Postal Accountability and Enhancement Act
PL 109-435 (H.R.6407), enacted 12/20/2006

120 STAT. 3198
PUBLIC LAW 109–435—DEC. 20, 2006
Public Law 109–435
109th Congress
An Act
To reform the postal laws of the United States.
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) SHORT TITLE.—This Act may be cited as the ‘‘Postal Account-
ability and Enhancement Act’’.
(b) TABLE OF CONTENTS.—The table of contents for this Act
is as follows:
Sec. 1. Short title; table of contents.
TITLE I—DEFINITIONS; POSTAL SERVICES
Sec. 101. Definitions.
Sec. 102. Postal Services.
TITLE II—MODERN RATE REGULATION
Sec. 201. Provisions relating to market-dominant products.
Sec. 202. Provisions relating to competitive products.
Sec. 203. Provisions relating to experimental and new products.
Sec. 204. Reporting requirements and related provisions.
Sec. 205. Complaints; appellate review and enforcement.
Sec. 206. Clerical amendment.
TITLE III—MODERN SERVICE STANDARDS
Sec. 301. Establishment of modern service standards.
Sec. 302. Postal service plan.
TITLE IV—PROVISIONS RELATING TO FAIR COMPETITION
Sec. 401. Postal Service Competitive Products Fund.
Sec. 402. Assumed Federal income tax on competitive products income.
Sec. 403. Unfair competition prohibited.
Sec. 404. Suits by and against the Postal Service.
Sec. 405. International postal arrangements.
TITLE V—GENERAL PROVISIONS
Sec. 501. Qualification and term requirements for Governors.
Sec. 502. Obligations.
Sec. 503. Private carriage of letters.
Sec. 504. Rulemaking authority.
Sec. 505. Noninterference with collective bargaining agreements.
Sec. 506. Bonus authority.
TITLE VI—ENHANCED REGULATORY COMMISSION
Sec. 601. Reorganization and modification of certain provisions relating to the Post-
al Regulatory Commission.
Sec. 602. Authority for Postal Regulatory Commission to issue subpoenas.
Sec. 603. Authorization of appropriations from the Postal Service Fund.
Sec. 604. Redesignation of the Postal Rate Commission.
Sec. 605. Inspector General of the Postal Regulatory Commission.
TITLE VII—EVALUATIONS
Sec. 701. Assessments of ratemaking, classification, and other provisions.
39 USC 101 note.
Postal Account-
ability and
Enhancement
Act.
Dec. 20, 2006
[H.R. 6407]
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120 STAT. 3199
PUBLIC LAW 109–435—DEC. 20, 2006
Sec. 702. Report on universal postal service and the postal monopoly.
Sec. 703. Study on equal application of laws to competitive products.
Sec. 704. Report on postal workplace safety and workplace-related injuries.
Sec. 705. Study on recycled paper.
Sec. 706. Greater diversity in Postal Service executive and administrative schedule
management positions.
Sec. 707. Contracts with women, minorities, and small businesses.
Sec. 708. Rates for periodicals.
Sec. 709. Assessment of certain rate deficiencies.
Sec. 710. Assessment of future business model of the Postal Service.
Sec. 711. Provisions relating to cooperative mailings.
Sec. 712. Definition.
TITLE VIII—POSTAL SERVICE RETIREMENT AND HEALTH BENEFITS
FUNDING
Sec. 801. Short title.
Sec. 802. Civil Service Retirement System.
Sec. 803. Health insurance.
Sec. 804. Repeal of disposition of savings provision.
Sec. 805. Effective dates.
TITLE IX—COMPENSATION FOR WORK INJURIES
Sec. 901. Temporary disability; continuation of pay.
TITLE X—MISCELLANEOUS
Sec. 1001. Employment of postal police officers.
Sec. 1002. Obsolete provisions.
Sec. 1003. Reduced rates.
Sec. 1004. Sense of Congress regarding Postal Service purchasing reform.
Sec. 1005. Contracts for transportation of mail by air.
Sec. 1006. Date of postmark to be treated as date of appeal in connection with the
closing or consolidation of post offices.
Sec. 1007. Provisions relating to benefits under chapter 81 of title 5, United States
Code, for officers and employees of the former Post Office Department.
Sec. 1008. Hazardous matter.
Sec. 1009. ZIP codes and retail hours.
Sec. 1010. Technical and conforming amendments.
TITLE I—DEFINITIONS; POSTAL
SERVICES
SEC. 101. DEFINITIONS.
Section 102 of title 39, United States Code, is amended by
striking ‘‘and’’ at the end of paragraph (3), by striking the period
at the end of paragraph (4) and inserting a semicolon, and by
adding at the end the following:
‘‘(5) ‘postal service’ refers to the delivery of letters, printed
matter, or mailable packages, including acceptance, collection,
sorting, transportation, or other functions ancillary thereto;
‘‘(6) ‘product’ means a postal service with a distinct cost
or market characteristic for which a rate or rates are, or may
reasonably be, applied;
‘‘(7) ‘rates’, as used with respect to products, includes fees
for postal services;
‘‘(8) ‘market-dominant product’ or ‘product in the market-
dominant category of mail’ means a product subject to sub-
chapter I of chapter 36;
‘‘(9) ‘competitive product’ or ‘product in the competitive
category of mail’ means a product subject to subchapter II
of chapter 36; and
‘‘(10) ‘year’, as used in chapter 36 (other than subchapters
I and VI thereof), means a fiscal year.’’.
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120 STAT. 3200
PUBLIC LAW 109–435—DEC. 20, 2006
SEC. 102. POSTAL SERVICES.
(a) IN GENERAL.—Section 404 of title 39, United States Code,
is amended—
(1) in subsection (a), by striking paragraph (6) and by
redesignating paragraphs (7) through (9) as paragraphs (6)
through (8), respectively; and
(2) by adding at the end the following:
‘‘(c)(1) In this subsection, the term ‘nonpostal service’ means
any service that is not a postal service defined under section 102(5).
‘‘(2) Nothing in this section shall be considered to permit or
require that the Postal Service provide any nonpostal service, except
that the Postal Service may provide nonpostal services which were
offered as of January 1, 2006, as provided under this subsection.
‘‘(3) Not later than 2 years after the date of enactment of
the Postal Accountability and Enhancement Act, the Postal Regu-
latory Commission shall review each nonpostal service offered by
the Postal Service on the date of enactment of that Act and deter-
mine whether that nonpostal service shall continue, taking into
account—
‘‘(A) the public need for the service; and
‘‘(B) the ability of the private sector to meet the public
need for the service.
‘‘(4) Any nonpostal service not determined to be continued by
the Postal Regulatory Commission under paragraph (3) shall termi-
nate.
‘‘(5) If the Postal Regulatory Commission authorizes the Postal
Service to continue a nonpostal service under this subsection, the
Postal Regulatory Commission shall designate whether the service
shall be regulated under this title as a market dominant product,
a competitive product, or an experimental product.’’.
(b) CONFORMING AMENDMENTS.—Section 1402(b)(1)(B)(ii) of the
Victims of Crime Act of 1984 (98 Stat. 2170; 42 U.S.C.
10601(b)(1)(B)(ii)) is amended by striking ‘‘404(a)(8)’’ and inserting
‘‘404(a)(7)’’.
TITLE II—MODERN RATE REGULATION
SEC. 201. PROVISIONS RELATING TO MARKET-DOMINANT PRODUCTS.
(a) IN GENERAL.—Chapter 36 of title 39, United States Code,
is amended by striking sections 3621 and 3622 and inserting the
following:
‘‘§ 3621. Applicability; definitions
‘‘(a) APPLICABILITY.—This subchapter shall apply with respect
to—
‘‘(1) first-class mail letters and sealed parcels;
‘‘(2) first-class mail cards;
‘‘(3) periodicals;
‘‘(4) standard mail;
‘‘(5) single-piece parcel post;
‘‘(6) media mail;
‘‘(7) bound printed matter;
‘‘(8) library mail;
‘‘(9) special services; and
‘‘(10) single-piece international mail,
Deadline.
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120 STAT. 3201
PUBLIC LAW 109–435—DEC. 20, 2006
subject to any changes the Postal Regulatory Commission may
make under section 3642.
‘‘(b) RULE OF CONSTRUCTION.—Mail matter referred to in sub-
section (a) shall, for purposes of this subchapter, be considered
to have the meaning given to such mail matter under the mail
classification schedule.
‘‘§ 3622. Modern rate regulation
‘‘(a) AUTHORITY GENERALLY.—The Postal Regulatory Commis-
sion shall, within 18 months after the date of enactment of this
section, by regulation establish (and may from time to time there-
after by regulation revise) a modern system for regulating rates
and classes for market-dominant products.
‘‘(b) OBJECTIVES.—Such system shall be designed to achieve
the following objectives, each of which shall be applied in conjunc-
tion with the others:
‘‘(1) To maximize incentives to reduce costs and increase
efficiency.
‘‘(2) To create predictability and stability in rates.
‘‘(3) To maintain high quality service standards established
under section 3691.
‘‘(4) To allow the Postal Service pricing flexibility.
‘‘(5) To assure adequate revenues, including retained
earnings, to maintain financial stability.
‘‘(6) To reduce the administrative burden and increase the
transparency of the ratemaking process.
‘‘(7) To enhance mail security and deter terrorism.
‘‘(8) To establish and maintain a just and reasonable
schedule for rates and classifications, however the objective
under this paragraph shall not be construed to prohibit the
Postal Service from making changes of unequal magnitude
within, between, or among classes of mail.
‘‘(9) To allocate the total institutional costs of the Postal
Service appropriately between market-dominant and competi-
tive products.
‘‘(c) FACTORS.—In establishing or revising such system, the
Postal Regulatory Commission shall take into account—
‘‘(1) the value of the mail service actually provided each
class or type of mail service to both the sender and the recipient,
including but not limited to the collection, mode of transpor-
tation, and priority of delivery;
‘‘(2) the requirement that each class of mail or type of
mail service bear the direct and indirect postal costs attrib-
utable 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;
‘‘(3) the effect of rate increases upon the general public,
business mail users, and enterprises in the private sector of
the economy engaged in the delivery of mail matter other
than letters;
‘‘(4) the available alternative means of sending and
receiving letters and other mail matter at reasonable costs;
‘‘(5) the degree of preparation of mail for delivery into
the postal system performed by the mailer and its effect upon
reducing costs to the Postal Service;
Deadline.
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PUBLIC LAW 109–435—DEC. 20, 2006
‘‘(6) 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;
‘‘(7) the importance of pricing flexibility to encourage
increased mail volume and operational efficiency;
‘‘(8) 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;
‘‘(9) 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;
‘‘(10) 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) either—
‘‘(i) improve the net financial position of the Postal
Service through reducing Postal Service costs or
increasing the overall contribution to the institutional
costs of the Postal Service; or
‘‘(ii) enhance the performance of mail preparation,
processing, transportation, or other functions; and
‘‘(B) do not cause unreasonable harm to the market-
place.
‘‘(11) the educational, cultural, scientific, and informational
value to the recipient of mail matter;
‘‘(12) the need for the Postal Service to increase its effi-
ciency and reduce its costs, including infrastructure costs, to
help maintain high quality, affordable postal services;
(13) the value to the Postal Service and postal users of
promoting intelligent mail and of secure, sender-identified mail;
and
‘‘(14) the policies of this title as well as such other factors
as the Commission determines appropriate.
‘‘(d) REQUIREMENTS.—
‘‘(1) IN
GENERAL.—The system for regulating rates and
classes for market-dominant products shall—
‘‘(A) include an annual limitation on the percentage
changes in rates to be set by the Postal Regulatory Commis-
sion that will be equal to the change in the Consumer
Price Index for All Urban Consumers unadjusted for sea-
sonal variation over the most recent available 12-month
period preceding the date the Postal Service files notice
of its intention to increase rates;
‘‘(B) establish a schedule whereby rates, when nec-
essary and appropriate, would change at regular intervals
by predictable amounts;
‘‘(C) not later than 45 days before the implementation
of any adjustment in rates under this section, including
adjustments made under subsection (c)(10)—
‘‘(i) require the Postal Service to provide public
notice of the adjustment;
‘‘(ii) provide an opportunity for review by the Postal
Regulatory Commission;
Deadline.
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120 STAT. 3203
PUBLIC LAW 109–435—DEC. 20, 2006
‘‘(iii) provide for the Postal Regulatory Commission
to notify the Postal Service of any noncompliance of
the adjustment with the limitation under subpara-
graph (A); and
‘‘(iv) require the Postal Service to respond to the
notice provided under clause (iii) and describe the
actions to be taken to comply with the limitation under
subparagraph (A);
‘‘(D) establish procedures whereby the Postal Service
may adjust rates not in excess of the annual limitations
under subparagraph (A); and
‘‘(E) notwithstanding any limitation set under subpara-
graphs (A) and (C), and provided there is not sufficient
unused rate authority under paragraph (2)(C), establish
procedures whereby rates may be adjusted on an expedited
basis due to either extraordinary or exceptional cir-
cumstances, provided that the Commission determines,
after notice and opportunity for a public hearing and com-
ment, and within 90 days after any request by the Postal
Service, that such adjustment is reasonable and equitable
and necessary to enable the Postal Service, under best
practices of honest, efficient, and economical management,
to maintain and continue the development of postal services
of the kind and quality adapted to the needs of the United
States.
‘‘(2) LIMITATIONS.—
‘‘(A) CLASSES
OF
MAIL.—Except as provided under
subparagraph (C), the annual limitations under paragraph
(1)(A) shall apply to a class of mail, as defined in the
Domestic Mail Classification Schedule as in effect on the
date of enactment of the Postal Accountability and
Enhancement Act.
‘‘(B) ROUNDING OF RATES AND FEES.—Nothing in this
subsection shall preclude the Postal Service from rounding
rates and fees to the nearest whole integer, if the effect
of such rounding does not cause the overall rate increase
for any class to exceed the Consumer Price Index for All
Urban Consumers.
‘‘(C) USE OF UNUSED RATE AUTHORITY.—
‘‘(i) DEFINITION.—In this subparagraph, the term
‘unused rate adjustment authority’ means the dif-
ference between—
‘‘(I) the maximum amount of a rate adjustment
that the Postal Service is authorized to make in
any year subject to the annual limitation under
paragraph (1); and
‘‘(II) the amount of the rate adjustment the
Postal Service actually makes in that year.
‘‘(ii) AUTHORITY.—Subject to clause (iii), the Postal
Service may use any unused rate adjustment authority
for any of the 5 years following the year such authority
occurred.
‘‘(iii) LIMITATIONS.—In exercising the authority
under clause (ii) in any year, the Postal Service—
‘‘(I) may use unused rate adjustment authority
from more than 1 year;
Deadline.
Procedures.
Notification.
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PUBLIC LAW 109–435—DEC. 20, 2006
‘‘(II) may use any part of the unused rate
adjustment authority from any year;
‘‘(III) shall use the unused rate adjustment
authority from the earliest year such authority
first occurred and then each following year; and
‘‘(IV) for any class or service, may not exceed
the annual limitation under paragraph (1) by more
than 2 percentage points.
‘‘(3) REVIEW.—Ten years after the date of enactment of
the Postal Accountability and Enhancement Act and as appro-
priate thereafter, the Commission shall review the system for
regulating rates and classes for market-dominant products
established under this section to determine if the system is
achieving the objectives in subsection (b), taking into account
the factors in subsection (c). If the Commission determines,
after notice and opportunity for public comment, that the
system is not achieving the objectives in subsection (b), taking
into account the factors in subsection (c), the Commission may,
by regulation, make such modification or adopt such alternative
system for regulating rates and classes for market-dominant
products as necessary to achieve the objectives.
‘‘(e) WORKSHARE DISCOUNTS.—
‘‘(1) DEFINITION.—In this subsection, the term ‘workshare
discount’ refers to rate discounts provided to mailers for the
presorting, prebarcoding, handling, or transportation of mail,
as further defined by the Postal Regulatory Commission under
subsection (a).
‘‘(2) SCOPE.—The Postal Regulatory Commission shall
ensure that such discounts do not exceed the cost that the
Postal Service avoids as a result of workshare activity, unless—
‘‘(A) the discount is—
‘‘(i) associated with a new postal service, a change
to an existing postal service, or with a new work share
initiative related to an existing postal service; and
‘‘(ii) necessary to induce mailer behavior that fur-
thers the economically efficient operation of the Postal
Service and the portion of the discount in excess of
the cost that the Postal Service avoids as a result
of the workshare activity will be phased out over a
limited period of time;
‘‘(B) the amount of the discount above costs avoided—
‘‘(i) is necessary to mitigate rate shock; and
‘‘(ii) will be phased out over time;
‘‘(C) the discount is provided in connection with sub-
classes of mail consisting exclusively of mail matter of
educational, cultural, scientific, or informational value; or
‘‘(D) reduction or elimination of the discount would
impede the efficient operation of the Postal Service.
‘‘(3) LIMITATION.—Nothing in this subsection shall require
that a work share discount be reduced or eliminated if the
reduction or elimination of the discount would—
‘‘(A) lead to a loss of volume in the affected category
or subclass of mail and reduce the aggregate contribution
to the institutional costs of the Postal Service from the
category or subclass subject to the discount below what
it otherwise would have been if the discount had not been
reduced or eliminated; or
Public comment.
Deadline.
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120 STAT. 3205
PUBLIC LAW 109–435—DEC. 20, 2006
‘‘(B) result in a further increase in the rates paid
by mailers not able to take advantage of the discount.
‘‘(4) REPORT.—Whenever the Postal Service establishes a
workshare discount rate, the Postal Service shall, at the time
it publishes the workshare discount rate, submit to the Postal
Regulatory Commission a detailed report that—
‘‘(A) explains the Postal Service’s reasons for estab-
lishing the rate;
‘‘(B) sets forth the data, economic analyses, and
other information relied on by the Postal Service to
justify the rate; and
‘‘(C) certifies that the discount will not adversely
affect rates or services provided to users of postal
services who do not take advantage of the discount
rate.
‘‘(f) TRANSITION RULE.—For the 1-year period beginning on
the date of enactment of this section, rates and classes for market-
dominant products shall remain subject to modification in accord-
ance with the provisions of this chapter and section 407, as such
provisions were last in effect before the date of enactment of this
section. Proceedings initiated to consider a request for a rec-
ommended decision filed by the Postal Service during that 1-year
period shall be completed in accordance with subchapter II of
chapter 36 of this title and implementing regulations, as in effect
before the date of enactment of this section.’’.
(b) REPEALED SECTIONS.—Sections 3623, 3624, 3625, and 3628
of title 39, United States Code, are repealed.
(c) REDESIGNATION.—Chapter 36 of title 39, United States Code
(as in effect after the amendment made by section 601, but before
the amendment made by section 202) is amended by striking the
heading for subchapter II and inserting the following:
‘‘SUBCHAPTER I—PROVISIONS RELATING TO MARKET-
DOMINANT PRODUCTS’’.
SEC. 202. PROVISIONS RELATING TO COMPETITIVE PRODUCTS.
Chapter 36 of title 39, United States Code, is amended by
inserting after section 3629 the following:
‘‘SUBCHAPTER II—PROVISIONS RELATING TO COMPETITIVE
PRODUCTS
‘‘§ 3631. Applicability; definitions and updates
‘‘(a) APPLICABILITY.—This subchapter shall apply with respect
to—
‘‘(1) priority mail;
‘‘(2) expedited mail;
‘‘(3) bulk parcel post;
‘‘(4) bulk international mail; and
‘‘(5) mailgrams;
subject to subsection (d) and any changes the Postal Regulatory
Commission may make under section 3642.
‘‘(b) DEFINITION.—For purposes of this subchapter, the term
‘costs attributable’, as used with respect to a product, means the
direct and indirect postal costs attributable to such product through
reliably identified causal relationships.
Certification.
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‘‘(c) RULE OF CONSTRUCTION.—Mail matter referred to in sub-
section (a) shall, for purposes of this subchapter, be considered
to have the meaning given to such mail matter under the mail
classification schedule.
‘‘§ 3632. Action of the Governors
‘‘(a) AUTHORITY TO ESTABLISH RATES AND CLASSES.—The Gov-
ernors, with the concurrence of a majority of all of the Governors
then holding office, shall establish rates and classes for products
in the competitive category of mail in accordance with the require-
ments of this subchapter and regulations promulgated under section
3633.
‘‘(b) PROCEDURES.—
‘‘(1) IN GENERAL.—Rates and classes shall be established
in writing, complete with a statement of explanation and jus-
tification, and the date as of which each such rate or class
takes effect.
‘‘(2) RATES OR CLASSES OF GENERAL APPLICABILITY.—In the
case of rates or classes of general applicability in the Nation
as a whole or in any substantial region of the Nation, the
Governors shall cause each rate and class decision under this
section and the record of the Governors’ proceedings in connec-
tion with such decision to be published in the Federal Register
at least 30 days before the effective date of any new rates
or classes.
‘‘(3) RATES OR CLASSES NOT OF GENERAL APPLICABILITY.—
In the case of rates or classes not of general applicability
in the Nation as a whole or in any substantial region of the
Nation, the Governors shall cause each rate and class decision
under this section and the record of the proceedings in connec-
tion with such decision to be filed with the Postal Regulatory
Commission by such date before the effective date of any new
rates or classes as the Governors consider appropriate, but
in no case less than 15 days.
‘‘(4) CRITERIA.—As part of the regulations required under
section 3633, the Postal Regulatory Commission shall establish
criteria for determining when a rate or class established under
this subchapter is or is not of general applicability in the
Nation as a whole or in any substantial region of the Nation.
‘‘(c) TRANSITION RULE.—Until regulations under section 3633
first take effect, rates and classes for competitive products shall
remain subject to modification in accordance with the provisions
of this chapter and section 407, as such provisions were as last
in effect before the date of enactment of this section.
‘‘§ 3633. Provisions applicable to rates for competitive prod-
ucts
‘‘(a) IN GENERAL.—The Postal Regulatory Commission shall,
within 18 months after the date of enactment of this section,
promulgate (and may from time to time thereafter revise) regula-
tions to—
‘‘(1) prohibit the subsidization of competitive products by
market-dominant products;
‘‘(2) ensure that each competitive product covers its costs
attributable; and
Deadline.
Regulations.
Filing date.
Federal Register,
publication.
Deadline.
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PUBLIC LAW 109–435—DEC. 20, 2006
‘‘(3) ensure that all competitive products collectively cover
what the Commission determines to be an appropriate share
of the institutional costs of the Postal Service.
‘‘(b) REVIEW OF MINIMUM CONTRIBUTION.—Five years after the
date of enactment of this section, and every 5 years thereafter,
the Postal Regulatory Commission shall conduct a review to deter-
mine whether the institutional costs contribution requirement under
subsection (a)(3) should be retained in its current form, modified,
or eliminated. In making its determination, the Commission shall
consider all relevant circumstances, including the prevailing
competitive conditions in the market, and the degree to which
any costs are uniquely or disproportionately associated with any
competitive products.’’.
SEC. 203. PROVISIONS RELATING TO EXPERIMENTAL AND NEW PROD-
UCTS.
Subchapter III of chapter 36 of title 39, United States Code,
is amended to read as follows:
‘‘SUBCHAPTER III—PROVISIONS RELATING TO
EXPERIMENTAL AND NEW PRODUCTS
‘‘§ 3641. Market tests of experimental products
‘‘(a) AUTHORITY.—
‘‘(1) IN GENERAL.—The Postal Service may conduct market
tests of experimental products in accordance with this section.
‘‘(2) PROVISIONS
WAIVED.—A product shall not, while it
is being tested under this section, be subject to the requirements
of sections 3622, 3633, or 3642, or regulations promulgated
under those sections.
‘‘(b) CONDITIONS.—A product may not be tested under this
section unless it satisfies each of the following:
‘‘(1) SIGNIFICANTLY DIFFERENT PRODUCT.—The product is,
from the viewpoint of the mail users, significantly different
from all products offered by the Postal Service within the
2-year period preceding the start of the test.
‘‘(2) MARKET DISRUPTION.—The introduction or continued
offering of the product will not create an unfair or otherwise
inappropriate competitive advantage for the Postal Service or
any mailer, particularly in regard to small business concerns
(as defined under subsection (h)).
‘‘(3) CORRECT CATEGORIZATION.—The Postal Service identi-
fies the product, for the purpose of a test under this section,
as either market-dominant or competitive, consistent with the
criteria under section 3642(b)(1). Costs and revenues attrib-
utable to a product identified as competitive shall be included
in any determination under section 3633(3) (relating to provi-
sions applicable to competitive products collectively). Any test
that solely affects products currently classified as competitive,
or which provides services ancillary to only competitive prod-
ucts, shall be presumed to be in the competitive product cat-
egory without regard to whether a similar ancillary product
exists for market-dominant products.
‘‘(c) NOTICE.—
‘‘(1) IN
GENERAL.—At least 30 days before initiating a
market test under this section, the Postal Service shall file
Deadline.
Federal Register,
publication.
Deadline.
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with the Postal Regulatory Commission and publish in the
Federal Register a notice—
‘‘(A) setting out the basis for the Postal Service’s deter-
mination that the market test is covered by this section;
and
‘‘(B) describing the nature and scope of the market
test.
‘‘(2) SAFEGUARDS.—For a competitive experimental product,
the provisions of section 504(g) shall be available with respect
to any information required to be filed under paragraph (1)
to the same extent and in the same manner as in the case
of any matter described in section 504(g)(1). Nothing in para-
graph (1) shall be considered to permit or require the publica-
tion of any information as to which confidential treatment
is accorded under the preceding sentence (subject to the same
exception as set forth in section 504(g)(3)).
‘‘(d) DURATION.—
‘‘(1) IN GENERAL.—A market test of a product under this
section may be conducted over a period of not to exceed 24
months.
‘‘(2) EXTENSION AUTHORITY.—If necessary in order to deter-
mine the feasibility or desirability of a product being tested
under this section, the Postal Regulatory Commission may,
upon written application of the Postal Service (filed not later
than 60 days before the date as of which the testing of such
product would otherwise be scheduled to terminate under para-
graph (1)), extend the testing of such product for not to exceed
an additional 12 months.
‘‘(e) DOLLAR-AMOUNT LIMITATION.—
‘‘(1) IN GENERAL.—A product may only be tested under
this section if the total revenues that are anticipated, or in
fact received, by the Postal Service from such product do not
exceed $10,000,000 in any year, subject to paragraph (2) and
subsection (g). In carrying out the preceding sentence, the
Postal Regulatory Commission may limit the amount of reve-
nues the Postal Service may obtain from any particular
geographic market as necessary to prevent market disruption
(as defined under subsection (b)(2)).
‘‘(2) 
EXEMPTION
AUTHORITY.—The 
Postal 
Regulatory
Commission may, upon written application of the Postal
Service, exempt the market test from the limit in paragraph
(1) if the total revenues that are anticipated, or in fact received,
by the Postal Service from such product do not exceed
$50,000,000 in any year, subject to subsection (g). In reviewing
an application under this paragraph, the Postal Regulatory
Commission shall approve such application if it determines
that—
‘‘(A) the product is likely to benefit the public and
meet an expected demand;
‘‘(B) the product is likely to contribute to the financial
stability of the Postal Service; and
‘‘(C) the product is not likely to result in unfair or
otherwise inappropriate competition.
‘‘(f) CANCELLATION.—If the Postal Regulatory Commission at
any time determines that a market test under this section fails,
with respect to any particular product, to meet 1 or more of the
requirements of this section, it may order the cancellation of the
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test involved or take such other action as it considers appropriate.
A determination under this subsection shall be made in accordance
with such procedures as the Commission shall by regulation pre-
scribe.
‘‘(g) ADJUSTMENT FOR INFLATION.—For purposes of each year
following the year in which occurs the deadline for the Postal
Service’s first report to the Postal Regulatory Commission under
section 3652(a), each dollar amount contained in this section shall
be adjusted by the change in the Consumer Price Index for such
year (as determined under regulations of the Commission).
‘‘(h) DEFINITION OF A SMALL BUSINESS CONCERN.—The criteria
used in defining small business concerns or otherwise categorizing
business concerns as small business concerns shall, for purposes
of this section, be established by the Postal Regulatory Commission
in conformance with the requirements of section 3 of the Small
Business Act.
‘‘(i) EFFECTIVE DATE.—Market tests under this subchapter may
be conducted in any year beginning with the first year in which
occurs the deadline for the Postal Service’s first report to the
Postal Regulatory Commission under section 3652(a).
‘‘§ 3642. New products and transfers of products between
the market-dominant and competitive categories
of mail
‘‘(a) IN GENERAL.—Upon request of the Postal Service or users
of the mails, or upon its own initiative, the Postal Regulatory
Commission may change the list of market-dominant products under
section 3621 and the list of competitive products under section
3631 by adding new products to the lists, removing products from
the lists, or transferring products between the lists.
‘‘(b) CRITERIA.—All determinations by the Postal Regulatory
Commission under subsection (a) shall be made in accordance with
the following criteria:
‘‘(1) The market-dominant category of products shall consist
of each product in the sale of which the Postal Service exercises
sufficient market power that it can effectively set the price
of such product substantially above costs, raise prices signifi-
cantly, decrease quality, or decrease output, without risk of
losing a significant level of business to other firms offering
similar products. The competitive category of products shall
consist of all other products.
‘‘(2) 
EXCLUSION
OF
PRODUCTS
COVERED
BY
POSTAL
MONOPOLY.—A product covered by the postal monopoly shall
not be subject to transfer under this section from the market-
dominant category of mail. For purposes of the preceding sen-
tence, the term ‘product covered by the postal monopoly’ means
any product the conveyance or transmission of which is reserved
to the United States under section 1696 of title 18, subject
to the same exception as set forth in the last sentence of
section 409(e)(1).
‘‘(3) ADDITIONAL CONSIDERATIONS.—In making any decision
under this section, due regard shall be given to—
‘‘(A) the availability and nature of enterprises in the
private sector engaged in the delivery of the product
involved;
‘‘(B) the views of those who use the product involved
on the appropriateness of the proposed action; and
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120 STAT. 3210
PUBLIC LAW 109–435—DEC. 20, 2006
‘‘(C) the likely impact of the proposed action on small
business concerns (within the meaning of section 3641(h)).
‘‘(c) TRANSFERS OF SUBCLASSES AND OTHER SUBORDINATE UNITS
ALLOWABLE.—Nothing in this title shall be considered to prevent
transfers under this section from being made by reason of the
fact that they would involve only some (but not all) of the subclasses
or other subordinate units of the class of mail or type of postal
service involved (without regard to satisfaction of minimum quantity
requirements standing alone).
‘‘(d) NOTIFICATION AND PUBLICATION REQUIREMENTS.—
‘‘(1) NOTIFICATION REQUIREMENT.—The Postal Service shall,
whenever it requests to add a product or transfer a product
to a different category, file with the Postal Regulatory Commis-
sion and publish in the Federal Register a notice setting out
the basis for its determination that the product satisfies the
criteria under subsection (b) and, in the case of a request
to add a product or transfer a product to the competitive
category of mail, that the product meets the regulations promul-
gated by the Postal Regulatory Commission under section 3633.
The provisions of section 504(g) shall be available with respect
to any information required to be filed.
‘‘(2) PUBLICATION
REQUIREMENT.—The Postal Regulatory
Commission shall, whenever it changes the list of products
in the market-dominant or competitive category of mail, pre-
scribe new lists of products. The revised lists shall indicate
how and when any previous lists (including the lists under
sections 3621 and 3631) are superseded, and shall be published
in the Federal Register.
‘‘(e) PROHIBITION.—Except as provided in section 3641, no
product that involves the physical delivery of letters, printed matter,
or packages may be offered by the Postal Service unless it has
been assigned to the market-dominant or competitive category of
mail (as appropriate) either—
‘‘(1) under this subchapter; or
‘‘(2) by or under any other provision of law.’’.
SEC. 204. REPORTING REQUIREMENTS AND RELATED PROVISIONS.
(a) REDESIGNATION.—Chapter 36 of title 39, United States Code
(as in effect before the amendment made by subsection (b)) is
amended—
(1) by striking the heading for subchapter IV and inserting
the following:
‘‘SUBCHAPTER V—POSTAL SERVICES, COMPLAINTS, AND
JUDICIAL REVIEW’’; and
(2) by striking the heading for subchapter V and inserting
the following:
‘‘SUBCHAPTER VI—GENERAL’’.
(b) REPORTS AND COMPLIANCE.—Chapter 36 of title 39, United
States Code, is amended by inserting after subchapter III the fol-
lowing:
Federal Register,
publication.
Federal Register,
publication.
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PUBLIC LAW 109–435—DEC. 20, 2006
‘‘SUBCHAPTER IV—REPORTING REQUIREMENTS AND
RELATED PROVISIONS
‘‘§ 3651. Annual reports by the Commission
‘‘(a) IN GENERAL.—The Postal Regulatory Commission shall
submit an annual report to the President and the Congress con-
cerning the operations of the Commission under this title, including
the extent to which regulations are achieving the objectives under
sections 3622 and 3633, respectively.
‘‘(b) ADDITIONAL INFORMATION.—
‘‘(1) IN GENERAL.—In addition to the information required
under subsection (a), each report under this section shall also
include, with respect to the period covered by such report,
an estimate of the costs incurred by the Postal Service in
providing—
‘‘(A) postal services to areas of the Nation where, in
the judgment of the Postal Regulatory Commission, the
Postal Service either would not provide services at all
or would not provide such services in accordance with
the requirements of this title if the Postal Service were
not required to provide prompt, reliable, and efficient serv-
ices to patrons in all areas and all communities, including
as required under the first sentence of section 101(b);
‘‘(B) free or reduced rates for postal services as required
by this title; and
‘‘(C) other public services or activities which, in the
judgment of the Postal Regulatory Commission, would not
otherwise have been provided by the Postal Service but
for the requirements of law.
‘‘(2) BASIS FOR ESTIMATES.—The Commission shall detail
the basis for its estimates and the statutory requirements
giving rise to the costs identified in each report under this
section.
‘‘(c) INFORMATION FROM POSTAL SERVICE.—The Postal Service
shall provide the Postal Regulatory Commission with such informa-
tion as may, in the judgment of the Commission, be necessary
in order for the Commission to prepare its reports under this
section.
‘‘§ 3652. Annual reports to the Commission
‘‘(a) COSTS, REVENUES, RATES, AND SERVICE.—Except as pro-
vided in subsection (c), the Postal Service shall, no later than
90 days after the end of each year, prepare and submit to the
Postal Regulatory Commission a report (together with such non-
public annex to the report as the Commission may require under
subsection (e))—
‘‘(1) which shall analyze costs, revenues, rates, and quality
of service, using such methodologies as the Commission shall
by regulation prescribe, and in sufficient detail to demonstrate
that all products during such year complied with all applicable
requirements of this title; and
‘‘(2) which shall, for each market-dominant product pro-
vided in such year, provide—
‘‘(A) product information, including mail volumes; and
‘‘(B) measures of the quality of service afforded by
the Postal Service in connection with such product,
including—
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PUBLIC LAW 109–435—DEC. 20, 2006
‘‘(i) the level of service (described in terms of speed
of delivery and reliability) provided; and
‘‘(ii) the degree of customer satisfaction with the
service provided.
The Inspector General shall regularly audit the data collection
systems and procedures utilized in collecting information and
preparing such report (including any annex thereto and the
information required under subsection (b)). The results of any
such audit shall be submitted to the Postal Service and the
Postal Regulatory Commission.
‘‘(b) INFORMATION RELATING TO WORKSHARE DISCOUNTS.—The
Postal Service shall include, in each report under subsection (a),
the following information with respect to each market-dominant
product for which a workshare discount was in effect during the
period covered by such report:
‘‘(1) The per-item cost avoided by the Postal Service by
virtue of such discount.
‘‘(2) The percentage of such per-item cost avoided that
the per-item workshare discount represents.
‘‘(3) The per-item contribution made to institutional costs.
‘‘(c) MARKET TESTS.—In carrying out subsections (a) and (b)
with respect to experimental products offered through market tests
under section 3641 in a year, the Postal Service shall—
‘‘(1) report data on the costs, revenues, and quality of
service by market test, which may be reported in summary
form; and
‘‘(2) report such data as the Postal Regulatory Commission
requires.
‘‘(d) SUPPORTING MATTER.—The Postal Regulatory Commission
shall have access, in accordance with such regulations as the
Commission shall prescribe, to the working papers and any other
supporting matter of the Postal Service and the Inspector General
in connection with any information submitted under this section.
‘‘(e) CONTENT AND FORM OF REPORTS.—
‘‘(1) IN GENERAL.—The Postal Regulatory Commission shall,
by regulation, prescribe the content and form of the public
reports (and any nonpublic annex and supporting matter
relating to the report) to be provided by the Postal Service
under this section. In carrying out this subsection, the Commis-
sion shall give due consideration to—
‘‘(A) providing the public with timely, adequate
information to assess the lawfulness of rates charged;
‘‘(B) avoiding unnecessary or unwarranted administra-
tive effort and expense on the part of the Postal Service;
and
‘‘(C) protecting the confidentiality of commercially sen-
sitive information.
‘‘(2) REVISED
REQUIREMENTS.—The Commission may, on
its own motion or on request of an interested party, initiate
proceedings (to be conducted in accordance with regulations
that the Commission shall prescribe) to improve the quality,
accuracy, or completeness of Postal Service data required by
the Commission under this subsection whenever it shall appear
that—
‘‘(A) the attribution of costs or revenues to products
has become significantly inaccurate or can be significantly
improved;
Regulations.
Regulations.
Regulations.
Audits.
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PUBLIC LAW 109–435—DEC. 20, 2006
‘‘(B) the quality of service data has become significantly
inaccurate or can be significantly improved; or
‘‘(C) such revisions are, in the judgment of the Commis-
sion, otherwise necessitated by the public interest.
‘‘(f) 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 or under subsection (d) contains
information which is described in section 410(c) of this title,
or exempt from public disclosure under section 552(b) of title
5, the Postal Service shall, at the time of providing such matter
to the Commission, notify the Commission 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).
‘‘(g) OTHER REPORTS.—The Postal Service shall submit to the
Postal Regulatory Commission, together with any other submission
that the Postal Service is required to make under this section
in a year, copies of its then most recent—
‘‘(1) comprehensive statement under section 2401(e);
‘‘(2) performance plan under section 2803; and
‘‘(3) program performance reports under section 2804.
‘‘§ 3653. Annual determination of compliance
‘‘(a) OPPORTUNITY FOR PUBLIC COMMENT.—After receiving the
reports required under section 3652 for any year, the Postal Regu-
latory Commission shall promptly provide an opportunity for com-
ment on such reports by users of the mails, affected parties, and
an officer of the Commission who shall be required to represent
the interests of the general public.
‘‘(b) DETERMINATION OF COMPLIANCE OR NONCOMPLIANCE.—Not
later than 90 days after receiving the submissions required under
section 3652 with respect to a year, the Postal Regulatory Commis-
sion shall make a written determination as to—
‘‘(1) whether any rates or fees in effect during such year
(for products individually or collectively) were not in compliance
with applicable provisions of this chapter (or regulations
promulgated thereunder); or
‘‘(2) whether any service standards in effect during such
year were not met.
If, with respect to a year, no instance of noncompliance is found
under this subsection to have occurred in such year, the written
determination shall be to that effect.
‘‘(c) NONCOMPLIANCE WITH REGARD TO RATES OR SERVICES.—
If, for a year, a timely written determination of noncompliance
is made under subsection (b), the Postal Regulatory Commission
shall take appropriate action in accordance with subsections (c)
and (e) of section 3662 (as if a complaint averring such noncompli-
ance had been duly filed and found under such section to be justi-
fied).
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120 STAT. 3214
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‘‘(d) REVIEW OF PERFORMANCE GOALS.—The Postal Regulatory
Commission shall also evaluate annually whether the Postal Service
has met the goals established under sections 2803 and 2804, and
may provide recommendations to the Postal Service related to the
protection or promotion of public policy objectives set out in this
title.
‘‘(e) REBUTTABLE PRESUMPTION.—A timely written determina-
tion described in the last sentence of subsection (b) shall, for pur-
poses of any proceeding under section 3662, create a rebuttable
presumption of compliance by the Postal Service (with regard to
the matters described under paragraphs (1) and (2) of subsection
(b)) during the year to which such determination relates.
‘‘§ 3654. Additional financial reporting
‘‘(a) ADDITIONAL FINANCIAL REPORTING.—
‘‘(1) IN GENERAL.—The Postal Service shall file with the
Postal Regulatory Commission beginning with the first full
fiscal year following the effective date of this section—
‘‘(A) within 40 days after the end of each fiscal quarter,
a quarterly report containing the information required by
the Securities and Exchange Commission to be included
in quarterly reports under sections 13 and 15(d) of the
Securities Exchange Act of 1934 (15 U.S.C. 78m, 78o(d))
on Form 10–Q, as such Form (or any successor form) may
be revised from time to time;
‘‘(B) within 60 days after the end of each fiscal year,
an annual report containing the information required by
the Securities and Exchange Commission to be included
in annual reports under such sections on Form 10–K, as
such Form (or any successor form) may be revised from
time to time; and
‘‘(C) periodic reports within the time frame and con-
taining the information prescribed in Form 8–K of the
Securities and Exchange Commission, as such Form (or
any successor form) may be revised from time to time.
‘‘(2) REGISTRANT DEFINED.—For purposes of defining the
reports required by paragraph (1), the Postal Service shall
be deemed to be the ‘registrant’ described in the Securities
and Exchange Commission Forms, and references contained
in such Forms to Securities and Exchange Commission regula-
tions are incorporated herein by reference, as amended.
‘‘(3) INTERNAL CONTROL REPORT.—For purposes of defining
the reports required by paragraph (1)(B), the Postal Service
shall comply with the rules prescribed by the Securities and
Exchange Commission implementing section 404 of the Sar-
banes-Oxley Act of 2002 (15 U.S.C. 7262), beginning with the
annual report for fiscal year 2010.
‘‘(b) FINANCIAL REPORTING.—
‘‘(1) The reports required by subsection (a)(1)(B) shall
include, with respect to the Postal Service’s pension and post-
retirement health obligations—
‘‘(A) the funded status of the Postal Service’s pension
and postretirement health obligations;
‘‘(B) components of the net change in the fund balances
and obligations and the nature and cause of any significant
changes;
‘‘(C) components of net periodic costs;
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‘‘(D) cost methods and assumptions underlying the rel-
evant actuarial valuations;
‘‘(E) the effect of a one-percentage point increase in
the assumed health care cost trend rate for each future
year on the service and interest costs components of net
periodic postretirement health cost and the accumulated
obligation;
‘‘(F) actual contributions to and payments from the
funds for the years presented and the estimated future
contributions and payments for each of the following 5
years;
‘‘(G) the composition of plan assets reflected in the
fund balances; and
‘‘(H) the assumed rate of return on fund balances and
the actual rates of return for the years presented.
‘‘(2) The Office of Personnel Management shall provide
the data listed under paragraph (1) to the Postal Service not
later than 30 days after the end of each fiscal year.
‘‘(3)(A) Beginning with reports for the fiscal year 2010,
for purposes of the reports required under subparagraphs (A)
and (B) of subsection (a)(1), the Postal Service shall include
segment reporting.
‘‘(B) The Postal Service shall determine the appropriate
segment reporting under subparagraph (A) after consultation
with the Postal Regulatory Commission.
‘‘(c) TREATMENT.—For purposes of the reports required by sub-
section (a)(1)(B), the Postal Service shall obtain an opinion from
an independent auditor on whether the information listed in sub-
section (b) is fairly stated in all material respects, either in relation
to the basic financial statements as a whole or on a stand-alone
basis.
‘‘(d) SUPPORTING MATTER.—The Postal Regulatory Commission
shall have access to the audit documentation and any other sup-
porting matter of the Postal Service and its independent auditor
in connection with any information submitted under this section.
‘‘(e) REVISED REQUIREMENTS.—The Postal Regulatory Commis-
sion may, on its own motion or on request of an interested party,
initiate proceedings (to be conducted in accordance with regulations
that the Commission shall prescribe) to improve the quality,
accuracy, or completeness of Postal Service data required under
this section whenever it shall appear that—
‘‘(1) the data have become significantly inaccurate or can
be significantly improved; or
‘‘(2) those revisions are, in the judgment of the Commission,
otherwise necessitated by the public interest.
‘‘(f) 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 or pursuant to subsection (d) contains
information which is described in section 410(c) of this title,
or exempt from public disclosure under section 552(b) of title
5, the Postal Service shall, at the time of providing such matter
to the Commission, notify the Commission 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.
Regulations.
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‘‘(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).’’.
SEC. 205. COMPLAINTS; APPELLATE REVIEW AND ENFORCEMENT.
Chapter 36 of title 39, United States Code, is amended by
striking sections 3662 and 3663 and inserting the following:
‘‘§ 3662. Rate and service complaints
‘‘(a) IN GENERAL.—Any interested person (including an officer
of the Postal Regulatory Commission representing the interests
of the general public) who believes the Postal Service is not oper-
ating in conformance with the requirements of the provisions of
sections 101(d), 401(2), 403(c), 404a, or 601, or this chapter (or
regulations promulgated under any of those provisions) may lodge
a complaint with the Postal Regulatory Commission in such form
and manner as the Commission may prescribe.
‘‘(b) PROMPT RESPONSE REQUIRED.—
‘‘(1) IN GENERAL.—The Postal Regulatory Commission shall,
within 90 days after receiving a complaint under subsection
(a)—
‘‘(A) either—
‘‘(i) upon a finding that such complaint raises mate-
rial issues of fact or law, begin proceedings on such
complaint; or
‘‘(ii) issue an order dismissing the complaint; and
‘‘(B) with respect to any action taken under subpara-
graph (A) (i) or (ii), issue a written statement setting forth
the bases of its determination.
‘‘(2) TREATMENT OF COMPLAINTS NOT TIMELY ACTED ON.—
For purposes of section 3663, any complaint under subsection
(a) on which the Commission fails to act in the time and
manner required by paragraph (1) shall be treated in the same
way as if it had been dismissed pursuant to an order issued
by the Commission on the last day allowable for the issuance
of such order under paragraph (1).
‘‘(c) ACTION REQUIRED IF COMPLAINT FOUND TO BE JUSTIFIED.—
If the Postal Regulatory Commission finds the complaint to be
justified, it shall order that the Postal Service take such action
as the Commission considers appropriate in order to achieve compli-
ance with the applicable requirements and to remedy the effects
of any noncompliance (such as ordering unlawful rates to be
adjusted to lawful levels, ordering the cancellation of market tests,
ordering the Postal Service to discontinue providing loss-making
products, or requiring the Postal Service to make up for revenue
shortfalls in competitive products).
‘‘(d) AUTHORITY TO ORDER FINES
IN CASES
OF DELIBERATE
NONCOMPLIANCE.—In addition, in cases of deliberate noncompliance
by the Postal Service with the requirements of this title, the Postal
Regulatory Commission may order, based on the nature, cir-
cumstances, extent, and seriousness of the noncompliance, a fine
(in the amount specified by the Commission in its order) for each
incidence of noncompliance. Fines resulting from the provision of
competitive products shall be paid from the Competitive Products
Deadline.
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Fund established in section 2011. All receipts from fines imposed
under this subsection shall be deposited in the general fund of
the Treasury of the United States.
‘‘§ 3663. Appellate review
‘‘A person, including the Postal Service, adversely affected or
aggrieved by a final order or decision of the Postal Regulatory
Commission may, within 30 days after such order or decision
becomes final, institute proceedings for review thereof by filing
a petition in the United States Court of Appeals for the District
of Columbia. The court shall review the order or decision in accord-
ance with section 706 of title 5, and chapter 158 and section
2112 of title 28, on the basis of the record before the Commission.
‘‘§ 3664. Enforcement of orders
‘‘The several district courts have jurisdiction specifically to
enforce, and to enjoin and restrain the Postal Service from violating,
any order issued by the Postal Regulatory Commission.’’.
SEC. 206. CLERICAL AMENDMENT.
Chapter 36 of title 39, United States Code, is amended by
striking the heading and analysis for such chapter and inserting
the following:
‘‘CHAPTER 36—POSTAL RATES, CLASSES, AND SERVICES
‘‘SUBCHAPTER I—PROVISIONS RELATING TO MARKET-DOMINANT
PRODUCTS
‘‘Sec.
‘‘3621. Applicability; definitions.
‘‘3622. Modern rate regulation.
‘‘[3623. Repealed.]
‘‘[3624. Repealed.]
‘‘[3625. Repealed.]
‘‘3626. Reduced Rates.
‘‘3627. Adjusting free rates.
‘‘[3628. Repealed.]
‘‘3629. Reduced rates for voter registration purposes.
‘‘SUBCHAPTER II—PROVISIONS RELATING TO COMPETITIVE PRODUCTS
‘‘3631. Applicability; definitions and updates.
‘‘3632. Action of the Governors.
‘‘3633. Provisions applicable to rates for competitive products.
‘‘3634. Assumed Federal income tax on competitive products.
‘‘SUBCHAPTER III—PROVISIONS RELATING TO EXPERIMENTAL AND NEW
PRODUCTS
‘‘3641. Market tests of experimental products.
‘‘3642. New products and transfers of products between the market-dominant and
competitive categories of mail.
‘‘SUBCHAPTER IV—REPORTING REQUIREMENTS AND RELATED
PROVISIONS
‘‘3651. Annual reports by the Commission.
‘‘3652. Annual reports to the Commission.
‘‘3653. Annual determination of compliance.
‘‘3654. Additional financial reporting.
‘‘SUBCHAPTER V—POSTAL SERVICES, COMPLAINTS, AND JUDICIAL
REVIEW
‘‘3661. Postal Services.
‘‘3662. Rate and service complaints.
‘‘3663. Appellate review.
‘‘3664. Enforcement of orders.
Deadline.
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‘‘SUBCHAPTER VI—GENERAL
‘‘3681. Reimbursement.
‘‘3682. Size and weight limits.
‘‘3683. Uniform rates for books; films, other materials.
‘‘3684. Limitations.
‘‘3685. Filing of information relating to periodical publications.
‘‘3686. Bonus authority.
‘‘SUBCHAPTER VII—MODERN SERVICE STANDARDS
‘‘3691. Establishment of modern service standards.’’.
TITLE III—MODERN SERVICE
STANDARDS
SEC. 301. ESTABLISHMENT OF MODERN SERVICE STANDARDS.
Chapter 36 of title 39, United States Code, as amended by
this Act, is further amended by adding at the end the following:
‘‘SUBCHAPTER VII—MODERN SERVICE STANDARDS
‘‘§ 3691. Establishment of modern service standards
‘‘(a) AUTHORITY GENERALLY.—Not later than 12 months after
the date of enactment of this section, the Postal Service shall,
in consultation with the Postal Regulatory Commission, by regula-
tion establish (and may from time to time thereafter by regulation
revise) a set of service standards for market-dominant products.
‘‘(b) OBJECTIVES.—
‘‘(1) IN
GENERAL.—Such standards shall be designed to
achieve the following objectives:
‘‘(A) To enhance the value of postal services to both
senders and recipients.
‘‘(B) To preserve regular and effective access to postal
services in all communities, including those in rural areas
or where post offices are not self-sustaining.
‘‘(C) To reasonably assure Postal Service customers
delivery reliability, speed and frequency consistent with
reasonable rates and best business practices.
‘‘(D) To provide a system of objective external perform-
ance measurements for each market-dominant product as
a basis for measurement of Postal Service performance.
‘‘(2) IMPLEMENTATION OF PERFORMANCE MEASUREMENTS.—
With respect to paragraph (1)(D), with the approval of the
Postal Regulatory Commission an internal measurement
system may be implemented instead of an external measure-
ment system.
‘‘(c) FACTORS.—In establishing or revising such standards, the
Postal Service shall take into account—
‘‘(1) the actual level of service that Postal Service customers
receive under any service guidelines previously established by
the Postal Service or service standards established under this
section;
‘‘(2) the degree of customer satisfaction with Postal Service
performance in the acceptance, processing and delivery of mail;
‘‘(3) the needs of Postal Service customers, including those
with physical impairments;
‘‘(4) mail volume and revenues projected for future years;
Deadline.
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‘‘(5) the projected growth in the number of addresses the
Postal Service will be required to serve in future years;
‘‘(6) the current and projected future cost of serving Postal
Service customers;
‘‘(7) the effect of changes in technology, demographics, and
population distribution on the efficient and reliable operation
of the postal delivery system; and
‘‘(8) the policies of this title and such other factors as
the Postal Service determines appropriate.
‘‘(d) REVIEW.—The regulations promulgated pursuant to this
section (and any revisions thereto), and any violations thereof,
shall be subject to review upon complaint under sections 3662
and 3663.’’.
SEC. 302. POSTAL SERVICE PLAN.
(a) IN GENERAL.—Within 6 months after the establishment
of the service standards under section 3691 of title 39, United
States Code, as added by this Act, the Postal Service shall, in
consultation with the Postal Regulatory Commission, develop and
submit to Congress a plan for meeting those standards.
(b) CONTENTS.—The plan under this section shall—
(1) establish performance goals;
(2) describe any changes to the Postal Service’s processing,
transportation, delivery, and retail networks necessary to allow
the Postal Service to meet the performance goals;
(3) describe any changes to planning and performance
management documents previously submitted to Congress to
reflect new performance goals; and
(4) describe the long-term vision of the Postal Service for
rationalizing its infrastructure and workforce, and how the
Postal Service intends to implement that vision.
(c) POSTAL FACILITIES.—
(1) FINDINGS.—Congress finds that—
(A) the Postal Service has more than 400 logistics
facilities, separate from its post office network;
(B) as noted by the President’s Commission on the
United States Postal Service, the Postal Service has more
facilities than it needs and the streamlining of this distribu-
tion network can pave the way for the potential consolida-
tion of sorting facilities and the elimination of excess costs;
(C) the Postal Service has always revised its distribu-
tion network to meet changing conditions and is best suited
to address its operational needs; and
(D) Congress strongly encourages the Postal Service
to—
(i) expeditiously move forward in its streamlining
efforts; and
(ii) keep unions, management associations, and
local elected officials informed as an essential part
of this effort and abide by any procedural requirements
contained in the national bargaining agreements.
(2) IN
GENERAL.—The Postal Service plan shall include
a description of—
(A) the long-term vision of the Postal Service for
rationalizing its infrastructure and workforce; and
(B) how the Postal Service intends to implement that
vision.
Deadline.
39 USC 3691
note.
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(3) CONTENT
OF
FACILITIES
PLAN.—The plan under this
subsection shall include—
(A) a strategy for how the Postal Service intends to
rationalize the postal facilities network and remove excess
processing capacity and space from the network, including
estimated timeframes, criteria, and processes to be used
for making changes to the facilities network, and the
process for engaging policy makers and the public in related
decisions;
(B) a discussion of what impact any facility changes
may have on the postal workforce and whether the Postal
Service has sufficient flexibility to make needed workforce
changes;
(C) an identification of anticipated costs, cost savings,
and other benefits associated with the infrastructure
rationalization alternatives discussed in the plan; and
(D) procedures that the Postal Service will use to—
(i) provide adequate public notice to communities
potentially affected by a proposed rationalization deci-
sion;
(ii) make available information regarding any
service changes in the affected communities, any other
effects on customers, any effects on postal employees,
and any cost savings;
(iii) afford affected persons ample opportunity to
provide input on the proposed decision; and
(iv) take such comments into account in making
a final decision.
(4) ANNUAL REPORTS.—
(A) IN GENERAL.—Not later than 90 days after the
end of each fiscal year, the Postal Service shall prepare
and submit a report to Congress on how postal decisions
have impacted or will impact rationalization plans.
(B) CONTENTS.—Each report under this paragraph
shall include—
(i) an account of actions taken during the preceding
fiscal year to improve the efficiency and effectiveness
of its processing, transportation, and distribution net-
works while preserving the timely delivery of postal
services, including overall estimated costs and cost
savings;
(ii) an account of actions taken to identify any
excess capacity within its processing, transportation,
and distribution networks and implement savings
through realignment or consolidation of facilities
including overall estimated costs and cost savings;
(iii) an estimate of how postal decisions related
to mail changes, security, automation initiatives,
worksharing, information technology systems, excess
capacity, consolidating and closing facilities, and other
areas will impact rationalization plans;
(iv) identification of any statutory or regulatory
obstacles that prevented or will prevent or hinder the
Postal Service from taking action to realign or consoli-
date facilities; and
(v) such additional topics and recommendations
as the Postal Service considers appropriate.
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(5) EXISTING EFFORTS.—Effective on the date of enactment
of this Act, the Postal Service may not close or consolidate
any processing or logistics facilities without using procedures
for public notice and input consistent with those described
under paragraph (3)(D).
(d) ALTERNATE RETAIL OPTIONS.—The Postal Service plan shall
include plans to expand and market retail access to postal services,
in addition to post offices, including—
(1) vending machines;
(2) the Internet;
(3) postage meters;
(4) Stamps by Mail;
(5) Postal Service employees on delivery routes;
(6) retail facilities in which overhead costs are shared with
private businesses and other government agencies;
(7) postal kiosks; or
(8) any other nonpost office access channel providing
market retail access to postal services.
(e) REEMPLOYMENT ASSISTANCE AND RETIREMENT BENEFITS.—
The Postal Service plan shall include—
(1) a comprehensive plan under which reemployment assist-
ance shall be afforded to employees displaced as a result of
automation of any of its functions, the closing and consolidation
of any of its facilities, or such other reasons as the Postal
Service may determine; and
(2) a plan, developed in consultation with the Office of
Personnel Management, to offer early retirement benefits.
(f) CONTINUED AUTHORITY.—Nothing in this section shall be
construed to prohibit the Postal Service from implementing any
change to its processing, transportation, delivery, and retail net-
works under any authority granted to the Postal Service for those
purposes.
TITLE IV—PROVISIONS RELATING TO
FAIR COMPETITION
SEC. 401. POSTAL SERVICE COMPETITIVE PRODUCTS FUND.
(a) PROVISIONS RELATING
TO POSTAL SERVICE COMPETITIVE
PRODUCTS FUND AND RELATED MATTERS.—
(1) IN GENERAL.—Chapter 20 of title 39, United States
Code, is amended by adding at the end the following:
‘‘§ 2011. Provisions relating to competitive products
‘‘(a)(1) In this subsection, the term ‘costs attributable’ has the
meaning given such term by section 3631.
‘‘(2) There is established in the Treasury of the United States
a revolving fund, to be called the Postal Service Competitive Prod-
ucts Fund, which shall be available to the Postal Service without
fiscal year limitation for the payment of—
‘‘(A) costs attributable to competitive products; and
‘‘(B) all other costs incurred by the Postal Service, to the
extent allocable to competitive products.
‘‘(b) There shall be deposited in the Competitive Products Fund,
subject to withdrawal by the Postal Service—
‘‘(1) revenues from competitive products;
Effective date.
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‘‘(2) amounts received from obligations issued by Postal
Service under subsection (e);
‘‘(3) interest and dividends earned on investments of the
Competitive Products Fund; and
‘‘(4) any other receipts of the Postal Service (including
from the sale of assets), to the extent allocable to competitive
products.
‘‘(c) If the Postal Service determines that the moneys of the
Competitive Products Fund are in excess of current needs, the
Postal Service may request the investment of such amounts as
the Postal Service determines advisable by the Secretary of the
Treasury in obligations of, or obligations guaranteed by, the Govern-
ment of the United States, and, with the approval of the Secretary,
in such other obligations or securities as the Postal Service deter-
mines appropriate.
‘‘(d) With the approval of the Secretary of the Treasury, the
Postal Service may deposit moneys of the Competitive Products
Fund in any Federal Reserve bank, any depository for public funds,
or in such other places and in such manner as the Postal Service
and the Secretary may mutually agree.
‘‘(e)(1)(A) Subject to the limitations specified in section 2005(a),
the Postal Service is authorized to borrow money and to issue
and sell such obligations as the Postal Service determines necessary
to provide for competitive products and deposit such amounts in
the Competitive Products Fund.
‘‘(B) Subject to paragraph (5), any borrowings by the Postal
Service under subparagraph (A) shall be supported and serviced
by—
‘‘(i) the revenues and receipts from competitive products
and the assets related to the provision of competitive products
(as determined under subsection (h)); or
‘‘(ii) for purposes of any period before accounting practices
and principles under subsection (h) have been established and
applied, the best information available from the Postal Service,
including the audited statements required by section 2008(e).
‘‘(2) The Postal Service may enter into binding covenants with
the holders of such obligations, and with any trustee under any
agreement entered into in connection with the issuance of such
obligations with respect to—
‘‘(A) the establishment of reserve, sinking, and other funds;
‘‘(B) application and use of revenues and receipts of the
Competitive Products Fund;
‘‘(C) stipulations concerning the subsequent issuance of
obligations or the execution of leases or lease purchases relating
to properties of the Postal Service; and
‘‘(D) such other matters as the Postal Service considers
necessary or desirable to enhance the marketability of such
obligations.
‘‘(3) Obligations issued by the Postal Service under this
subsection—
‘‘(A) shall be in such forms and denominations;
‘‘(B) shall be sold at such times and in such amounts;
‘‘(C) shall mature at such time or times;
‘‘(D) shall be sold at such prices;
‘‘(E) shall bear such rates of interest;
‘‘(F) may be redeemable before maturity in such manner,
at such times, and at such redemption premiums;
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‘‘(G) may be entitled to such relative priorities of claim
on the assets of the Postal Service with respect to principal
and interest payments; and
‘‘(H) shall be subject to such other terms and conditions,
as the Postal Service determines.
‘‘(4) Obligations issued by the Postal Service under this
subsection—
‘‘(A) shall be negotiable or nonnegotiable and bearer or
registered instruments, as specified therein and in any inden-
ture or covenant relating thereto;
‘‘(B) shall contain a recital that such obligations are issued
under this section, and such recital shall be conclusive evidence
of the regularity of the issuance and sale of such obligations
and of their validity;
‘‘(C) shall be lawful investments and may be accepted as
security for all fiduciary, trust, and public funds, the investment
or deposit of which shall be under the authority or control
of any officer or agency of the Government of the United States,
and the Secretary of the Treasury or any other officer or agency
having authority over or control of any such fiduciary, trust,
or public funds, may at any time sell any of the obligations
of the Postal Service acquired under this section;
‘‘(D) shall not be exempt either as to principal or interest
from any taxation now or hereafter imposed by any State
or local taxing authority; and
‘‘(E) except as provided in section 2006(c), shall not be
obligations of, nor shall payment of the principal thereof or
interest thereon be guaranteed by, the Government of the
United States, and the obligations shall so plainly state.
‘‘(5) The Postal Service shall make payments of principal, or
interest, or both on obligations issued under this section out of
revenues and receipts from competitive products and assets related
to the provision of competitive products (as determined under sub-
section (h)), or for purposes of any period before accounting practices
and principles under subsection (h) have been established and
applied, the best information available, including the audited state-
ments required by section 2008(e). For purposes of this subsection,
the total assets of the Competitive Products Fund shall be the
greater of—
‘‘(A) the assets related to the provision of competitive prod-
ucts as calculated under subsection (h); or
‘‘(B) the percentage of total Postal Service revenues and
receipts from competitive products times the total assets of
the Postal Service.
‘‘(f) The receipts and disbursements of the Competitive Products
Fund shall be accorded the same budgetary treatment as is accorded
to receipts and disbursements of the Postal Service Fund under
section 2009a.
‘‘(g) A judgment (or settlement of a claim) against the Postal
Service or the Government of the United States shall be paid
out of the Competitive Products Fund to the extent that the judg-
ment or claim arises out of activities of the Postal Service in
the provision of competitive products.
‘‘(h)(1)(A) The Secretary of the Treasury, in consultation with
the Postal Service and an independent, certified public accounting
firm and other advisors as the Secretary considers appropriate,
shall develop recommendations regarding—
Recommen-
dations.
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‘‘(i) the accounting practices and principles that should
be followed by the Postal Service with the objectives of—
‘‘(I) identifying and valuing the assets and liabilities
of the Postal Service associated with providing competitive
products, including the capital and operating costs incurred
by the Postal Service in providing such competitive prod-
ucts; and
‘‘(II) subject to subsection (e)(5), preventing the sub-
sidization of such products by market-dominant products;
and
‘‘(ii) the substantive and procedural rules that should be
followed in determining the assumed Federal income tax on
competitive products income of the Postal Service for any year
(within the meaning of section 3634).
‘‘(B) Not earlier than 6 months after the date of enactment
of this section, and not later than 12 months after such date,
the Secretary of the Treasury shall submit the recommendations
under subparagraph (A) to the Postal Regulatory Commission.
‘‘(2)(A) Upon receiving the recommendations of the Secretary
of the Treasury under paragraph (1), the Commission shall give
interested parties, including the Postal Service, users of the mails,
and an officer of the Commission who shall be required to represent
the interests of the general public, an opportunity to present their
views on those recommendations through submission of written
data, views, or arguments with or without opportunity for oral
presentation, or in such other manner as the Commission considers
appropriate.
‘‘(B)(i) After due consideration of the views and other informa-
tion received under subparagraph (A), the Commission shall by
rule—
‘‘(I) provide for the establishment and application of the
accounting practices and principles which shall be followed
by the Postal Service;
‘‘(II) provide for the establishment and application of the
substantive and procedural rules described under paragraph
(1)(A)(ii); and
‘‘(III) provide for the submission by the Postal Service
to the Postal Regulatory Commission of annual and other peri-
odic reports setting forth such information as the Commission
may require.
‘‘(ii) Final rules under this subparagraph shall be issued not
later than 12 months after the date on which recommendations
are submitted under paragraph (1) (or by such later date on which
the Commission and the Postal Service may agree). The Commission
is authorized to promulgate regulations revising such rules.
‘‘(C)(i) Reports described under subparagraph (B)(i)(III) shall
be submitted at such time and in such form, and shall include
such information, as the Commission by rule requires.
‘‘(ii) The Commission may, on its own motion or on request
of an interested party, initiate proceedings (to be conducted in
accordance with such rules as the Commission shall prescribe)
to improve the quality, accuracy, or completeness of Postal Service
information under subparagraph (B)(i)(III) whenever it shall appear
that—
‘‘(I) the quality of the information furnished in those reports
has become significantly inaccurate or can be significantly
improved; or
Regulations.
Deadline.
Reports.
Submission
period.
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‘‘(II) such revisions are, in the judgment of the Commission,
otherwise necessitated by the public interest.
‘‘(D) A copy of each report described under subparagraph
(B)(i)(III) shall be submitted by the Postal Service to the Secretary
of the Treasury and the Inspector General of the United States
Postal Service.
‘‘(i)(1) The Postal Service shall submit an annual report to
the Secretary of the Treasury concerning the operation of the
Competitive Products Fund. The report shall address such matters
as risk limitations, reserve balances, allocation or distribution of
moneys, liquidity requirements, and measures to safeguard against
losses.
‘‘(2) A copy of the most recent report submitted under paragraph
(1) shall be included in the annual report submitted by the Postal
Regulatory Commission under section 3652(g).’’.
(2) CLERICAL
AMENDMENT.—The table of sections for
chapter 20 of title 39, United States Code, is amended by
adding after the item relating to section 2010 the following:
‘‘2011. Provisions relating to competitive products.’’.
(b) TECHNICAL AND CONFORMING AMENDMENTS.—
(1) DEFINITION.—Section 2001 of title 39, United States
Code, is amended by striking ‘‘and’’ at the end of paragraph
(1), by redesignating paragraph (2) as paragraph (3), and by
inserting after paragraph (1) the following:
‘‘(2) COMPETITIVE PRODUCTS FUND.—The term ‘Competitive
Products Fund’ means the Postal Service Competitive Products
Fund established by section 2011; and’’.
(2) CAPITAL OF THE POSTAL SERVICE.—Section 2002(b) of
title 39, United States Code, is amended by striking ‘‘Fund,’’
and inserting ‘‘Fund and the balance in the Competitive Prod-
ucts Fund,’’.
(3) POSTAL SERVICE FUND.—
(A) PURPOSES FOR WHICH AVAILABLE.—Section 2003(a)
of title 39, United States Code, is amended by striking
‘‘title.’’ and inserting ‘‘title (other than any of the purposes,
functions, or powers for which the Competitive Products
Fund is available).’’.
(B) DEPOSITS.—Section 2003(b) of title 39, United
States Code, is amended by striking ‘‘There’’ and inserting
‘‘Except as otherwise provided in section 2011, there’’.
(4) RELATIONSHIP BETWEEN THE TREASURY AND THE POSTAL
SERVICE.—Section 2006 of title 39, United States Code, is
amended—
(A) in subsection (a), in the first sentence, by inserting
‘‘or 2011’’ after ‘‘section 2005’’;
(B) in subsection (b)—
(i) in the first sentence, by inserting ‘‘under section
2005’’ before ‘‘in such amounts’’; and
(ii) in the second sentence, by inserting ‘‘under
section 2005’’ before ‘‘in excess of such amount.’’; and
(C) in subsection (c), by inserting ‘‘or 2011(e)(4)(E)’’
after ‘‘section 2005(d)(5)’’.
Reports.
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SEC. 402. ASSUMED FEDERAL INCOME TAX ON COMPETITIVE PROD-
UCTS INCOME.
Subchapter II of chapter 36 of title 39, United States Code,
as amended by section 202, is amended by adding at the end
the following:
‘‘§ 3634. Assumed Federal income tax on competitive products
income
‘‘(a) DEFINITIONS.—For purposes of this section—
‘‘(1) the term ‘assumed Federal income tax on competitive
products income’ means the net income tax that would be
imposed by chapter 1 of the Internal Revenue Code of 1986
on the Postal Service’s assumed taxable income from competi-
tive products for the year; and
‘‘(2) the term ‘assumed taxable income from competitive
products’, with respect to a year, refers to the amount rep-
resenting what would be the taxable income of a corporation
under the Internal Revenue Code of 1986 for the year, if—
‘‘(A) the only activities of such corporation were the
activities of the Postal Service allocable under section
2011(h) to competitive products; and
‘‘(B) the only assets held by such corporation were
the assets of the Postal Service allocable under section
2011(h) to such activities.
‘‘(b) COMPUTATION AND TRANSFER REQUIREMENTS.—The Postal
Service shall, for each year beginning with the year in which
occurs the deadline for the Postal Service’s first report to the
Postal Regulatory Commission under section 3652(a)—
‘‘(1) compute its assumed Federal income tax on competitive
products income for such year; and
‘‘(2) transfer from the Competitive Products Fund to the
Postal Service Fund the amount of that assumed tax.
‘‘(c) DEADLINE FOR TRANSFERS.—Any transfer required to be
made under this section for a year shall be due on or before
the January 15th next occurring after the close of such year.’’.
SEC. 403. UNFAIR COMPETITION PROHIBITED.
(a) SPECIFIC LIMITATIONS.—Chapter 4 of title 39, United States
Code, is amended by adding after section 404 the following:
‘‘§ 404a. Specific limitations
‘‘(a) Except as specifically authorized by law, the Postal Service
may not—
‘‘(1) establish any rule or regulation (including any
standard) the effect of which is to preclude competition or
establish the terms of competition unless the Postal Service
demonstrates that the regulation does not create an unfair
competitive advantage for itself or any entity funded (in whole
or in part) by the Postal Service;
‘‘(2) compel the disclosure, transfer, or licensing of intellec-
tual property to any third party (such as patents, copyrights,
trademarks, trade secrets, and proprietary information); or
‘‘(3) obtain information from a person that provides (or
seeks to provide) any product, and then offer any postal service
that uses or is based in whole or in part on such information,
without the consent of the person providing that information,
unless substantially the same information is obtained (or
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obtainable) from an independent source or is otherwise obtained
(or obtainable).
‘‘(b) The Postal Regulatory Commission shall prescribe regula-
tions to carry out this section.
‘‘(c) Any party (including an officer of the Commission rep-
resenting the interests of the general public) who believes that
the Postal Service has violated this section may bring a complaint
in accordance with section 3662.’’.
(b) CONFORMING AMENDMENTS.—
(1) GENERAL
POWERS.—Section 401 of title 39, United
States Code, is amended by striking ‘‘The’’ and inserting ‘‘Sub-
ject to the provisions of section 404a, the’’.
(2) SPECIFIC POWERS.—Section 404(a) of title 39, United
States Code, is amended by striking ‘‘Without’’ and inserting
‘‘Subject to the provisions of section 404a, but otherwise with-
out’’.
(c) CLERICAL AMENDMENT.—The analysis for chapter 4 of title
39, United States Code, is amended by inserting after the item
relating to section 404 the following:
‘‘404a. Specific limitations.’’.
SEC. 404. SUITS BY AND AGAINST THE POSTAL SERVICE.
(a) IN GENERAL.—Section 409 of title 39, United States Code,
is amended by striking subsections (d) and (e) and inserting the
following:
‘‘(d)(1) For purposes of the provisions of law cited in paragraphs
(2)(A) and (2)(B), respectively, the Postal Service—
‘‘(A) shall be considered to be a ‘person’, as used in the
provisions of law involved; and
‘‘(B) shall not be immune under any other doctrine of
sovereign immunity from suit in Federal court by any person
for any violation of any of those provisions of law by any
officer or employee of the Postal Service.
‘‘(2) This subsection applies with respect to—
‘‘(A) the Act of July 5, 1946 (commonly referred to as
the ‘Trademark Act of 1946’ (15 U.S.C. 1051 and following));
and
‘‘(B) the provisions of section 5 of the Federal Trade
Commission Act to the extent that such section 5 applies to
unfair or deceptive acts or practices.
‘‘(e)(1) To the extent that the Postal Service, or other Federal
agency acting on behalf of or in concert with the Postal Service,
engages in conduct with respect to any product which is not reserved
to the United States under section 1696 of title 18, the Postal
Service or other Federal agency (as the case may be)—
‘‘(A) shall not be immune under any doctrine of sovereign
immunity from suit in Federal court by any person for any
violation of Federal law by such agency or any officer or
employee thereof; and
‘‘(B) shall be considered to be a person (as defined in
subsection (a) of the first section of the Clayton Act) for pur-
poses of—
‘‘(i) the antitrust laws (as defined in such subsection);
and
‘‘(ii) section 5 of the Federal Trade Commission Act
to the extent that such section 5 applies to unfair methods
of competition.
Applicability.
Regulations.
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For purposes of the preceding sentence, any private carriage of
mail allowable by virtue of section 601 shall not be considered
a service reserved to the United States under section 1696 of
title 18.
‘‘(2) No damages, interest on damages, costs or attorney’s fees
may be recovered, and no criminal liability may be imposed, under
the antitrust laws (as so defined) from any officer or employee
of the Postal Service, or other Federal agency acting on behalf
of or in concert with the Postal Service, acting in an official capacity.
‘‘(3) This subsection shall not apply with respect to conduct
occurring before the date of enactment of this subsection.
‘‘(f)(1) Each building constructed or altered by the Postal Service
shall be constructed or altered, to the maximum extent feasible
as determined by the Postal Service, in compliance with 1 of the
nationally recognized model building codes and with other
applicable nationally recognized codes.
‘‘(2) Each building constructed or altered by the Postal Service
shall be constructed or altered only after consideration of all require-
ments (other than procedural requirements) of zoning laws, land
use laws, and applicable environmental laws of a State or subdivi-
sion of a State which would apply to the building if it were not
a building constructed or altered by an establishment of the Govern-
ment of the United States.
‘‘(3) For purposes of meeting the requirements of paragraphs
(1) and (2) with respect to a building, the Postal Service shall—
‘‘(A) in preparing plans for the building, consult with appro-
priate officials of the State or political subdivision, or both,
in which the building will be located;
‘‘(B) upon request, submit such plans in a timely manner
to such officials for review by such officials for a reasonable
period of time not exceeding 30 days; and
‘‘(C) permit inspection by such officials during construction
or alteration of the building, in accordance with the customary
schedule of inspections for construction or alteration of
buildings in the locality, if such officials provide to the Postal
Service—
‘‘(i) a copy of such schedule before construction of the
building is begun; and
‘‘(ii) reasonable notice of their intention to conduct
any inspection before conducting such inspection.
Nothing in this subsection shall impose an obligation on any
State or political subdivision to take any action under the
preceding sentence, nor shall anything in this subsection
require the Postal Service or any of its contractors to pay
for any action taken by a State or political subdivision to
carry out this subsection (including reviewing plans, carrying
out on-site inspections, issuing building permits, and making
recommendations).
‘‘(4) Appropriate officials of a State or a political subdivision
of a State may make recommendations to the Postal Service con-
cerning measures necessary to meet the requirements of paragraphs
(1) and (2). Such officials may also make recommendations to the
Postal Service concerning measures which should be taken in the
construction or alteration of the building to take into account local
conditions. The Postal Service shall give due consideration to any
such recommendations.
Deadline.
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‘‘(5) In addition to consulting with local and State officials
under paragraph (3), the Postal Service shall establish procedures
for soliciting, assessing, and incorporating local community input
on real property and land use decisions.
‘‘(6) For purposes of this subsection, the term ‘State’ includes
the District of Columbia, the Commonwealth of Puerto Rico, and
a territory or possession of the United States.
‘‘(g)(1) Notwithstanding any other provision of law, legal rep-
resentation may not be furnished by the Department of Justice
to the Postal Service in any action, suit, or proceeding arising,
in whole or in part, under any of the following:
‘‘(A) Subsection (d) or (e) of this section.
‘‘(B) Subsection (f) or (g) of section 504 (relating to adminis-
trative subpoenas by the Postal Regulatory Commission).
‘‘(C) Section 3663 (relating to appellate review).
The Postal Service may, by contract or otherwise, employ attorneys
to obtain any legal representation that it is precluded from obtaining
from the Department of Justice under this paragraph.
‘‘(2) In any circumstance not covered by paragraph (1), the
Department of Justice shall, under section 411, furnish the Postal
Service such legal representation as it may require, except that,
with the prior consent of the Attorney General, the Postal Service
may, in any such circumstance, employ attorneys by contract or
otherwise to conduct litigation brought by or against the Postal
Service or its officers or employees in matters affecting the Postal
Service.
‘‘(3)(A) In any action, suit, or proceeding in a court of the
United States arising in whole or in part under any of the provisions
of law referred to in subparagraph (B) or (C) of paragraph (1),
and to which the Commission is not otherwise a party, the Commis-
sion shall be permitted to appear as a party on its own motion
and as of right.
‘‘(B) The Department of Justice shall, under such terms and
conditions as the Commission and the Attorney General shall con-
sider appropriate, furnish the Commission such legal representation
as it may require in connection with any such action, suit, or
proceeding, except that, with the prior consent of the Attorney
General, the Commission may employ attorneys by contract or
otherwise for that purpose.
‘‘(h) A judgment against the Government of the United States
arising out of activities of the Postal Service shall be paid by
the Postal Service out of any funds available to the Postal Service,
subject to the restriction specified in section 2011(g).’’.
(b) TECHNICAL AMENDMENT.—Section 409(a) of title 39, United
States Code, is amended by striking ‘‘Except as provided in section
3628 of this title,’’ and inserting ‘‘Except as otherwise provided
in this title,’’.
SEC. 405. INTERNATIONAL POSTAL ARRANGEMENTS.
(a) IN GENERAL.—Section 407 of title 39, United States Code,
is amended to read as follows:
‘‘§ 407. International postal arrangements
‘‘(a) It is the policy of the United States—
‘‘(1) to promote and encourage communications between
peoples by efficient operation of international postal services
Procedures.
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and other international delivery services for cultural, social,
and economic purposes;
‘‘(2) to promote and encourage unrestricted and undistorted
competition in the provision of international postal services
and other international delivery services, except where provi-
sion of such services by private companies may be prohibited
by law of the United States;
‘‘(3) to promote and encourage a clear distinction between
governmental and operational responsibilities with respect to
the provision of international postal services and other inter-
national delivery services by the Government of the United
States and by intergovernmental organizations of which the
United States is a member; and
‘‘(4) to participate in multilateral and bilateral agreements
with other countries to accomplish these objectives.
‘‘(b)(1) The Secretary of State shall be responsible for formula-
tion, coordination, and oversight of foreign policy related to inter-
national postal services and other international delivery services
and shall have the power to conclude postal treaties, conventions,
and amendments related to international postal services and other
international delivery services, except that the Secretary may not
conclude any treaty, convention, or other international agreement
(including those regulating international postal services) if such
treaty, convention, or agreement would, with respect to any competi-
tive product, grant an undue or unreasonable preference to the
Postal Service, a private provider of international postal or delivery
services, or any other person.
‘‘(2) In carrying out the responsibilities specified in paragraph
(1), the Secretary of State shall exercise primary authority for
the conduct of foreign policy with respect to international postal
services and international delivery services, including the deter-
mination of United States positions and the conduct of United
States participation in negotiations with foreign governments and
international bodies. In exercising this authority, the Secretary—
‘‘(A) shall coordinate with other agencies as appropriate,
and in particular, shall give full consideration to the authority
vested by law or Executive order in the Postal Regulatory
Commission, the Department of Commerce, the Department
of Transportation, and the Office of the United States Trade
Representative in this area;
‘‘(B) shall maintain continuing liaison with other executive
branch agencies concerned with postal and delivery services;
‘‘(C) shall maintain continuing liaison with the Committee
on Homeland Security and Governmental Affairs of the Senate
and the Committee on Government Reform of the House of
Representatives;
‘‘(D) shall maintain appropriate liaison with both represent-
atives of the Postal Service and representatives of users and
private providers of international postal services and other
international delivery services to keep informed of their
interests and problems, and to provide such assistance as may
be needed to ensure that matters of concern are promptly
considered by the Department of State or (if applicable, and
to the extent practicable) other executive branch agencies; and
‘‘(E) shall assist in arranging meetings of such public sector
advisory groups as may be established to advise the Department
of State and other executive branch agencies in connection
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with international postal services and international delivery
services.
‘‘(3) The Secretary of State shall establish an advisory com-
mittee (within the meaning of the Federal Advisory Committee
Act) to perform such functions as the Secretary considers appro-
priate in connection with carrying out subparagraphs (A) through
(D) of paragraph (2).
‘‘(c)(1) Before concluding any treaty, convention, or amendment
that establishes a rate or classification for a product subject to
subchapter I of chapter 36, the Secretary of State shall request
the Postal Regulatory Commission to submit its views on whether
such rate or classification is consistent with the standards and
criteria established by the Commission under section 3622.
‘‘(2) The Secretary shall ensure that each treaty, convention,
or amendment concluded under subsection (b) is consistent with
the views submitted by the Commission pursuant to paragraph
(1), except if, or to the extent, the Secretary determines, in writing,
that it is not in the foreign policy or national security interest
of the United States to ensure consistency with the Commission’s
views. Such written determination shall be provided to the Commis-
sion together with a full explanation of the reasons thereof, provided
that the Secretary may designate which portions of the determina-
tion or explanation shall be kept confidential for reasons of foreign
policy or national security.
‘‘(d) Nothing in this section shall be considered to prevent
the Postal Service from entering into such commercial or operational
contracts related to providing international postal services and other
international delivery services as it deems appropriate, except
that—
‘‘(1) any such contract made with an agency of a foreign
government (whether under authority of this subsection or
otherwise) shall be solely contractual in nature and may not
purport to be international law; and
‘‘(2) a copy of each such contract between the Postal Service
and an agency of a foreign government shall be transmitted
to the Secretary of State and the Postal Regulatory Commission
not later than the effective date of such contract.
‘‘(e)(1) In this subsection, the term ‘private company’ means
a private company substantially owned or controlled by persons
who are citizens of the United States.
‘‘(2) With respect to shipments of international mail that are
competitive products within the meaning of section 3631 that are
exported or imported by the Postal Service, the Customs Service
and other appropriate Federal agencies shall apply the customs
laws of the United States and all other laws relating to the importa-
tion or exportation of such shipments in the same manner to both
shipments by the Postal Service and similar shipments by private
companies.
‘‘(3) In exercising the authority under subsection (b) to conclude
new postal treaties and conventions related to international postal
services and to renegotiate such treaties and conventions, the Sec-
retary of State shall, to the maximum extent practicable, take
such measures as are within the Secretary’s control to encourage
the governments of other countries to make available to the Postal
Service and private companies a range of nondiscriminatory customs
procedures that will fully meet the needs of all types of American
shippers. The Secretary of State shall consult with the United
Establishment.
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States Trade Representative and the Commissioner of Customs
in carrying out this paragraph.
‘‘(4) The provisions of this subsection shall take effect 6 months
after the date of enactment of this subsection or such earlier date
as the Bureau of Customs and Border Protection of the Department
of Homeland Security may determine in writing.’’.
(b) EFFECTIVE DATE.—Notwithstanding any provision of the
amendment made by subsection (a), the authority of the United
States Postal Service to establish the rates of postage or other
charges on mail matter conveyed between the United States and
other countries shall remain available to the Postal Service until—
(1) with respect to market-dominant products, the date
as of which the regulations promulgated under section 3622
of title 39, United States Code (as amended by section 201(a))
take effect; and
(2) with respect to competitive products, the date as of
which the regulations promulgated under section 3633 of title
39, United States Code (as amended by section 202) take effect.
TITLE V—GENERAL PROVISIONS
SEC. 501. QUALIFICATION AND TERM REQUIREMENTS FOR GOV-
ERNORS.
(a) QUALIFICATIONS.—
(1) IN GENERAL.—Section 202(a) of title 39, United States
Code, is amended by striking ‘‘(a)’’ and inserting ‘‘(a)(1)’’ and
by striking the fourth sentence and inserting the following:
‘‘The Governors shall represent the public interest generally,
and shall be chosen solely on the basis of their experience
in the field of public service, 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 4 of the Governors shall be chosen solely on
the basis of their demonstrated ability in managing organiza-
tions or corporations (in either the public or private sector)
that employ at least 50,000 employees. The Governors shall
not be representatives of specific interests using the Postal
Service, and may be removed only for cause.’’.
(2) APPLICABILITY.—The amendment made by paragraph
(1) shall not affect the appointment or tenure of any person
serving as a Governor of the United States Postal Service
under an appointment made before the date of enactment of
this Act however, when any such office becomes vacant, the
appointment of any person to fill that office shall be made
in accordance with such amendment. The requirement set forth
in the fourth sentence of section 202(a)(1) of title 39, United
States Code (as amended by subsection (a)) shall be met begin-
ning not later than 9 years after the date of enactment of
this Act.
(b) CONSULTATION REQUIREMENT.—Section 202(a) of title 39,
United States Code, is amended by adding at the end the following:
‘‘(2) In selecting the individuals described in paragraph (1)
for nomination for appointment to the position of Governor, the
President should consult with the Speaker of the House of Rep-
resentatives, the minority leader of the House of Representatives,
Effective date.
39 USC 202 note.
39 USC 407 note.
Effective date.
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the majority leader of the Senate, and the minority leader of the
Senate.’’.
(c) 7-YEAR TERMS.—
(1) IN GENERAL.—Section 202(b) of title 39, United States
Code, is amended in the first sentence by striking ‘‘9 years’’
and inserting ‘‘7 years’’.
(2) APPLICABILITY.—
(A) CONTINUATION BY INCUMBENTS.—The amendment
made by paragraph (1) shall not affect the tenure of any
person serving as a Governor of the United States Postal
Service on the date of enactment of this Act and such
person may continue to serve the remainder of the
applicable term.
(B) VACANCY
BY
INCUMBENT
BEFORE
7
YEARS
OF
SERVICE.—If a person who is serving as a Governor of
the United States Postal Service on the date of enactment
of this Act resigns, is removed, or dies before the expiration
of the 9-year term of that Governor, and that Governor
has served less than 7 years of that term, the resulting
vacancy in office shall be treated as a vacancy in a 7-
year term.
(C) VACANCY
BY
INCUMBENT
AFTER
7
YEARS
OF
SERVICE.—If a person who is serving as a Governor of
the United States Postal Service on the date of enactment
of this Act resigns, is removed, or dies before the expiration
of the 9-year term of that Governor, and that Governor
has served 7 years or more of that term, that term shall
be deemed to have been a 7-year term beginning on its
commencement date for purposes of determining vacancies
in office. Any appointment to the vacant office shall be
for a 7-year term beginning at the end of the original
9-year term determined without regard to the deeming
under the preceding sentence. Nothing in this subpara-
graph shall be construed to affect any action or authority
of any Governor or the Board of Governors during any
portion of a 9-year term deemed to be a 7-year term under
this subparagraph.
(d) TERM LIMITATION.—
(1) IN GENERAL.—Section 202(b) of title 39, United States
Code, is amended—
(A) by inserting ‘‘(1)’’ after ‘‘(b)’’; and
(B) by adding at the end the following:
‘‘(2) No person may serve more than 2 terms as a Gov-
ernor.’’.
(2) APPLICABILITY.—The amendments made by paragraph
(1) shall not affect the tenure of any person serving as a
Governor of the United States Postal Service on the date of
enactment of this Act with respect to the term which that
person is serving on that date. Such person may continue
to serve the remainder of the applicable term, after which
the amendments made by paragraph (1) shall apply.
SEC. 502. OBLIGATIONS.
(a) PURPOSES FOR WHICH OBLIGATIONS MAY BE ISSUED.—The
first sentence of section 2005(a)(1) of title 39, United States Code,
is amended by striking ‘‘title.’’ and inserting ‘‘title, other than
39 USC 202 note.
39 USC 202 note.
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any of the purposes for which the corresponding authority is avail-
able to the Postal Service under section 2011.’’.
(b) LIMITATION
ON NET ANNUAL INCREASE
IN OBLIGATIONS
ISSUED
FOR CERTAIN PURPOSES.—The third sentence of section
2005(a)(1) of title 39, United States Code, is amended to read
as follows: ‘‘In any one fiscal year, the net increase in the amount
of obligations outstanding issued for the purpose of capital improve-
ments and the net increase in the amount of obligations outstanding
issued for the purpose of defraying operating expenses of the Postal
Service shall not exceed a combined total of $3,000,000,000.’’.
(c) LIMITATIONS ON OBLIGATIONS OUTSTANDING.—
(1) IN GENERAL.—Subsection (a) of section 2005 of title
39, United States Code, is amended by adding at the end
the following:
‘‘(3) For purposes of applying the respective limitations under
this subsection, the aggregate amount of obligations issued by the
Postal Service which are outstanding as of any one time, and
the net increase in the amount of obligations outstanding issued
by the Postal Service for the purpose of capital improvements
or for the purpose of defraying operating expenses of the Postal
Service in any fiscal year, shall be determined by aggregating
the relevant obligations issued by the Postal Service under this
section with the relevant obligations issued by the Postal Service
under section 2011.’’.
(2) CONFORMING AMENDMENT.—The second sentence of sec-
tion 2005(a)(1) of title 39, United States Code, is amended
by striking ‘‘any such obligations’’ and inserting ‘‘obligations
issued by the Postal Service which may be’’.
(d) AMOUNTS WHICH MAY BE PLEDGED.—
(1) OBLIGATIONS TO WHICH PROVISIONS APPLY.—The first
sentence of section 2005(b) of title 39, United States Code,
is amended by striking ‘‘such obligations,’’ and inserting ‘‘obliga-
tions issued by the Postal Service under this section,’’.
(2) ASSETS, REVENUES, AND RECEIPTS TO WHICH PROVISIONS
APPLY.—Subsection (b) of section 2005 of title 39, United States
Code, is amended by striking ‘‘(b)’’ and inserting ‘‘(b)(1)’’, and
by adding at the end the following:
‘‘(2) Notwithstanding any other provision of this section—
‘‘(A) the authority to pledge assets of the Postal Service
under this subsection shall be available only to the extent
that such assets are not related to the provision of competitive
products (as determined under section 2011(h) or, for purposes
of any period before accounting practices and principles under
section 2011(h) have been established and applied, the best
information available from the Postal Service, including the
audited statements required by section 2008(e)); and
‘‘(B) any authority under this subsection relating to the
pledging or other use of revenues or receipts of the Postal
Service shall be available only to the extent that they are
not revenues or receipts of the Competitive Products Fund.’’.
SEC. 503. PRIVATE CARRIAGE OF LETTERS.
(a) IN GENERAL.—Section 601 of title 39, United States Code,
is amended by striking subsection (b) and inserting the following:
‘‘(b) A letter may also be carried out of the mails when—
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‘‘(1) the amount paid for the private carriage of the letter
is at least the amount equal to 6 times the rate then currently
charged for the 1st ounce of a single-piece first class letter;
‘‘(2) the letter weighs at least 121⁄2 ounces; or
‘‘(3) such carriage is within the scope of services described
by regulations of the United States Postal Service (including,
in particular, sections 310.1 and 320.2–320.8 of title 39 of
the Code of Federal Regulations, as in effect on July 1, 2005)
that purport to permit private carriage by suspension of the
operation of this section (as then in effect).
‘‘(c) Any regulations necessary to carry out this section shall
be promulgated by the Postal Regulatory Commission.’’.
(b) EFFECTIVE DATE.—This section shall take effect on the
date as of which the regulations promulgated under section 3633
of title 39, United States Code (as amended by section 202) take
effect.
SEC. 504. RULEMAKING AUTHORITY.
Paragraph (2) of section 401 of title 39, United States Code,
is amended to read as follows:
‘‘(2) to adopt, amend, and repeal such rules and regulations,
not inconsistent with this title, as may be necessary in the
execution of its functions under this title and such other func-
tions as may be assigned to the Postal Service under any
provisions of law outside of this title;’’.
SEC. 505. NONINTERFERENCE WITH COLLECTIVE BARGAINING AGREE-
MENTS.
(a) LABOR DISPUTES.—Section 1207 of title 39, United States
Code, is amended to read as follows:
‘‘§ 1207. Labor disputes
‘‘(a) If there is a collective-bargaining agreement in effect, no
party to such agreement shall terminate or modify such agreement
unless the party desiring such termination or modification serves
written notice upon the other party to the agreement of the proposed
termination or modification not less than 90 days prior to the
expiration date thereof, or not less than 90 days prior to the
time it is proposed to make such termination or modification. The
party serving such notice shall notify the Federal Mediation and
Conciliation Service of the existence of a dispute within 45 days
after such notice, if no agreement has been reached by that time.
‘‘(b) If the parties fail to reach agreement or to adopt a proce-
dure providing for a binding resolution of a dispute by the expiration
date of the agreement in effect, or the date of the proposed termi-
nation or modification, the Director of the Federal Mediation and
Conciliation Service shall within 10 days appoint a mediator of
nationwide reputation and professional stature, and who is also
a member of the National Academy of Arbitrators. The parties
shall cooperate with the mediator in an effort to reach an agreement
and shall meet and negotiate in good faith at such times and
places that the mediator, in consultation with the parties, shall
direct.
‘‘(c)(1) If no agreement is reached within 60 days after the
expiration or termination of the agreement or the date on which
the agreement became subject to modification under subsection
(a) of this section, or if the parties decide upon arbitration but
do not agree upon the procedures therefore, an arbitration board
Notification.
Notice.
Deadlines.
39 USC 601 note.
Regulations.
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shall be established consisting of 3 members, 1 of whom shall
be selected by the Postal Service, 1 by the bargaining representative
of the employees, and the third by the 2 thus selected. If either
of the parties fails to select a member, or if the members chosen
by the parties fail to agree on the third person within 5 days
after their first meeting, the selection shall be made from a list
of names provided by the Director. This list shall consist of not
less then 9 names of arbitrators of nationwide reputation and
professional nature, who are also members of the National Academy
of Arbitrators, and whom the Director has determined are available
and willing to serve.
‘‘(2) The arbitration board shall give the parties a full and
fair hearing, including an opportunity to present evidence in support
of their claims, and an opportunity to present their case in person,
by counsel or by other representative as they may elect. Decisions
of the arbitration board shall be conclusive and binding upon the
parties. The arbitration board shall render its decision within 45
days after its appointment.
‘‘(3) Costs of the arbitration board and mediation shall be
shared equally by the Postal Service and the bargaining representa-
tive.
‘‘(d) In the case of a bargaining unit whose recognized collective-
bargaining representative does not have an agreement with the
Postal Service, if the parties fail to reach the agreement within
90 days after the commencement of collective bargaining, a mediator
shall be appointed in accordance with the terms in subsection
(b) of this section, unless the parties have previously agreed to
another procedure for a binding resolution of their differences.
If the parties fail to reach agreement within 180 days after the
commencement of collective bargaining, and if they have not agreed
to another procedure for binding resolution, an arbitration board
shall be established to provide conclusive and binding arbitration
in accordance with the terms of subsection (c) of this section.’’.
(b) NONINTERFERENCE WITH COLLECTIVE BARGAINING AGREE-
MENTS.—Except as otherwise provided by the amendment made
by subsection (a), nothing in this Act shall restrict, expand, or
otherwise affect any of the rights, privileges, or benefits of either
employees of or labor organizations representing employees of the
United States Postal Service under chapter 12 of title 39, United
States Code, the National Labor Relations Act, any handbook or
manual affecting employee labor relations within the United States
Postal Service, or any collective bargaining agreement.
(c) FREE MAILING PRIVILEGES CONTINUE UNCHANGED.—Nothing
in this Act or any amendment made by this Act shall affect any
free mailing privileges accorded under section 3217 or sections
3403 through 3406 of title 39, United States Code.
SEC. 506. BONUS AUTHORITY.
Chapter 36 of title 39, United States Code, is amended by
inserting after section 3685 the following:
‘‘§ 3686. Bonus authority
‘‘(a) IN GENERAL.—The Postal Service may establish 1 or more
programs to provide bonuses or other rewards to officers and
employees of the Postal Service in senior executive or equivalent
positions to achieve the objectives of this chapter.
‘‘(b) LIMITATION ON TOTAL COMPENSATION.—
39 USC 1217
note.
39 USC 1201
note.
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‘‘(1) IN GENERAL.—Under any such program, the Postal
Service may award a bonus or other reward in excess of the
limitation set forth in the last sentence of section 1003(a),
if such program has been approved under paragraph (2). Any
such award or bonus may not cause the total compensation
of such officer or employee to exceed the total annual compensa-
tion payable to the Vice President under section 104 of title
3 as of the end of the calendar year in which the bonus
or award is paid.
‘‘(2) APPROVAL PROCESS.—If the Postal Service wishes to
have the authority, under any program described in subsection
(a), to award bonuses or other rewards in excess of the limita-
tion set forth in the last sentence of section 1003(a)—
‘‘(A) the Postal Service shall make an appropriate
request to the Board of Governors of the Postal Service
in such form and manner as the Board requires; and
‘‘(B) the Board of Governors shall approve any such
request if the Board certifies, for the annual appraisal
period involved, that the performance appraisal system
for affected officers and employees of the Postal Service
(as designed and applied) makes meaningful distinctions
based on relative performance.
‘‘(3) REVOCATION AUTHORITY.—If the Board of Governors
of the Postal Service finds that a performance appraisal system
previously approved under paragraph (2)(B) does not (as
designed and applied) make meaningful distinctions based on
relative performance, the Board may revoke or suspend the
authority of the Postal Service to continue a program approved
under paragraph (2) until such time as appropriate corrective
measures have, in the judgment of the Board, been taken.
‘‘(c) EXCEPTIONS
FOR CRITICAL POSITIONS.—Notwithstanding
any other provision of law, the Board of Governors may allow
up to 12 officers or employees of the Postal Service in critical
senior executive or equivalent positions to receive total compensa-
tion in an amount not to exceed 120 percent of the total annual
compensation payable to the Vice President under section 104 of
title 3 as of the end of the calendar year in which such payment
is received. For each exception made under this subsection, the
Board shall provide written notification to the Director of the Office
of Personnel Management and the Congress within 30 days after
the payment is made setting forth the name of the officer or
employee involved, the critical nature of his or her duties and
responsibilities, and the basis for determining that such payment
is warranted.
‘‘(d) INFORMATION FOR INCLUSION IN COMPREHENSIVE STATE-
MENT.—Included in its comprehensive statement under section
2401(e) for any period shall be—
‘‘(1) the name of each person receiving a bonus or other
payment during such period which would not have been allow-
able but for the provisions of subsection (b) or (c);
‘‘(2) the amount of the bonus or other payment; and
‘‘(3) the amount by which the limitation set forth in the
last sentence of section 1003(a) was exceeded as a result of
such bonus or other payment.
‘‘(e) REGULATIONS.—The Board of Governors may prescribe
regulations for the administration of this section.’’.
Notification.
Deadline.
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TITLE VI—ENHANCED REGULATORY
COMMISSION
SEC. 601. REORGANIZATION AND MODIFICATION OF CERTAIN PROVI-
SIONS RELATING TO THE POSTAL REGULATORY COMMIS-
SION.
(a) TRANSFER
AND REDESIGNATION.—Title 39, United States
Code, is amended—
(1) by inserting after chapter 4 the following:
‘‘CHAPTER 5—POSTAL REGULATORY COMMISSION
‘‘Sec.
‘‘501. Establishment.
‘‘502. Commissioners.
‘‘503. Rules; regulations; procedures.
‘‘504. Administration.
‘‘505. Officer of the Postal Regulatory Commission representing the general public.
‘‘§ 501. Establishment
‘‘The Postal Regulatory Commission is an independent
establishment of the executive branch of the Government of the
United States.
‘‘§ 502. Commissioners
‘‘(a) The Postal Regulatory Commission is composed of 5
Commissioners, appointed by the President, by and with the advice
and consent of the Senate. The Commissioners shall be chosen
solely on the basis of their technical qualifications, professional
standing, and demonstrated expertise in economics, accounting,
law, or public administration, and may be removed by the President
only for cause. Each individual appointed to the Commission shall
have the qualifications and expertise necessary to carry out the
enhanced responsibilities accorded Commissioners under the Postal
Accountability and Enhancement Act. Not more than 3 of the
Commissioners may be adherents of the same political party.
‘‘(b) No Commissioner shall be financially interested in any
enterprise in the private sector of the economy engaged in the
delivery of mail matter.
‘‘(c) A Commissioner may continue to serve after the expiration
of his term until his successor has qualified, except that a Commis-
sioner may not so continue to serve for more than 1 year after
the date upon which his term otherwise would expire under sub-
section (f).
‘‘(d) One of the Commissioners shall be designated as Chairman
by, and shall serve in the position of Chairman at the pleasure
of, the President.
‘‘(e) The Commissioners shall by majority vote designate a
Vice Chairman of the Commission. The Vice Chairman shall act
as Chairman of the Commission in the absence of the Chairman.
‘‘(f) The Commissioners shall serve for terms of 6 years.’’;
(2) by striking, in subchapter I of chapter 36 (as in effect
before the amendment made by section 201(c)), the heading
for such subchapter I and all that follows through section
3602;
39 USC 3601,
3602.
President.
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(3) by redesignating sections 3603 and 3604 as sections
503 and 504, respectively, and transferring such sections to
the end of chapter 5 (as inserted by paragraph (1)); and
(4) by adding after such section 504 the following:
‘‘§ 505. Officer of the Postal Regulatory Commission rep-
resenting the general public
‘‘The Postal Regulatory Commission shall designate an officer
of the Postal Regulatory Commission in all public proceedings (such
as developing rules, regulations, and procedures) who shall rep-
resent the interests of the general public.’’.
(b) APPLICABILITY.—The amendment made by subsection (a)(1)
shall not affect the appointment or tenure of any person serving
as a Commissioner on the Postal Regulatory Commission (as so
redesignated by section 604) under an appointment made before
the date of enactment of this Act or any nomination made before
that date, but, when any such office becomes vacant, the appoint-
ment of any person to fill that office shall be made in accordance
with such amendment.
(c) CLERICAL AMENDMENT.—The analysis for part I of title
39, United States Code, is amended by inserting after the item
relating to chapter 4 the following:
‘‘5. Postal Regulatory Commission ...........................................
501’’
SEC. 602. AUTHORITY FOR POSTAL REGULATORY COMMISSION TO
ISSUE SUBPOENAS.
Section 504 of title 39, United States Code (as so redesignated
by section 601) is amended by adding at the end the following:
‘‘(f)(1) Any Commissioner of the Postal Regulatory Commission,
any administrative law judge appointed by the Commission under
section 3105 of title 5, and any employee of the Commission des-
ignated by the Commission may administer oaths, examine wit-
nesses, take depositions, and receive evidence.
‘‘(2) The Chairman of the Commission, any Commissioner des-
ignated by the Chairman, and any administrative law judge
appointed by the Commission under section 3105 of title 5 may,
with respect to any proceeding conducted by the Commission under
this title or to obtain information to be used to prepare a report
under this title—
‘‘(A) issue subpoenas requiring the attendance and presen-
tation of testimony by, or the production of documentary or
other evidence in the possession of, any covered person; and
‘‘(B) order the taking of depositions and responses to writ-
ten interrogatories by a covered person.
The written concurrence of a majority of the Commissioners then
holding office shall, with respect to each subpoena under subpara-
graph (A), be required in advance of its issuance.
‘‘(3) In the case of contumacy or failure to obey a subpoena
issued under this subsection, upon application by the Commission,
the district court of the United States for the district in which
the person to whom the subpoena is addressed resides or is served
may issue an order requiring such person to appear at any des-
ignated place to testify or produce documentary or other evidence.
Any failure to obey the order of the court may be punished by
the court as a contempt thereof.
39 USC 501 note.
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‘‘(4) For purposes of this subsection, the term ‘covered person’
means an officer, employee, agent, or contractor of the Postal
Service.
‘‘(g)(1) If the Postal Service determines that any document
or other matter it provides to the Postal Regulatory Commission
under a subpoena issued under subsection (f), or otherwise at the
request of the Commission in connection with any proceeding or
other purpose under this title, contains information which is
described in section 410(c) of this title, or exempt from public
disclosure under section 552(b) of title 5, the Postal Service shall,
at the time of providing such matter to the Commission, notify
the Commission, in writing, of its determination (and the reasons
therefor).
‘‘(2) Except as provided in paragraph (3), no officer or employee
of the Commission may, with respect to any information as to
which the Commission has been notified under paragraph (1)—
‘‘(A) use such information for purposes other than the pur-
poses for which it is supplied; or
‘‘(B) permit anyone who is not an officer or employee of
the Commission to have access to any such information.
‘‘(3)(A) Paragraph (2) shall not prohibit the Commission
from publicly disclosing relevant information in furtherance
of its duties under this title, provided that the Commission
has adopted regulations under section 553 of title 5, that estab-
lish a procedure for according appropriate confidentiality to
information identified by the Postal Service under paragraph
(1). In determining the appropriate degree of confidentiality
to be accorded information identified by the Postal Service
under paragraph (1), the Commission shall balance the nature
and extent of the likely commercial injury to the Postal Service
against the public interest in maintaining the financial trans-
parency of a government establishment competing in commer-
cial markets.
‘‘(B) Paragraph (2) shall not prevent the Commission from
requiring production of information in the course of any dis-
covery procedure established in connection with a proceeding
under this title. The Commission shall, by regulations based
on rule 26(c) of the Federal Rules of Civil Procedure, establish
procedures for ensuring appropriate confidentiality for informa-
tion furnished to any party.’’.
SEC. 603. AUTHORIZATION OF APPROPRIATIONS FROM THE POSTAL
SERVICE FUND.
(a) POSTAL REGULATORY COMMISSION.—Subsection (d) of section
504 of title 39, United States Code (as so redesignated by section
601) is amended to read as follows:
‘‘(d) There are authorized to be appropriated, out of the Postal
Service Fund, such sums as may be necessary for the Postal Regu-
latory Commission. In requesting an appropriation under this sub-
section for a fiscal year, the Commission shall prepare and submit
to the Congress under section 2009 a budget of the Commission’s
expenses, including expenses for facilities, supplies, compensation,
and employee benefits.’’.
(b) OFFICE
OF INSPECTOR GENERAL
OF
THE UNITED STATES
POSTAL SERVICE.—Section 8G(f) of the Inspector General Act of
1978 (5 U.S.C. App.) is amended—
(1) by redesignating paragraph (4) as paragraph (5);
5 USC app. 8G.
Budget.
Regulations.
Confidentiality.
Notification.
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(2) by redesignating the second paragraph (3) (relating
to employees and labor organizations) as paragraph (4); and
(3) by adding at the end the following:
‘‘(6) 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 United States Postal Service.’’.
(c) BUDGET PROGRAM.—
(1) IN GENERAL.—The next to last sentence of section 2009
of title 39, United States Code, is amended to read as follows:
‘‘The budget program shall also include separate statements
of the amounts which (1) the Postal Service requests to be
appropriated under subsections (b) and (c) of section 2401,
(2) the Office of Inspector General of the United States Postal
Service requests to be appropriated, out of the Postal Service
Fund, under section 8G(f) of the Inspector General Act of 1978,
and (3) the Postal Regulatory Commission requests to be appro-
priated, out of the Postal Service Fund, under section 504(d)
of this title.’’.
(2) CONFORMING AMENDMENT.—Section 2003(e)(1) of title
39, United States Code, is amended by striking the first sen-
tence and inserting the following: ‘‘The Fund shall be available
for the payment of (A) all expenses incurred by the Postal
Service in carrying out its functions as provided by law, subject
to the same limitation as set forth in the parenthetical matter
under subsection (a); (B) all expenses of the Postal Regulatory
Commission, subject to the availability of amounts appropriated
under section 504(d); and (C) all expenses of the Office of
Inspector General, subject to the availability of amounts appro-
priated under section 8G(f) of the Inspector General Act of
1978.’’.
(d) EFFECTIVE DATE.—
(1) IN GENERAL.—The amendments made by this section
shall apply with respect to fiscal years beginning on or after
October 1, 2008.
(2) SAVINGS PROVISION.—The provisions of title 39, United
States Code, and the Inspector General Act of 1978 (5 U.S.C.
App.) that are amended by this section shall, for purposes
of any fiscal year before the first fiscal year to which the
amendments made by this section apply, continue to apply
in the same way as if this section had never been enacted.
SEC. 604. REDESIGNATION OF THE POSTAL RATE COMMISSION.
(a) AMENDMENTS TO TITLE 39, UNITED STATES CODE.—Title
39, United States Code, is amended in sections 404, 503 and 504
(as so redesignated by section 601), 1001 and 1002, by striking
‘‘Postal Rate Commission’’ each place it appears and inserting
‘‘Postal Regulatory Commission’’;
(b) AMENDMENTS TO TITLE 5, UNITED STATES CODE.—Title 5,
United States Code, is amended in sections 104(1), 306(f), 2104(b),
3371(3), 5314 (in the item relating to Chairman, Postal Rate
Commission), 5315 (in the item relating to Members, Postal Rate
Commission), 
5514(a)(5)(B), 
7342(a)(1)(A), 
7511(a)(1)(B)(ii),
8402(c)(1), 8423(b)(1)(B), and 8474(c)(4) by striking ‘‘Postal Rate
Commission’’ and inserting ‘‘Postal Regulatory Commission’’.
(c) AMENDMENT TO THE ETHICS IN GOVERNMENT ACT OF 1978.—
Section 101(f)(6) of the Ethics in Government Act of 1978 (5 U.S.C.
5 USC app. 101.
Applicability.
5 USC app. 8G
note.
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App.) is amended by striking ‘‘Postal Rate Commission’’ and
inserting ‘‘Postal Regulatory Commission’’.
(d) AMENDMENT TO THE REHABILITATION ACT OF 1973.—Section
501(b) of the Rehabilitation Act of 1973 (29 U.S.C. 791(b)) is
amended by striking ‘‘Postal Rate Office’’ and inserting ‘‘Postal
Regulatory Commission’’.
(e) AMENDMENT TO TITLE 44, UNITED STATES CODE.—Section
3502(5) of title 44, United States Code, is amended by striking
‘‘Postal Rate Commission’’ and inserting ‘‘Postal Regulatory
Commission’’.
(f) OTHER REFERENCES.—Whenever a reference is made in any
provision of law (other than this Act or a provision of law amended
by this Act), regulation, rule, document, or other record of the
United States to the Postal Rate Commission, such reference shall
be considered a reference to the Postal Regulatory Commission.
SEC. 605. INSPECTOR GENERAL OF THE POSTAL REGULATORY
COMMISSION.
(a) IN GENERAL.—Section 8G(a)(2) of the Inspector General
Act of 1978 is amended by inserting ‘‘the Postal Regulatory Commis-
sion,’’ after ‘‘the United States International Trade Commission,’’.
(b) ADMINISTRATION.—Section 504 of title 39, United States
Code (as so redesignated by section 601) is amended by adding
after subsection (g) (as added by section 602) the following:
‘‘(h)(1) Notwithstanding any other provision of this title or
of the Inspector General Act of 1978, the authority to select, appoint,
and employ officers and employees of the Office of Inspector General
of the Postal Regulatory Commission, and to obtain any temporary
or intermittent services of experts or consultants (or an organization
of experts or consultants) for such Office, shall reside with the
Inspector General of the Postal Regulatory Commission.
‘‘(2) Except as provided in paragraph (1), any exercise of
authority under this subsection shall, to the extent practicable,
be in conformance with the applicable laws and regulations that
govern selections, appointments, and employment, and the
obtaining of any such temporary or intermittent services, within
the Postal Regulatory Commission.’’.
(c) DEADLINE.—No later than 180 days after the date of the
enactment of this Act—
(1) the first Inspector General of the Postal Regulatory
Commission shall be appointed; and
(2) the Office of Inspector General of the Postal Regulatory
Commission shall be established.
TITLE VII—EVALUATIONS
SEC. 701. ASSESSMENTS OF RATEMAKING, CLASSIFICATION, AND
OTHER PROVISIONS.
(a) IN GENERAL.—The Postal Regulatory Commission shall, at
least every 5 years, submit a report to the President and Congress
concerning—
(1) the operation of the amendments made by this Act;
and
(2) recommendations for any legislation or other measures
necessary to improve the effectiveness or efficiency of the postal
laws of the United States.
Deadline.
Reports.
39 USC 501 note.
Establishment.
5 USC app. 8G
note.
5 USC app. 8G.
39 USC 404 note.
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(b) POSTAL SERVICE VIEWS.—A report under this section shall
be submitted only after reasonable opportunity has been afforded
to the Postal Service to review the report and to submit written
comments on the report. Any comments timely received from the
Postal Service under the preceding sentence shall be attached to
the report submitted under subsection (a).
SEC. 702. REPORT ON UNIVERSAL POSTAL SERVICE AND THE POSTAL
MONOPOLY.
(a) REPORT BY THE POSTAL REGULATORY COMMISSION.—
(1) IN GENERAL.—Not later than 24 months after the date
of enactment of this Act, the Postal Regulatory Commission
shall submit a report to the President and Congress on uni-
versal postal service and the postal monopoly in the United
States (in this section referred to as ‘‘universal service and
the postal monopoly’’), including the monopoly on the delivery
of mail and on access to mailboxes.
(2) CONTENTS.—The report under this subsection shall
include—
(A) a comprehensive review of the history and develop-
ment of universal service and the postal monopoly,
including how the scope and standards of universal service
and the postal monopoly have evolved over time for the
Nation and its urban and rural areas;
(B) the scope and standards of universal service and
the postal monopoly provided under current law (including
sections 101 and 403 of title 39, United States Code),
and current rules, regulations, policy statements, and prac-
tices of the Postal Service;
(C) a description of any geographic areas, populations,
communities (including both urban and rural communities),
organizations, or other groups or entities not currently
covered by universal service or that are covered but that
are receiving services deficient in scope or quality or both;
and
(D) the scope and standards of universal service and
the postal monopoly likely to be required in the future
in order to meet the needs and expectations of the United
States public, including all types of mail users, based on
discussion of such assumptions, alternative sets of assump-
tions, and analyses as the Postal Service considers plau-
sible.
(b) RECOMMENDED CHANGES TO UNIVERSAL SERVICE AND THE
MONOPOLY.—The Postal Regulatory Commission shall include in
the report under subsection (a), and in all reports submitted under
section 701 of this Act—
(1) any recommended changes to universal service and
the postal monopoly as the Commission considers appropriate,
including changes that the Commission may implement under
current law and changes that would require changes to current
law, with estimated effects of the recommendations on the
service, financial condition, rates, and security of mail provided
by the Postal Service;
(2) with respect to each recommended change described
under paragraph (1)—
39 USC 501 note.
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(A) an estimate of the costs of the Postal Service attrib-
utable to the obligation to provide universal service under
current law; and
(B) an analysis of the likely benefit of the current
postal monopoly to the ability of the Postal Service to
sustain the current scope and standards of universal
service, including estimates of the financial benefit of the
postal monopoly to the extent practicable, under current
law; and
(3) such additional topics and recommendations as the
Commission considers appropriate, with estimated effects of
the recommendations on the service, financial condition, rates,
and the security of mail provided by the Postal Service.
(c) CONSULTATION.—In preparing the report required by this
section, the Postal Regulatory Commission—
(1) shall solicit written comments from the Postal Service
and consult with the Postal Service and other Federal agencies,
users of the mails, enterprises in the private sector engaged
in the delivery of the mail, and the general public; and
(2) shall address in the report any written comments
received under this section.
(d) CLARIFYING PROVISION.—Nothing in this section shall be
considered to relate to any services that are not postal services
within the meaning of section 102 of title 39, United States Code,
as amended by section 101 of this Act.
SEC. 703. STUDY ON EQUAL APPLICATION OF LAWS TO COMPETITIVE
PRODUCTS.
(a) IN GENERAL.—The Federal Trade Commission shall prepare
and submit to the President and Congress, and to the Postal Regu-
latory Commission, within 1 year after the date of enactment of
this Act, a comprehensive report identifying Federal and State
laws that apply differently to the United States Postal Service
with respect to the competitive category of mail (within the meaning
of section 102 of title 39, United States Code, as amended by
section 101) and to private companies providing similar products.
(b) RECOMMENDATIONS.—The Federal Trade Commission shall
include such recommendations as it considers appropriate for
bringing such legal differences to an end, and in the interim,
to account under section 3633 of title 39, United States Code (as
added by this Act), for the net economic effects provided by those
laws.
(c) CONSULTATION.—In preparing its report, the Federal Trade
Commission shall consult with the United States Postal Service,
the Postal Regulatory Commission, other Federal agencies, mailers,
private companies that provide delivery services, and the general
public, and shall append to such report any written comments
received under this subsection.
(d) COMPETITIVE PRODUCT REGULATION.—The Postal Regu-
latory Commission shall take into account the recommendations
of the Federal Trade Commission, and subsequent events that affect
the continuing validity of the estimate of the net economic effect,
in promulgating or revising the regulations required under section
3633 of title 39, United States Code.
SEC. 704. REPORT ON POSTAL WORKPLACE SAFETY AND WORKPLACE-
RELATED INJURIES.
(a) REPORT BY THE INSPECTOR GENERAL.—
Deadline.
Reports.
39 USC 3633
note.
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(1) IN GENERAL.—Not later than 6 months after the enact-
ment of this Act, the Inspector General of the United States
Postal Service shall submit a report to Congress and the Postal
Service that—
(A) details and assesses any progress the Postal Service
has made in improving workplace safety and reducing
workplace-related injuries nationwide; and
(B) identifies opportunities for improvement that
remain with respect to such improvements and reductions.
(2) CONTENTS.—The report under this subsection shall
also—
(A) discuss any injury reduction goals established by
the Postal Service;
(B) describe the actions that the Postal Service has
taken to improve workplace safety and reduce workplace-
related injuries, and assess how successful the Postal
Service has been in meeting its injury reduction goal; and
(C) identify areas where the Postal Service has failed
to meet its injury reduction goals, explain the reasons
why these goals were not met, and identify opportunities
for making further progress in meeting these goals.
(b) REPORT BY THE POSTAL SERVICE.—
(1) REPORT TO CONGRESS.—Not later than 6 months after
receiving the report under subsection (a), the Postal Service
shall submit a report to Congress detailing how it plans to
improve workplace safety and reduce workplace-related injuries
nationwide, including goals and metrics.
(2) PROBLEM
AREAS.—The report under this subsection
shall also include plans, developed in consultation with the
Inspector General and employee representatives, including rep-
resentatives of each postal labor union and management
association, for addressing the problem areas identified by the
Inspector General in the report under subsection (a)(2)(C).
SEC. 705. STUDY ON RECYCLED PAPER.
(a) IN GENERAL.—Within 12 months after the date of enactment
of this Act, the Government Accountability Office shall study and
submit to the Congress, the Board of Governors of the Postal
Service, and to the Postal Regulatory Commission a report
concerning—
(1) a description and analysis of the accomplishments of
the Postal Service in each of the preceding 5 years involving
recycling activities, including efforts by the Postal Service to
recycle undeliverable and discarded mail and other materials
and its public affairs efforts to promote the increased recycling
of paper products; and
(2) additional opportunities that may be available for the
United States Postal Service to engage in recycling initiatives,
including consultation with the paper recycling industry and
encouraging mailers to increase both the recycling of paper
products and the use of recycled paper, and the projected costs
and revenues of undertaking such opportunities.
(b) RECOMMENDATIONS.—The report shall include recommenda-
tions for any administrative or legislative actions that may be
appropriate.
Deadline.
Reports.
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SEC. 706. GREATER DIVERSITY IN POSTAL SERVICE EXECUTIVE AND
ADMINISTRATIVE SCHEDULE MANAGEMENT POSITIONS.
(a) IN
GENERAL.—The Board of Governors shall study and,
within 1 year after the date of the enactment of this Act, submit
to the President and Congress a report concerning the extent to
which women and minorities are represented in supervisory and
management positions within the United States Postal Service.
Any data included in the report shall be presented in the aggregate
and by pay level.
(b) PERFORMANCE EVALUATIONS.—The United States Postal
Service shall, as soon as is practicable, take such measures as
may be necessary to incorporate the affirmative action and equal
opportunity criteria contained in 4313(5) of title 5, United States
Code, into the performance appraisals of senior supervisory or
managerial employees.
SEC. 707. CONTRACTS WITH WOMEN, MINORITIES, AND SMALL
BUSINESSES.
The Board of Governors shall study and, within 1 year after
the date of the enactment of this Act, submit to the President
and the Congress a report concerning the number and value of
contracts and subcontracts the Postal Service has entered into
with women, minorities, and small businesses.
SEC. 708. RATES FOR PERIODICALS.
(a) IN GENERAL.—The United States Postal Service, acting
jointly with the Postal Regulatory Commission, shall study and
submit to the President and Congress a report concerning—
(1) the quality, accuracy, and completeness of the informa-
tion used by the Postal Service in determining the direct and
indirect postal costs attributable to periodicals; and
(2) any opportunities that might exist for improving effi-
ciencies in the collection, handling, transportation, or delivery
of periodicals by the Postal Service, including any pricing incen-
tives for mailers that might be appropriate.
(b) RECOMMENDATIONS.—The report shall include recommenda-
tions for any administrative action or legislation that might be
appropriate.
SEC. 709. ASSESSMENT OF CERTAIN RATE DEFICIENCIES.
(a) IN GENERAL.—Within 12 months after the date of the enact-
ment of this Act, the Office of Inspector General of the United
States Postal Service shall study and submit to the President,
the Congress, and the United States Postal Service, a report con-
cerning the administration of section 3626(k) of title 39, United
States Code.
(b) SPECIFIC
REQUIREMENTS.—The study and report shall
specifically address the adequacy and fairness of the process by
which assessments under section 3626(k) of title 39, United States
Code, are determined and appealable, including—
(1) whether the Postal Regulatory Commission or any other
body outside the Postal Service should be assigned a role;
and
(2) whether a statute of limitations should be established
for the commencement of proceedings by the Postal Service
thereunder.
Deadline.
Reports.
Reports.
Deadline.
Reports.
39 USC 1001
note.
Deadline.
Reports.
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SEC. 710. ASSESSMENT OF FUTURE BUSINESS MODEL OF THE POSTAL
SERVICE.
(a) GOVERNMENT
ACCOUNTABILITY
OFFICE
MANDATE.—The
Comptroller General of the United States shall prepare and submit
to the President and Congress a report that builds upon the work
of the 2002 President’s Commission on the United States Postal
Service by evaluating in-depth various options and strategies for
the long-term structural and operational reforms of the United
States Postal Service. The final report required by this section
shall be submitted within 5 years of the date of enactment of
this Act.
(b) PROTECTION
OF UNIVERSAL SERVICE.—The Government
Accountability Office may include such recommendations as it con-
siders appropriate with respect to how the Postal Service’s business
model can be maintained or transformed in an orderly manner
that will minimize adverse effects on all interested parties and
assure continued availability of affordable, universal postal service
throughout the United States. The Government Accountability
Office shall not consider any strategy or other course of action
that would pose a significant risk to the continued availability
of affordable, universal postal service throughout the United States.
(c) ELEMENTS OF REPORT.—
(1) TOPICS TO ADDRESS.—The report shall address at least
the following:
(A) Specification of nature and bases of one or more
sets of reasonable assumptions about the development of
the postal services market, to the extent that such assump-
tions may be necessary or appropriate for each strategy
identified by the Government Accountability Office.
(B) Specification of the nature and bases of one or
more sets of reasonable assumptions about the development
of the regulatory framework for postal services, to the
extent that such assumptions may be necessary or appro-
priate for each strategy identified by the Government
Accountability Office.
(C) Qualitative and, to the extent possible, quantitative
effects that each strategy identified by the Government
Accountability Office may have on universal service gen-
erally, the Postal Service, mailers, postal employees, pri-
vate companies that provide delivery services, and the gen-
eral public.
(D) Financial effects that each strategy identified by
the Government Accountability Office may have on the
Postal Service, postal employees, the Treasury of the
United States, and other affected parties, including the
American mailing consumer.
(E) Feasible and appropriate procedural steps and
timetables for implementing each strategy identified by
the Government Accountability Office.
(F) Such additional topics as the Comptroller General
shall consider necessary and appropriate.
(2) MATTERS TO CONSIDER.—For each strategy identified,
the Government Accountability Office shall assess how each
business model might—
(A) address the human-capital challenges facing the
Postal Service, including how employee-management rela-
tions within the Postal Service may be improved;
Reports.
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(B) optimize the postal infrastructure, including the
best methods for providing retail services that ensure con-
venience and access to customers;
(C) ensure the safety and security of the mail and
of postal employees;
(D) minimize areas of inefficiency or waste and improve
operations involved in the collection, processing, or delivery
of mail; and
(E) impact other matters that the Comptroller General
determines are relevant to evaluating a viable long-term
business model for the Postal Service.
(3) EXPERIENCES OF OTHER COUNTRIES.—In preparing the
report required by subsection (a), the Government Account-
ability Office shall comprehensively and quantitatively inves-
tigate the experiences of other industrialized countries that
have transformed the national post office. The Government
Accountability Office shall undertake such original research
as it deems necessary. In each case, the Government Account-
ability Office shall describe as fully as possible the costs and
benefits of transformation of the national post office on all
affected parties and shall identify any lessons that foreign
experience may imply for each strategy identified by the
research organization.
(d) OUTSIDE EXPERTS.—In preparing its study, the Government
Accountability Office may retain the services of additional experts
and consultants.
(e) CONSULTATION.—In preparing its report, the Government
Accountability Office shall consult fully with the Postal Service,
the Postal Regulatory Commission, other Federal agencies, postal
employee unions and management associations, mailers, private
companies that provide delivery services, and the general public.
The Government Accountability Office shall include with its final
report a copy of all formal written comments received under this
subsection.
(f) AUTHORIZATION OF APPROPRIATIONS.—There are authorized
to be appropriated from the Postal Service Fund such sums as
may be necessary to carry out this section.
SEC. 711. PROVISIONS RELATING TO COOPERATIVE MAILINGS.
(a) STUDY.—
(1) IN GENERAL.—The Postal Regulatory Commission shall
examine section E670.5.3 of the Domestic Mail Manual to deter-
mine whether it contains adequate safeguards to protect
against—
(A) abuses of rates for nonprofit mail; and
(B) deception of consumers.
(2) REPORT.—The Commission shall report the results of
its examination to the Postal Service, along with any rec-
ommendations that the Commission determines appropriate.
(b) FAILURE
TO ACT.—If the Postal Service fails to act on
the recommendations of the Commission, the Commission may take
such action as it determines necessary to prevent abuse of rates
or deception of consumers.
SEC. 712. DEFINITION.
For purposes of this title, the term ‘‘Board of Governors’’ has
the meaning given such term by section 102 of title 39, United
States Code.
39 USC 501 note.
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PUBLIC LAW 109–435—DEC. 20, 2006
TITLE VIII—POSTAL SERVICE RETIRE-
MENT AND HEALTH BENEFITS FUND-
ING
SEC. 801. SHORT TITLE.
This title may be cited as the ‘‘Postal Civil Service Retirement
and Health Benefits Funding Amendments of 2006’’.
SEC. 802. CIVIL SERVICE RETIREMENT SYSTEM.
(a) IN GENERAL.—Chapter 83 of title 5, United States Code,
is amended—
(1) in section 8334(a)(1)(B), by striking clause (ii) and
inserting the following:
‘‘(ii) In the case of an employee of the United States Postal
Service, no amount shall be contributed under this subparagraph.’’;
and
(2) by amending section 8348(h) to read as follows:
‘‘(h)(1) In this subsection, the term ‘Postal surplus or supple-
mental liability’ means the estimated difference, as determined
by the Office, between—
‘‘(A) the actuarial present value of all future benefits pay-
able from the Fund under this subchapter to current or former
employees of the United States Postal Service and attributable
to civilian employment with the United States Postal Service;
and
‘‘(B) the sum of—
‘‘(i) the actuarial present value of deductions to be
withheld from the future basic pay of employees of the
United States Postal Service currently subject to this sub-
chapter under section 8334;
‘‘(ii) that portion of the Fund balance, as of the date
the Postal surplus or supplemental liability is determined,
attributable to payments to the Fund by the United States
Postal Service and its employees, minus benefit payments
attributable to civilian employment with the United States
Postal Service, plus the earnings on such amounts while
in the Fund; and
‘‘(iii) any other appropriate amount, as determined by
the Office in accordance with generally accepted actuarial
practices and principles.
‘‘(2)(A) Not later than June 15, 2007, the Office shall determine
the Postal surplus or supplemental liability, as of September 30,
2006. If that result is a surplus, the amount of the surplus shall
be transferred to the Postal Service Retiree Health Benefits Fund
established under section 8909a by June 30, 2007.
‘‘(B) The Office shall redetermine the Postal surplus or supple-
mental liability as of the close of the fiscal year, for each fiscal
year beginning after September 30, 2007, through the fiscal year
ending September 30, 2038. If the result is a surplus, that amount
shall remain in the Fund until distribution is authorized under
subparagraph (C). Beginning June 15, 2017, if the result is a
supplemental liability, the Office shall establish an amortization
schedule, including a series of annual installments commencing
on September 30 of the subsequent fiscal year, which provides
for the liquidation of such liability by September 30, 2043.
Effective date.
Deadline.
Redetermination
period.
Deadlines.
5 USC 101 note.
Postal Civil
Service
Retirement and
Health Benefits
Funding
Amendments of
2006.
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‘‘(C) As of the close of the fiscal years ending September 30,
2015, 2025, 2035, and 2039, if the result is a surplus, that amount
shall be transferred to the Postal Service Retiree Health Benefits
Fund, and any prior amortization schedule for payments shall be
terminated.
‘‘(D) Amortization schedules established under this paragraph
shall be set in accordance with generally accepted actuarial prac-
tices and principles, with interest computed at the rate used in
the most recent valuation of the Civil Service Retirement System.
‘‘(E) The United States Postal Service shall pay the amounts
so determined to the Office, with payments due not later than
the date scheduled by the Office.
‘‘(3) Notwithstanding any other provision of law, in computing
the amount of any payment under any other subsection of this
section that is based upon the amount of the unfunded liability,
such payment shall be computed disregarding that portion of the
unfunded liability that the Office determines will be liquidated
by payments under this subsection.’’.
(b) CREDIT ALLOWED FOR MILITARY SERVICE.—In the applica-
tion of section 8348(g)(2) of title 5, United States Code, for the
fiscal year 2007, the Office of Personnel Management shall include,
in addition to the amount otherwise computed under that para-
graph, the amounts that would have been included for the fiscal
years 2003 through 2006 with respect to credit for military service
of former employees of the United States Postal Service as though
the Postal Civil Service Retirement System Funding Reform Act
of 2003 (Public Law 108–18) had not been enacted, and the Sec-
retary of the Treasury shall make the required transfer to the
Civil Service Retirement and Disability Fund based on that amount.
(c) REVIEW.—
(1) IN GENERAL.—
(A) REQUEST FOR REVIEW.—Notwithstanding any other
provision of this section (including any amendment made
by this section), any determination or redetermination
made by the Office of Personnel Management under this
section (including any amendment made by this section)
shall, upon request of the United States Postal Service,
be subject to a review by the Postal Regulatory Commission
under this subsection.
(B) REPORT.—Upon receiving a request under subpara-
graph (A), the Commission shall promptly procure the serv-
ices of an actuary, who shall hold membership in the Amer-
ican Academy of Actuaries and shall be qualified in the
evaluation of pension obligations, to conduct a review in
accordance with generally accepted actuarial practices and
principles and to provide a report to the Commission con-
taining the results of the review. The Commission, upon
determining that the report satisfies the requirements of
this paragraph, shall approve the report, with any com-
ments it may choose to make, and submit it with any
such comments to the Postal Service, the Office of Per-
sonnel Management, and Congress.
(2) RECONSIDERATION.—Upon receiving the report from the
Commission under paragraph (1), the Office of Personnel
Management shall reconsider its determination or redetermina-
tion in light of such report, and shall make any appropriate
adjustments. The Office shall submit a report containing the
Reports.
5 USC 8348 note.
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results of its reconsideration to the Commission, the Postal
Service, and Congress.
SEC. 803. HEALTH INSURANCE.
(a) IN GENERAL.—
(1) FUNDING.—Chapter 89 of title 5, United States Code,
is amended—
(A) in section 8906(g)(2)(A), by striking ‘‘shall be paid
by the United States Postal Service.’’ and inserting ‘‘shall
through September 30, 2016, be paid by the United States
Postal Service, and thereafter shall be paid first from the
Postal Service Retiree Health Benefits Fund up to the
amount contained in the Fund, with any remaining amount
paid by the United States Postal Service.’’; and
(B) by inserting after section 8909 the following:
‘‘§ 8909a. Postal Service Retiree Health Benefit Fund
‘‘(a) There is in the Treasury of the United States a Postal
Service Retiree Health Benefits Fund which is administered by
the Office of Personnel Management.
‘‘(b) The Fund is available without fiscal year limitation for
payments required under section 8906(g)(2)(A).
‘‘(c) The Secretary of the Treasury shall immediately invest,
in interest-bearing securities of the United States such currently
available portions of the Fund as are not immediately required
for payments from the Fund. Such investments shall be made
in the same manner as investments for the Civil Service Retirement
and Disability Fund under section 8348.
‘‘(d)(1) Not later than June 30, 2007, and by June 30 of each
succeeding year, the Office shall compute the net present value
of the future payments required under section 8906(g)(2)(A) and
attributable to the service of Postal Service employees during the
most recently ended fiscal year.
‘‘(2)(A) Not later than June 30, 2007, the Office shall compute,
and by June 30 of each succeeding year, the Office shall recompute
the difference between—
‘‘(i) the net present value of the excess of future payments
required under section 8906(g)(2)(A) for current and future
United States Postal Service annuitants as of the end of the
fiscal year ending on September 30 of that year; and
‘‘(ii)(I) the value of the assets of the Postal Retiree Health
Benefits Fund as of the end of the fiscal year ending on Sep-
tember 30 of that year; and
‘‘(II) the net present value computed under paragraph (1).
‘‘(B) Not later than June 30, 2017, the Office shall compute,
and by June 30 of each succeeding year shall recompute, a schedule
including a series of annual installments which provide for the
liquidation of any liability or surplus by September 30, 2056, or
within 15 years, whichever is later, of the net present value deter-
mined under subparagraph (A), including interest at the rate used
in that computation.
‘‘(3)(A) The United States Postal Service shall pay into such
Fund—
‘‘(i) $5,400,000,000, not later than September 30, 2007;
‘‘(ii) $5,600,000,000, not later than September 30, 2008;
‘‘(iii) $5,400,000,000, not later than September 30, 2009;
‘‘(iv) $5,500,000,000, not later than September 30, 2010;
Deadlines.
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‘‘(v) $5,500,000,000, not later than September 30, 2011;
‘‘(vi) $5,600,000,000, not later than September 30, 2012;
‘‘(vii) $5,600,000,000, not later than September 30, 2013;
‘‘(viii) $5,700,000,000, not later than September 30, 2014;
‘‘(ix) $5,700,000,000, not later than September 30, 2015;
and
‘‘(x) $5,800,000,000, not later than September 30, 2016.
‘‘(B) Not later than September 30, 2017, and by September
30 of each succeeding year, the United States Postal Service shall
pay into such Fund the sum of—
‘‘(i) the net present value computed under paragraph (1);
and
‘‘(ii) any annual installment computed under paragraph
(2)(B).
‘‘(4) Computations under this subsection shall be made con-
sistent with the assumptions and methodology used by the Office
for financial reporting under subchapter II of chapter 35 of title
31.
‘‘(5)(A)(i) Any computation or other determination of the Office
under this subsection shall, upon request of the United States
Postal Service, be subject to a review by the Postal Regulatory
Commission under this paragraph.
‘‘(ii) Upon receiving a request under clause (i), the Commission
shall promptly procure the services of an actuary, who shall hold
membership in the American Academy of Actuaries and shall be
qualified in the evaluation of healthcare insurance obligations, to
conduct a review in accordance with generally accepted actuarial
practices and principles and to provide a report to the Commission
containing the results of the review. The Commission, upon deter-
mining that the report satisfies the requirements of this subpara-
graph, shall approve the report, with any comments it may choose
to make, and submit it with any such comments to the Postal
Service, the Office of Personnel Management, and Congress.
‘‘(B) Upon receiving the report under subparagraph (A), the
Office of Personnel Management shall reconsider its determination
or redetermination in light of such report, and shall make any
appropriate adjustments. The Office shall submit a report con-
taining the results of its reconsideration to the Commission, the
Postal Service, and Congress.
‘‘(6) After consultation with the United States Postal Service,
the Office shall promulgate any regulations the Office determines
necessary under this subsection.’’.
(2) TECHNICAL AND CONFORMING AMENDMENT.—The table
of sections for chapter 89 of title 5, United States Code, is
amended by inserting after the item relating to section 8909
the following:
‘‘8909a. Postal Service Retiree Health Benefits Fund.’’.
(b) REVIEW.—
(1) IN GENERAL.—
(A) REQUEST FOR REVIEW.—Any regulation established
under section 8909a(d)(5) of title 5, United States Code
(as added by subsection (a)), shall, upon request of the
United States Postal Service, be subject to a review by
the Postal Regulatory Commission under this paragraph.
5 USC 8909a.
Regulatioins.
Reports.
Reports.
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(B) REPORT.—Upon receiving a request under subpara-
graph (A), the Commission shall promptly procure the serv-
ices of an actuary, who shall hold membership in the Amer-
ican Academy of Actuaries and shall be qualified in the
evaluation of healthcare insurance obligations, to conduct
a review in accordance with generally accepted actuarial
practices and principles and to provide a report to the
Commission containing the results of the review. The
Commission, upon determining that the report satisfies
the requirements of this paragraph, shall approve the
report, with any comments it may choose to make, and
submit it with any such comments to the Postal Service,
the Office of Personnel Management, and Congress.
(2) RECONSIDERATION.—Upon receiving the report under
paragraph (1), the Office of Personnel Management shall
reconsider its determination or redetermination in light of such
report, and shall make any appropriate adjustments. The Office
shall submit a report containing the results of its reconsider-
ation to the Commission, the Postal Service, and Congress.
SEC. 804. REPEAL OF DISPOSITION OF SAVINGS PROVISION.
(a) IN GENERAL.—Section 3 of the Postal Civil Service Retire-
ment System Funding Reform Act of 2003 (Public Law 108–18)
is repealed.
(b) SAVINGS.—Savings accrued to the Postal Service as a result
of enactment of Public Law 108–18 and attributable to fiscal year
2006 shall be transferred to the Postal Service Retiree Health
Benefits Fund established under section 8909a of title 5, United
States Code, as added by section 803 of this Act.
SEC. 805. EFFECTIVE DATES.
(a) IN GENERAL.—Except as provided under subsection (b), this
title shall take effect on October 1, 2006.
(b) TERMINATION OF EMPLOYER CONTRIBUTION.—The amend-
ment made by paragraph (1) of section 802(a) shall take effect
on the first day of the first pay period beginning on or after
October 1, 2006.
TITLE IX—COMPENSATION FOR WORK
INJURIES
SEC. 901. TEMPORARY DISABILITY; CONTINUATION OF PAY.
(a) TIME OF ACCRUAL OF RIGHT.—Section 8117 of title 5, United
States Code, is amended—
(1) by striking ‘‘An employee’’ and inserting ‘‘(a) An
employee other than a Postal Service employee’’; and
(2) by adding at the end the following:
‘‘(b) A Postal Service employee is not entitled to compensation
or continuation of pay for the first 3 days of temporary disability,
except as provided under paragraph (3) of subsection (a). A Postal
Service employee may use annual leave, sick leave, or leave without
pay during that 3-day period, except that if the disability exceeds
14 days or is followed by permanent disability, the employee may
have their sick leave or annual leave reinstated or receive pay
for the time spent on leave without pay under this section.’’.
5 USC 8334 note.
39 USC note
prec. 2001.
Reports.
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(b) 
TECHNICAL
AND
CONFORMING
AMENDMENT.—Section
8118(b)(1) of title 5, United States Code, is amended to read as
follows:
‘‘(1) without a break in time, except as provided under
section 8117(b), unless controverted under regulations of the
Secretary;’’.
TITLE X—MISCELLANEOUS
SEC. 1001. EMPLOYMENT OF POSTAL POLICE OFFICERS.
Section 3061 of title 18, United States Code, is amended by
adding at the end the following:
‘‘(c)(1) The Postal Service may employ police officers for duty
in connection with the protection of property owned or occupied
by the Postal Service or under the charge and control of the Postal
Service, and persons on that property, including duty in areas
outside the property to the extent necessary to protect the property
and persons on the property.
‘‘(2) With respect to such property, such officers shall have
the power to—
‘‘(A) enforce Federal laws and regulations for the protection
of persons and property;
‘‘(B) carry firearms; and
‘‘(C) make arrests without a warrant for any offense against
the Unites States committed in the presence of the officer
or for any felony cognizable under the laws of the United
States if the officer has reasonable grounds to believe that
the person to be arrested has committed or is committing
a felony.
‘‘(3) With respect to such property, such officers may have,
to such extent as the Postal Service may by regulations prescribe,
the power to—
‘‘(A) serve warrants and subpoenas issued under the
authority of the United States; and
‘‘(B) conduct investigations, on and off the property in
question, of offenses that may have been committed against
property owned or occupied by the Postal Service or persons
on the property.
‘‘(4)(A) As to such property, the Postmaster General may pre-
scribe regulations necessary for the protection and administration
of property owned or occupied by the Postal Service and persons
on the property. The regulations may include reasonable penalties,
within the limits prescribed in subparagraph (B), for violations
of the regulations. The regulations shall be posted and remain
posted in a conspicuous place on the property.
‘‘(B) A person violating a regulation prescribed under this
subsection shall be fined under this title, imprisoned for not
more than 30 days, or both.’’.
SEC. 1002. OBSOLETE PROVISIONS.
(a) REPEAL.—
(1) IN GENERAL.—Chapter 52 of title 39, United States
Code, is repealed.
(2) CONFORMING AMENDMENTS.—(A) Section 5005(a) of title
39, United States Code, is amended—
39 USC 5201 et
seq.
Penalty.
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(i) by striking paragraph (1), and by redesignating
paragraphs (2) through (4) as paragraphs (1) through (3),
respectively; and
(ii) in paragraph (3) (as so designated by clause (i)),
by striking ‘‘(as defined in section 5201(6) of this title)’’.
(B) Section 5005(b) of such title 39 is amended by striking
‘‘(a)(4)’’ each place it appears and inserting ‘‘(a)(3)’’.
(C) Section 5005(c) of such title 39 is amended by striking
‘‘by carrier or person under subsection (a)(1) of this section,
by contract under subsection (a)(4) of this section, or’’ and
inserting ‘‘by contract under subsection (a)(3) of this section
or’’.
(b) ELIMINATING RESTRICTION
ON LENGTH
OF CONTRACTS.—
(1) Section 5005(b)(1) of title 39, United States Code, is amended
by striking ‘‘(or where the Postal Service determines that special
conditions or the use of special equipment warrants, not in excess
of 6 years)’’ and inserting ‘‘(or such longer period of time as may
be determined by the Postal Service to be advisable or appropriate)’’.
(2) Section 5402(d) of such title 39 is amended by striking
‘‘for a period of not more than 4 years’’.
(3) Section 5605 of such title 39 is amended by striking ‘‘for
periods of not in excess of 4 years’’.
(c) TECHNICAL AND CONFORMING AMENDMENT.—The table of
chapters for part V of title 39, United States Code, is amended
by repealing the item relating to chapter 52.
SEC. 1003. REDUCED RATES.
Section 3626 of title 39, United States Code, is amended—
(1) in subsection (a), by striking all before paragraph (4)
and inserting the following:
‘‘(a)(1) Except as otherwise provided in this section, rates of
postage for a class of mail or kind of mailer under former section
4358, 4452(b), 4452(c), 4554(b), or 4554(c) of this title shall be
established in accordance with section 3622.
‘‘(2) For the purpose of this subsection, the term ‘regular-rate
category’ means any class of mail or kind of mailer, other than
a class or kind referred to in section 2401(c).
‘‘(3) Rates of postage for a class of mail or kind of mailer
under former section 4358(a) through (c) of this title shall be estab-
lished so that postage on each mailing of such mail reflects its
preferred status as compared to the postage for the most closely
corresponding regular-rate category mailing.’’;
(2) in subsection (g), by adding at the end the following:
‘‘(3) For purposes of this section and former section 4358(a)
through (c) of this title, those copies of an issue of a publication
entered within the county in which it is published, but distributed
outside such county on postal carrier routes originating in the
county of publication, shall be treated as if they were distributed
within the county of publication.
‘‘(4)(A) In the case of an issue of a publication, any number
of copies of which are mailed at the rates of postage for a class
of mail or kind of mailer under former section 4358(a) through
(c) of this title, any copies of such issue which are distributed
outside the county of publication (excluding any copies subject to
paragraph (3)) shall be subject to rates of postage provided for
under this paragraph.
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‘‘(B) The rates of postage applicable to mail under this para-
graph shall be established in accordance with section 3622.
‘‘(C) This paragraph shall not apply with respect to an issue
of a publication unless the total paid circulation of such issue
outside the county of publication (not counting recipients of copies
subject to paragraph (3)) is less than 5,000.’’; and
(3) by adding at the end the following:
‘‘(n) In the administration of this section, matter that satisfies
the circulation standards for requester publications shall not be
excluded from being mailed at the rates for mail under former
section 4358 solely because such matter is designed primarily for
free circulation or for circulation at nominal rates, or fails to meet
the requirements of former section 4354(a)(5).’’.
SEC. 1004. SENSE OF CONGRESS REGARDING POSTAL SERVICE PUR-
CHASING REFORM.
It is the sense of Congress that the Postal Service should—
(1) ensure the fair and consistent treatment of suppliers
and contractors in its current purchasing policies and any revi-
sion or replacement of such policies, such as through the use
of competitive contract award procedures, effective dispute reso-
lution mechanisms, and socioeconomic programs; and
(2) implement commercial best practices in Postal Service
purchasing policies to achieve greater efficiency and cost
savings by taking full advantage of private-sector partnerships
as recommended in July 2003 by the President’s Commission
on the United States Postal Service.
SEC. 1005. CONTRACTS FOR TRANSPORTATION OF MAIL BY AIR.
(a) DEFINITIONS.—Section 5402(a) of title 39, United States
Code, is amended—
(1) in paragraph (4), by striking ‘‘(g)(1)(D)(i)’’ and inserting
‘‘(g)(1)(A)(iv)(I)’’;
(2) in paragraph (5), by striking ‘‘(g)(1)(D)(i)’’ and inserting
‘‘(g)(1)(A)(iv)(I)’’;
(3) in paragraph (8), by striking ‘‘rates paid to a bush
carrier’’ and inserting ‘‘linehaul rates and a single terminal
handling payment at a bush terminal handling rate paid to
a bush carrier’’;
(4) in paragraph (11), by striking ‘‘(g)(1)(D)(ii)’’ and
inserting ‘‘(g)(1)(A)(iv)(II)’’; and
(5) in paragraph (13)—
(A) in subparagraph (A)—
(i) by striking ‘‘clause (i) or (ii) of subsection
(g)(1)(D)’’ and inserting ‘‘subclause (I) or (II) of sub-
section (g)(1)(A)(iv)’’; and
(ii) by striking ‘‘and’’ after the semicolon;
(B) in subparagraph (B), by adding ‘‘and’’ after the
semicolon; and
(C) by adding at the end the following:
‘‘(C) is not comprised of previously qualified existing
mainline carriers as a result of merger or sale;’’.
(b) NONPRIORITY BYPASS MAIL.—Section 5402(g) of title 39,
United States Code, is amended—
(1) in paragraph (3), by adding at the end the following:
‘‘(C) When a new hub results from a change in a
determination under subparagraph (B), mail tender from
that hub during the 12-month period beginning on the
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PUBLIC LAW 109–435—DEC. 20, 2006
effective date of that change shall be based on the pas-
senger and freight shares to the destinations of the affected
hub or hubs resulting in the new hub.’’; and
(2) in paragraph (5)(A)(i), by striking ‘‘(g)(1)(D)(ii)’’ and
inserting ‘‘(g)(1)(A)(iv)(II)’’.
(c) EQUITABLE TENDER.—Section 5402(h) of title 39, United
States Code, is amended—
(1) in paragraph (1), by inserting ‘‘bush’’ after ‘‘providing
scheduled’’;
(2) by striking paragraph (3) and inserting the following:
‘‘(3)(A) Except as provided under subparagraph (C), a new
or existing 121 bush passenger carrier qualified under sub-
section (g)(1) shall be exempt from the requirements under
paragraphs (1)(B) and (2)(A) on a city pair route for a period
which shall extend for—
‘‘(i) 1 year;
‘‘(ii) 1 year in addition to the extension under clause
(i) if, as of the conclusion of the first year, such carrier
has been providing not less than 5 percent of the passenger
service on that route (as calculated under paragraph (5));
and
‘‘(iii) 1 year in addition to the extension under clause
(ii) if, as of the conclusion of the second year, such carrier
has been providing not less than 10 percent of the pas-
senger service on that route (as calculated under paragraph
(5)).
‘‘(B)(i) The first 3 121 bush passenger carriers entitled
to the exemptions under subparagraph (A) on any city pair
route shall divide no more than an additional 10 percent of
the mail, apportioned equally, comprised of no more than—
‘‘(I) 5 percent of the share of each qualified passenger
carrier servicing that route that is not a 121 bush passenger
carrier; and
‘‘(II) 5 percent of the share of each nonpassenger carrier
servicing that route that transports 25 percent or more
of the total nonmail freight under subsection (i)(1).
‘‘(ii) Additional 121 bush passenger carriers entering service
on that city pair route after the first 3 shall not receive any
additional mail share.
‘‘(iii) If any 121 bush passenger carrier on a city pair
route receiving an additional share of the mail under clause
(ii) discontinues service on that route, the 121 bush passenger
carrier that has been providing the longest period of service
on that route and is otherwise eligible but is not receiving
a share by reason of clause (ii), shall receive the share of
the carrier discontinuing service.
‘‘(C) Notwithstanding the requirements of this subsection,
if only 1 passenger carrier or aircraft is qualified to be tendered
nonpriority bypass mail as a passenger carrier or aircraft on
a city pair route in the State of Alaska, the Postal Service
shall tender 20 percent of the nonpriority bypass mail described
under paragraph (1) to the passenger carrier or aircraft pro-
viding at least 10 percent of the passenger service on such
route.’’;
(3) in paragraph (5)(A)—
(A) by striking ‘‘(i)’’ after ‘‘(A)’’; and
(B) by striking clause (ii).
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120 STAT. 3258
PUBLIC LAW 109–435—DEC. 20, 2006
(d) PERCENT OF NONMAIL FREIGHT.—Section 5402(i)(6) of title
39, United States Code, is amended—
(1) by striking ‘‘(A)’’ after ‘‘(6)’’; and
(2) by striking subparagraph (B).
(e) PERCENT OF TENDER RATE.—Section 5402(j)(3)(B) of title
39, United States Code, is amended by striking ‘‘bush routes in
the State of Alaska’’ and inserting ‘‘routes served exclusively by
bush carriers in the State of Alaska’’.
(f) DETERMINATION
OF RATES.—Section 5402(k) of title 39,
United States Code, is amended by striking paragraph (5).
(g) 
TECHNICAL
AND
CONFORMING
AMENDMENT.—Section
5402(p)(3) of title 39, United States Code, is amended by striking
‘‘(g)(1)(D)’’ and inserting ‘‘(g)(1)(A)(iv)’’.
(h) EFFECTIVE DATE.—
(1) IN GENERAL.—Except as provided under paragraph (2),
this section shall take effect on the date of enactment of this
Act.
(2) EQUITABLE TENDER.—Subsection (c) shall take effect
on December 1, 2006.
SEC. 1006. DATE OF POSTMARK TO BE TREATED AS DATE OF APPEAL
IN CONNECTION WITH THE CLOSING OR CONSOLIDATION
OF POST OFFICES.
(a) IN GENERAL.—Section 404(b) of title 39, United States Code,
is amended by adding at the end the following:
‘‘(6) For purposes of paragraph (5), any appeal received by
the Commission shall—
‘‘(A) if sent to the Commission through the mails, be consid-
ered to have been received on the date of the Postal Service
postmark on the envelope or other cover in which such appeal
is mailed; or
‘‘(B) if otherwise lawfully delivered to the Commission,
be considered to have been received on the date determined
based on any appropriate documentation or other indicia (as
determined under regulations of the Commission).’’.
(b) EFFECTIVE DATE.—This section and the amendments made
by this section shall apply with respect to any determination to
close or consolidate a post office which is first made available,
in accordance with paragraph (3) of section 404(b) of title 39,
United States Code, after the end of the 3-month period beginning
on the date of the enactment of this Act.
SEC. 1007. PROVISIONS RELATING TO BENEFITS UNDER CHAPTER 81
OF TITLE 5, UNITED STATES CODE, FOR OFFICERS AND
EMPLOYEES OF THE FORMER POST OFFICE DEPART-
MENT.
(a) IN GENERAL.—Section 8 of the Postal Reorganization Act
(39 U.S.C. 1001 note) is amended by inserting ‘‘(a)’’ after ‘‘8.’’ and
by adding at the end the following:
‘‘(b) For purposes of chapter 81 of title 5, United States Code,
the Postal Service shall, with respect to any individual receiving
benefits under such chapter as an officer or employee of the former
Post Office Department, have the same authorities and responsibil-
ities as it has with respect to an officer or employee of the Postal
Service receiving such benefits.’’.
(b) EFFECTIVE DATE.—This section and the amendments made
by this section shall be effective as of the first day of the fiscal
year in which this Act is enacted.
39 USC 1001
note.
39 USC 404 note.
39 USC 5402
note.
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PUBLIC LAW 109–435—DEC. 20, 2006
SEC. 1008. HAZARDOUS MATTER.
(a) NONMAILABILITY GENERALLY.—Section 3001 of title 39,
United States Code, is amended—
(1) by redesignating subsection (n) as subsection (o); and
(2) by inserting after subsection (m) the following:
‘‘(n)(1) Except as otherwise authorized by law or regulations
of the Postal Service, hazardous material is nonmailable.
‘‘(2) In this subsection, the term ‘hazardous material’ means
a substance or material designated by the Secretary of Transpor-
tation under section 5103(a) of title 49.’’.
(b) MAILABILITY.—Chapter 30 of title 39, United States Code,
is amended by adding at the end the following:
‘‘§ 3018. Hazardous material
‘‘(a) IN GENERAL.—The Postal Service shall prescribe regula-
tions for the safe transportation of hazardous material in the mail.
‘‘(b) PROHIBITIONS.—No person may—
‘‘(1) mail or cause to be mailed hazardous material that
has been declared by statute or Postal Service regulation to
be nonmailable;
‘‘(2) mail or cause to be mailed hazardous material in
violation of any statute or Postal Service regulation restricting
the time, place, or manner in which hazardous material may
be mailed; or
‘‘(3) manufacture, distribute, or sell any container, pack-
aging kit, or similar device that—
‘‘(A) is represented, marked, certified, or sold by such
person for use in the mailing of hazardous material; and
‘‘(B) fails to conform with any statute or Postal Service
regulation setting forth standards for a container, pack-
aging kit, or similar device used for the mailing of haz-
ardous material.
‘‘(c) CIVIL PENALTY; CLEAN-UP COSTS AND DAMAGES.—
‘‘(1) IN GENERAL.—A person who knowingly violates this
section or a regulation prescribed under this section shall be
liable for—
‘‘(A) a civil penalty of at least $250, but not more
than $100,000, for each violation;
‘‘(B) the costs of any clean-up associated with each
violation; and
‘‘(C) damages.
‘‘(2) KNOWING ACTION.—A person acts knowingly for pur-
poses of paragraph (1) when—
‘‘(A) the person has actual knowledge of the facts giving
rise to the violation; or
‘‘(B) a reasonable person acting in the circumstances
and exercising reasonable care would have had that knowl-
edge.
‘‘(3) SEPARATE VIOLATIONS.—
‘‘(A) VIOLATIONS
OVER
TIME.—A separate violation
under this subsection occurs for each day hazardous mate-
rial, mailed or caused to be mailed in noncompliance with
this section, is in the mail.
‘‘(B) SEPARATE ITEMS.—A separate violation under this
subsection occurs for each item containing hazardous mate-
rial that is mailed or caused to be mailed in noncompliance
with this section.
Regulations.
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PUBLIC LAW 109–435—DEC. 20, 2006
‘‘(d) HEARINGS.—The Postal Service may determine that a per-
son has violated this section or a regulation prescribed under this
section only after notice and an opportunity for a hearing. Pro-
ceedings under this section shall be conducted in accordance with
section 3001(m).
‘‘(e) PENALTY CONSIDERATIONS.—In determining the amount
of a civil penalty for a violation of this section, the Postal Service
shall consider—
‘‘(1) the nature, circumstances, extent, and gravity of the
violation;
‘‘(2) with respect to the person who committed the violation,
the degree of culpability, any history of prior violations, the
ability to pay, and any effect on the ability to continue in
business;
‘‘(3) the impact on Postal Service operations; and
‘‘(4) any other matters that justice requires.
‘‘(f) CIVIL ACTIONS TO COLLECT.—
‘‘(1) IN
GENERAL.—In accordance with section 409(d), a
civil action may be commenced in an appropriate district court
of the United States to collect a civil penalty, clean-up costs,
and damages assessed under subsection (c).
‘‘(2) COMPROMISE.—The Postal Service may compromise the
amount of a civil penalty, clean-up costs, and damages assessed
under subsection (c) before commencing a civil action with
respect to such civil penalty, clean-up costs, and damages under
paragraph (1).
‘‘(g) CIVIL JUDICIAL PENALTIES.—
‘‘(1) IN GENERAL.—At the request of the Postal Service,
the Attorney General may bring a civil action in an appropriate
district court of the United States to enforce this section or
a regulation prescribed under this section.
‘‘(2) RELIEF.—The court in a civil action under paragraph
(1) may award appropriate relief, including a temporary or
permanent injunction, civil penalties as determined in accord-
ance with this section, or punitive damages.
‘‘(3) CONSTRUCTION.—A civil action under this subsection
shall be in lieu of civil penalties for the same violation under
subsection (c)(1)(A).
‘‘(h) DEPOSIT OF AMOUNTS COLLECTED.—
‘‘(1) POSTAL
SERVICE
FUND.—Except as provided under
paragraph (2), amounts collected under subsection (c)(1)(B) and
(C) shall be deposited into the Postal Service Fund under
section 2003.
‘‘(2) 
TREASURY.—Amounts 
collected 
under 
subsection
(c)(1)(A) and any punitive damages collected under subsection
(c)(1)(C) shall be deposited into the Treasury of the United
States.’’.
(c) CONFORMING AMENDMENTS.—(1) Section 2003(b) of title 39,
United States Code, is amended—
(A) in paragraph (7), by striking ‘‘and’’ after the semicolon;
(B) in paragraph (8), by striking ‘‘purposes.’’ and inserting
‘‘purposes; and’’; and
(C) by adding at the end the following:
‘‘(9) any amounts collected under section 3018.’’.
(2) The analysis for chapter 30 of title 39, United States Code,
is amended by adding at the end the following:
‘‘3018. Hazardous material.’’.
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PUBLIC LAW 109–435—DEC. 20, 2006
(d) INJURIOUS ARTICLES AS NONMAILABLE.—Section 1716(a) of
title 18, United States Code, is amended by inserting after ‘‘explo-
sives,’’ the following: ‘‘hazardous materials,’’.
SEC. 1009. ZIP CODES AND RETAIL HOURS.
(a) ZIP CODES.—Not later than September 30, 2007, the United
States Postal Service shall assign a single, unified ZIP code to
serve, as nearly as practicable, each of the following communities:
(1) Auburn Township, Ohio.
(2) Hanahan, South Carolina.
(3) Bradbury, California.
(4) Discovery Bay, California.
(b) RETAIL HOURS.—Not later than 60 days after the date
of the enactment of this Act, the United States Postal Service
shall provide the same window service hours for the Fairport Harbor
Branch of the United States Post Office in Painesville, Ohio, as
were in effect as of December 1, 2005.
SEC. 1010. TECHNICAL AND CONFORMING AMENDMENTS.
(a) REIMBURSEMENT.—Section 3681 of title 39, United States
Code, is amended by striking ‘‘section 3628’’ and inserting ‘‘sections
3662 through 3664’’.
(b) SIZE AND WEIGHT LIMITS.—Section 3682 of title 39, United
States Code, is amended to read as follows:
‘‘§ 3682. Size and weight limits
‘‘The Postal Service may establish size and weight limitations
for mail matter in the market-dominant category of mail consistent
with regulations the Postal Regulatory Commission may prescribe
under section 3622. The Postal Service may establish size and
weight limitations for mail matter in the competitive category of
mail consistent with its authority under section 3632.’’.
(c) REVENUE FOREGONE, ETC.—Title 39, United States Code,
is amended—
(1) in section 503 (as so redesignated by section 601),
by striking ‘‘this chapter.’’ and inserting ‘‘this title.’’; and
(2) in section 2401(d), by inserting ‘‘(as last in effect before
enactment of the Postal Accountability and Enhancement Act)’’
after ‘‘3626(a)’’ and after ‘‘3626(a)(3)(B)(ii)’’.
(d) APPROPRIATIONS AND REPORTING REQUIREMENTS.—
(1) APPROPRIATIONS.—Subsection (e) of section 2401 of title
39, United States Code, is amended—
(A) by striking ‘‘Committee on Post Office and Civil
Service’’ each place it appears and inserting ‘‘Committee
on Government Reform’’; and
(B) by striking ‘‘Not later than March 15 of each year,’’
and inserting ‘‘Each year,’’.
(2) REPORTING
REQUIREMENTS.—Sections 2803(a) and
2804(a) of title 39, United States Code, are amended by striking
‘‘2401(g)’’ and inserting ‘‘2401(e)’’.
(e) AUTHORITY
TO
FIX
RATES
AND
CLASSES
GENERALLY;
REQUIREMENT RELATING
TO LETTERS SEALED AGAINST INSPEC-
TION.—Section 404 of title 39, United States Code (as amended
by section 102) is further amended by redesignating subsections
(b) and (c) as subsections (d) and (e), respectively, and by inserting
after subsection (a) the following:
‘‘(b) Except as otherwise provided, the Governors are authorized
to establish reasonable and equitable classes of mail and reasonable
Deadlines.
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and equitable rates of postage and fees for postal services in accord-
ance with the provisions of chapter 36. Postal rates and fees shall
be reasonable and equitable and sufficient to enable the Postal
Service, under best practices of honest, efficient, and economical
management, to maintain and continue the development of postal
services of the kind and quality adapted to the needs of the United
States.
‘‘(c) The Postal Service shall maintain one or more classes
of mail for the transmission of letters sealed against inspection.
The rate for each such class shall be uniform throughout the United
States, its territories, and possessions. One such class shall provide
for the most expeditious handling and transportation afforded mail
matter by the Postal Service. No letter of such a class of domestic
origin shall be opened except under authority of a search warrant
authorized by law, or by an officer or employee of the Postal
Service for the sole purpose of determining an address at which
the letter can be delivered, or pursuant to the authorization of
the addressee.’’.
(f) LIMITATIONS.—Section 3684 of title 39, United States Code,
is amended by striking all that follows ‘‘any provision’’ and inserting
‘‘of this title.’’.
(g) 
MISCELLANEOUS.—Title 
39, 
United 
States 
Code, 
is
amended—
(1) in section 1005(d)(2)—
(A) by striking ‘‘subsection (g) of section 5532,’’; and
(B) by striking ‘‘8344,’’ and inserting ‘‘8344’’;
(2) in the analysis for part III, by striking the item relating
to chapter 28 and inserting the following:
‘‘28. Strategic Planning and Performance Management ........................... 2801’’;
(3) in section 3005(a)—
(A) in the matter before paragraph (1), by striking
all that follows ‘‘nonmailable’’ and precedes ‘‘(h),’’ and
inserting ‘‘under section 3001(d),’’; and
(B) in the sentence following paragraph (3), by striking
all that follows ‘‘nonmailable’’ and precedes ‘‘(h),’’ and
inserting ‘‘under such section 3001(d),’’;
(4) in section 3210(a)(6)(C), by striking the matter after
‘‘if such mass mailing’’ and before ‘‘than 60 days’’ and inserting
‘‘is postmarked fewer’’; and
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120 STAT. 3263
PUBLIC LAW 109–435—DEC. 20, 2006
LEGISLATIVE HISTORY—H.R. 6407 (S. 662):
CONGRESSIONAL RECORD, Vol. 152 (2006):
Dec. 8, considered and passed House and Senate.
WEEKLY COMPILATION OF PRESIDENTIAL DOCUMENTS, Vol. 42 (2006):
Dec. 20, Presidential statement.
(5) by striking the heading for section 3627 and inserting
the following:
‘‘§ 3627. Adjusting free rates’’.
Approved December 20, 2006.
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