42 U.S.C. 1395w ) is amended— (1) in the last sentence of subsection (a), by striking under subsection (d)(1) with respect to enrollees described in subparagraphs (A) and (B) of such subsection and inserting under subsections (d)(1) and (d)(4) with respect to enrollees described in subparagraphs (A) and (B) of such respective subsection ; and (2) in subsection (d), by adding at the end the following new paragraph: (4) For each year, there shall be transferred from the Postal Service Fund to the Trust Fund an amount, as estimated by the Chief Actuary of the Centers for Medicare & Medicaid Services, equal to the reduction in aggregate premiums payable under this part for a month in such year that is attributable to the application of section 1839(j) with respect to— (A) enrollees age 65 and over; and (B) enrollees under age 65. Such amounts shall be transferred from time to time as appropriate but, to the extent practicable, on an annual basis and in a manner that places the Trust Fund in the same actuarial status as if this paragraph and section 1839(j) did not apply. . II Postal Service Operations Reform 201. Governance reform (a) Board of Governors (1) In general Section 202 of title 39, United States Code, is amended to read as follows: 202. Board of Governors (a) In general There is established in the Postal Service a Board of Governors composed of 5 Governors, a Postmaster General, and a Deputy Postmaster General, all of whom shall be appointed in accordance with this section. The Governors shall have the power to— (1) exercise the powers of the Postal Service, consistent with section 203(c); (2) appoint, fix the term of service of, and remove the Postmaster General; (3) in consultation with the Postmaster General, appoint, fix the term of service of, and remove the Deputy Postmaster General; (4) set the strategic direction of postal operations and approve the pricing and product strategy for the Postal Service; (5) set the compensation of the Postmaster General and the Deputy Postmaster General in accordance with private sector best practices, as determined by the Governors pursuant to section 3686; and (6) carry out any other duties specifically provided for in this title. (b) Appointment; pay (1) In general The Governors shall be appointed by the President, by and with the advice and consent of the Senate, not more than 3 of whom may be adherents of the same political party. The Governors shall elect a Chair from among their members. The Governors shall represent the public interest generally, and shall be chosen solely on the basis of their experience in the field of public administration, law, or accounting, or on their demonstrated ability in managing organizations or corporations (in either the public or private sector) of substantial size, except that at least 3 of the Governors shall be chosen solely on the basis of their demonstrated ability in managing organizations or corporations (in either the public or private sector) that employ at least 10,000 employees. The Governors shall not be representatives of specific interests using the Postal Service, and may be removed only for cause. (2) Compensation Each Governor shall receive a salary of $30,000 a year plus $300 a day for not more than 42 days of meetings each year and shall be reimbursed for travel and reasonable expenses incurred in attending meetings of the Board. Nothing in the preceding sentence shall be construed to limit the number of days of meetings each year to 42 days. (3) Consultation In selecting the individuals described in paragraph (1) for nomination for appointment to the position of Governor, the President should consult with the Speaker of the House of Representatives, the minority leader of the House of Representatives, the majority leader of the Senate, and the minority leader of the Senate. (c) Terms of Governors (1) In general The terms of the 5 Governors shall be 7 years, except that the terms of the 5 Governors first taking office shall expire as designated by the President at the time of appointment, 1 at the end of 1 year, 1 at the end of 2 years, 1 at the end of 3 years, 1 at the end of 4 years, and 1 at the end of 5 years, following the appointment of the first of them. Any Governor appointed to fill a vacancy before the expiration of the term for which the Governor’s predecessor was appointed shall serve for the remainder of such term. A Governor may continue to serve after the expiration of the Governor’s term until his successor has qualified, but not to exceed one year. (2) Limitation No individual may serve more than 2 terms as a Governor. (d) Staff The Chair of the Board of Governors shall ensure that the Board has appropriate independent staff to carry out the roles and responsibilities of the Board. . (2) Application Any individual serving as a Governor on the Board of Governors of the Postal Service on the date of enactment of this Act shall continue to serve as a Governor until the term applicable to such individual expires (as determined under section 202(b) of title 39, United States Code, as in effect before the amendments made by this section take effect pursuant to subsection (g)). (b) Postmaster General (1) In general Section 203 of title 39, United States Code, is amended to read as follows: 203. Postmaster General (a) In general The chief executive officer of the Postal Service is the Postmaster General, appointed pursuant to section 202(a)(1). The alternate chief executive officer of the Postal Service is the Deputy Postmaster General, appointed pursuant to section 202(a)(2) of this title. (b) Powers Consistent with the requirements of this title, the exercise of the power of the Postal Service shall be vested in the Governors and carried out by the Postmaster General in a manner consistent with the strategic direction and pricing and product strategy approved by the Governors. The Postmaster General shall consult with the Governors and the Deputy Postmaster General in carrying out such power. . (2) Conforming amendment The item relating to section 203 in the table of sections for chapter 2 of title 39, United States Code, is amended to read as follows: 203. Postmaster General. . (c) Procedures of the Board Section 205 of title 39, United States Code, is amended to read as follows: 205. Procedures of the Board of Governors (a) Vacancies Vacancies in the Board shall not impair the powers of the Board under this title. (b) Vote The Board shall act upon majority vote of those members who are present, subject to such quorum requirements as the Board may establish. (c) Limitation No officer or employee of the United States may serve concurrently as a Governor. A Governor may hold any other office or employment not inconsistent or in conflict with the Governor’s duties, responsibilities, and powers as an officer of the Government of the United States in the Postal Service. . (d) Delegation of authority Section 402 of title 39, United States Code, is amended to read as follows: 402. Delegation of authority (a) Postmaster General The Postmaster General may delegate his or her authority under such terms, conditions, and limitations, including the power of redelegation, as he or she determines desirable. The Postmaster General may establish such committees of officers and employees of the Postal Service, and delegate such powers to any committee, as the Postmaster General determines appropriate to carry out his or her functions and duties. Delegations under this section shall be consistent with other provisions of this title, shall not relieve the Postmaster General of full responsibility for the carrying out the Postmaster General’s duties and functions, and shall be revocable by the Postmaster General. (b) Board of Governors The Board may establish such committees of the Board, and delegate such powers to any committee, as the Board determines appropriate to carry out its functions and duties. Delegations to committees shall be consistent with other provisions of this title, shall not relieve the Board of full responsibility for the carrying out of its duties and functions, and shall be revocable by the Board in its exclusive judgment. . (e) International postal arrangements (1) In general Section 407 of title 39, United States Code, is amended by adding at the end the following: (f) After submission to the Postal Regulatory Commission by the Department of State of the budget detailing the estimated costs of carrying out the activities under this section, and the Commission’s review and approval of such submission, the Postal Service shall transfer to the Department of State, from any funds available to the Postal Service, such sums as may be reasonable, documented, and auditable for the Department of State to carry out such activities. . (2) Application The amendment made by paragraph (1) shall take effect on October 1 of the first fiscal year beginning after the date of enactment of this Act. (3) Conforming amendment Section 633 of title VI of the Treasury and General Government Appropriations Act, 1999 ( Public Law 105–277 ; 39 U.S.C. 407 note) is amended by striking subsection (d). (f) Technical and conforming amendments Title 39, United States Code, is amended as follows: (1) In section 102(3)— (A) by striking 9 members and inserting 5 members ; and (B) by striking section 202(a) and inserting section 202(b)(1) . (2) In section 204— (A) by striking the Board and inserting the Postmaster General ; and (B) by striking the Governors and . (3) In section 207, by striking the Board and inserting the Postal Service . (4) In section 414(b)(2), by striking the Governors in each instance it appears and inserting the Postal Service . (5) In section 416(c)— (A) by striking the Governors and inserting the Postal Service ; and (B) by striking they and inserting the Postal Service . (6) In section 1011, by striking the Board and inserting the Postal Service . (7) By striking section 2402 and inserting the following: 2402. Annual report The Postmaster General shall render an annual report concerning the operations of the Postal Service under this title to the President and Congress. . (8) In section 3632— (A) by striking the section heading, and inserting Establishment of rates and classes of competitive products ; (B) by striking subsection (a) and redesignating subsections (b) and (c) as (a) and (b), respectively; (C) in paragraph (a)(2) (as redesignated by subparagraph (B)), by striking and the record of the Governors’ proceedings in connection with such decision ; (D) in paragraph (a)(3) (as redesignated by subparagraph (B))— (i) by striking and the record of the proceedings in connection with such decision ; and (ii) by striking the Governors consider and inserting the Postal Service considers ; and (E) by striking the Governors in each instance it appears and inserting the Postal Service . (9) The table of sections for chapter 36 of title 39, United States Code, is amended by striking the item relating to section 3632 and inserting the following: 3632. Establishment of rates and classes of competitive products. . (g) Delayed effective date The amendments made by this section shall take effect upon the date that is 30 days after the date of enactment of this Act. 202. Transition to more efficient and secure mail delivery (a) In general Subchapter VII of chapter 36 of title 39, United States Code, is amended by adding at the end the following: 3692. Delivery-point modernization (a) Definitions For purposes of this section— (1) the term delivery point means a mailbox or other receptacle to which mail is delivered; (2) the term primary mode of mail delivery means the typical method by which the Postal Service delivers letter mail to the delivery point of a postal patron; (3) the term door delivery means a primary mode of mail delivery whereby mail is placed into a slot or receptacle at or near the postal patron’s door or is hand delivered to a postal patron, but does not include centralized delivery, curbside delivery, or sidewalk delivery; (4) the term centralized delivery means a primary mode of mail delivery whereby mail receptacles of a number of delivery points are grouped or clustered at a single location; (5) the term curbside delivery means a primary mode of mail delivery whereby a mail receptacle is situated at the edge of a sidewalk abutting a road or curb, at a road, or at a curb, and can be served by a letter carrier from a motorized vehicle; and (6) the term sidewalk delivery means a primary mode of mail delivery whereby a mail receptacle is situated at the edge of a sidewalk and can be served by a letter carrier from the sidewalk. (b) Policy It shall be the policy of the Postal Service— (1) to provide access to secure, convenient mail and package delivery receptacles to the greatest number of postal patrons feasible; and (2) to use the most cost-effective primary mode of mail delivery feasible for postal patrons. (c) Phaseout of door delivery for new addresses For any new delivery point established after December 31, 2016, the Postal Service shall provide a primary mode of mail delivery other than door delivery, with a preference for secure, centralized delivery. (d) Business address conversion (1) Identification Not later than 1 year after the date of the Postal Service Reform Act of 2016 , each Postal Service district office shall identify the business delivery points within its service area that are appropriate candidates for conversion from door delivery to centralized delivery, curbside delivery, or sidewalk delivery. (2) Conversion requirement Beginning not later than October 1, 2017, the Postal Service shall implement a program to convert delivery points identified under paragraph (1) to centralized delivery, curbside delivery, or sidewalk delivery at a rate sufficient to ensure that— (A) not less than 20 percent of such delivery points are converted by September 30, 2018; (B) not less than 40 percent of such delivery points are converted by September 30, 2019; (C) not less than 60 percent of such delivery points are converted by September 30, 2020; (D) not less than 80 percent of such delivery points are converted by September 30, 2021; and (E) all such delivery points are converted by September 30, 2022. (3) Notification In carrying out conversions under paragraph (2), the Postal Service shall provide written notice at least 60 days in advance of the implementation date of a change in primary mode of mail delivery to postal customers served by an applicable delivery point. (e) Residential address conversion (1) Identification Not later than 1 year after the date of the enactment of the Postal Service Reform Act of 2016 , each Postal Service district office shall identify the residential delivery points within its service area that are appropriate candidates for conversion from door delivery to centralized delivery, curbside delivery, or sidewalk delivery. (2) Voluntary conversion Not later than October 1, 2017, the Postal Service shall commence a program to convert delivery points identified under paragraph (1) to centralized delivery, curbside delivery, or sidewalk delivery. Such program shall operate as follows: (A) Not later than 3 months after the identification of the delivery points under paragraph (1), the Postal Service shall divide such delivery points into geographically based address units (such as street blocks or other similar reasonably segregable units) not to exceed 50 delivery points per unit. (B) Not later than 6 months after such identification, the Postal Service shall provide written notification to postal patrons served by each identified delivery point containing the following: (i) Notice that the delivery point has been proposed for conversion to a more efficient primary mode of mail delivery to more economically provide universal postal service and improve service. (ii) A description of the new primary mode of delivery proposed by the Postal Service and a visual example of such mode. (iii) A conversion consent form and notice that conversion for residential addresses is on a voluntary basis. (iv) A description of benefits of conversion to the postal patron, including access to secure mail and package delivery, and benefits of conversion to the Postal Service, including a smaller environmental impact for delivery. (v) A description of how the conversion process would work, and the monetary costs (if any) to the postal patron. (vi) Any other information the Postal Service considers necessary. (C) No delivery point may be converted under this subsection unless prior written consent is provided to the Postal Service by a postal patron served by such delivery point who is at least 18 years old. Prior to the conversion of a delivery point under this section, any written consent so provided may be withdrawn by such patron or by any other postal patron served by such delivery point who is at least 18 years old upon written notification to the Postal Service. The Postal Service shall place on the Postal Service’s public Web site an option to request that a consent form or consent-withdrawal form be delivered to any delivery point identified for conversion under this subsection. (D) Upon the receipt of written consent applicable to at least 40 percent of the delivery points within an address unit described under subparagraph (A), the Postal Service shall— (i) not later than 30 days after the date that the requisite percentage is reached, provide written notice to each delivery point within such unit stating that the conversion threshold has been reached and that— (I) with respect to any delivery point for which a consent for conversion was received, that the primary mode of mail delivery for such address will be converted; and (II) with respect to any delivery point for which a consent for conversion was not received, that— (aa) a postal patron served by such delivery point may elect, by written consent, at any time to convert the primary mode of mail delivery to the same form of delivery as the converted delivery points in such unit; and (bb) if such a patron provides such consent, the primary mode of mail delivery shall be converted not later than 30 days after the date of such consent or, in any case where the conversion of delivery points has not yet occurred, upon implementation of that conversion; (ii) not later than 90 days after the date that the requisite percentage is reached, but not less than 30 days following the written notice under clause (i), convert the delivery points for which consent was received to the applicable new primary mode of mail delivery; and (iii) following the conversion of an address unit, ensure that the primary mode of mail delivery for any new residents to the address unit is the converted primary mode of mail, regardless of the primary mode of mail delivery for the previous occupant. (f) Considerations In making a determination to convert the primary mode of mail delivery under this section, the Postal Service shall consider— (1) the impact of weather conditions, physical barriers, or any other factor that may impact the feasibility of providing a primary mode of mail delivery other than door delivery (such as a factor that may significantly reduce the potential cost savings associated with providing centralized delivery or curbside delivery); (2) whether the address is in a registered historic district (as that term is defined in section 47(c)(3)(B) of the Internal Revenue Code of 1986), is listed on the National Register of Historic Places, is designated as a National Historic Landmark, or is of historic value; and (3) population density and the concentration of poverty. (g) Waiver for physical hardship (1) In general The Postal Service shall establish and maintain a waiver program under which, upon application, door delivery may be continued, or provided, for a delivery point identified under subsection (d)(1) or (e)(1) at no cost to the applicant in any case in which— (A) centralized delivery, curbside delivery, or sidewalk delivery would, but for this paragraph, otherwise be the primary mode of mail delivery; and (B) door delivery is necessary in order to avoid causing significant physical hardship or physical safety risks to a postal patron. (2) Treatment of waiver An address receiving door delivery pursuant to a waiver under this subsection— (A) shall be counted, for purposes of the reporting requirement under subsection (j), as an address that receives the primary mode of mail delivery which the address would be subject to if not for the waiver; and (B) shall, not later than 60 days after ceasing to meet the requirements of paragraph (1), be converted to the primary mode of mail delivery which is otherwise applicable. (h) Procedures In carrying out conversions under this section, the Postal Service shall establish procedures to— (1) solicit, consider, and respond to input from the general public, postal patrons, State and local governments, local associations, and property owners; (2) calculate and make publicly accessible the cost or savings of the conversion to the Postal Service as well as the average conversion cost or savings to each postal patron and any cost or savings to the State and local government; and (3) place centralized delivery points in locations that maximize delivery efficiency, ease of use for postal patrons, and respect for private property rights. (i) Voucher program The Postal Service shall provide for a voucher program under which, upon application, the Postal Service may defray all or any portion of the costs associated with conversion from door delivery under this section which would otherwise be borne by postal patrons. (j) Annual report Not later than 60 days after the end of each of fiscal years 2017 through 2023, the Postal Service shall submit to Congress and the Inspector General a report on the implementation of this section during the most recently completed fiscal year. Each such report shall include— (1) the number of residential and business addresses that— (A) receive door delivery as of the end of the fiscal year preceding the most recently completed fiscal year; (B) receive door delivery as of the end of the most recently completed fiscal year; and (C) during the most recently completed fiscal year, were converted from door delivery to— (i) centralized delivery; (ii) curbside delivery; and (iii) any other primary mode of mail delivery; (2) the estimated cost savings from the conversions described in paragraph (1)(C); (3) a description of the progress made by the Postal Service toward meeting the requirements of the phaseout under subsection (c); and (4) any other information which the Postal Service considers appropriate. (k) Inspector General audit The Inspector General shall issue an annual audit report on the implementation of this section not later than 90 days after the date on which the Postal Service releases its annual report under subsection (j). Such report shall include— (1) an audit of the data contained in the Postal Service’s report under subsection (j); and (2) an evaluation of the Postal Service’s implementation of the voucher program under subsection (i). (l) Review Subchapters IV and V shall not apply with respect to any action taken by the Postal Service under this section. . (b) Clerical amendment The table of sections for chapter 36 of title 39, United States Code, is amended by adding after the item relating to section 3691 the following: 3692. Delivery-point modernization. . (c) Updated delivery cost data (1) Study Not later than 180 days after the date of the enactment of this Act, the Postal Service shall begin to collect data on delivery mode costs and the potential savings of converting to more cost-efficient primary modes of mail delivery. (2) Report Not later than 2 years after the date of enactment of this Act, the Postal Service shall submit a report to the Committee on Oversight and Government Reform of the House of Representatives and the Committee on Homeland Security and Governmental Affairs of the Senate describing the findings of the study conducted under paragraph (1). (d) Inspector General review of costs and benefits of delivery point conversions (1) Study Not later than 2 years after the date on which the Postal Service commences delivery point conversions pursuant to subsections (d)(2) and (e)(2) of section 3692 of title 39, United States Code (as added by subsection (a)), and not later than 3 years thereafter, the Inspector General of the Postal Community shall conduct a study of the costs and benefits of such conversions. (2) Report Not later than 1 year after the date on which the Inspector General conducts each study required under paragraph (1), the Inspector General shall submit to the Committee on Homeland Security and Governmental Affairs of the Senate and the Committee on Oversight and Government Reform of the House of Representatives a report on the results of each study. (3) Content The studies required under paragraph (1) shall assess the following: (A) The cost savings realized by the Postal Service from the conversions under subsections (d)(2) and (e)(2) of section 3692 of title 39, United States Code (as added by subsection (a)), and the projected cost savings the Postal Service is likely to realize from full implementation of such conversions. (B) The expenses incurred by the Postal Service to achieve such conversions and the projected expenses the Postal Service is likely to incur from full implementation of such conversions. (C) The impact of the conversions on— (i) response rates to mailed advertising; (ii) advertising revenue earned by the Postal Service; (iii) small businesses, including small home-based businesses; and (iv) mail volumes shipped through the Postal Service. (D) Any other factors the Inspector General considers relevant to provide a complete analysis of the costs and benefits associated with the conversions described under such subsections. (4) Net cost benefit analysis The Inspector General shall conduct a cost benefit analysis to determine the net cost or benefit to the Postal Service of the conversions conducted under such subsections and include the analysis in each report submitted under paragraph (2). 203. Modernizing postal rates (a) Adequacy, efficiency, and fairness of postal rates (1) Objectives Section 3622(b) of title 39, United States Code, is amended— (A) in paragraph (2), by inserting and ensure after create ; (B) in paragraph (3)— (i) by inserting and meet after maintain ; and (ii) by inserting , with a focus on achieving predictable and consistent delivery before the period at the end; (C) in paragraph (5), by inserting establish and before maintain ; (D) in paragraph (6), by striking process and inserting and cost allocation processes ; and (E) in paragraph (9), by inserting (and to ensure appropriate levels of transparency) before the period at the end. (2) Factors Section 3622(c) of title 39, United States Code, is amended to read as follows: (c) Factors In establishing or revising such system, the Postal Regulatory Commission shall take into account the following factors: (1) The effect of rate increases upon the general public and business mail users. (2) The available alternative means of sending and receiving written communications, information, and letters and other mail matter at reasonable costs. (3) The reliability of delivery timelines and the extent to which the Postal Service is meeting its service standard obligations. (4) The need to ensure that the Postal Service has adequate revenues and has taken appropriate cost-cutting measures to maintain financial stability and meet all legal obligations. (5) The extent to which the Postal Service has taken actions to increase its efficiency and reduce its costs. (6) The value of the mail service actually provided by each class or type of mail service to both the sender and the recipient, including but not limited to the collection, mode of transportation, and priority of delivery. (7) The requirement that each class of mail or type of mail service bear the direct and indirect postal costs attributable to each class or type of mail service through reliably identified causal relationships plus that portion of all other costs of the Postal Service reasonably assignable to such class or type. (8) The degree of preparation of mail for delivery into the postal system performed by the mailer and its effect upon improving efficiency and reducing costs to the Postal Service. (9) Simplicity of structure for the entire schedule and simple, identifiable relationships between the rates or fees charged the various classes of mail for postal services. (10) The importance of pricing flexibility to encourage increased mail volume and operational efficiency. (11) The relative value to the people of the kinds of mail matter entered into the postal system and the desirability and justification for special classifications and services of mail. (12) The importance of providing classifications with extremely high degrees of reliability and speed of delivery and of providing those that do not require high degrees of reliability and speed of delivery. (13) The desirability of special classifications for both postal users and the Postal Service in accordance with the policies of this title, including agreements between the Postal Service and postal users, when available on public and reasonable terms to similarly situated mailers, that— (A) improve the net financial position of the Postal Service by reducing Postal Service costs or increasing the overall contribution to the institutional costs of the Postal Service; and (B) do not cause— (i) unfair competitive advantage for the Postal Service or postal users eligible for the agreements; or (ii) unreasonable disruption to the volume or revenues of other postal users. (14) The educational, cultural, scientific, and informational value to the recipient of mail matter. (15) The need for the Postal Service to increase its efficiency and reduce its costs, including infrastructure costs, to help maintain high quality, affordable postal services. (16) The value to the Postal Service and postal users of promoting intelligent mail and of secure, sender-identified mail. (17) The importance of stability and predictability of rates to ratepayers. (18) The policies of this title as well as such other factors as the Commission determines appropriate. . (3) Requirements Section 3622(d)(1) of title 39, United States Code, is amended— (A) by redesignating subparagraphs (B) through (E) as subparagraphs (C) through (F), respectively; (B) in subparagraph (F) (as redesignated by clause (i)) by striking subparagraphs (A) and (C) and inserting subparagraphs (A) and (D) ; and (C) by inserting after subparagraph (A) the following: (B) establish postal rates for each group of functionally equivalent agreements between the Postal Service and users of the mail that— (i) cover attributable cost; (ii) improve the net financial position of the Postal Service; and (iii) do not cause unreasonable disruption in the marketplace, consistent with subsection (c)(13)(B); for purposes of this subparagraph, a group of functionally equivalent agreements shall consist of all service agreements that are functionally equivalent to each other within the same market-dominant product, but shall not include agreements within an experimental product; . (4) Technical and conforming amendments Section 3622 of title 39, United States Code, is amended— (A) in subsection (a) by striking , within 18 months after the date of enactment of this section, ; and (B) in subsection (d)(1)(E) (as redesignated by paragraph (3)(A)(i)) by striking (c)(10) and inserting (c)(H) . (b) Repeal of rate preferences for qualified political committees Subsection (e) of section 3626 of title 39, United States Code, is repealed. (c) Use of negotiated service agreements (1) Streamlined review of qualifying service agreements for competitive products Section 3633 of title 39, United States Code, is amended by adding at the end the following: (c) Streamlined review Not later than 90 days after the date of enactment of this subsection, after notice and opportunity for comment, the Postal Regulatory Commission shall promulgate (and may from time to time thereafter revise) regulations for streamlined after-the-fact review of newly proposed agreements between the Postal Service and users of the mail that provide rates not of general applicability for competitive products. Streamlined review shall apply only if agreements are functionally equivalent to existing agreements that have collectively covered attributable costs and collectively improved the net financial position of the Postal Service. The regulations issued under this subsection shall provide that streamlined review shall be concluded not later than 5 business days after the date on which the agreement is filed with the Commission and shall be limited to approval or disapproval of the agreement as a whole based on the Commission's determination of its functional equivalence. Agreements not approved may be resubmitted without prejudice under section 3632. . (2) Submission of service agreements for streamlined review Section 3632(b) of title 39, United States Code, is amended— (A) by redesignating paragraph (4) as paragraph (5); and (B) by inserting after paragraph (3) the following: (4) Rates for streamlined review In the case of rates not of general applicability for competitive products that the Postmaster General considers eligible for streamlined review under section 3633(c), the Postmaster General shall cause the agreement to be filed with the Postal Regulatory Commission by a date that is on or before the effective date of any new rate established under the agreement, as the Postmaster General considers appropriate. . (3) Transparency and accountability for service agreements (A) Certain information required to be included in determinations of compliance Section 3653 of title 39, United States Code, is amended— (i) by redesignating subsections (c), (d), and (e) as subsections (d), (e), and (f), respectively; and (ii) by inserting after subsection (b) the following: (c) Written determination Each annual written determination of the Commission under this section shall include the following: (1) Requirements For each group of functionally equivalent agreements between the Postal Service and users of the mail, whether such group fulfilled requirements to— (A) cover costs attributable; and (B) improve the net financial position of the Postal Service. (2) Noncompliance Any group of functionally equivalent agreements not meeting subparagraphs (A) and (B) of paragraph (1) shall be determined to be in noncompliance under this subsection. (3) Definition For purposes of this subsection, a group of functionally equivalent agreements shall consist of 1 or more service agreements that are functionally equivalent to each other within the same market-dominant or competitive product, but shall not include agreements within an experimental product. . (B) Technical amendment Section 3653(d) of title 39, United States Code (as redesignated by subparagraph (A)), is amended by striking subsections (c) and (e) and inserting subsections (c) and (d) . 204. Nonpostal services (a) Nonpostal services (1) In general Part IV of title 39, United States Code, is amended by adding after chapter 36 the following: 37 Nonpostal Services Sec. 3701. Purpose. 3702. Definitions. 3703. Postal service program for State governments. 3704. Postal service program for other government agencies. 3705. Transparency and accountability for nonpostal services. 3701. Purpose The purpose of this chapter is to enable the Postal Service to increase its net revenues through specific nonpostal products and services that are expressly authorized by this chapter. Postal Service revenues and expenses under this chapter shall be funded through the Postal Service Fund. 3702. Definitions In this chapter— (1) the term nonpostal services is limited to services offered by the Postal Service that are expressly authorized by this chapter and are not postal products or services; (2) the term attributable costs has the meaning given such term in section 3631; and (3) the term year means a fiscal year. 3703. Postal service program for State governments (a) In general Notwithstanding any other provision of this title, the Postal Service may establish a program to enter into agreements with an agency of any State government, local government, or tribal government to provide property and services on behalf of such agencies for non-commercial products and services at Postal Service facilities within the United States, but only if such property and services— (1) provide enhanced value to the public, such as by lowering the cost or raising the quality of such services or by making such services more accessible; (2) do not interfere with or detract from the value of postal services, including— (A) the cost and efficiency of postal services; and (B) unreasonably restricting access to postal retail service, such as customer waiting time and access to parking; and (3) provide a reasonable contribution to the institutional costs of the Postal Service, defined as reimbursement that covers at least 100 percent of attributable costs of all property and services provided under each relevant agreement in each year. (b) Public notice At least 90 days before offering a service under the program, the Postal Service shall make available to the public on its Web site— (1) the agreement with the agency regarding such service; and (2) a business plan that describes the specific service to be provided, the enhanced value to the public, terms of reimbursement, the estimated annual reimbursement to the Postal Service, and the estimated percentage of attributable Postal Service costs that will be covered by reimbursement (with documentation to support the estimates). (c) Public comment Before offering a service under the program, the Postal Service shall provide for a public comment period of at least 30 days that allows the public to post comments relating to the provision of such services on the Postal Service Web site. The Postal Service shall make reasonable efforts to provide written responses to the comments on such Web site at least 30 days before offering such services. (d) Approval required The Postal Service may not establish the program under subsection (a) unless the Governors of the Postal Service approve such program by a recorded vote that is publicly disclosed on the Postal Service Web site with a majority of the total Governors voting for approval. (e) Application of reporting requirements For purposes of the reporting requirements under section 3705, the Postal Service shall submit a separate report for each agreement with an agency entered into under subsection (a) analyzing the costs, revenues, rates, and quality of service for the provision of all services under such agreement, including information demonstrating that the agreement satisfies the requirements of paragraphs (1) through (3) of subsection (a). (f) Regulations required The Postal Regulatory Commission shall issue such regulations as are necessary to carry out this section. (g) Definitions For the purpose of this section— (1) the term local government means a county, municipality, city, town, township, local public authority, school district, special district, intrastate district, council of governments, or regional or interstate government entity; (2) the term State government includes the government of the District of Columbia, the Commonwealth of Puerto Rico, the United States Virgin Islands, Guam, American Samoa, the Commonwealth of the Northern Mariana Islands, and any other territory or possession of the United States; (3) the term tribal government means the government of an Indian tribe, as that term is defined in section 4(e) of the Indian Self-Determination Act ( 25 U.S.C. 450b(e) ); and (4) the term United States , when used in a geographical sense, means the States, the District of Columbia, the Commonwealth of Puerto Rico, the United States Virgin Islands, Guam, American Samoa, the Commonwealth of the Northern Mariana Islands, and any other territory or possession of the United States. 3704. Postal service program for other government agencies (a) In general The Postal Service may establish a program to provide property and services to other Government agencies within the meaning of section 411, but only if such program provides a reasonable contribution to the institutional costs of the Postal Service, defined as reimbursement by each agency that covers at least 100 percent of the attributable costs of all property and service provided by the Postal Service in each year to such agency. (b) Application of reporting requirements For purposes of the reporting requirements under section 3705, the Postal Service shall submit a separate report for each agreement with an agency entered into under subsection (a) analyzing the costs, revenues, rates, and quality of service for the provision of all services under such agreement, including information demonstrating that the agreement satisfies the requirements of subsection (a). 3705. Transparency and accountability for nonpostal services (a) Annual report to the Commission (1) In general Not later than 90 days after the last day of each year, the Postal Service shall submit to the Postal Regulatory Commission a report that analyzes costs, revenues, rates, and quality of service for each agreement for the provision of property and services under this chapter, using such methodologies as the Commission may prescribe, and in sufficient detail to demonstrate compliance with the requirements of this chapter. (2) Supporting matter A report submitted under paragraph (1) shall include any nonpublic annex, the working papers, and any other supporting matter of the Postal Service and the Inspector General related to the information submitted in such report. (b) Content and form of report (1) In general The Postal Regulatory Commission shall, by regulation, prescribe the content and form of the report required under subsection (a). In prescribing such regulations, the Commission shall give due consideration to— (A) providing the public with timely, adequate information to assess compliance; (B) avoiding unnecessary or unwarranted administrative effort and expense on the part of the Postal Service; and (C) protecting the confidentiality of information that is commercially sensitive or is exempt from public disclosure under section 552(b) of title 5. (2) Revised requirements The Commission may, on its own motion or on request of any interested party, initiate proceedings to improve the quality, accuracy, or completeness of Postal Service data required by the Commission if— (A) the attribution of costs or revenues to property or services under this chapter has become significantly inaccurate or can be significantly improved; (B) the quality of service data provided to the Commission for a report under this chapter has become significantly inaccurate or can be significantly improved; or (C) such revisions are, in the judgment of the Commission, otherwise necessitated by the public interest. (c) Audits The Inspector General shall regularly audit the data collection systems and procedures used in collecting information and preparing the report required under subsection (a). The results of any such audit shall be submitted to the Postal Service and the Postal Regulatory Commission. (d) Confidential information (1) In general If the Postal Service determines that any document or portion of a document, or other matter, which it provides to the Postal Regulatory Commission in a nonpublic annex under this section contains information described in section 410(c), 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 of its determination, in writing, and describe with particularity the documents (or portions of documents) or other matter for which confidentiality is sought and the reasons therefor. (2) Treatment Any information or other matter described in paragraph (1) to which the Commission gains access under this section shall be subject to paragraphs (2) and (3) of section 504(g) in the same way as if the Commission had received notification with respect to such matter under section 504(g)(1). (e) Annual compliance determination (1) Opportunity for public comment Upon receiving a report required under subsection (a), the Postal Regulatory Commission shall promptly— (A) provide an opportunity for comment on such report by any interested party; and (B) appoint an officer of the Commission to represent the interests of the general public. (2) Determination of compliance or noncompliance Not later than 90 days after receiving a report required under subsection (a), the Postal Regulatory Commission shall make a written determination as to whether the nonpostal activities carried out during the applicable year were or were not in compliance with the provisions of this chapter. For purposes of this paragraph, any case in which the requirements for coverage of attributable costs have not been met shall be considered to be a case of noncompliance. If, with respect to a year, no instance of noncompliance is found to have occurred, the determination shall be to that effect. Such determination of noncompliance shall be included with the annual compliance determination required under section 3653. (3) Noncompliance If a timely written determination of noncompliance is made under paragraph (2), the Postal Regulatory Commission shall take the following appropriate action. If the requirements for coverage of attributable costs specified by this chapter are not met, the Commission shall, within 60 days after the determination, prescribe remedial action to restore compliance as soon as practicable, including the full restoration of revenue shortfalls during the following year. The Commission may order the Postal Service to discontinue a nonpostal service under section 3703 that persistently fails to meet cost coverage requirements. (4) Deliberate noncompliance In the case of deliberate noncompliance by the Postal Service with the requirements of this chapter, the Postal Regulatory Commission may order, based on the nature, circumstances, extent, and seriousness of the noncompliance, a fine (in the amount specified by the Commission in its order) for each incidence of such noncompliance. All receipts from fines imposed under this subsection shall be deposited in the general fund of the Treasury. (f) Regulations required The Postal Regulatory Commission shall issue such regulations as are necessary to carry out this section. . (2) Clerical amendment The table of chapters for part IV of title 39, United States Code, is amended by adding after the item relating to chapter 36 the following: 37. Nonpostal services 3701 . (b) Conforming amendments (1) Section 404 Section 404(e) of title 39, United States Code, is amended— (A) in paragraph (2), by inserting after subsection the following: , or any nonpostal products or services authorized by chapter 37 ; and (B) by adding at the end the following: (6) Licensing which, before the date of enactment of this paragraph, has been authorized by the Postal Regulatory Commission for continuation as a nonpostal service may not be used for any purpose other than— (A) to continue to provide licensed mailing, shipping, or stationery supplies offered as of June 23, 2011; or (B) to license other goods, products, or services, the primary purpose of which is to promote and enhance the image or brand of the Postal Service. (7) Nothing in this section shall be considered to prevent the Postal Service from establishing nonpostal products and services that are expressly authorized by chapter 37. . (2) Section 411 The last sentence of section 411 of title 39, United States Code, is amended by striking including reimbursability and inserting including reimbursability within the limitations of chapter 37 . (3) Treatment of existing nonpostal services All individual nonpostal services, provided directly or through licensing, that are continued pursuant to section 404(e) of title 39, United States Code, shall be considered to be expressly authorized by chapter 37 of such title (as added by subsection (a)(1)) and shall be subject to the requirements of such chapter. 205. Efficient and flexible universal postal service (a) Conditions regarding determinations for post office closures Clause (i) of section 404(d)(2)(A) of title 39, United States Code, is amended to read as follows: (i) the effect of such closing or consolidation on the community served by such post office, including through an analysis of— (I) the distance (as measured by public roads) to the closest postal retail facility not proposed for closure or consolidation under such plan; (II) the characteristics of such location, including weather and terrain; (III) whether commercial mobile service (as defined in section 332 of the Communications Act of 1934) and commercial mobile data service (as defined in section 6001 of the Middle Class Tax Relief and Job Creation Act of 2012) are available in at least 80 percent of the total geographic area of the ZIP codes served by the postal retail facility proposed for closure or consolidation; and (IV) whether fixed broadband Internet access service is available to households in at least 80 percent of such geographic area at speeds not less than those sufficient for service to be considered broadband for purposes of the most recent report of the Federal Communications Commission under section 706 of the Telecommunications Act of 1996; . (b) PRC review of determinations To close or consolidate a post office (1) Deadline for review Section 404(d)(5) title 39, United States Code, is amended by striking 120 days and inserting 60 days, or a longer period for good cause shown but in no event longer than 120 days, . (2) Applicability The amendment made by paragraph (1) shall not apply with respect to an appeal received by the Postal Regulatory Commission before the date of enactment of this Act (as determined applying the rules set forth in section 404(d)(6) of such title). (c) Expedited procedures (1) In general Section 3661 of title 39, United States Code, is amended by adding at the end the following: (d) (1) The Commission shall issue its opinion within 90 days, or a longer period for good cause shown but in no event longer than 120 days, after the receipt of any proposal (as referred to in subsection (b)) concerning an identical or substantially identical proposal on which the Commission has issued an opinion within the preceding 5 years. (2) If necessary in order to comply with the 90-day requirement under paragraph (1), the Commission may apply expedited procedures which the Commission shall by regulation prescribe. . (2) Regulations The Postal Regulatory Commission shall prescribe any regulations necessary to carry out the amendment made by paragraph (1) within 90 days after the date of enactment of this Act. (3) Applicability The amendment made by this subsection shall apply with respect to any proposal received by the Postal Regulatory Commission on or after the earlier of— (A) the 90th day after the date of enactment of this Act; or (B) the effective date of the regulations under paragraph (2). (d) Alternate postal access choice Section 404(d) of title 39, United States Code, is amended by striking paragraph (1) and inserting the following: (1) The Postal Service, prior to making a determination under subsection (a)(3) as to the necessity for the closing or consolidation of any post office, shall— (A) provide adequate notice of its intention to close or consolidate such post office at least 60 days prior to the proposed date of such closing or consolidation to postal patrons served by such post office; (B) conduct a nonbinding survey on the proposed closing or consolidation to allow postal patrons served by such post office an opportunity to indicate their preference between or among— (i) the closing or consolidation; and (ii) 1 or more alternative options; and (C) ensure that— (i) should the closure or consolidation of a postal retail facility be deemed necessary, it shall be the policy of the Postal Service to provide alternative access to postal services to those served by the postal retail facility by the option chosen by the highest number of survey respondents under subparagraph (B)(ii); and (ii) if the Postal Service is unable to provide alternative access through the option identified in clause (i), or if that option is cost prohibitive, the Postal Service may provide alternative access through a different means. Upon selection of an alternative access method other than the one identified by clause (i), the Postal Service must provide written notice to those patrons served by the postal retail facility identifying and explaining why the option identified by clause (i) was not possible or cost prohibitive. . (e) Applicability of procedures relating to closures and consolidations (1) In general Section 404(d) of title 39, United States Code, is further amended by adding at the end the following: (7) For purposes of this subsection, the term post office means a post office and any other facility described in section 2(2) of the Postal Service Reform Act of 2016. . (2) Effective date In the case of any post office (within the meaning of the amendment made by paragraph (1)) which, but for such amendment, would not otherwise be subject to section 404(d) of title 39, United States Code, the amendment made by subsection (a) shall be effective with respect to any closure or consolidation, the proposed effective date of which occurs on or after the 60th day following the date of enactment of this Act. (f) Enhanced reporting on postal service efficiency Section 3652(a) of title 39, United States Code, is amended— (1) in paragraph (1), by striking and at the end; (2) in paragraph (2)(B)(ii), by striking the period at the end and inserting ; and ; and (3) by adding after paragraph (2) the following: (3) which shall provide the overall change in Postal Service productivity and the resulting effect of such change on overall Postal Service costs during such year, using such methodologies as the Commission shall by regulation prescribe, if necessary. . (g) POSTPlan study (1) In general Beginning not later than 30 days after the date of enactment of this Act, the Inspector General of the Postal Community shall conduct a 1-year review to study of the impacts of the POSTPlan post office restructuring plan on Postal Service expenses, revenue, and retail service provision. (2) Content In conducting the review under paragraph (1), the Inspector General shall examine— (A) changes in the costs for the provision of Postal Service operated retail service, both nationwide and in the aggregate for each of the Level 2, Level 4, Level 6, and Level 18 post offices for which the hours, functions, or responsibilities changed as a result of the POSTPlan initiative before and after the implementation of the POSTPlan initiative; (B) changes in revenue received by Postal Service operated retail service, both nationwide and in the aggregate for each of the Level 2, Level 4, Level 6, and Level 18 post offices for which the hours, functions, or responsibilities changed as a result of the POSTPlan initiative before and after the implementation of the POSTPlan initiative; (C) a determination of the relative cost savings, taking into account any changes in revenue earned, realized on an annual basis for Level 2, Level 4, Level 6, and Level 18 offices each in the aggregate and any trends in such cost savings; (D) the relative impact on retail access to postal services for individuals served by Level 2, Level 4, Level 6, and Level 18 offices each in the aggregate; and (E) any other factors the Inspector General determines appropriate. (3) Report and recommendations Upon completion of the review required under paragraph (1), the Inspector General shall submit to the Postal Service, the Committee on Homeland Security and Governmental Affairs of the Senate, and the Committee on Oversight and Government Reform of the House of Representatives a report containing— (A) the results of the review; and (B) any recommendations resulting from such review. (4) Postal Service review Prior to any hour changes or consolidation decisions related to POSTPlan initiative impacted post offices, the Postal Service shall— (A) review the report and any recommendations submitted pursuant to paragraph (3); and (B) revise any planned efforts regarding the POSTPlan initiative, as appropriate. 206. Fair stamp-evidencing competition Section 404a(a) of title 39, United States Code, is further amended— (1) in paragraph (2), by striking or at the end; (2) in paragraph (3) by striking the period and inserting ; or ; and (3) by adding at the end the following: (4) offer to the public any postage-evidencing product or service that does not comply with any rule or regulation that would be applicable to such product or service if the product or service were offered by a private company. . 207. Market-dominant rates (a) Establishment of rate baseline Notwithstanding any order of the Postal Regulatory Commission to the contrary— (1) no earlier than the first Sunday after the date of enactment of this Act, on a date selected by the Postmaster General in the exercise of the Postmaster General’s unreviewable discretion, the Postal Service shall reinstate, as nearly as is practicable, 50 percent of the rate surcharge implemented under section 3622(d)(1)(G) (as redesignated by this Act) that was in effect on April 9, 2016; and (2) the partially reinstated surcharge reinstated pursuant to paragraph (1) shall be considered a part of the rate base for purposes of determining the percentage changes in rates when the Postal Service files a notice of rate adjustment. (b) Subsequent rate increases The reinstatement described under subsection (a)(1) may not affect the calculation of the Postal Service’s maximum rate adjustment authority under subpart C of Part 3010 of title 39, Code of Federal Regulations, for purposes of any rate increase that occurs following such reinstatement. (c) Postal Regulatory Commission authority not affected Nothing in this section shall be construed as affecting the authority of the Postal Regulatory Commission to, by regulation, make such modification or adopt such alternative system for regulating rates and classes for market-dominant products as provided under section 3622 of title 39, United States Code. (d) Exigency appeal terminated The Postal Service— (1) shall withdraw its judicial appeal concerning the rates previously established pursuant to section 3622(d)(1)(G) (as redesignated by this Act) of title 39, United States Code; and (2) may not institute or maintain an additional rate increase pursuant to section 3622(d)(1)(G) (as redesignated by this Act) of title 39, United States Code, predicated upon the same extraordinary or exceptional circumstances upon which rates have previously been increased pursuant to such section. 208. Completion of initial rate regulation review The Postal Regulatory Commission shall complete the initial review of the system for regulating rates and classes for market-dominant products established under section 3622 of title 39, United States Code, such that a final rule or rules regarding a revised or reapproved system for regulating rates and classes for market-dominant products is issued not later than January 1, 2018. 209. Review of Postal Service cost attribution guidelines Not later than April 1, 2018, the Postal Regulatory Commission shall initiate a review of the regulations issued pursuant to sections 3633(a) and 3652(a)(1) of title 39, United States Code, to determine whether revisions are appropriate to ensure that all direct and indirect costs attributable to competitive and market-dominant products are properly attributed to those products, including by considering the underlying methodologies in determining cost attribution and considering options to revise such methodologies. If the Commission determines, after notice and opportunity for public comment, that revisions are appropriate, the Commission shall make modifications or adopt alternative methodologies as necessary. 210. Aviation security for parcels (a) In general Chapter 54 of title 39, United States Code, is amended by adding at the end the following: 5404. Aviation security for parcels A parcel carried by an air carrier or foreign air carrier (as those terms are defined in section 40102(a) of title 49) shall— (1) use postage that has been generated by a postage evidencing system that has been validated under level 4 of the 140 series of the Federal Information Processing Standards; or (2) be entered with in person sender verification. . (b) Technical amendment Section 5401(b) of title 39, United States Code, is amended by inserting or 5404 after in section 5402 . (c) Conforming amendment The table of sections for chapter 54 of title 39, United States Code, is amended by adding at the end the following: 5404. Aviation security for parcels. . 211. ZIP Codes Not later than September 30, 2017, the Postal Service shall designate a single, unique ZIP code for, as nearly as practicable, each of the following communities: (1) Miami Lakes, Florida. (2) Storey County, Nevada. (3) Flanders, Northampton, and Riverside in the Town of Southampton, New York. III Postal Service Personnel 301. Postal Service Chief Innovation Officer (a) In general Chapter 2 of title 39, United States Code, is amended by adding at the end the following: 209. Chief Innovation Officer (a) In general There is established within the Postal Service the position of Chief Innovation Officer, appointed by the Postmaster General, who shall manage the Postal Service’s development and implementation of innovative postal and nonpostal products and services. (b) Duties The primary duties of the Chief Innovation Officer are as follows: (1) Leading the development of innovative nonpostal products and services that will maximize revenue to the Postal Service. (2) Developing innovative postal products and services, specifically those that utilize emerging information technologies, to maximize revenue to the Postal Service. (3) Implementing the innovation strategy described under subsection (d). (4) Monitoring the performance of innovative products and services and revising them as needed to meet changing market trends. (5) Taking into consideration comments or advisory opinions, if applicable, issued by the Postal Regulatory Commission prior to the initial sale of innovative postal or nonpostal products and services. (c) Appointment (1) Deadline As soon as practicable after the date of enactment of the Postal Service Reform Act of 2016 , but no later than 6 months after such date, the Postmaster General shall appoint a Chief Innovation Officer. (2) Requirements Any individual appointed to serve as the Chief Innovation Officer shall have proven expertise and a record of success in at least 1 of the following: postal and shipping industry; innovation product research and development; marketing brand strategy; emerging communications technology; or business process management. (3) Current officer or employee eligible An officer or employee of the Postal Service may be appointed to the position of Chief Innovation Officer under this chapter. Upon appointment to such position, such officer or employee may not concurrently hold any other position in the Postal Service. (d) Innovation strategy (1) In general Not later than 12 months after the date on which the Chief Innovation Officer is appointed under subsection (c)(1), the Postmaster General shall submit to the Committee on Oversight and Government Reform of the House of Representatives, the Committee on Homeland Security and Governmental Affairs of the Senate, and the Postal Regulatory Commission a comprehensive strategy for maximizing revenues through innovative postal and nonpostal products and services. (2) Matters to be addressed The strategy submitted under paragraph (1) shall address— (A) the specific innovative postal and nonpostal products and services to be developed and offered by the Postal Service, including the nature of the market to be filled by each product and service and the likely date by which each product and service will be introduced; (B) the cost of developing and offering each product or service; (C) the anticipated sales volume of each product and service; (D) the anticipated revenues and profits expected to be generated by each product and service; (E) the likelihood of success of each product and service as well as the risks associated with the development and sale of each product and service; (F) the trends anticipated in market conditions that may affect the success of each product and service over the 5-year period beginning on the date such strategy or update is submitted; (G) the metrics that will be utilized to assess the effectiveness of the innovation strategy; and (H) the specific methods by which mailpiece design analysis may be improved to speed the approval process and promote the increased use of innovative mailpiece design. (3) Strategy updates On January 1, 2018, and every 3 years thereafter, the Postal Service shall submit an update to the innovation strategy submitted under paragraph (1) to the Committee on Oversight and Government Reform of the House of Representatives, the Committee on Homeland Security and Governmental Affairs of the Senate, and the Postal Regulatory Commission. (e) Report (1) In general On the date of submission of the President’s annual budget under section 1105(a) of title 31, the Postmaster General shall submit to the Committee on Oversight and Government Reform of the House of Representatives, the Committee on Homeland Security and Governmental Affairs of the Senate, and the Postal Regulatory Commission a report that details the Postal Service’s progress in implementing the innovation strategy described under subsection (d). (2) Matters to be addressed The report required under paragraph (1) shall address— (A) the revenue generated by each product and service developed through the innovation strategy and the costs of developing and offering each such product and service for the most recent fiscal year; (B) the total sales volume and revenue generated by each product and service on a monthly basis for the preceding year; (C) trends in the markets filled by each product and service; (D) products and services identified in the innovation strategy that are to be discontinued, the date on which the discontinuance will occur, and the reasons for the discontinuance; (E) alterations in products and services identified in the innovation strategy that will be made to meet changing market conditions, and an explanation of how these alterations will ensure the success of the products and services; and (F) the performance of the innovation strategy according to the metrics identified in subsection (d)(2)(G). (f) Comptroller General study (1) In general The Comptroller General shall conduct a study on the implementation of the innovation strategy described under subsection (d) not later than 4 years after the date of enactment of the Postal Service Reform Act of 2016. (2) Contents The study required under paragraph (1) shall assess the effectiveness of the Postal Service in identifying, developing, and selling innovative postal and nonpostal products and services. The study shall also include— (A) an audit of the costs of developing each innovative postal and nonpostal product and service developed or offered by the Postal Service during the period beginning on the date of enactment of the Postal Service Reform Act of 2016 and ending 4 years after such date; (B) the sales volume of each such product and service; (C) the revenues and profits generated by each such product and service; and (D) the likelihood of continued success of each such product and service. (3) Submission The results of the study required under this subsection shall be submitted to the Committee on Oversight and Government Reform of the House of Representatives, the Committee on Homeland Security and Governmental Affairs of the Senate, and the Postal Regulatory Commission. . (b) Clerical amendment The table of sections at the beginning of chapter 2 of title 39, United States Code, is amended by adding at the end the following: 209. Chief Innovation Officer. . 302. Inspector General of the Postal Community (a) Presidentially Appointed, Senate-Confirmed Inspector General The Inspector General Act of 1978 (5 U.S.C. App.) is amended— (1) in section 8G— (A) in subsection (a)— (i) in paragraph (2), by striking the United States International Trade Commission, the Postal Regulatory Commission, and the United States Postal Service and inserting and the United States International Trade Commission ; (ii) in paragraph (3), by striking subsection (h)(1) and inserting subsection (g)(1) ; and (iii) in paragraph (4)— (I) by striking subparagraph (B); (II) by striking subsection (h)(1) and inserting subsection (g)(1) ; and (III) by redesignating subparagraphs (C), (D), (E), (F), (G), (H), and (I) as (B), (C), (D), (E), (F), (G), and (H), respectively; (B) in subsection (c), by striking Except as provided under subsection (f) of this section, the and inserting The ; (C) by striking subsection (f); and (D) by redesignating subsections (g) and (h) as (f) and (g), respectively; and (2) in section 12— (A) in paragraph (1), by inserting the Postmaster General of the United States; the Chairman of the Postal Regulatory Commission; after the President of the Export-Import Bank; ; and (B) in paragraph (2), by inserting the United States Postal Service, the Postal Regulatory Commission, after the Export-Import Bank, . (b) Inspector general of the postal community (1) Establishment The Inspector General Act of 1978 (5 U.S.C. App.), as amended by subsection (a), is further amended by inserting after section 8L the following new section: 8M. Special provisions concerning the United States Postal Service and Postal Regulatory Commission (a) Office of Inspector General of the Postal Community The Inspector General for the United States Postal Service and the Postal Regulatory Commission shall be referred to as the Inspector General of the Postal Community . (b) Responsibilities In carrying out the duties and responsibilities specified in this Act, the Inspector General of the Postal Community shall have equal responsibility over the United States Postal Service and the Postal Regulatory Commission. (c) Applicable head of the establishment For purposes of the applicability of this Act to the Inspector General of the Postal Community— (1) the head of the establishment shall mean the Postmaster General of the United States for activities by the Office related to the United States Postal Service; and (2) the head of the establishment shall mean the Chairman of the Postal Regulatory Commission for activities by the Office related to the Postal Regulatory Commission. (d) Applicability of establishment for reports In carrying out the duties and responsibilities under section 5— (1) the term establishment shall include as separate establishments— (A) the United States Postal Service; and (B) the Postal Regulatory Commission; and (2) the Inspector General of the Postal Community shall prepare separate semiannual reports for the United States Postal Service and the Postal Regulatory Commission. (e) Office space In carrying out the duties and responsibilities under section 6(c), the heads of the establishments for the United States Postal Service and the Postal Regulatory Commission shall work jointly with one another and in consultation with the Inspector General of the Postal Community to ensure adequate and appropriate provision to the Office of the Inspector General of the Postal Community under section 6(c). (f) Budget In carrying out the duties and responsibilities under section 6(f)— (1) the head of the establishment shall mean the Postmaster General of the United States; and (2) designation of the Postmaster General of the United States as head of the establishment under this subsection shall not be construed as granting any authorities to the Postmaster General of the United States with regard to the Postal Regulatory Commission. (g) General duties and responsibilities In carrying out the duties and responsibilities specified in this Act— (1) the Inspector General of the Postal Community shall have oversight responsibility for all activities of the Postal Inspection Service, including any internal investigation performed by the Postal Inspection Service; (2) the Inspector General of the Postal Community shall give particular regard to the activities of the Postal Inspection Service with a view toward avoiding duplication and insuring effective coordination and cooperation; and (3) the Chief Postal Inspector shall promptly report the significant activities being carried out by the Postal Inspection Service to the Inspector General of the Postal Community. (h) Authorization of appropriations There are authorized to be appropriated, out of the Postal Service Fund, such sums as may be necessary for the Office of Inspector General of the Postal Community. . (2) Conforming amendments Section 8J of the Inspector General Act of 1978 (5 U.S.C. App.) is amended by striking The special provisions under section through of this Act and inserting The special provisions under section 8, 8A, 8B, 8C, 8D, 8E, 8F, 8H, 8I, or 8M of this Act . (3) Appointment Not later than 180 days after the date of enactment of this Act, the President shall appoint, by and with the advice and consent of the Senate, an Inspector General of the Postal Community. Any individual appointed under the previous sentence shall be deemed to be appointed under section 8M of the Inspector General Act of 1978 (5 U.S.C. App.) (as amended by paragraph (1)). (c) Transfer of the Office of the Inspector General of the Postal Regulatory Commission (1) In general On the date that is the effective date of this section, the duties, responsibilities, functions, personnel, assets, unexpended balances of appropriations, and obligations held by the Inspector General of the Postal Regulatory Commission shall be transferred to the Office of the Inspector General of the Postal Community. (2) Existing Inspector General The Inspector General of the Postal Regulatory Commission transferred pursuant to paragraph (1) shall serve under the Inspector General of the Postal Community. (d) Transfer of the Office of the Inspector General of United States Postal Service (1) In general On the date that is the effective date of this section, the duties, responsibilities, functions, personnel, assets, unexpended balances of appropriations, and obligations held by the Inspector General of the United States Postal Service shall be transferred to the Office of the Inspector General of the Postal Community. (2) Existing Inspector General The Inspector General of the United States Postal Service transferred pursuant to paragraph (1) shall serve under the Inspector General of the Postal Community. (e) Delegation and assignment Except as otherwise expressly prohibited by law or otherwise provided in this Act, the Inspector General of the Postal Community may delegate any of the functions transferred pursuant to this section to such officers and employees of the Office of the Inspector General of the Postal Community as the Inspector General may designate, and may authorize successive redelegations of such functions as may be necessary or appropriate. No delegation of functions under this subsection or under any other provision of this Act shall relieve the Inspector General of the Postal Community of responsibility for the administration of the function. (f) Savings provisions (1) Legal documents Any order, determination, rule, regulation, permit, grant, loan, contract, agreement, certificate, license, or privilege that has been issued, made, granted, or allowed to become effective that is in effect on the effective date of this section shall continue in effect according to their terms until modified, terminated, superseded, set aside, or revoked in accordance with law. (2) Proceedings This section shall not affect any proceeding pending on the effective date of this section before an office transferred by either such subsection, but such proceeding shall be continued. Nothing in this paragraph shall be considered to prohibit the discontinuance or modification of any such proceeding under the same terms and conditions and to the same extent that such proceeding could have been discontinued or modified if this section had not been enacted. (3) Suits This section shall not affect any suit commenced before the effective date of this section, and in any such suit, proceeding shall be had, appeals taken, and judgments rendered in the same manner and with the same effect as if this section had not been enacted. (4) References Any reference in any other Federal law, Executive order, rule, regulation, or delegation of authority, or any document relating to the Inspector General of the Postal Regulatory Commission, the Inspector General of the United States Postal Service, or the office of either such inspector general shall be deemed to refer to the Inspector General of the Postal Community or the Office of the Inspector General of the Postal Community, as applicable. (g) Availability of existing funds Existing appropriations and funds available for the performance of functions, programs, and activities transferred pursuant to this section shall remain available, for the duration of their period of availability, for necessary expenses in connection with the Office of the Inspector General of the Postal Community and the transfer of such functions, programs, and activities. (h) Title 39 amendments Title 39, United States Code, is amended as follows: (1) In section 102(4), by striking the Inspector General appointed under section 202(e) of this title and inserting the Inspector General of the Postal Community as described in section 8M of the Inspector General Act of 1978 (5 U.S.C. App.) . (2) In section 504, by striking subsection (h). (3) In section 1003(b), by striking the Office of Inspector General of the United States Postal Service and inserting the Office of Inspector General of the Postal Community . (4) In section 2003(e)(1), by striking the Office of Inspector General, subject to the availability of amounts appropriated under section 8G(f) of the Inspector General Act of 1978. and inserting the Office of Inspector General of the Postal Community . (5) In section 2009, by striking the Office of Inspector General of the United States Postal Service requests to be appropriated, out of the Postal Service Fund, under section 8G(f) of the Inspector General Act of 1978, and and inserting the Office of Inspector General of the Postal Community requests to be appropriated out of the Postal Service Fund . (6) In section 2011(h)(D), by striking the Inspector General of the United States Postal Service and inserting the Inspector General of the Postal Community . (i) Delayed effective date This section, and the amendments made by this section, shall take effect upon the date that is 30 days after the date on which an individual is confirmed by the Senate as the Inspector General of the Postal Community under subsection (b)(3). 303. Right of appeal to Merit Systems Protection Board Section 1005(a)(4)(A)(ii)(I) of title 39, United States Code, is amended to read as follows: (I) is an officer or employee of the Postal Service who— (aa) is not represented by a bargaining representative recognized under section 1203; and (bb) is in a supervisory, professional, technical, clerical, administrative, or managerial position covered by the Executive and Administrative Schedule; and . IV Postal Contracting Reform 401. Contracting provisions (a) In general Part I of title 39, United States Code, is amended by adding at the end the following: 7 Contracting Provisions Sec. 701. Definitions. 702. Delegation of contracting authority. 703. Posting of noncompetitive purchase requests for noncompetitive contracts. 704. Review of ethical issues. 705. Ethical restrictions on participation in certain contracting activity. 701. Definitions In this chapter— (1) the term contracting officer means an employee of a covered postal entity who has authority to enter into a postal contract; (2) the term covered postal entity means— (A) the Postal Service; or (B) the Postal Regulatory Commission; (3) the term head of a covered postal entity means— (A) in the case of the Postal Service, the Postmaster General; or (B) in the case of the Postal Regulatory Commission, the Chairman of the Postal Regulatory Commission; (4) the term postal contract means— (A) in the case of the Postal Service, any contract (including any agreement or memorandum of understanding) entered into by the Postal Service for the procurement of goods or services; or (B) in the case of the Postal Regulatory Commission, any contract (including any agreement or memorandum of understanding) in an amount exceeding the simplified acquisition threshold (as defined in section 134 of title 41 and adjusted under section 1908 of such title) entered into by the Postal Regulatory Commission for the procurement of goods or services; and (5) the term senior procurement executive means the senior procurement executive of a covered postal entity. 702. Delegation of contracting authority (a) In general (1) Policy Not later than 60 days after the date of enactment of this chapter, the head of each covered postal entity shall issue a policy on contracting officer delegations of authority for postal contracts for the covered postal entity. (2) Contents The policy issued under paragraph (1) shall require that— (A) notwithstanding any delegation of authority with respect to postal contracts, the ultimate responsibility and accountability for the award and administration of postal contracts resides with the senior procurement executive; and (B) a contracting officer shall maintain an awareness of and engagement in the activities being performed on postal contracts of which that officer has cognizance, notwithstanding any delegation of authority that may have been executed. (b) Posting of delegations (1) In general The head of each covered postal entity shall make any delegation of authority for postal contracts outside the functional contracting unit readily available and accessible on the Web site of the covered postal entity. (2) Effective date This paragraph shall apply to any delegation of authority made on or after the date that is 30 days after the date of enactment of this chapter. 703. Posting of noncompetitive purchase requests for noncompetitive contracts (a) Posting required (1) Postal regulatory commission The Postal Regulatory Commission shall make the noncompetitive purchase request for any noncompetitive award for any contract (including any agreement or memorandum of understanding) entered into by the Postal Regulatory Commission for the procurement of goods and services, in an amount of $20,000 or more, including the rationale supporting the noncompetitive award, publicly available on the Web site of the Postal Regulatory Commission— (A) not later than 14 days after the date of the award of the noncompetitive contract; or (B) not later than 30 days after the date of the award of the noncompetitive contract, if the basis for the award was a compelling business interest. (2) Postal service The Postal Service shall make the noncompetitive purchase request for any noncompetitive award of a postal contract in an amount of $250,000 or more, including the rationale supporting the noncompetitive award, publicly available on the Web site of the Postal Service— (A) not later than 14 days after the date of the award; or (B) not later than 30 days after the date of the award, if the basis for the award was a compelling business interest. (3) Adjustments to the posting threshold (A) Review and determination Not later than January 31 of each year, the Postal Service and the Postal Regulatory Commission shall— (i) review the applicable threshold established under paragraph (1) or (2); and (ii) based on any change in the Consumer Price Index for All Urban Consumers of the Department of Labor, determine whether an adjustment to the threshold shall be made. (B) Amount of adjustments An adjustment under subparagraph (A) shall be made in increments of $5,000. If the covered postal entity determines that a change in the Consumer Price Index for a year would require an adjustment in an amount that is less than $5,000, the Postal Service may not make an adjustment to the threshold for the year. (4) Effective date This subsection shall apply to any noncompetitive contract awarded on or after the date that is 90 days after the date of enactment of this chapter. (b) Public availability (1) In general Subject to paragraph (2), the information required to be made publicly available by a covered postal entity under subsection (a) shall be readily accessible on the Web site of the covered postal entity. (2) Protection of proprietary information A covered postal entity shall— (A) carefully screen any description of the rationale supporting a noncompetitive award required to be made publicly available under subsection (a) to determine whether the description includes proprietary data (including any reference or citation to the proprietary data) or security-related information; and (B) remove any proprietary data or security-related information before making publicly available a description of the rationale supporting a noncompetitive award. (c) Waivers (1) Waiver permitted If the Postal Service determines that making a noncompetitive purchase request for a postal contract of the Postal Service publicly available would risk placing the Postal Service at a competitive disadvantage relative to a private sector competitor, the senior procurement executive, in consultation with the advocate for competition of the Postal Service, may waive the requirements under subsection (a). (2) Form and content of waiver (A) Form A waiver under paragraph (1) shall be in the form of a written determination placed in the file of the contract to which the noncompetitive purchase request relates. (B) Content A waiver under paragraph (1) shall include— (i) a description of the risk associated with making the noncompetitive purchase request publicly available; and (ii) a statement that redaction of sensitive information in the noncompetitive purchase request would not be sufficient to protect the Postal Service from being placed at a competitive disadvantage relative to a private sector competitor. (3) Delegation of waiver authority The Postal Service may not delegate the authority to approve a waiver under paragraph (1) to any employee having less authority than the senior procurement executive. 704. Review of ethical issues If a contracting officer identifies any ethical issues relating to a proposed contract and submits those issues and that proposed contract to the designated ethics official for the covered postal entity before the awarding of that contract, that ethics official shall— (1) review the proposed contract; and (2) advise the contracting officer on the appropriate resolution of ethical issues. 705. Ethical restrictions on participation in certain contracting activity (a) Definitions In this section— (1) the term covered employee means— (A) a contracting officer; or (B) any employee of a covered postal entity whose decisionmaking affects a postal contract as determined by regulations prescribed by the head of a covered postal entity; (2) the term final conviction means a conviction, whether entered on a verdict or plea, including a plea of nolo contendere, for which a sentence has been imposed; and (3) the term covered relationship means a covered relationship described in section 2635.502(b)(1) of title 5, Code of Federal Regulations, or any successor thereto. (b) In general (1) Regulations The head of each covered postal entity shall prescribe regulations that— (A) require a covered employee to include in the file of any noncompetitive purchase request for a noncompetitive postal contract a written certification that— (i) discloses any covered relationship of the covered employee; and (ii) states that the covered employee will not take any action with respect to the noncompetitive purchase request that affects the financial interests of a friend, relative, or person with whom the covered employee is affiliated in a nongovernmental capacity, or otherwise gives rise to an appearance of the use of public office for private gain, as described in section 2635.702 of title 5, Code of Federal Regulations, or any successor thereto; (B) require a contracting officer to consult with the ethics counsel for the covered postal entity regarding any disclosure made by a covered employee under subparagraph (A)(i), to determine whether participation by the covered employee in the noncompetitive purchase request would give rise to a violation of part 2635 of title 5, Code of Federal Regulations (commonly referred to as the Standards of Ethical Conduct for Employees of the Executive Branch), or any successor thereto; (C) require the ethics counsel for a covered postal entity to review any disclosure made by a contracting officer under subparagraph (A)(i) to determine whether participation by the contracting officer in the noncompetitive purchase request would give rise to a violation of part 2635 of title 5, Code of Federal Regulations (commonly referred to as the Standards of Ethical Conduct for Employees of the Executive Branch), or any successor thereto; (D) under subsections (d) and (e) of section 2635.502 of title 5, Code of Federal Regulations, or any successor thereto, require the ethics counsel for a covered postal entity to— (i) authorize a covered employee that makes a disclosure under subparagraph (A)(i) to participate in the noncompetitive postal contract; or (ii) disqualify a covered employee that makes a disclosure under subparagraph (A)(i) from participating in the noncompetitive postal contract; (E) require a contractor to timely disclose to the contracting officer in a bid, solicitation, award, or performance of a postal contract any conflict of interest with a covered employee; and (F) include authority for the head of the covered postal entity to grant a waiver or otherwise mitigate any organizational or personal conflict of interest, if the head of the covered postal entity determines that the waiver or mitigation is in the best interests of the covered postal entity. (2) Posting of waivers Not later than 30 days after the head of a covered postal entity grants a waiver described in paragraph (1)(F), the head of the covered postal entity shall make the waiver publicly available on the Web site of the covered postal entity. (c) Contract voidance and recovery (1) Unlawful conduct In any case in which there is a final conviction for a violation of any provision of chapter 11 of title 18 relating to a postal contract, the head of a covered postal entity may— (A) void that contract; and (B) recover the amounts expended and property transferred by the covered postal entity under that contract. (2) Obtaining or disclosing procurement information (A) In general In any case in which a contractor under a postal contract fails to timely disclose a conflict of interest to the appropriate contracting officer as required under the regulations promulgated under subsection (b)(1)(E), the head of a covered postal entity may— (i) void that contract; and (ii) recover the amounts expended and property transferred by the covered postal entity under that contract. (B) Conviction or administrative determination A case described under subparagraph (A) is any case in which— (i) there is a final conviction for an offense punishable under section 2105 of title 41; or (ii) the head of a covered postal entity determines, based upon a preponderance of the evidence, that the contractor or someone acting for the contractor has engaged in conduct constituting an offense punishable under section 2105 of such title. . (b) Clerical amendment The table of chapters at the beginning of part I is amended by adding at the end the following: 7. Contracting Provisions 701 . 402. Technical amendment to definition Section 7101(8) of title 41, United States Code, is amended— (1) by striking and at the end of subparagraph (C); (2) by striking the period at the end of subparagraph (D) and inserting ; and ; and (3) by adding at the end the following: (E) the United States Postal Service and the Postal Regulatory Commission. .