[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[S. 2468 Introduced in Senate (IS)]







108th CONGRESS
  2d Session
                                S. 2468

            To reform the postal laws of the United States.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                              May 20, 2004

 Ms. Collins (for herself, Mr. Carper, Mr. Stevens, Mr. Voinovich, Mr. 
   Sununu, Mr. Lieberman, Mr. Akaka, and Mr. Durbin) introduced the 
 following bill; which was read twice and referred to the Committee on 
                          Governmental Affairs

_______________________________________________________________________

                                 A BILL


 
            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 
Accountability 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.
                      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.
                TITLE VI--ENHANCED REGULATORY COMMISSION

Sec. 601. Reorganization and modification of certain provisions 
                            relating to the Postal Regulatory 
                            Commission.
Sec. 602. Authority for Postal Regulatory Commission to issue 
                            subpoenas.
Sec. 603. Appropriations for the Postal Regulatory Commission.
Sec. 604. Redesignation of the Postal Rate Commission.
Sec. 605. Financial transparency.
                         TITLE VII--EVALUATIONS

Sec. 701. Assessments of ratemaking, classification, and other 
                            provisions.
Sec. 702. Report on universal postal service and the postal monopoly.
Sec. 703. Study on equal application of laws to competitive products.
   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.
Sec. 902. Disability retirement for postal employees.

                 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 physical delivery of 
        letters, printed matter, or packages weighing up to 70 pounds, 
        including physical acceptance, collection, sorting, 
        transportation, or other services ancillary thereto;
            ``(6) `product' means a postal service with a distinct cost 
        or market characteristic for which a rate is 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 
        subchapter 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.''.

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) Nothing in this title shall be considered to permit or 
require that the Postal Service provide any special nonpostal or 
similar services.''.
    (b) Conforming Amendments.--(1) 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)''.
    (2) Section 2003(b)(1) of title 39, United States Code, is amended 
by striking ``and nonpostal''.

                    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, 3622, and 3623 and inserting the 
following:
``Sec. 3621. Applicability; definitions
    ``(a) Applicability.--This subchapter shall apply with respect to--
            ``(1) first-class mail letters;
            ``(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,
subject to any changes the Postal Regulatory Commission may make under 
section 3642.
    ``(b) Rule of Construction.--Mail matter referred to in subsection 
(a) shall, for purposes of this subchapter, be considered to have the 
meaning given to such mail matter under the mail classification 
schedule.
``Sec. 3622. Modern rate regulation
    ``(a) Authority Generally.--The Postal Regulatory Commission shall, 
within 12 months after the date of the enactment of this section, by 
regulation establish (and may from time to time thereafter 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:
            ``(1) To reduce the administrative burden and increase the 
        transparency of the ratemaking process.
            ``(2) To create predictability and stability in rates.
            ``(3) To maximize incentives to reduce costs and increase 
        efficiency.
            ``(4) To enhance mail security and deter terrorism by 
        promoting secure, sender-identified mail.
            ``(5) To allow the Postal Service pricing flexibility, 
        including the ability to use pricing to promote intelligent 
        mail and encourage increased mail volume during nonpeak 
        periods.
            ``(6) To assure adequate revenues, including retained 
        earnings, to maintain financial stability and meet the service 
        standards established under section 3691.
            ``(7) To allocate the total institutional costs of the 
        Postal Service equitably between market-dominant and 
        competitive products.
    ``(c) Factors.--In establishing or revising such system, the Postal 
Regulatory Commission shall take into account--
            ``(1) the establishment and maintenance of a fair and 
        equitable schedule for rates and classification system;
            ``(2) 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 
        transportation, and priority of delivery;
            ``(3) the direct and indirect postal costs attributable to 
        each class or type of mail service plus that portion of all 
        other costs of the Postal Service reasonably assignable to such 
        class or type;
            ``(4) 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;
            ``(5) the available alternative means of sending and 
        receiving letters and other mail matter at reasonable costs;
            ``(6) 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;
            ``(7) 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;
            ``(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 from the 
        point of view of both the user and of the Postal Service;
            ``(11) the educational, cultural, scientific, and 
        informational value to the recipient of mail matter; and
            ``(12) the policies of this title as well as such other 
        factors as the Commission deems appropriate.
    ``(d) Requirements.--The system for regulating rates and classes 
for market-dominant products shall--
            ``(1) require the Postal Rate Commission to set annual 
        limitations on the percentage changes in rates based on 
        inflation using indices, such as the Consumer Price Index, the 
        Employment Cost Index, the Gross Domestic Product Price Index, 
        or any similar measure as the Postal Rate Commission may 
        prescribe;
            ``(2) establish a schedule whereby rates, when necessary 
        and appropriate, would increase at regular intervals by 
        predictable amounts;
            ``(3) not later than 45 days before the implementation of 
        any adjustment in rates under this section--
                    ``(A) require the Postal Service to provide public 
                notice of the adjustment;
                    ``(B) provide an opportunity for review by the 
                Postal Rate Commission;
                    ``(C) provide for the Postal Rate Commission to 
                notify the Postal Service of any noncompliance of the 
                adjustment with the limitation under paragraph (1); and
                    ``(D) require the Postal Service to respond to the 
                notice provided under subparagraph (C) and describe the 
                actions to be taken to comply with the limitation under 
                paragraph (1);
            ``(4) notwithstanding any limitation set under paragraphs 
        (1) and (3), establish procedures whereby rates may be adjusted 
        on an expedited basis due to unexpected and extraordinary 
        circumstances.
    ``(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) Regulations.--As part of the regulations established 
        under subsection (a), the Postal Regulatory Commission shall 
        establish rules for workshare discounts that 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 
                        or with a change to an existing postal service; 
                        and
                            ``(ii) necessary to induce mailer behavior 
                        that furthers the economically efficient 
                        operation of the Postal Service;
                    ``(B) a reduction in the discount would--
                            ``(i) lead to a loss of volume in the 
                        affected category of mail and reduce the 
                        aggregate contribution to institutional costs 
                        of the Postal Service from the mail 
matter subject to the discount below what it otherwise would have been 
if the discount had not been reduced to costs avoided;
                            ``(ii) result in a further increase in the 
                        rates paid by mailers not able to take 
                        advantage of the discount; or
                            ``(iii) impede the efficient operation of 
                        the Postal Service;
                    ``(C) the amount of the discount above costs 
                avoided--
                            ``(i) is necessary to mitigate rate shock; 
                        and
                            ``(ii) will be phased out over time;
                    ``(D) the workshare discount is provided in 
                connection with subclasses of mail consisting 
                exclusively of mail matter of educational, cultural, or 
                scientific value; or
                    ``(E) the Postal Regulatory Commission determines 
                that such discounts are reasonable and equitable and 
                consistent with the objectives and factors taken into 
                account under subsections (b) and (c).
            ``(3) Report.--Whenever the Postal Service establishes or 
        maintains a workshare discount, the Postal Service shall, at 
        the time it publishes the workshare discount rate, submit to 
        the Postal Regulatory Commission a detailed report and 
        explanation of the Postal Service's reasons for establishing or 
        maintaining the rate, setting forth the data, economic 
        analyses, and other information relied on by the Postal Service 
        to justify the rate.
    ``(f) Transition Rule.--Until regulations under this section first 
take effect, rates and classes for market-dominant products shall 
remain subject to modification in accordance with the provisions of 
this chapter and section 407, as such provisions were last in effect 
before the date of the enactment of this section.
``Sec. 3623. Service agreements for market-dominant products
    ``(a) In General.--
            ``(1) Authority.--The Postal Service may enter into service 
        agreements with a customer or group of customers that provide 
        for the provision of postal services under terms, conditions, 
        or service standards that differ from those that would apply 
        under the otherwise applicable classification of market-
        dominant mail.
            ``(2) Agreements.--An agreement under this section may 
        involve--
                    ``(A) performance by the contracting mail user of 
                mail preparation, processing, transportation, or other 
                functions;
                    ``(B) performance by the Postal Service of 
                additional mail preparation, processing, 
                transportation, or other functions; or
                    ``(C) other terms and conditions that meet the 
                requirements of subsections (b) and (c).
    ``(b) Requirements.--A service agreement under this section may be 
entered into only if each of the following conditions is met:
            ``(1) The total revenue generated under the agreement--
                    ``(A) will cover all Postal Service costs 
                attributable to the postal services covered by the 
                agreement; and
                    ``(B) will result in no less contribution to the 
                institutional costs of the Postal Service than would 
                have been generated had the agreement not been entered 
                into.
            ``(2) Rates or fees for other mailers will not increase as 
        a result of the agreement.
            ``(3) The agreement pertains exclusively to products in the 
        market-dominant category of mail.
            ``(4) The agreement will not preclude or materially hinder 
        similarly situated mail users from entering into agreements 
        with the Postal Service on the same, or substantially the same 
        terms or conditions, and the Postal Service remains willing and 
        able to enter into such.
    ``(c) Limitations.--A service agreement under this section shall--
            ``(1) be for a term not to exceed 3 years; and
            ``(2) provide that such agreement shall be subject to the 
        cancellation authority of the Commission under section 3662.
    ``(d) Notice Requirements.--
            ``(1) In general.--At least 30 days before a service 
        agreement under this section is to take effect, the Postal 
        Service shall file with the Postal Regulatory Commission and 
        publish in the Federal Register the following information with 
        respect to such agreement:
                    ``(A) A description of the postal services the 
                agreement involves.
                    ``(B) A description of the functions the customer 
                is to perform under the agreement.
                    ``(C) A description of the functions the Postal 
                Service is to perform under the agreement.
                    ``(D) The rates and fees payable by the customer 
                during the term of the agreement.
                    ``(E) With respect to each condition under 
                subsection (b), information sufficient to demonstrate 
                the bases for the view of the Postal Service that such 
                condition would be met.
            ``(2) Agreements less than national in scope.--In the case 
        of a service agreement under this section that is less than 
        national in scope, the information described under paragraph 
        (1) shall also be published by the Postal Service in a manner 
        designed to afford reasonable notice to persons within any 
        geographic area to which such agreement (or any amendment to 
        that agreement) pertains.
    ``(e) Equal Treatment Required.--If the Postal Service enters into 
a service agreement with a mailer under this section, the Postal 
Service shall make such agreement available to similarly situated 
mailers on functionally equivalent terms and conditions consistent with 
the regulatory system established under section 3622 without 
unreasonable distinctions based on mailer profiles, provided that such 
distinctions, if ignored, would not render any subsequent agreement 
uneconomic or impractical.
    ``(f) Complaints.--Any person who believes that a service agreement 
under this section is not in conformance with the requirements of this 
section, or who is aggrieved by a decision of the Postal Service not to 
enter into an agreement under this section, may file a complaint with 
the Postal Regulatory Commission in accordance with section 3662.
    ``(g) Postal Regulatory Commission Role.--
            ``(1) Regulations.--The Postal Regulatory Commission may 
        promulgate such regulations regarding service agreements as the 
        Commission determines necessary to implement the requirements 
        of this section.
            ``(2) Review.--The Postal Regulatory Commission may review 
        any agreement or proposed agreement under this section and may 
        suspend, cancel, or prevent such agreement if the Commission 
        finds that the agreement does not meet the requirements of this 
        section.
    ``(h) Interpretation.--The determination of whether the revenue 
generated under the agreement meets the requirements of subsection 
(b)(1)(B) shall be based, to the extent practicable, on the actual 
contribution of the mail involved, not on the average contribution made 
by the mail classification most similar to the services performed under 
the agreement. If mailer-specific data is not available, the bases for 
the determination used shall be provided and shall include a discussion 
of the suitability of the data used, in accordance with regulations 
established by the Postal Regulatory Commission.''.
    (b) Repealed Sections.--Sections 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

``Sec. 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.
    ``(c) Rule of Construction.--Mail matter referred to in subsection 
(a) shall, for purposes of this subchapter, be considered to have the 
meaning given to such mail matter under the mail classification 
schedule.
    ``(d) Limitation.--Notwithstanding any other provision of this 
section, nothing in this subchapter shall be considered to apply with 
respect to any product then currently in the market-dominant category 
of mail.
``Sec. 3632. Action of the Governors
    ``(a) Authority To Establish Rates and Classes.--The Governors, 
with the written 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 requirements 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 
        justification, and the date as of which each such rate or class 
        takes effect.
            ``(2) Public notice; review; and compliance.--Not later 
        than 30 days before the date of implementation of any 
        adjustment in rates under this section--
                    ``(A) the Governors shall provide public notice of 
                the adjustment and an opportunity for review by the 
                Postal Regulatory Commission;
                    ``(B) the Postal Rate Commission shall notify the 
                Governors of any noncompliance of the adjustment with 
                section 3633; and
                    ``(C) the Governors shall respond to the notice 
                provided under subparagraph (B) and describe the 
                actions to be taken to comply with section 3633.
    ``(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 the enactment of this section.
``Sec. 3633. Provisions applicable to rates for competitive products
    ``The Postal Regulatory Commission shall, within 180 days after the 
date of the enactment of this section, promulgate (and may from time to 
time thereafter revise) regulations to--
            ``(1) prohibit the subsidization of competitive products by 
        market-dominant products;
            ``(2) ensure that each competitive product covers its costs 
        attributable; and
            ``(3) ensure that all competitive products collectively 
        cover their share of the institutional costs of the Postal 
        Service.''.

SEC. 203. PROVISIONS RELATING TO EXPERIMENTAL AND NEW PRODUCTS.

    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

``Sec. 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 
        identifies 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 
        attributable to a product identified as competitive shall be 
        included in any determination under section 3633(3)(relating to 
        provisions applicable to competitive products collectively). 
        Any test that solely affects products currently classified as 
        competitive, or which provides services ancillary to only 
        competitive products, shall be presumed to be in the 
        competitive product category 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 
        with the Postal Regulatory Commission and publish in the 
        Federal Register a notice--
                    ``(A) setting out the basis for the Postal 
                Service's determination 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 paragraph 
        (1) shall be considered to permit or require the publication 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 
        determine 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 paragraph (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).
            ``(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 to meet 1 
or more of the requirements of this section, it may order the 
cancellation of the 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 prescribe.
    ``(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).
``Sec. 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 significantly, decrease quality, or decrease output, 
        without risk of losing substantial 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 sentence, 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
                    ``(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 
        Commission 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 
        promulgated 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, prescribe 
        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 following:

     ``SUBCHAPTER IV--REPORTING REQUIREMENTS AND RELATED PROVISIONS

``Sec. 3651. Annual reports by the Commission
    ``(a) In General.--The Postal Regulatory Commission shall submit an 
annual report to the President and the Congress concerning the 
operations of the Commission under this title, including the extent to 
which regulations are achieving the objectives under sections 3622, 
3633, and 3691.
    ``(b) Information From Postal Service.--The Postal Service shall 
provide the Postal Regulatory Commission with such information as may, 
in the judgment of the Commission, be necessary in order for the 
Commission to prepare its reports under this section.
``Sec. 3652. Annual reports to the Commission
    ``(a) Costs, Revenues, Rates, and Service.--Except as provided 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 nonpublic annex to the report 
as the Commission may require under subsection (e))--
            ``(1) which shall analyze costs, revenues, rates, and 
        quality of service 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 
        provided in such year, provide--
                    ``(A) product information, including mail volumes; 
                and
                    ``(B) measures of the service afforded by the 
                Postal Service in connection with such product, 
                including--
                            ``(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.
Before submitting a report under this subsection (including any annex 
to the report and the information required under subsection (b)), the 
Postal Service shall have the information contained in such report (and 
annex) audited by the Inspector General. The results of any such audit 
shall be submitted along with the report to which it pertains.
    ``(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) Service Agreements and Market Tests.--In carrying out 
subsections (a) and (b) with respect to service agreements (including 
service agreements entered into under section 3623) and experimental 
products offered through market tests under section 3641 in a year, the 
Postal Service--
            ``(1) may report summary data on the costs, revenues, and 
        quality of service by service agreement and market test; and
            ``(2) shall 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 Commission 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 
                administrative effort and expense on the part of the 
                Postal Service; and
                    ``(C) protecting the confidentiality of 
                commercially sensitive 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;
                    ``(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 
                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 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) strategic plan under section 2802;
            ``(3) performance plan under section 2803; and
            ``(4) program performance reports under section 2804.
``Sec. 3653. Annual determination of compliance
    ``(a) Opportunity for Public Comment.--After receiving the reports 
required under section 3652 for any year, the Postal Regulatory 
Commission shall promptly provide an opportunity for comment 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 Commission 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) If Any Noncompliance Is Found.--If, for a year, a timely 
written determination of noncompliance is made under subsection (b), 
the Postal Regulatory Commission shall take any appropriate remedial 
action authorized by section 3662(c).
    ``(d) Rebuttable Presumption.--A timely written determination 
described in the last sentence of subsection (b) shall, for purposes of 
any proceeding under section 3662, create a rebuttable presumption of 
compliance by the Postal Service (with regard to the matters described 
in paragraphs (1) through (3) of subsection (b)) during the year to 
which such determination relates.''.

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:
``Sec. 3662. Rate and service complaints
    ``(a) In General.--Interested persons (including an officer of the 
Postal Regulatory Commission representing the interests of the general 
public) who believe the Postal Service is not operating in conformance 
with the requirements of chapter 1, 4, or 6, or this chapter (or 
regulations promulgated under any of those chapters) 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), either--
                    ``(A) begin proceedings on such complaint; or
                    ``(B) issue an order dismissing the complaint 
                (together with a statement of the reasons therefor).
            ``(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 under 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 compliance with the 
applicable requirements and to remedy the effects of any noncompliance 
including 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, and 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, circumstances, 
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 out of the Competitive Products 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.
``Sec. 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 accordance 
with section 706 of title 5, and chapter 158 and section 2112 of title 
28, on the basis of the record before the Commission.
``Sec. 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. Service agreements for market-dominant products.
``[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.
    ``SUBCHAPTER V--POSTAL SERVICES, COMPLAINTS, AND JUDICIAL REVIEW

``3661. Postal Services.
``3662. Rate and service complaints.
``3663. Appellate review.
``3664. Enforcement of orders.
                        ``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

``Sec. 3691. Establishment of modern service standards
    ``(a) Authority Generally.--The Postal Regulatory Commission shall, 
within 12 months after the date of the enactment of this section, by 
regulation establish (and may from time to time thereafter by 
regulation revise) a set of service standards for market-dominant 
products consistent with sections 101 (a) and (b) and 403.
    ``(b) Objectives.--Such standards shall be designed to achieve the 
following objectives:
            ``(1) To enhance and preserve the value of postal services 
        to both senders and recipients.
            ``(2) To provide a system of objective external performance 
        measurements for each market-dominant product as a basis for 
        measurement of Postal Service performance.
            ``(3) To guarantee Postal Service customers delivery 
        reliability, speed and frequency consistent with reasonable 
        rates and best business practices.
    ``(c) Factors.--In establishing or revising such standards, the 
Postal Regulatory Commission 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) mail volume and revenues projected for future years;
            ``(4) the projected growth in the number of addresses the 
        Postal Service will be required to serve in future years;
            ``(5) the current and projected future cost of serving 
        Postal Service customers;
            ``(6) the effect of changes in technology, demographics and 
        population distribution on the efficient and reliable operation 
        of the postal delivery system; and
            ``(7) the policies of this title as well as such other 
        factors as the Commission determines appropriate.''.

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) Content.--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; and
            (3) describe any changes to planning and performance 
        management documents previously submitted to Congress to 
        reflect new performance goals.
    (c) Postal Facilities.--The Postal Service plan shall include a 
description of its long-term vision for rationalizing its 
infrastructure and workforce and how it intends to implement that 
vision, including--
            (1) a strategy for how it 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;
            (2) an update on how postal decisions related to mail 
        changes, security, automation initiatives, worksharing, 
        information technology systems, and other areas will impact 
        network rationalization plans;
            (3) 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; and
            (4) an identification of anticipated costs, cost savings, 
        and other benefits associated with the infrastructure 
        rationalization alternatives discussed in the plan.
    (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) Postal Service employees on delivery routes; and
            (4) retail facilities in which overhead costs are shared 
        with private businesses and other government agencies.
    (e) Reemployment Assistance and Retirement Benefits.--The Postal 
Service plan shall include--
            (1) a plan under which reemployment assistance shall be 
        afforded to employees displaced as a result of the automation 
        or privatization of any of its functions or the closing and 
        consolidation of any of its facilities; and
            (2) a plan, developed in consultation with the Office of 
        Personnel Management, to offer early retirement benefits.
    (f) Inspector General Report.--
            (1) In general.--Before submitting the plan under this 
        section to Congress, the Postal Service shall submit the plan 
        to the Inspector General of the United States Postal Service in 
        a timely manner to carry out this subsection.
            (2) Report.--The Inspector General shall prepare a report 
        describing the extent to which the Postal Service plan--
                    (A) is consistent with the continuing obligations 
                of the Postal Service under title 39, United States 
                Code; and
                    (B) provides for the Postal Service to meet the 
                service standards established under section 3691.
            (3) Submission of report.--The Postal Service shall submit 
        the report of the Inspector General under this subsection with 
        the plan submitted to Congress under subsection (a).

           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:
``Sec. 2011. Provisions relating to competitive products
    ``(a) There is established in the Treasury of the United States a 
revolving fund, to be called the Postal Service Competitive Products 
Fund, which shall be available to the Postal Service without fiscal 
year limitation for the payment of--
            ``(1) costs attributable to competitive products; and
            ``(2) all other costs incurred by the Postal Service, to 
        the extent allocable to competitive products.
For purposes of this subsection, the term `costs attributable' has the 
meaning given such term by section 3631.
    ``(b) There shall be deposited in the Competitive Products Fund, 
subject to withdrawal by the Postal Service--
            ``(1) revenues from competitive products;
            ``(2) amounts received from obligations issued by the 
        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, it may invest 
such amounts as it considers appropriate in accordance with regulations 
which the Secretary of the Treasury shall prescribe within 12 months 
after the date of enactment of the Postal Accountability and 
Enhancement Act.
    ``(d) The Postal Service may, in its sole discretion, provide that 
moneys of the Competitive Products Fund be deposited in a Federal 
Reserve bank or a depository for public funds.
    ``(e)(1) 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 it determines necessary to provide for competitive 
products and deposit such amounts in the Competitive Products Fund, 
except that the Postal Service may pledge only assets related to the 
provision of competitive products (as determined under subsection (h) 
or, 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)), and the revenues and 
receipts from such products, for the payment of the principal of or 
interest on such obligations, for the purchase or redemption thereof, 
and for other purposes incidental thereto, including creation of 
reserve, sinking, and other funds which may be similarly pledged and 
used, to such extent and in such manner as the Postal Service 
determines necessary or desirable.
    ``(2) The Postal Service may enter into binding covenants with the 
holders of such obligations, and with the trustee, if any, under any 
agreement entered into in connection with the issuance thereof 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) may not be purchased by the Secretary of the 
        Treasury;
            ``(B) shall not be exempt either as to principal or 
        interest from any taxation now or hereafter imposed by any 
        State or local taxing authority;
            ``(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; and
            ``(D) notwithstanding the provisions of the Federal 
        Financing Bank Act of 1973 or any other provision of law 
        (except as specifically provided by reference to this 
        subparagraph in a law enacted after this subparagraph takes 
        effect), shall not be eligible for purchase by, commitment to 
        purchase by, or sale or issuance to, the Federal Financing 
        Bank.
    ``(4)(A) This paragraph applies with respect to the period 
beginning on the date of the enactment of this paragraph and ending at 
the close of the 5-year period which begins on the date on which the 
Postal Service makes its submission under subsection (h)(1).
    ``(B) During the period described in subparagraph (A), nothing in 
subparagraph (A) or (D) of paragraph (3) or the last sentence of 
section 2006(b) shall, with respect to any obligations sought to be 
issued by the Postal Service under this subsection, be considered to 
affect such obligations' eligibility for purchase by, commitment to 
purchase by, or sale or issuance to, the Federal Financing Bank.
    ``(C) The Federal Financing Bank may elect to purchase such 
obligations under such terms, including rates of interest, as the Bank 
and the Postal Service may agree, but at a rate of yield no less than 
the prevailing yield on outstanding marketable securities of comparable 
maturity issued by entities with the same credit rating as the rating 
then most recently obtained by the Postal Service under subparagraph 
(D), as determined by the Bank.
    ``(D) In order to be eligible to borrow under this paragraph, the 
Postal Service shall first obtain a credit rating from a nationally 
recognized credit rating organization. Such rating--
            ``(i) shall be determined taking into account only those 
        assets and activities of the Postal Service which are described 
        in section 3634(a)(2) (relating to the Postal Service's assumed 
        taxable income from competitive products); and
            ``(ii) may, before final rules of the Postal Regulatory 
        Commission under subsection (h) are issued (or deemed to have 
        been issued), be based on the best information available from 
        the Postal Service, including the audited statements required 
        by section 2008(e).
    ``(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 against the Postal Service or the Government of 
the United States (or settlement of a claim) shall, to the extent that 
it arises out of activities of the Postal Service in the provision of 
competitive products, be paid out of the Competitive Products Fund.
    ``(h)(1) The Postal Service, in consultation with an independent, 
certified public accounting firm and such other advisors as it 
considers appropriate, shall develop recommendations regarding--
            ``(A) the accounting practices and principles that should 
        be followed by the Postal Service with the objectives of 
        identifying the capital and operating costs incurred by the 
        Postal Service in providing competitive products, and 
        preventing the cross-subsidization of such products by market-
        dominant products; and
            ``(B) the substantive and procedural rules that should be 
        followed in determining the Postal Service's assumed Federal 
        income tax on competitive products income for any year (within 
        the meaning of section 3634).
Such recommendations shall be submitted to the Postal Regulatory 
Commission no later than 12 months after the effective date of this 
section.
    ``(2)(A) Upon receiving the recommendations of the Postal Service 
under paragraph (1), the Commission shall give interested parties, 
including the Postal Service, enterprises in the private sector of the 
economy engaged in the delivery of mail matter other than letters, 
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) After due consideration of the views and other information 
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 in paragraph (1)(B); 
        and
            ``(iii) provide for the submission by the Postal Service to 
        the Postal Regulatory Commission of annual and other periodic 
        reports setting forth such information as the Commission may 
        require.
Final rules under this subparagraph shall be issued not later than 12 
months after the date on which the Postal Service makes its submission 
to the Commission under paragraph (1) (or by such later date as the 
Commission and the Postal Service may agree to). If final rules are not 
issued by the Commission by the deadline under the preceding sentence, 
the recommendations submitted by the Postal Service under paragraph (1) 
shall be treated as the final rules. The Commission is authorized to 
promulgate regulations revising such rules.
    ``(C) Reports described in subparagraph (B)(iii) shall be submitted 
at such time and in such form, and shall include such information, as 
the Commission by rule requires. 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 data under such subparagraph 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
            ``(ii) such revisions are, in the judgment of the 
        Commission, otherwise necessitated by the public interest.
    ``(D) A copy of each report described in subparagraph (B)(iii) 
shall also be transmitted by the Postal Service to the Secretary of the 
Treasury and the Inspector General of the United States Postal Service.
    ``(i) The Postal Service shall render an annual report to the 
Secretary of the Treasury concerning the operation of the Competitive 
Products Fund, in which it shall address such matters as risk 
limitations, reserve balances, allocation or distribution of moneys, 
liquidity requirements, and measures to safeguard against losses. A 
copy of its then most recent report under this subsection shall be 
included with any other submission that it is required to make to the 
Postal Regulatory Commission under section 3652(g).''.
            (2) Clerical amendment.--The analysis 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' 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 
        Products 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 (b), by adding at the end the 
                following: ``Nothing in this chapter shall be 
                considered to permit or require the Secretary of the 
                Treasury to purchase any obligations of the Postal 
                Service other than those issued under section 2005.''; 
                and
                    (B) in subsection (c), by inserting ``under section 
                2005'' before ``shall be obligations''.

SEC. 402. ASSUMED FEDERAL INCOME TAX ON COMPETITIVE PRODUCTS 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:
``Sec. 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 competitive products for 
        the year; and
            ``(2) the term `assumed taxable income from competitive 
        products', with respect to a year, refers to the amount 
        representing 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:
``Sec. 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 
        intellectual 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 obtainable) from an independent source or is 
        otherwise obtained (or obtainable).
    ``(b) The Postal Regulatory Commission shall prescribe regulations 
to carry out this section.
    ``(c) Any party (including an officer of the Commission 
representing the interests of the general public) who believes that the 
Postal Service has violated this section may bring a complaint in 
accordance with section 3662.''.
    (b) Conforming Amendments.--
            (1) General powers.--Section 401 of title 39, United States 
        Code, is amended by striking ``The'' and inserting ``Subject to 
        the provisions of section 404a, the''.
            (2) Specific powers.--Section 404(a) of title 39, United 
        States Code, is amended by striking ``Without'' and inserting 
        ``Subject to the provisions of section 404a, but otherwise 
        without''.
    (c) Clerical Amendment.--The analysis for chapter 4 of title 39, 
United States Code, is amended by inserting after the item relating to 
section 404 the following:

``404a. Specific limitations.''.

SEC. 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 
        purposes 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.
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 under the antitrust laws (as so defined) from the Postal 
Service or any officer or employee thereof acting in an official 
capacity for any conduct with respect to a product in the market-
dominant category of mail.
    ``(3) This subsection shall not apply with respect to conduct 
occurring before the date of the enactment of this subsection.
    ``(f) To the extent that the Postal Service engages in conduct with 
respect to the provision of competitive products, it shall be 
considered a person for the purposes of the Federal bankruptcy laws.
    ``(g)(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 
requirements (other than procedural requirements) of zoning laws, land 
use laws, and applicable environmental laws of a State or subdivision 
of a State which would apply to the building if it were not a building 
constructed or altered by an establishment of the Government 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 
        appropriate 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 concerning 
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.
    ``(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.
    ``(h)(1) Notwithstanding any other provision of law, legal 
representation 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 
        administrative subpoenas by the Postal Regulatory Commission).
            ``(C) Section 3663 (relating to appellate review).
The Postal Service may, by contract or otherwise, employ attorneys to 
obtain any legal representation that it is 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 Commission shall be 
permitted to appear as a party on its own motion and as of right.
    ``(B) The Department of Justice shall, under such terms and 
conditions as the Commission and the Attorney General shall consider 
appropriate, furnish the Commission such legal representation as it may 
require in connection with any such action, suit, or proceeding, except 
that, with the prior consent of the Attorney General, the Commission 
may employ attorneys by contract or otherwise for that purpose.
    ``(i) 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,''.

                      TITLE V--GENERAL PROVISIONS

SEC. 501. QUALIFICATION AND TERM REQUIREMENTS FOR GOVERNORS.

    (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 
        demonstrated ability in managing organizations or corporations 
        (in either the public or private sector) of substantial size. 
        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 the 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 
        beginning not later than 9 years after the date of the 
        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 Representatives, the 
minority leader of the House of Representatives, the majority leader of 
the Senate, and the minority leader of the Senate.''.
    (c) 5-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 ``5 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 5 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 5 
                years of that term, the resulting vacancy in office 
                shall be treated as a vacancy in a 5-year term.
                    (C) Vacancy by incumbent after 5 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 5 years or more 
                of that term, that term shall be deemed to have been a 
                5-year term beginning on its commencement date for 
                purposes of determining vacancies in office. Any 
                appointment to the vacant office shall be for a 5-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 subparagraph 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 5-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 3 terms as a 
        Governor.''.
            (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 any of 
the purposes for which the corresponding authority is available to the 
Postal Service under section 2011.''.
    (b) Increase Relating to Obligations Issued for Capital 
Improvements.--Section 2005(a)(1) of title 39, United States Code, is 
amended by striking the third sentence.
    (c) 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 
        ``obligations issued by the Postal Service under this 
        section,''.
            (2) Assets, revenues, and receipts to which provisions 
        apply.--Subsection (b) of section 2005 of title 39, United 
        States Code, is amended by striking ``(b)'' and inserting 
        ``(b)(1)'', and by adding at the end the following:
    ``(2) Notwithstanding any other provision of this 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--
            ``(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 12\1/2\ ounces; or
            ``(3) such carriage is within the scope of services 
        described by regulations of the United States Postal Service 
        (as in effect on July 1, 2001) 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 functions as may be assigned to the Postal 
        Service under any provisions of law outside of this title;''.

SEC. 505. NONINTERFERENCE WITH COLLECTIVE BARGAINING AGREEMENTS.

    (a) Labor Disputes.--Section 1207 of title 39, United States Code, 
is amended to read as follows:
``Sec. 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 of such notice, if no 
agreement has been reached by that time.
    ``(b) If the parties fail to reach agreement or to adopt a 
procedure providing for a binding resolution of a dispute by the 
expiration date of the agreement in effect, or the date of the proposed 
termination 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 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 representative.
    ``(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 of 
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 of 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 Agreements.--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.

                TITLE VI--ENHANCED REGULATORY COMMISSION

SEC. 601. REORGANIZATION AND MODIFICATION OF CERTAIN PROVISIONS 
              RELATING TO THE POSTAL REGULATORY COMMISSION.

    (a) Transfer and Redesignation.--Title 39, United States Code, is 
amended--
            (1) by inserting after chapter 4 the following:

               ``CHAPTER 5--POSTAL REGULATORY COMMISSION

``Sec.
``501. Establishment.
``502. Commissioners.
``503. Rules; regulations; procedures.
``504. Administration.
``Sec. 501. Establishment
    ``The Postal Regulatory Commission is an independent establishment 
of the executive branch of the Government of the United States.
``Sec. 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 Commissioner 
may not so continue to serve for more than 1 year after the date upon 
which his term otherwise would expire under subsection (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; and
            (3) by redesignating sections 3603 and 3604 as sections 503 
        and 504, respectively, and transferring such sections to the 
        end of chapter 5 (as inserted by paragraph (1)).
    (b) 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 the enactment 
of this Act or any nomination made before that date, but, when any such 
office becomes vacant, the appointment of any person to fill that 
office shall be made in accordance with such amendment.
    (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 designated by the 
Commission may administer oaths, examine witnesses, take depositions, 
and receive evidence.
    ``(2) The Chairman of the Commission, any Commissioner designated 
by the Chairman, and any administrative law judge appointed by the 
Commission under section 3105 of title 5 may, with respect to any 
proceeding conducted by the Commission under this title--
            ``(A) issue subpoenas requiring the attendance and 
        presentation of testimony by, or the production of documentary 
        or other evidence in the possession of, any covered person; and
            ``(B) order the taking of depositions and responses to 
        written interrogatories by a covered person.
The written concurrence of a majority of the Commissioners then holding 
office shall, with respect to each subpoena under subparagraph (A), be 
required in advance of its issuance.
    ``(3) In the case of contumacy or failure to obey a 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 designated place to testify or 
produce documentary or other evidence. Any failure to obey the order of 
the court may be punished by the court as a contempt thereof.
    ``(4) For purposes of this subsection, the term `covered person' 
means an officer, employee, agent, or contractor of the Postal Service.
    ``(g)(1) If the Postal Service determines that any 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 
        purposes for which it is supplied; or
            ``(B) permit anyone who is not an officer or employee of 
        the Commission to have access to any such information.
            ``(3)(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 
        establish 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 transparency of a government establishment competing 
        in commercial markets.
            ``(B) Paragraph (2) shall not prevent the Commission from 
        requiring production of information in the course of any 
        discovery 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 
        information furnished to any party.''.

SEC. 603. APPROPRIATIONS FOR THE POSTAL REGULATORY COMMISSION.

    (a) Authorization of Appropriations.--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 Regulatory 
Commission. In requesting an appropriation under this subsection 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) 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 
        appropriated, 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 sentence 
        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 appropriated under section 8G(f) 
of the Inspector General Act of 1978.''.
    (c) Effective Date.--
            (1) In general.--The amendments made by this section shall 
        apply with respect to fiscal years beginning on or after 
        October 1, 2002.
            (2) Savings provision.--The provisions of title 39, United 
        States Code, 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. 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. FINANCIAL TRANSPARENCY.

    Section 101 of title 39, United States Code, is amended--
            (1) by redesignating subsections (d) through (g) as 
        subsections (e) through (h), respectively; and
            (2) by inserting after subsection (c) the following:
    ``(d) As an independent establishment of the executive branch of 
the Government of the United States, the Postal Service shall be 
subject to a high degree of transparency to ensure fair treatment of 
customers of the Postal Service's market-dominant products and 
companies competing with the Postal Service's competitive products.''.

                         TITLE VII--EVALUATIONS

SEC. 701. ASSESSMENTS OF RATEMAKING, CLASSIFICATION, AND OTHER 
              PROVISIONS.

    (a) In General.--The Postal Regulatory Commission shall, at least 
every 3 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.
    (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 Service.--
            (1) In general.--Not later than 12 months after the date of 
        enactment of this Act, the Postal Regulatory Commission shall 
        submit a report to the President and Congress on universal 
        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 
                development 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 practices 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 assumptions, and analyses as the 
                Postal Service considers plausible.
    (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)--
                    (A) an estimate of the costs of the Postal Service 
                attributable 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.

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 Regulatory 
Commission, within 1 year after the date of the 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 similar 
products provided by private companies.
    (b) Recommendations.--The Federal Trade Commission shall include 
such recommendations as it considers appropriate for bringing such 
legal discrimination 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 advantages 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 Regulatory 
Commission shall take into account the recommendations of the Federal 
Trade Commission in promulgating or revising the regulations required 
under section 3633 of title 39, United States Code.

   TITLE VIII--POSTAL SERVICE RETIREMENT AND HEALTH BENEFITS FUNDING

SEC. 801. SHORT TITLE.

    This title may be cited as the ``Postal Civil Service Retirement 
and Health Benefits Funding Amendments of 2004''.

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 
supplemental liability' means the estimated difference, as determined 
by the Office, between--
            ``(A) the actuarial present value of all future benefits 
        payable from the Fund under this 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 subchapter under section 8334;
                    ``(ii) that portion of the Fund balance, as of the 
                date the Postal surplus or supplemental liability is 
                determined, attributable to payments to the Fund by the 
                United States Postal 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 30, 2006, the Office shall determine 
the Postal surplus or supplemental liability, as of September 30, 2005. 
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. If the result is a supplemental 
liability, the Office shall establish an amortization schedule, 
including a series of annual installments commencing September 30, 
2006, which provides for the liquidation of such liability by September 
30, 2043.
    ``(B) The Office shall redetermine the Postal surplus or 
supplemental liability as of the close of the fiscal year, for each 
fiscal year beginning after September 30, 2006, 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), and any prior amortization schedule for payments 
shall be terminated. If the result is a supplemental liability, the 
Office shall establish a new 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.
    ``(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 practices 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 application of 
section 8348(g)(2) of title 5, United States Code, for the fiscal year 
2006, the Office of Personnel Management shall include, in addition to 
the amount otherwise computed under that paragraph, the amounts that 
would have been included for the fiscal years 2003 through 2005 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 Secretary of the Treasury shall make the 
required transfer to the Civil Service Retirement and Disability Fund 
based on that amount.

SEC. 803. HEALTH INSURANCE.

    (a) In General.--Chapter 89 of title 5, United States Code, is 
amended--
            (1) in section 8906(g)(2)(A), by striking ``shall be paid 
        by the United States Postal Service.'' and inserting ``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
            (2) by inserting after section 8909 the following:
``Sec. 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 December 31, 2006, and by December 31 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 December 31, 2006, the Office shall 
compute, and by December 31 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 
        September 30 of that year; and
            ``(II) the net present value computed under paragraph (1).
    ``(B) Not later than December 31, 2006, the Office shall compute, 
and by December 31 of each succeeding year shall recompute, an 
amortization schedule including a series of annual installments which 
provide for the liquidation by January 31, 2046, or within 15 years, 
whichever is later, of the net present value determined 
under subparagraph (A), including interest at the rate used in that 
computation.
    ``(3) Not later than January 31, 2007, and by January 31 of each 
succeeding year, the United States Postal Service shall pay into such 
Fund--
            ``(A) the net present value computed under paragraph (1); 
        and
            ``(B) the annual installment computed under paragraph 
        (2)(B).
    ``(4) Computations under this subsection shall be made consistent 
with the assumptions and methodology used by the Office for financial 
reporting under subchapter II of chapter 35 of title 31.
    ``(5) After consultation with the United States Postal Service, the 
Office shall promulgate any regulations the Office determines necessary 
under this subsection.''.
    (b) 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.''.

SEC. 804. REPEAL OF DISPOSITION OF SAVINGS PROVISION.

    Section 3 of the Postal Civil Service Retirement System Funding 
Reform Act of 2003 (Public Law 108-18) is repealed.

SEC. 805. EFFECTIVE DATES.

    (a) In General.--Except as provided under subsection (b), this 
title shall take effect on October 1, 2005.
    (b) Termination of Employer Contribution.--The amendment 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, 2005.

                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. A 
Postal Service employee may use annual leave, sick leave, or leave 
without pay during that 3-day period.''.
    (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;''.

SEC. 902. DISABILITY RETIREMENT FOR POSTAL EMPLOYEES.

    (a) Total Disability.--Section 8105 of title 5, United States Code, 
is amended--
            (1) in subsection (a), by adding at the end the following: 
        ``This section applies to a Postal Service employee, except as 
        provided under subsection (c).''; and
            (2) by adding at the end the following:
    ``(c)(1) In this subsection, the term `retirement age' has the 
meaning given under section 216(l)(1) of the Social Security Act (42 
U.S.C. 416(l)(1)).
    ``(2) Notwithstanding any other provision of law, for any injury 
occurring on or after the date of enactment of the Postal 
Accountability and Enhancement Act, and for any new claim for a period 
of disability commencing on or after that date, the compensation 
entitlement for total disability is converted to 50 percent of the 
monthly pay of the employee on the later of--
            ``(A) the date on which the injured employee reaches 
        retirement age; or
            ``(B) 1 year after the employee begins receiving 
        compensation.''.
    (b) Partial Disability.--Section 8106 of title 5, United States 
Code, is amended--
            (1) in subsection (a), by adding at the end the following: 
        ``This section applies to a Postal Service employee, except as 
        provided under subsection (d).''; and
            (2) by adding at the end the following:
    ``(d)(1) In this subsection, the term `retirement age' has the 
meaning given under section 216(l)(1) of the Social Security Act (42 
U.S.C. 416(l)(1)).
            ``(2) Notwithstanding any other provision of law, for any 
        injury occurring on or after the date of enactment of this 
        subsection, and for any new claim for a period of disability 
        commencing on or after that date, the compensation entitlement 
        for partial disability is converted to 50 percent of the 
        difference between the monthly pay of an employee and the 
        monthly wage earning capacity of the employee after the 
        beginning of partial disability on the later of--
                    ``(A) the date on which the injured employee 
                reaches retirement age; or
                    ``(B) 1 year after the employee begins receiving 
                compensation.''.
                                 <all>